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

Policy Matters Brief - July 31, 2024

July 31, 2024 · Public Policy & Regulatory Affairs Team

Florida holds fee schedule hearing

On July 25, the Florida Division of Workers’ Compensation held a public workshop to discuss updates to the current version of the Workers’ Compensation Health Care Provider Reimbursement Manual. Legislative changes enacted in 2023 and 2024 have enabled the Division to update the reimbursement manual without approval from the Legislature.

As part of its first attempt to update the manual, the Division has proposed numerous changes and requested input from stakeholders during the workshop. More workshops on the proposed changes will follow as the Division continues to consult with stakeholders to ensure the reimbursement manual affects all impacted parties fairly. Information on the workshop, the proposed changes, and future workshops can be found here..

Pennsylvania continues discussion on AWP and pharmacy reimbursement

The Pennsylvania Workers’ Compensation Advisory Council recently discussed the ongoing issues of Average Wholesale Price and pharmacy benchmarks in light of the Federated Mutual Insurance Company v. Summit Pharmacy case. During the meeting, the Bureau of Workers’ Compensation reported on efforts to identify alternative benchmarks to the currently prescribed use of AWP. The Bureau stated that they have not decided on a new pharmacy benchmark and that a legislative solution may be needed next year.

Texas Division of Workers’ Compensation seeks legislative input and proposes updated telemedicine

The Texas Division of Workers’ Compensation (TDWC) recently posted an online survey seeking input on legislative recommendations from system stakeholders to include in its 2024 biennial report to the state Legislature.

The survey is open until July 31, 2024 and can be accessed here.

The TDWC also has proposed an informal draft rule affecting doctors’ ability to perform maximum medical improvement (MMI) examinations via telemedicine. The proposed ‘informal’ draft changes several segments of the Texas Administrative Code in order to allow treating doctors to perform and properly bill for an MMI examination via telemedicine (which currently is not permitted). Information about these proposed ‘informal’ rules can be found here. The comment period closes on August 12, 2024.

Proposed updates to Colorado workers’ comp medical rules include prohibiting physicians from dispensing gabapentin and an eBilling mandate

Following stakeholder meetings earlier this year, the Colorado Division of Workers’ Compensation (DWC) proposed updates and amendments to its rules governing medical utilization and fees. Among the changes are routine updates to procedure coding and reimbursement rates, along with proposals to mandate electronic medical billing for payers and most providers, and disallow physicians from dispensing gabapentin.

In its proposal to add gabapentin to the list of medications dispensed only by licensed pharmacies, the DWC would exclude physicians and other practitioners who may otherwise be legally able to dispense in the state from a practice law perspective. The existing DWC rule already prohibits non-pharmacy dispensing of controlled substances, including opioids and benzodiazepines. The proposed language reflects simplified wording recommended by the Optum Public Policy and Regulatory Affairs team.

The DWC also proposes to require most providers and payers to adopt electronic medical billing and bill processing. The updated language states that, effective January 1, 2026, all payers (excluding self-insured employers) must accept electronic bills and acknowledge receipt of a complete electronic medical bill to the submitting party. Also on that date, all providers (or their billing representative) that submit at least 25 workers’ compensation medical bills per month must submit them via a HIPAA-compliant electronic transaction to payers with established connectivity to the provider’s system or clearinghouse. Providers will need to follow the payer’s requirements for submission of attachments, whether by electronic submission, mail, fax, email or web upload, as well as requirements for payment methods–adding that a payer must offer at least one method of payment that does not require an associated fee or limit form of payment to only credit cards.

A public hearing on the proposed changes will be held via Zoom on September 10, 2024, with written comments due by the end of the hearing. Per the DWC’s typical schedule – any adopted changes will likely be announced and published later this year and take effect January 1 of next year (though the eBilling provisions would likely not kick in until a later date). More information on this rulemaking can be viewed online here.

Alaska first responder PTSD presumption bill signed

Alaska Senate Bill 147, signed in law on July 11, 2024, includes the addition of a workers’ compensation presumption for post-traumatic stress disorder (PTSD) in certain first responders and correctional officers. The bill includes a presumption that an employee’s PTSD claim is covered under the workers’ compensation law if the employee is or was employed as a first responder (the bill outlines which first responders this includes) or a correctional officer; and while employed or within three years after the last date of employment, they receive a diagnosis by a psychiatrist or a psychologist of PTSD. The presumption applies for a period of three years following the last date of employment, and it may be rebutted by a preponderance of the evidence that the PTSD resulted from factors that were not work related. SB 147 includes other provisions, including the establishment of a workers’ compensation stay-at-work benefits program to include an emphasis on stay-at-work/early return-to-work. Most of SB 147’s provisions take effect January 1, 2025.

Michigan workers’ comp healthcare services advisory committee meeting reviews rule changes and discusses pharmaceutical issues

On July 17, 2024, the Michigan Workers' Disability Compensation Agency’s Health Care Services Advisory Committee met for a regularly scheduled meeting, during which the Committee approved draft amendments/updates to the Agency’s health care services rules. The Committee approved routine updates to billing and reimbursement source documents, removal of redundant or unnecessary rule provisions, allowing certain radiology procedures that include contrast to be billed/reimbursed separately, and a 3% increase to the medical fee schedule conversion factor. The draft rule changes will need to be officially proposed and go through the state’s formal rulemaking process, subject to a public comment period, before being adopted and becoming effective.

Other topics discussed or presented include:

First responder presumed coverage fund and its payout of claims exceeding the funds received
A presentation on GLP-1 medications
High-priced topical medications, average wholesale price (AWP), and other pharmaceutical pricing benchmarks or controls

The Agency plans to establish a subgroup to further review and discuss the topic of high-priced medications, particularly topical medications often dispensed by physicians, as well as AWP and various pricing benchmark options. The Optum Public Policy and Regulatory Affairs team will participate in that subgroup.

Idaho workers’ comp negotiated rulemaking meetings continue and address medical fees and disputes

On July 11, 2024, the Idaho Industrial Commission held another stakeholder meeting to review its draft rule changes and gather input. As previously noted, the Commission is reexamining its workers’ compensation regulations and hosting meetings throughout 2024 to allow stakeholders to comment on current regulations and recommend changes to improve effectiveness and reduce regulatory burden.

Notable topics brought up by stakeholders in the July 11 meeting focused mostly on medical fees and disputes, including:

High-priced topical medications dispensed by physicians
Continued rentals of certain DME beyond the purchase price and the possibility of adopting a DME fee schedule
Timeframes required of providers to bill and request reconsideration for medical services
Contracted PPO discounts/reduction

After the rulemaking meetings, the Commission will hold two public hearings (tentatively scheduled for October 7 and 24, 2024) to receive final public testimony and comments. The Commission is accepting written comments until August 1, 2024. More information on the rulemaking process and how to submit comments can be viewed here.

Ohio BWC formulary and first fill list updated

The Ohio Bureau of Workers’ Compensation (BWC) adopted updates to both its outpatient medication formulary rule appendix and first fill of outpatient medications rule appendix (both drug lists), effective August 1, 2024. The BWC added and removed several medications in addition to changing coverage criteria for certain medications. Although the BWC uses its formulary and first fill list for state fund claims, self-insuring employers can also use them. The BWC formulary is intended to provide prescribers with a concise list of medications for treatment of approved conditions related to the claim, along with information regarding any restrictions or limitations on the use of approved medications. The BWC first fill list specifies the circumstances under which the BWC will reimburse for the first fill of prescription drugs.

Kentucky PBM legislation

Kentucky Senate Bill 188 and House Bill 190, two related bills adding to requirements of PBMs and insurers for contracted reimbursement to and treatment of pharmacies, were signed into law earlier this year and will take effect in 2025. Perhaps the most notable provision in these bills is a requirement for PBMs and insurers to reimburse certain contracted pharmacies at a minimum of the national average drug acquisition cost (NADAC) for the drug (or the wholesale acquisition cost, WAC, if no NADAC exists) plus a dispensing fee. NADAC is a federal pricing benchmark used mostly in Medicaid programs as a reimbursement maximum.

The minimum reimbursement provisions for Kentucky “retail independent” pharmacies will take effect January 1, 2025, at which point the minimum dispensing fee for those pharmacy types will be $10.64 until January 1, 2027, when a minimum dispensing fee determined by the Department of Insurance should take effect. Both the minimum NADAC (or WAC) and dispensing fee reimbursement provisions will have a delayed effective date of January 1, 2027 for Kentucky retail chain pharmacies. Other notable provisions in these bills include added network adequacy requirements; anti-steering and related reporting requirements; prohibitions on several types of fees charged by PBMs to pharmacies; and added PBM/pharmacy contract terms.

It should be noted that the state’s current maximum dispensing fee of $5 for workers’ compensation claims, which is outlined in regulations, could conflict with this new statute’s minimum dispensing fee. The Kentucky Legislative Research Commission, in a “local government mandate statement” prepared during the legislative process, forecasted that SB 188 would cause an increase to insurance premium rates.

Minnesota renews electronic eligibility transaction exemption for workers’ comp and auto payers

The Minnesota Department of Health (MDH) published a notice renewing the limited exception from state requirements for the standard electronic exchange of eligibility transactions for payers not subject to certain federal regulations. This exception continues to apply only to exchanges of the Health Care Eligibility Benefit Inquiry and Response transaction with health care group purchasers (payers) not subject to federal HIPAA transactions and code sets regulations (specifically workers’ compensation, auto, and property and casualty insurers) through July 31, 2025.

Although Minnesota law mandates electronic medical billing and processing requirements that generally apply to all payer types (including workers’ comp and auto), the MDH can exempt certain payers from these requirements. This limited exception is typically reviewed annually (with the next review scheduled to run from May to June 2025) to determine if the exception will be continued through July 2026. For more information on this latest exemption renewal, see pages 48 and 49 in the Minnesota State Register here.

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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