A Healthesystems publication

Spring 2015

State of the States



Arizona’s workers’ compensation rules allow most injured workers their choice of medical provider with exceptions for employees of privately self-insured employers. In recent years the Industrial Commission has received numerous complaints that workers are being told they must obtain their care from a preferred provider or within the insurer’s network of providers. In response to these complaints, the Commission recently noticed all stakeholders with a firmly worded reminder of the current statutory requirements and penalties associated with any employer or carrier impairing the injured worker’s right to select their own provider. The notification also reminded carriers of the consequences associated with bad faith or unfair claims processing practices.

The Arizona legislature considered legislation on this issue earlier this year that would have increased the penalties for bad faith and unfair claim processing violations; however the bill did not have the necessary support to advance through the House and it died in committee. A copy of the Directors’ Notice to Community is available at www.ica.state.az.us/PublicNotices/DIRECTOR_NoticeToCommunityReDirectedCareFinal.pdf.


California’s Division of Workers’ Compensation (DWC) continues to roll out provisions of SB863, the major reform bill passed in 2012. Many of the provisions required by the bill have been adopted via rule change in the last two years, including how medical service and fee disputes are resolved, lien filing rules, improvements to medical provider networks (MPNs) and changes to medical providers’ professional service fees. Still outstanding are a number of provisions, including the adoption of fee schedules for home health services, interpreters and copy fees. Also on the DWC agenda in 2015 is the adoption of new medical state reporting rules and updates to medical treatment guidelines. The DWC has posted its schedule of rule status and next steps at www.dir.ca.gov/DWC/educonf22/DWC-Update/DWC-Update.pdf.


The Division of Workers’ Compensation updated their medical fee schedule and policy January 1, 2015. One of the provisions would require providers to obtain pre-approval from carriers before dispensing compounds and physician-dispensed medications. In addition, these medications when dispensed by the physician should be paid at no greater than the rate paid to a pharmacy.

New York

The Workers’ Compensation Board (WCB) is in the process of developing recommendations for a complete systems overhaul with the intent to increase efficiency and improve the delivery of benefits to injured workers. This effort, referred to as the Business Process Reengineering (BPR) project, began in late 2013 and since that time the Board has made good progress toward advancing its goals. The WCB has a website devoted to the BPR project (www.wcb.ny.gov/BPR/BPR_overview.jsp) with extensive information on the vision for the future state of workers’ compensation in New York and the benefits associated with the project. The WCB has also done extensive outreach to systems stakeholders with town-hall type meetings throughout the state in December 2014.

One of the first components of the BPR project is to develop a centralized medical portal which would replace many of the paper processes in place today. Though no formal draft has been developed and there are still many decisions to be made at the WCB, the medical portal is expected to accept provider requests for preauthorization of certain medical services, requests for treatment guideline variances, and could even include an option for providers to attach medical reports. Carriers would then be able to respond in the portal, which is intended to speed the delivery of care to the injured worker. Additionally, the medical portal is expected to be the central repository for medical billing and payment data, commonly referred to as EDI Medical Reporting.

The WCB has an advisory committee that meets regularly to review the project plan, share input from stakeholders and develop their formal recommendations. This project has great potential, but as with any major systems overhaul there are also risks and the committee needs to hear from the stakeholder community to better understand those risks. The WCB has received input from hundreds of stakeholders, including Healthesystems, and they confirmed in stakeholder meetings that they intend to remove inefficiencies rather than creating new burdens for the community. Read more at www.wcb.ny.gov/BPR/HeresWhatWeAreHearingMedicalPortalOutreach.pdf.

It is anticipated that draft requirements will be made available to stakeholders later in the year for public comment. In the meantime, comments and questions on this project can be directed to WCB Project Sponsor Brian Collins at K.Brian.Collins@wcb.ny.gov or to the entire BPR committee at BPR@wcb.ny.gov.


The Michigan Workers’ Compensation Agency (WCA) adopted changes to its Health Care Services Rules and Fee Schedule on December 26, 2014. The rule changes primarily impact prescribers and payers and are intended to control utilization and payment processes for compounded topical pain relievers, opioids, biologics and injections in the office setting. The new rules were developed with input from a broad range of stakeholders and took nearly a year to finalize. Healthesystems was integral to the rule development process and provided input directly to the WCA, which was ultimately incorporated into the final regulation. A copy of the complete rule is available at www.michigan.gov/documents/wca/14_rules_477175_7.pdf.


Vermont is considering a complete rule rewrite that will have a number of implications for carriers. One provision within the rewrite is a requirement for insurers to provide injured workers with a complete list of all approved medications, which would be updated based on changes in the treatment plan. Several stakeholders have voiced concerns over the practicality of providing an injured worker with a list of approved medications, which can change frequently over the course of the claim. There are unanswered questions as to how this would add benefit to the injured worker’s medical outcome, to offset the administrative burden it places on the carrier. The proposal is posted on the Vermont website at http://labor.vermont.gov/proposed-workers-compensation-rules. No implementation timeframe is available at this time.




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