A Healthesystems publication

Fall 2014

State of the States


North Carolina

On August 7, Governor Pat McCrory signed Senate Bill 744, changing the workers’ compensation landscape in North Carolina by implementing the state’s first workers’ compensation pharmacy fee schedule. The pharmacy fee schedule language was added to the state’s budget bill (Senate Bill 744) as a late amendment on July 30, shortly before the bill’s passage on August 2. The fee schedule caps payment for prescription drugs dispensed to injured workers at 95% of the Average Wholesale Price (AWP), calculated on a per-unit basis as of the date of dispensing. Payment for physician-dispensed drugs is also capped at 95% of the AWP set by the original manufacturer of the drug, as identified by its National Drug Code (NDC). Claims for physician-dispensed drugs that do not include the original manufacturer’s NDC are limited to 100% of the AWP of the least expensive clinically equivalent drug. In addition, the bill limits reimbursement for physician-dispensed Schedule II and Schedule III controlled substances to an initial five-day supply for each physician who treats the injured worker, beginning with the worker’s initial treatment following injury. The pharmacy fee schedule became effective on August 7, 2014.

The North Carolina Industrial Commission is working toward adopting rules that will make some clarifications regarding the fee schedule. Healthesystems has provided input for that process.

The full text of Senate Bill 744 may be viewed at http://www.ncga.state.nc.us/Sessions/2013/Bills/Senate/PDF/S744v9.pdf (see page 148 for the pharmacy fee schedule language).


In July, the Industrial Commission of Arizona (ICA) released for public comment a first draft of a rule outlining a process for utilizing medical treatment guidelines. The ICA is required to develop state-specific, evidence-based treatment guidelines by the end of 2014 in accordance with Arizona Revised Statute § 23-1062.03. The ICA has indicated that new treatment guidelines would be mandatory for treating chronic pain or using opioids and would otherwise identify care that is generally considered reasonable. Carriers and self-insured employers would be required to pay for treatment and services defined as reasonable under the treatment guidelines, and no preauthorization would be required to ensure payment for such treatment and services. Providers could seek preauthorization in cases where treatment or services deviate from or are not addressed in the adopted guidelines.

While the draft rule focused on process, the work is ongoing with the understanding that rulemaking will ultimately specify ODG treatment guidelines.

The ICA accepted public comments on the proposed treatment guidelines at a July 28, 2014 meeting, and on September 29, 2014, the Director’s Advisory Committee for Evidence Based Medical Treatment Guidelines met to discuss the guidelines as well. This committee was established in 2012 to make recommendations to the ICA with respect to the statutory requirements to establish evidence-based treatment guidelines for injured workers.

Healthesystems has been actively involved in discussions on the proposed guidelines and has provided comments to the ICA regarding potential impacts the treatment guidelines may have on injured worker treatment and pharmaceutical billing.


In early June, the Florida Division of Workers’ Compensation (DWC) proposed revisions to the workers’ compensation medical services billing, filing and reporting rule, 69L-7.710 F.A.C. The proposal rewrites and reorganizes the rule into five separate rules. The proposal includes specific billing instructions for repackaged drugs, clarifying the use and placement on billing forms of original and repackaged National Drug Codes (NDCs). It also adds new, and modifies existing Explanation of Bill Review Codes for use in describing reimbursement decisions involving repackaged drugs. Additional provisions of the proposed rule adopt the CMS-1500 version 02/12 billing form and the 2014 Medical EDI Implementation Guide, Revision F. The proposed Revision F retains and updates the DWC’s proprietary (non-standard) format for state reporting.

The DWC conducted a public rule development workshop on June 18, 2014; however, at present, no estimated timeframe for adoption of the revised rule is available.

The Notice of Development of Rulemaking and the proposed text may be viewed at https://www.flrules.org/gateway/View_Notice.asp?id=14637608.

Louisiana & West Virginia

With prescription drug abuse and overdose deaths on the rise, several states are trying to take control of the epidemic. West Virginia and Louisiana have taken legislative steps this year to reschedule certain opioids in order to help curb their use. West Virginia House Bill 4208 went into effect June 6, 2014, and moved hydrocodone from a Schedule III controlled substance to a Schedule II and tramadol from unscheduled status to a Schedule IV controlled substance. Louisiana’s Senate Bill 618, effective August 1, 2014, moved carisoprodol from a Schedule III controlled substance to a Schedule II. Both bills passed their respective legislatures without a single nay vote and were quickly signed by the states’ governors. The reclassification will provide tighter controls on hydrocodone and carisoprodol, as they are now required to adhere to federal and state-specific Schedule II restrictions that include a 30-day supply limit with no refills.

Tramadol’s entry into a low-tiered schedule means patients will be limited to five refills in a six-month prescription, and prescribers in West Virginia now are responsible for reporting prescribing and dispensing information for this drug to the state’s Prescription Drug Monitoring Program (PDMP).

In Louisiana, a prescriber is required to access the PDMP prior to initially prescribing any Schedule II controlled dangerous substance to a patient. The recent legislative action means that this requirement will now apply to carisoprodol.


Prescription drug abuse—specifically, abuse involving opioids—is a pervasive, multi-dimensional issue impacting individuals, families and communities, and it has become an epidemic in Tennessee. In order to combat this epidemic, Governor Bill Haslam introduced a plan this year to prevent and treat prescription drug abuse in the state. Referred to as “Prescription for Success: Statewide Strategies to Prevent and Treat the Prescription Drug Abuse Epidemic in Tennessee,” this program involves a number of different state agencies working together to reduce the misuse and abuse of prescription drugs. The strategic plan was developed by the Tennessee Department of Mental Health and Substance Abuse Services in collaboration with sister agencies impacted by the prescription drug epidemic. Numerous recommendations are provided in the plan, including the development and adoption of opioid treatment guidelines by the Department of Health, improved use of the state’s Controlled Substance Monitoring Database, and the passage of legislation enhancing laws governing pain management clinics. Other efforts to help curtail prescription drug abuse include prescriber and dispenser information sharing across state lines. The Department of Health is currently working with other states to create a prescription drug alliance in order to share prescriber and dispenser information from each state’s PDMP. Without information from other states’ PDMPs, it is impossible to get a full picture of the types of drugs that individuals are being prescribed.

Details can be viewed on the Tennessee Department of Mental Services and Substance Abuse Services website at http://tn.gov/mental/prescriptionforsuccess/Prescription%20For%20Success.pdf.


On June 10, 2014, the Oregon Workers’ Compensation Division (WCD) announced that it was pushing the July 1, 2014 effective date for the use of release 2.0 of the International Association of Industrial Accident Boards and Commissions (IAIABC) EDI rules for reporting medical bill payment records out to October 1, 2014. This was followed by a WCD announcement on August 4, 2014 that insurers would be required to report under EDI release 2.0 no later than January 1, 2015, and that the WCD would not impose civil penalties against insurers who did not meet the October 1 deadline until March 2015. Each of the changes in effective dates for the EDI Release 2.0 rules, as well as the postponement of penalties against insurers, were made to accommodate carriers who were still in the process of programming and testing their systems to use the new release.

Healthesystems’ efforts to implement EDI release 2.0 for Oregon medical bill payment reporting began in early 2013 and culminated on October 1, 2014, with the implementation of the systems necessary to report bills using the new requirements.



Table of Contents