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Important legislative and regulatory updates

New York adopts changes to the Pharmacy Direction of Care Regulations

July 1, 2025 · Public Policy & Regulatory Affairs Team

The New York Workers’ Compensation Board (WCB) has adopted rules that modify the regulatory structure of pharmacy direction of care. The changes below affect pharmacy notification as well as the ability of an injured worker to use a non-network pharmacy under certain circumstances. These changes take effect on July 11, 2025, and impact only claims administrators actively utilizing a pharmacy direction of care (DOC) program in New York state.

Information on the adopted regulations can be found here: Subject Number 046-1759

Pursuant to sections 440.3, 440.4 and 440.8, an insurer, employer or other payer may implement, or contract with another entity to implement, a pharmacy benefit network (PBN) in New York state and direct injured workers to utilize a network pharmacy. Consequently, a payer can deny an out-of-network bill submitted by a non-PBN pharmacy.

The recently adopted rules modify and impact pharmacy direction of care regulations and direction of care programs in three distinct ways, outlined in the following sections:

Utilization of a non-network pharmacy (440.3 and 440.4)

After a claim is accepted and the payer has filed (or will file) a legal objection to the medication or body part, the payer must notify the pharmacy, PBM, or designated pharmacies in the DOC program that they will only pay for the medication upon resolution of the legal objection. Until then, the claimant may use a non-network pharmacy outside of the designated DOC network.
The drug formulary still applies to controverted accidents, or injuries, body parts, or conditions not yet accepted by the payer.

Notification to a non-network pharmacy (440.8)

Payers or their agents utilizing a DOC network must pay a non-network pharmacy bill —at state fee schedule — for the first received bill and notify the billing pharmacy, or their entity, that future bills for this claim will be denied.

We are adapting Optum DOC programs to ensure compliance with the adopted modifications, including ensuring that clients who use a DOC program in connection with our pharmacy bill review program pharmacies will receive the proper initial bill payment and warning. We will also reach out to clients regarding the ability of an injured worker to use a non-network pharmacy under the specific conditions outlined in the adopted changes. This may require implementing a streamlined communication process between our clients and Optum when legal challenges are filed.

Should you have any questions regarding the recently adopted New York regulations, please contact our Public Policy and Regulatory Affairs (PPRA) team at optumwc.policymatters@optum.com

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.

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