A Healthesystems publication

Fall 2015

The State of the States



Physician Dispensing Legislation, Fee Reductions

In its first session this year, the House read legislation (HB31 & HB32) that would limit physician dispensing for workers’ compensation claims. The bills were referred to the Labor & Commerce and Judiciary Committees, but did not advance through the legislature. Both are eligible for carryover in 2016. In related news, the Medical Services Review Board (MSRC) recently published and later withdrew a rule proposal that would make deep cuts to provider and pharmacy reimbursement starting in 2016. The MSRC conducted a hearing and publically indicated they will be moving forward with a fee reduction for all providers in 2016 independent of the rules process.


Evidence-based Medicine Rule Development Faces Delays

The Arizona Industrial Commission Workers’ Compensation Advisory Board indicated its intent to promulgate rules on evidence-based medicine starting with pain management and opioid prescribing. The Commission recently published a report that it would work with payers to implement a pilot program; however, there was a lack of consensus regarding how the preauthorization process might work in the pilot and those efforts have been put aside pending future rulemaking. Recent leadership changes at the Commission may contribute to delays in rule development.


Working Towards a Closed Formulary

The Division of Workers’ Compensation (DWC) has been very active in recent months, with Home Health and Interpreter Fee Schedule drafts and Medical Treatment Utilization Schedule updates that would impact how physicians treat chronic pain patients. The DWC also adopted its Implementation Guide for Medical Bill Payment Records version 2.0, which become effective date on April 6, 2016.

In addition, the DWC has been preparing to implement a closed formulary under the mandate created by 2015 Assembly Bill 1124. Regulators have begun to outline a plan for implementation of a drug formulary that would include regular updates and involve a committee of medical professionals who would oversee the update process. A stakeholder meeting in early September drew a large crowd, many of whom were vocal as to the benefits and potential pitfalls of formularies. Healthesystems Regulatory Affairs and Clinical staff have been directly engaged in these efforts and are advocating for rules that would deliver the most appropriate and timely medical care to the injured worker. A formulary is expected to be implemented by June 2017.


Coverage Required for Opioid Antagonists

The Department of Labor and Employment, Division of Workers’ Compensation has adopted amendments to Rule 16 & 18 dealing with Utilizations Standards and Medical Billing. The new rules require carriers to provide coverage for opioid antagonist products when a worker is at risk for accidental overdose, in accordance with recent statewide health policy changes. The Rules also incorporate updates to opioid prescribing guidance and clarification of billing requirements for compounded drugs and repackaged drugs. The new rules are effective on January 1, 2016.


Fee Schedule Changes

Connecticut Workers’ Compensation Agency (WCA) adopted changes to its Official Connecticut Practitioner Fee Schedule effective for medical services rendered on or after July 15, 2015. The fees payable to healthcare providers authorized or permitted to render care under Connecticut Workers’ Compensation Act are effective on this date regardless of the date of injury. The 2015 Fee Schedule includes revisions of reimbursement rules for durable medical equipment (DME) and radiology services, among others, and became effective April 1, 2015.


Clarifying the "Controlled Substance Provider" Designation

The Florida Department of Health recently released a clarification statement regarding the controlled substance prescriber designation on its website list of practitioner’s profiles. The "controlled substance provider" designation is not required in order for pharmacists to fill the practitioner’s controlled substance prescriptions.

Because pharmacists use their professional judgement in deciding to fill or not fill a prescription, some consumers have complained they been turned away when they presented a prescription from a physician who did not have a controlled substance designation on their Department of Health Physician Profile. This special designation is reserved for practitioners who specialize in the treatment of chronic, nonmalignant pain. The requirement, which is applicable under Florida Statute Section 456.44, has been incorrectly interpreted by some pharmacies that have declined to fill controlled substance prescriptions from doctors who do not have the designation. The Board of Health statement was intended to stop pharmacists from turning patients away when there is a legitimate need for pain medications.


Closed Formulary Bill Does Not Advance

Earlier this year SB256 was proposed, which would have required the Director of the Office of Workers’ Compensation (OWC) to develop, oversee, and update a closed formulary. The Director would appoint a panel by September 1, 2015 to develop a formulary, which would include Y or N drugs. Due to a lack of consensus from the stakeholder community, the bill failed to advance, but the Director has begun the process of developing rules that would implement the same concept by rule. The OWC is also in the process of updating three chapters of its medical treatment guidelines, including the chapter on chronic pain.


New E-billing Protocols

In May, the Minnesota governor signed HF 2193 into law, enacting new electronic billing (e-billing) protocols for workers’ compensation under Minn. Stat. § 176.135 7A. The new requirements are for carriers and self-insured payers to post clearinghouse information on their websites. The law change was the result of feedback by providers who complained that they were unable to adhere to mandatory e-billing requirements without knowing which clearinghouse each insurer was using to accept e-bills on their behalf. In other news, the Department of Labor updated their Chronic Pain Guidelines, with an effective date of July 1, 2015. The updated guidance has information for prescribers as to how they shall screen patients for chronic pain and perform random drug testing, as well as a plan for weaning when trials of pain medication do not deliver functional gains as expected.


Tightening Controls on Physician Dispensing

Senate Bill 231 revised the payment timeframes for medical bills and established controls for physician-dispensed drugs. The bill limits the day supply that physicians can dispense for Schedule II and III controlled substance to 15 days. Senate Bill 231 was signed by the governor on May 27, 2015, and becomes effective on January 1, 2016.

New Mexico

Reimbursement Required for Medical Marijuana

A recent fee schedule proposal published by the state requires insurers to reimburse injured workers for medical marijuana when used for treatment of their workers’ compensation claims when prescribed for an approved condition. This is the first state to recommend medical marijuana as an approved treatment based on a court decision earlier this year. However, there are many issues with this proposal and it is undetermined if the language will be approved in the final version of the fee schedule, since there are many regulatory and political hurdles that need to be overcome prior to this rule being implemented. The new fee schedule is expected to be published and become effective by January 1, 2016.

North Carolina

Bill Provisions to Reduce Pharmaceutical Costs, Preserve Access

The state’s budget bill contained provisions that will require the Industrial Commission to study how a drug formulary could impact the workers’ compensation system. The bill also included restrictions on physician dispensing, specifically Schedule IV and V medications. These changes are expected to drive down pharmaceutical costs while preserving injured workers’ ability to access appropriate medications though the pharmacy of their choice.


Upcoming ODG Implementation

The Division of Workers’ Compensation has begun rule development to implement the Official Disability Guidelines (ODG) as the standard of care effective January 1, 2016. They have also proposed the implementation of the ODG closed formulary with a proposed effective date July 1, 2016 for claims with dates of accident as of January 1, 2016. A public hearing was conducted on August 25, 2015 and Healthesystems participated by providing input to Division staff along with other interested stakeholders.


New Medical Fee and E-billing Requirements

New legislation requires the state to develop medical fee schedules and prepare for electronic billing requirements. The new law will require payers and providers to exchange billing, claims, case management, health records, and all supporting documentation according to IAIABC-adopted standards. The Commission must establish a schedule for rules implementation by January 1, 2016. Fee schedule development meetings are taking place with many stakeholders presenting information to the Commission with several stakeholders proposing adoption of Medicare-based fee schedules. Healthesystems staff is participating in the process and anticipate rules proposals to be submitted prior to the end of 2015.


Healthesystems Is Ready for ICD-10 – Are You?

The month of October marked a significant milestone for the U.S. healthcare industry. As of October 1, 2015, all HIPAA-covered entities are required to begin using ICD-10 diagnosis coding as mandated by the U.S. Department of Health and Human Services. Because the vast majority of medical providers are subject to HIPAA, state workers’ compensation systems in about half the country were already aligned with the federal mandate prior to the October 1 deadline. More information about ICD-10 is available at http://www.cms.gov/Medicare/Coding/ICD10/Latest_News.html



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