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Policy Matters Brief – February 27, 2026

February 27, 2026 · Public Policy & Regulatory Affairs Team

In this issue of the Policy Matters Brief, we report on several states that introduced bills restricting or regulating the use of artificial intelligence (AI) in claims decisions. We also provide news on Arizona’s proposed medical fee schedule updates and California’s major utilization review rule changes. 

Additional state activity includes: 

  • Arizona, Florida, Georgia, and Hawaii legislatures advance bills on pharmacy direction of care, reimbursement changes, and pharmacy cost controls. 
  • Kansas and New Jersey consider medical marijuana coverage mandates. 
  • Massachusetts, Missouri, Nevada, Ohio, Oregon issue or propose updates to medical or pharmacy fee schedules and related rules. 
  • New York releases multiple bulletins on liability-free medication provision, mandatory electronic submissions, and upcoming regulatory revisions. 
  • Vermont expands PTSD workers’ compensation coverage to 911 communication personnel. 

Bills limiting AI introduced in multiple states

Several states have introduced bills requiring human review of claim denials or limiting the use of AI and automated systems in making benefit determinations. These include: 

  • Alabama – SB 63 
  • Florida – HB 527 
  • Georgia – SB 444 
  • Hawaii – HB 1787 
  • Iowa – Senate Study Bill 3118 
  • Oklahoma – HB 3675 
  • Virginia – SB 586 

Arizona updates

Industrial Commission fee schedule proposal

The Industrial Commission of Arizona has released proposed updates to the Physicians’ and Pharmaceutical Fee Schedule for public comment. This annual update includes: 

  • A newly developed dental fee schedule 
  • Additional updates across all medical service categories 
  • Comments due March 6, 2026

For more information, visit Arizona 2026/2027 Fee Schedule Proposals, Public Comments, and Hearing Transcripts. Stakeholders may send comments to: MRO@azica.gov.  

Arizona House Bill 2813 – pharmacy direction of care

An interesting piece of legislation currently working its way through the legislative process in Arizona is House Bill 2813, which proposes changes to workers’ compensation pharmacy processes and reimbursement. If passed, the bill would permit employers and insurers to direct injured workers to pharmacies within their established pharmacy networks. For more information, visit Bill History for HB2813. 

California updates

MTUS public hearing

The California Department of Workers Compensation (DWC) has scheduled a public hearing on February 27, 2026, regarding updates to Medical Treatment Utilization Schedule (MTUS) rules. These include: 

  • General approaches / initial treatment 
  • Eye disorders 
  • Chronic pain 

For more information, visit DWC Evidence-Based Updates to the Medical Treatment Utilization Schedule (MTUS). 

Updated Utilization Review Regulations adopted

The DWC has adopted longanticipated updates to the Utilization Review Regulations, effective April 1, 2026. 

The updated rules impact the provision of utilization review (UR) across the entire spectrum of medical care — from prospective to retrospective review. They also cover how payers, providers, and UR entities are to proceed with UR in the future.  

Regarding the delivery of pharmacy services, the updated UR rules now permit medical provider network (MPN) doctors to treat an injured worker (within the rules), with medications exempt from the MTUS Drug Formulary, without seeking prospective review during the first 30 days from the date of injury. 

Key changes include: 

  • Enforcement of UR plan accreditation requirements 
  • Allowing encrypted email or EDI submission of RFAs 
  • Revised rules on bill denials for prospective or retrospective review 
  • Updated consequences for UR non-compliance 
  • Allowing MPN physicians (under defined conditions) to prescribe medications exempt from the MTUS Drug Formulary during the first 30 days postinjury without prospective review 

Florida – Three-Member Panel Biennial Reports

The Florida Division of Workers’ Compensation (DWC) released its updated report on the Resolution of Medical Reimbursement and Utilization Disputes for FY 2024–2025. The report outlines reimbursement dispute trends and medical utilization patterns. In addition, the Workers’ Compensation Board (WCB) recently released bulletins related to the provision of care for injured workers. 

The Three-Member Panel Biennial Reports can be viewed on their website under the Workers’ Compensation Reports menu.

Georgia – pharmacy direction of care bill

Georgia House Bill 1119 proposes changes to reimbursement for certain medications (including OTC and topicals) and would allow employers and insurers to direct injured workers to pharmacies within their network. 

For more information, visit Georgia General Assembly - Legislation Search. 

Kansas – medical marijuana bill

Kansas House Bill 2678 would authorize cultivation, distribution, sale, and medical use of cannabis for 21 qualifying conditions, including chronic pain as an opioid alternative. For more information, visit HB 2678 | Bills and Resolutions | Kansas State Legislature. 

Massachusetts – fee schedule update

The Massachusetts Department of Industrial Accidents recently released an updated DMEPOS fee schedule effective March 1, 2025. The DIA fee schedule is tied to the state Medicaid fee schedule. For more information on the update, including updated reimbursement rates and codes, visit 101 CMR 322.00: Rates for Durable Medical Equipment, Oxygen and Respiratory Therapy Equipment. 

Nevada – 2026 fee schedule update

On February 1, the Nevada Division of Industrial Relations revised its annual Medical Providers Fee Schedule, with updates to: 

  • Medical service conversion factors 
  • Hospital reimbursement 
  • Coding and billing requirements 
  • Increased pharmacy dispensing fee 

For more information on the updated fee schedule, click here to view the document.

New Jersey – medical marijuana reimbursement bill

In New Jersey, the General Assembly is considering Bill A1023, which would require workers’ compensation, personal injury protection (PIP), and health insurance to cover medical cannabis in certain circumstances. For more information, visit New Jersey Legislature Bill A1023

New York – several rule updates

The New York Workers’ Compensation Board (WCB) recently released bulletins related to the provision of care for injured workers. 

Section 21a Amendment (Bulletin 0461787)

Allows payers to provide medical care and prescribed medications under the drug formulary for up to one year without admitting liability.  

Mandatory Electronic RFA2 Submission (Bulletin 0461800)

The WCB will no longer accept paper RFA2 (Request for Further Action by an Insurer/Employer) forms. Future forms are to be submitted to the WCB electronically via eCase. 

Fee Schedule Rulemaking (Bulletin 0461788)

The WCB intends to revise several fee schedules, including physical therapy, behavioral health, and podiatry. 

2026 Regulatory Agenda

This year’s agenda includes potential changes to DME and Medical Fee Schedules, formulary updates, and medical treatment guidelines revisions. 

Ohio – pharmacy fee schedule update

The Ohio Bureau of Workers’ Compensation (BWC) amended outpatient medication payment rules on February 16, 2026, including: 

  • Reducing nonsterile compound cap from $400 to $100 
  • Adjusting dispensing fees based on compounding time 

For more information, visit: Filings for Rule Number 4123-6-21.1  

Oregon – proposed rule amendments

On February 19, the Oregon Workers’ Compensation Division (WCD) proposed changes to medical fees and payments, interpreter services, managed care organizations (MCOs), and visual field loss impairment ratings. 

Vermont – PTSD coverage expansion for 911 personnel

Vermont Senate Bill 306 would extend workers’ compensation PTSD coverage to emergency communications personnel (for example, 911 call takers, dispatchers). The bill would: 

  • Classify these workers as “first responders in communications” 
  • Provide access to mental health support and training to maintain and enhance skills 
  • Establish a PTSD presumption for workers' compensation purposes 

If enacted, the bill would take effect this July 1, 2026.