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The latest legislative and regulatory activity that impacts you and the services we provide

Policy Matters Brief - July 10, 2024

July 10, 2024 · Public Policy & Regulatory Affairs Team

Proposed changes to California workers’ comp UR and physician reporting regulations

The California Division of Workers’ Compensation (DWC) proposed changes to its rules governing utilization review (UR) and to requirements for physician reporting and coordination of care. The proposed changes are intended to implement exemptions to prospective UR for treatment rendered within the first 30 days from the date of injury by an authorized provider. The changes are also aimed at implementing a statutory accreditation requirement and DWC’s oversight of UR plans, including changes to UR enforcement rules. Timeframes for review of medications under the formulary are also being amended to align with statute.

As part of this rulemaking, the DWC proposes to update existing regulations in order to address problematic issues in they system. These additional changes include a new physician reporting form (PR-1) which combines the current physician progress report (PR-2) with the RFA (request for authorization) form and adds information fields for reporting of occurrences currently required by law of a primary treating physician. The proposed regulations also direct that electronic submission of an RFA should be sent through a secure, electronic e-mail system.

A public hearing is scheduled for July 25, 2024, with written comments due by the end of that day. More information on this rulemaking, including a detailed description of the proposed changes, can be viewed here.

Florida passes bill increasing doctor reimbursement rates

In Florida, a recently enacted law raised reimbursement rates for certain medical services provided to injured workers. Senate Bill 362 will increase the reimbursement calculation for general physician services from 110% of Medicare to 175% of Medicare and increase reimbursement for surgical services from 140% of Medicare to 210% of Medicare. The bill will take effect on January 1, 2025.

New York updates work comp DMEPOS fee schedule

After a prolonged rule-making process, the New York Workers’ Compensation Board has finally adopted an update to its DMEPOS fee schedule. The revised fee schedule includes updates to the HCPCS codes utilized within the fee schedule as well as updates to both the reimbursement rates for items and supplies as well as prior authorization or PAR indication for various items and supplies. The new fee schedule took effect upon publication as of June 28, 2024 and can be found here.

Montana workers’ comp medical fee schedules and formulary updated

The Montana Department of Labor & Industry (DLI) adopted updated rules governing its professional and facility fee schedules, effective July 1, 2024. The more notable updates included an increased base rate for inpatient services at an acute care hospital as well as new dental service reimbursement and billing provisions.

As part of the same rulemaking package, DLI also adopted an update to its drug formulary. The April 2024 edition of the ODG Drug Formulary was adopted for prescriptions written on or after July 1, 2024. Although this update meets a statutory annual re-adoption requirement, existing regulations already state that the automatic monthly updates of the annual formulary edition are incorporated by reference without additional rulemaking and will take effect when the update is posted on the DLI website.

This combined rulemaking also included less substantive language revisions that clarify, simplify, and increase usability of the rules. Consequently, rule language duplicative of statute was removed.

New York passes bill authorizing treatment by occupational therapists

The New York state legislature recently passed a bill to permit treatment for work related injuries by physical therapist assistants or occupational therapist assistants. The bill would permit assistants under the direct supervision of a licensed therapists to provide treatment to injured workers related to treatment plans approved by their supervising licensed therapist or referring physicians. Assembly Bill 1204 is currently awaiting action by the Governor.

Rhode Island passes PTSD bill

The Rhode Island legislature recently passed a bill (SB 2059) to extend injured-on-duty benefits to policy officers and firefighters who suffer from diagnosed PTSD. The diagnosis must relate to actions in the course of their duty/employment that render them unable to perform future duty. If diagnosed with PTSD, police officers and firefighters would be entitled to receive accidental disability retirement allowance and IOD benefits. SB 2059 became effective upon the Governor’s signature on June 20, 2024.

Michigan bill applying false claims law to PIP advances

Michigan House Bill 5193, which would subject auto insurance personal injury protection (PIP) claims to the state’s existing Health Care False Claim Act, passed out of the House in late June and is currently pending in the Senate. The Health Care False Claim Act addresses areas such as fraud in obtaining certain health insurance benefits or payments and prohibits kickbacks or bribes.

Idaho PBM legislation

Idaho House Bill 596, adds extensive requirements under the state’s existing pharmacy benefit manager (PBM) law. The bill broadly applies to various insurance lines and adds several provisions for PBMs – including requirements for “spread” pricing and manufacturer rebates. Additional provisions include PBM reporting to the state; pharmacy network adequacy requirements; and prohibitions on “steering” to affiliated pharmacies and charging pharmacies claim adjudication fees. The bill was signed into law earlier this year and becomes effective January 1, 2025.

In case you missed it: California modified proposed workers’ comp pharmacy fee schedule rules, opened up second comment period

The California Division of Workers’ Compensation announced in June a second round of rulemaking (including a new comment period) pertaining to modifications to the originally proposed pharmacy fee schedule rule changes. A prior Policy Matters Alert discussed these proposed modifications in more detail here. Notable suggested modifications included allowing dispensing physicians to receive a dispensing, compounding and sterility fee, and extending the implementation timeframe from 90 days to 180 days. Although the second comment period has passed, the Optum Workers’ Comp and Auto No-Fault Public Policy and Regulatory Affairs team will continue to provide updates as they are made known. We also remain available to discuss the proposed rules, including the latest modifications, and their impact on how we work with clients to provide quality pharmacy care. Official information on this ongoing rulemaking can be found here.

76th Annual SAWCA Convention

The Southern Association of Workers’ Compensation Administrators (SAWCA) will hold its 76^th Annual Convention July 29 – August 2, 2024, at Hotel Effie Sandestin in Miramar Beach, Florida. Optum will sponsor the traditional Regulators Roundtable session, which will bring together workers’ comp. agency leaders from across the nation to discuss challenges, concerns, and issues facing jurisdictions.

SAWCA is an organization comprised of 21 state workers’ compensation agencies and several industry organizations, including Optum, that come together to share ideas, perspectives, and common concerns to improve workers’ compensation for all. We previously spoke with SAWCA’s Executive Director, Gary Davis, on a Policy Guys podcast episode, where he provided an overview of the importance of SAWCA to the workers’ compensation community and how it connects regulators and industry professionals. Click here to listen to that episode.

Additional Optum resources:

For more information on these policy developments and others we have been tracking this year, be sure to visit our Legislative and Regulatory Tracker. Bills or regulations can be filtered by insurance line, topic, status and jurisdiction.

If you have questions on these or any other public policy developments, please contact our team at OptumWC.PolicyMatters@optum.com.

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