A Healthesystems publication

Spring 2012

State of the States

Alabama Fee Schedule

The Alabama Department of Industrial Relations (DIR) increased the dispensing fee for both brand name and generic drugs. Additionally, DIR increased the rates for durable medical equipment and home health services in conjunction with the increase in the medical consumer price increase. Finally, the new fee schedule increased the rates for most non-emergency and ground transportation services, as well as the rates for air ambulance services. The aforementioned changes were effective as of January 1, 2012.


The Division of Workers’ Compensation has adjusted the ambulance services section of the official medical fee schedule (OMFS) to conform to changes in the Medicare payment system, as required by Labor Code section 5307.1. The effective date of the changes was March 1, 2012 for ambulance services. The adjustment incorporates the 2.4% ambulance inflation factor for 2012 as adopted by Medicare.


Maine’s fee schedule was updated and made effective on December 11, 2011. Notable changes include a more specific definition of durable medical equipment, as well as a change in the reimbursement methodology for DME. DME items are now reimbursed at the lesser of the providers’ cost plus 20% or $500. Providers will now be required to submit an invoice or proof of their cost for any DME item or supply greater than $100.


Beginning February 1, 2012, Nevada’s Workers’ Compensation Section has increased the pharmacy dispense fee, as well as rates for home health and other fee schedule services in conjunction with an overall 3% increase in all reimbursement rates. The adjustment to all fee schedule rates is tied to the medical consumer price index, as in prior years.


The Bureau of Workers’ Compensation has published new guidance for self insurers, effective as of January 1, 2012. These changes relate to reimbursement rules for repackaged drugs, which are now payable based upon the average wholesale price (AWP) of the original labeler. The BWC also implemented two new dispensing fees for compound drugs – one dispensing fee for sterile compound drugs and one dispensing fee for non-sterile compound drugs.

Oklahoma Fee Schedule

Oklahoma’s 2012 fee schedule became effective on January 1, 2012. There is new reimbursement language which addresses how repackaged and compounded medications are paid. Overall, medical reimbursement for DME products was reduced across the board, and is now payable based upon the lesser of the provider’s usual and customary charges or 90% of Medicare’s rate.

New York

New York’s Attorney General is pushing for expansion and enhancement of the state’s prescription drug monitoring program. I-STOP, which stands for Internet System for Tracking Over-Prescribing, would improve the current prescription drug monitoring program by creating an online, real-time reporting system that would require reporting by prescribers at the time the prescription is issued and by dispensers at the time the medication is dispensed. Furthermore, I-STOP would require health care practitioners to review a patient’s prescription history prior to issuing a prescription and would require pharmacists to review the system to ensure that the patient’s prescription is legitimate.


A bill introduced during the 2011 legislative session to cap the price of repackaged and compound drugs was carried over to the 2012 legislative session. House Bill 1243 would limit reimbursement for repackaged drugs to the fee schedule rate plus a markup and dispensing fee. For compound medications, HB 1243 would set reimbursement for each ingredient at the underlying drug code.


Arizona House Bill 2367 would add the state as an employer eligible for the state’s not yet active directed care, medical management pilot program. The pilot program allows employers or the employer’s insurance carrier to contract with providers to create a network in which injured workers must obtain care. The pilot program is an opportunity to determine if network contracts can provide for rates lower than the fee schedule rates and result in costs savings. Arizona’s legislature is also considering the implementation of medical treatment guidelines. House Bill 2365 would establish the American College of Occupational and Environmental Medicine (ACOEM) Treatment Guidelines as the standard for the treatment of injured workers in Arizona. For instances when the ACOEM guidelines do not address a particular treatment issues, HB 2365 also allows providers to use other national treatment guidelines.



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