A Healthesystems publication

Fall 2013

State of the States


Rhode Island

The Rhode Island Medical Advisory Board has adopted “Chronic Noninterventional, Non-Cancer Pain Protocols.”  The pain protocols, which are new, outline recommendations for evaluation and treatment procedures for the management of chronic, non-cancer pain in injured workers where the pain is not acute or acutely postoperative in nature.  The protocols recommend the use of assessment tools for evaluation of functionality and pain, patient education, pain contracts and drug screening.  The protocols also include discussion of classes of medications used to treat chronic pain, with a particular focus on opioids.  

In addition, the Medical Advisory Board revised the Pharmacy Protocol for the first time since 2001.  The Board amended the recommendations to limit the prescribing of opiates to 30 days and require physician-to-physician review when prescribing a brand name medication after therapeutic failure of the generic equivalent, when prescribing off-label use of a medication.


The Delaware Health Care Advisory Panel (Panel) voted unanimously to adopt revisions to pharmacy fee schedule regulations.  The revised regulation will decrease the pharmacy fee schedule and re-establish dispensing fees that have been absent from the Delaware fee schedule since 2008.  It will also limit reimbursement for repackaged drugs to the AWP of the underlying drug product while requiring reimbursement for compound drugs to be separately calculated using the NDC for each drug included in the compound. A new drug formulary, based on the Delaware Medical Assistance Program and classified by Preferred Agents and Non-Preferred Agents, was adopted and became effective September 11, 2013.  On October 10, 2013, the Office of Workers’ Compensation subsequently issued a communication clarifying use of the formulary, with a revised formulary and justification form dated October 2, 2013.

The formulary contains five categories of drugs, primarily focusing on narcotics. If a drug in one of the categories contained in the formulary is not listed in the formulary, then it is not allowed. As of September 11, 2013, Oxycontin, oxycodone extended release, Actiq and transmucosal fentanyl may only be used with prior written approval by the employer or carrier with one exception—an injured worker on a stable dose of Oxycontin prior to September 11, 2013, may continue to use this medication without prior authorization. In the October 10, 2013, communication, the OWC clarified that prior authorization is not required for any other drug and removed corresponding notations referencing prior authorization from the formulary.

When a drug listed as a Non-Preferred Agent in the formulary is prescribed, the physician (or authorized person) must complete the justification form designated by the OWC and the physician must document two Preferred Agent trials in the medical record. When a physician prescribes any brand name drug outside the five categories of drugs covered in the formulary, the justification form must be completed; however, no Preferred Agent trial is required. Instructions on the justification form direct the prescriber to give the completed form to the injured worker, along with the prescription; and the injured worker must give the justification form and prescription to the pharmacist. Upon receipt of a completed justification form, the pharmacist must dispense the non-preferred or brand name drug. If the pharmacy does not receive a justification form for brand name drugs not contained in the formulary, the pharmacist is required to substitute the generic equivalent.


The Minnesota legislature approved Senate SB 1234 containing the latest workers’ compensation reform efforts that were negotiated and agreed upon by the labor and business members of the Minnesota Workers’ Compensation Advisory Council.  Effective October 1, 2013, one of SB 1234’s provisions will amend Minnesota law by adding long-term use of opioids or other scheduled medications to alleviate intractable pain to the existing treatment standards list, as well as require the use of written contracts between the injured worker and health care provider who prescribes the medication. 

Additionally, SB 1234 will provide the Commissioner of Labor and Industry the authority to develop rules establishing standards and criteria for long-term opioid and scheduled pain medication use. The Department of Labor is already considering the adoption of rule amendments to the treatment parameters. As a result, a draft rule proposal governing long term use of opioid analgesics is available on the Department of Labor’s website, www.dli.mn.gov. The proposal would dictate which patients are eligible for long-term use of opioids and require the health care provider to identify any possible contraindications, establish a long-term treatment program, prepare and sign a written agreement between the patient and doctor and require consistent monitoring of the prescriptions. Further development of the proposed draft rule will be forthcoming.

New Hampshire

New Hampshire Governor Maggie Hassan signed New Hampshire Senate Bill 71 on June 28, 2013, requiring the establishment of a committee to study the use and misuse of prescription drugs in workers’ compensation cases.  The committee is charged with studying the extent of misuse and abuse of opiates and other prescription medications commonly abused by injured workers.  The committee will consider the direct and indirect social and economic costs of opioid misuse, as well as the effectiveness of other state laws.  The committee will also study whether the state should establish a closed formulary, interagency opioid dosing guidelines and pain treatment guidelines governing utilization.  In addition, the committee will contemplate enhancing the controlled drug prescription health and safety program. 

Legislators from both chambers will make up the committee membership.  Legislative recommendations made by the committee were due by November 1, 2013.  Healthesystems will monitor the development of these recommendations.


One of many proposals being considered by Wisconsin Workers’ Compensation Advisory Committee (WCAC) during the “agreed bill” process is a price cap on repackaged drugs.  The proposal provides language that will establish the reimbursement rate for repackaged drugs at the average wholesale price (AWP) set by the original manufacturer of the underlying drug, if it can be determined, or the AWP of the lowest cost, therapeutically-equivalent drug.  Alternatively, labor groups are proposing a more conservative price control, which is to apply the state’s current pharmacy fee schedule to repackaged drugs.  

Wisconsin handles workers’ compensation legislative changes differently than almost any other state in that the Advisory Council has an “agreed-bill process” in which labor and management representatives propose, consider and provide feedback regarding changes to the workers’ compensation law before those changes are submitted to the Legislature.  In order for any amendment to be accepted in the “agreed-bill process”, it must be approved unanimously by all voting members of the Council.  The process is designed to reach consensus before going to the Legislature, which traditionally approves the WCAC recommendations.  Therefore, the real efforts to enact repackaged drug reimbursement changes are with the WCAC.  With the help and collaboration of our clients and insurer advocacy groups, Healthesystems was a key contributor to the recommended proposed repack language addressed in the management proposal.  


According to statements by Kentucky Gov. Steve Beshear, the state’s landmark pill mill legislation (House Bill 1) has been a huge success in combating prescription drug abuse in the state since becoming law one year ago.   Gov. Beshear credits HB 1 with saving lives based on a decrease in the number of deaths blamed on prescription overdoses for the first time in ten years.  The legislation included multiple provisions to help prevent the abuse and diversion of prescription drugs:

  • It requires all prescribers to register with the Kentucky All Schedule Prescription Electronic Reporting System (KASPER), the state’s prescription monitoring system
  • It requires prescribers to access KASPER before issuing prescriptions.  
  • It requires medical licensure boards to investigate prescribing complaints immediately. 
  • It allows better coordination between health regulators and law enforcement to address abuse. 

The number of reports requested through KASPER more than tripled from almost 811,000 in 2011 to nearly 2.7 million in 2012 because of the requirement of HB 1 that all prescribers register with (KASPER), which tracks controlled substances dispensed in Kentucky.  With the increase in users and reports requested, prescribing trends have significantly changed.  Specifically, there has been a reduction for the first time in ten years in the number of prescriptions issued for the most heavily abused substances such as hydrocodone, oxycodone and alprazolam.

Another major impact of HB 1 is that 20 non-physician owned pain management facilities have been shut down.  Since the bill’s passage, many facilities have voluntarily closed their doors, and the Cabinet for Health and Family Services has issued “cease and desist” letters to another four non-compliant pain management facilities.

Even with the recent success, Kentucky is still actively working to reduce and prevent prescription drug abuse.  Over the next 12 months, the CHFS and University of Kentucky, under contract, will continue to evaluate HB 1’s effectiveness. The goal will be to measure the impact of the legislation on prescription drug abuse, develop additional recommendations and mitigate unintentional consequences.

Federal Law

Last year’s nationwide meningitis outbreak that was traced to contaminated compounded drugs from Massachusetts caused more than 700 illnesses and 55 deaths and triggered demands for stricter federal regulation.  In response, a bipartisan group of United States Senators introduced legislation to Congress (S. 959 - The Pharmaceutical Compounding Quality and Accountability Act) that would subject compounding manufacturers to extensive federal regulations.

The proposal establishes a clear distinction between traditional compounding, which would continue to be regulated by state pharmacy boards, and a new category of “compounding manufacturers” that make sterile products without, or in advance of, a prescription.  Additionally, S. 959 would only apply to compound manufacturers who sell compounds across state lines. This new legislation is believed to be needed because compounding manufacturers are not currently regulated by the FDA, but instead are regulated to varying degrees at the state level.  As a result, interstate compounding commerce often falls in the proverbial regulatory crack, as states are not assessing out-of-state manufacturers.  

To ensure that interstate compound manufacturing is consistently regulated, S. 959 would require these compounding manufacturers to register with the Food and Drug Administration (FDA), to disclose the registrant’s compounding products, and to comply with certain manufacturing processes.  The bill would also prohibit compounding of certain categories of drugs that the FDA considers unsafe.  By clarifying oversight of compounding practices, the bill would presumably help prevent another public health crisis and erase the confusion over who has responsibility to regulate compounding pharmacies.



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