Legislative Updates

Resources Legislative Updates

StateWatch Spring 2017

Posted by Genex on May 9, 2017

Keep current with new legislation and its potential effect on your organization. This regulatory update is for informational purposes only, and provides some key highlights on state initiatives that may impact the services Genex provides.

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Generic drugs approval by the FDA reached new heights last year, with more than 800 approvals or tentative approvals, the highest annual number ever, according to a report released by the federal agency’s Office of Generic Drugs. This could result in substantial savings for workers’ comp payers, since generics often cost less than non-generic medications prescribed to injured workers. Data from pharmacy benefit manager Optum has shown that a 1 percent increase in generic utilization results in a 2.9 percent reduction in spend, without reducing the effectiveness of injured workers’ drug therapy.

Montana and Utah legislatures are considering resolutions asking Congress to help them cap prices charged by air ambulance services. Proposals have also been introduced in North Dakota, Texas and New Mexico to prohibit the air carriers from billing patients when insurers don't pay the full tab. The proposed resolution in Montana states that out-of-state corporations have forced residents into bankruptcy, while Utah officials claim air ambulance companies often refuse to reveal their actual costs to insurers, which often results in reimbursement rejection leaving patients with debts amounting to "tens of thousands." The Airline Deregulation Act of 1978 prohibits states from enacting or enforcing laws governing a commercial air carrier’s prices, routes or services. The law has proven to be a cost driver for workers' comp carriers.



WATCHLIST: Recently introduced SB 89 would limit workers’ compensation benefits to claimants 65 and older and cut off medical benefits to claimants who don’t seek treatment for a period of four years or longer. Under the bill, employers’ liability for workers’ compensation claims would cease after 500 weeks or when a claimant reaches age 65.


WATCHLIST: Several WC bills were introduced in February. SB 1332, which the Senate passed unanimously on Feb. 23 would repeal a statute declaring that a worker who settles a claim waives the right to future medical care for “known conditions described in the agreement.” It would be replaced with a new provision defining a “full and final settlement” to be an agreement through which the worker waives the right to “any future entitlement to benefits on the claim,” including the right to change or reopen the claim in the future.

Under HB 2180 medical providers could be temporarily suspended from treating injured workers or fined up to $1,000 if they have a history of writing medical reports that are overturned. HB 2181, would eliminate the authority for employers to choose the provider to conduct the initial exam when police, highway patrol, sheriffs’ deputies and other peace officers are injured. In HB 2182, if three claims initially denied based on a medical report are overturned and found to be compensable during any two-year period, the doctor who wrote the report would be prohibited from serving as an attending physician for five years from the date of the most recent reversal.


Gov. Hutchinson recently signed HB 1262 which prevents employees fired for testing positive for drug and alcohol use to contest the results before the state Department of Labor. The law is scheduled to go in effect Aug. 18.


According to a January California Department of Public Health report, thousands of California workers were found to have elevated blood lead levels from 2012 to 2014, according to a report from the state Department of Public Health. The report examines data from the state’s Occupational Blood Lead Registry. Among the 38,440 workers who had a blood lead test recorded in the registry during the three-year period, 6,051 had elevated levels of lead, defined as 5 micrograms of lead per deciliter of blood or more. The Health Department noted that many businesses use lead in their operations but don’t regularly offer testing to employees, so the report might not reflect the full magnitude of elevated lead levels among the state’s workers.


The Workers’ Compensation Commission recently published comprehensive revisions to its opioid management protocols. The new guidelines incorporate a state law that limits initial prescriptions to seven-day supplies for adults, with some exceptions It also requires providers to explain the risks of addiction and overdose to patients who are prescribed opioids for the first time and they also must check the Physician Drug Monitoring Program before writing the first prescription. For a patient requiring prolonged use of opioids, prescribers must review the patient’s records in the Connecticut Prescription Monitoring and Reporting System at least once every 90 days. Before any surgery that will require more than a 72-hour supply of any controlled substance, the prescriber must check the patient’s records through the monitoring and reporting system. To ensure patient compliance, the opioid protocols indicate patients receiving opioids for chronic pain should have their urine tested at least twice or up to four times annually.


A state Supreme Court ruling that lifted attorney fee caps in workers’ comp cases will increase Florida employers’ costs by $1.3 billion, according to a recent report by the National Center for Policy Analysis. This includes an increase of $929 million in annual premiums for insured employers and $361 million in increased claims for self-insureds.

The Florida Supreme Court also recently declined to adopt the "Daubert" standard of admissibility for expert scientific testimony. The move could potentially create a schism between the procedural rules that govern the adjudication of workers' compensation cases and matters in the courts, officials said.

WATCHLIST: SB 1582 would overhaul Florida’s entire workers’ compensation rate-making process by converting it into a loss cost state, limiting defense attorney profits while possibly paving the way for higher claimants’ attorney fees. It would make sweeping changes capable of withstanding judicial review, and stabilize rates in the wake of two state Supreme Court decisions.


WATCHLIST: SB 12 is a 13-bill package proposing a series of tax changes, a reduced pension obligation and workers’ compensation reforms, among other changes. SB 12 would create a closed drug formulary, decrease medical fees by 10 percent to 15 percent and cap the maximum weekly compensation rate for permanent partial disabilities. It would also allow judges to deduct from new awards any disability caused by previous injuries, and add spinal injuries to the list of pre-existing conditions that can be apportioned. This bill contains provisions for utilization review changes beginning January 1, 2018.


Gov. Branstad recently signed a bill designed to reduce employers’ workers’ comp costs. House File 518 also limits legal fees, frees employers from liability for pre-existing disabilities and denies benefits to workers who test positive for drugs or alcohol. Under the new law, workers also will not be compensated for permanent partial disabilities if they are receiving benefits for permanent total disabilities; traveling employees can be offered light duty if the employer pays for any travel, lodging and meals; and PPD compensation would begin only when maximum medical improvement has been reached and the impairment rating can be determined.


WATCHLIST: HB 296, would significantly change the current workers’ compensation system. Among its initiatives, it would cap permanent partial disability medical benefits at 15 years from the date of injury or last exposure, terminate an employer’s obligation to pay any benefits in all claims when a worker reaches age 70 or four years after the date of injury, whichever is later; and create medical treatment guidelines and a drug formulary. The proposal would also reduce the interest rate from 12 percent to 6 percent that employers or carriers must pay injured workers if they delay benefits. It also limits to four years the time injured workers can reopen claims if their conditions worsen.


A recent decision in Barber v. Louisiana Workforce Commission (a constitutionality suit brought by a group of injured workers’ representatives and doctors against the state) resulted in a permanent injunction halting parts of the utilization review process under the Louisiana Medical Treatment Guidelines. Because of the ruling, the Workers’ Compensation Advisory Council has announced that the current treatment guidelines and medical appeals processes will remain in place for now, but the confusion surrounding the issue has left the notices of intent in limbo.

WATCHLIST: Two bills would create new formularies in the state’s workers’ comp system. Authors of HB 529 hope to adopt a new drug formulary within the current medical treatment guidelines with a tentative effective date of July 1, 2018. HB 592 is designed to implement a pharmacy formulary for all claims, new or legacy, with a tentative effective date of Jan. 1, 2018.


Gov. Hogan signed into law SB 426, which increases the cap on unpaid benefits from $45,000 to $65,000 to dependents of an injured worker who dies from causes unrelated to the claim. The governor also signed SB 32, which requires workers' compensation carriers who cancel a policy to file a copy of their cancellation notice with the Workers' Compensation Commission, was also signed by the governor. 


Gov. Christie signed into law SB 3, an opioid control bill that limits the initial opioid prescription for injured workers to a 5-day supply for acute pain. The governor stated that the legislation is the most stringent opioid timeframe imposed by any state legislative body in the country. Additionally, the law requires any opioid prescription for acute pain to be for the lowest effective dose and requires practitioners to document the claimant’s history and results using non-opioid medication and non-pharmacological pain management approaches and further document the claimant’s substance abuse history before prescribing a Schedule II controlled substance. The bill goes into effect May 16.

New Jersey also has a new auto insurance law that requires providers treating patients covered by personal injury protection to use the Uniform Pre-Service and Post-Service Appeal Forms to submit internal appeals to insurers. The state is also planning to update the NJ PIP Fee Schedule in the near future.


On April 3, Gov. Martinez signed SB 155 into law, which limits workers’ compensation temporary total disability and permanent partial disability benefits for injured workers who leave their current employers for another company or fail to accept a job offer. The new law takes effect July 1.


On April 9, Gov. Cuomo signed into law S2009/A3009, which amend the workers’ compensation law by  establishing a prescription drug formulary to be completed on or before Dec. 31. The new formulary will require a tiered list of preapproved, preferred drugs and non-preferred drugs that will require preauthorization.


WATCHLIST: HB 243/SB 175 were recently introduced and would require doctors to prescribe opioids electronically and would limit prescriptions to a five-day supply, among a lengthy list of proposed reforms. The bills call for a new reporting standards requirement for prescribers and pharmacies that include electronic prescriptions, investigations into the patient’s prescription history and, in some cases, documented rationale for prescribing. Noncompliance would carry civil penalties for pharmacies at up to $10,000 a year. The legislation also calls for prescriber audits.


The Oklahoma Workers' Compensation Commission announced that beginning January 1, 2018, electronic filing of first report of injury (FROI) and subsequent report of injury (SROI) will become mandatory. Electronic reporting will be through Electronic Data Interchange (EDI) transactions using the Claims 3.0 reporting standards adopted by the International Association of Industrial Accident Boards and Commissions (IAIABC).

WATCHLIST: In February, lawmakers proposed 23 workers’ compensation bills, including one that would review the opt-out provisions. Another, HB 2242, which focuses on workers’ comp coverage for subcontractors, is among three bills that have passed the House and are now being considered by the Senate.


WATCHLIST: HB 18 would fast-track adoption of a closed drug formulary, but some regulators say that while they support the concept, the proposed legislation is light on specifics. The bill would direct the state Department of Labor & Industry to select a nationally recognized, evidence-based formulary for the state workers' compensation system. On Jan. 31, Gov. Tom Wolf announced his proposed fiscal 2018 budget, which will include $10 million to provide the overdose-reverse drug Naloxone to first responders. Pennsylvania had 3,264 opioid overdose deaths in 2015, the fifth highest in the nation per capita, per the CDC.

SB 520, a bill clarifying that the workers' compensation system is the exclusive remedy for injured workers, was recently re-introduced. This bill would add language to Pennsylvania's Workers' Compensation Act stating that an employer's "affiliate, holding company or subsidiary" shall not be exposed to third-party lawsuits.


WATCHLIST: HB 666/SB 297 would limit utilization review to those medical services costing more than $1,500 and require the employer to make three providers available to workers, from which the worker will choose a treating physician. The bill also changes the circumstances under which an employee can apply for increased benefits if he can't find a job or if his salary is lower than it was before the injury.


The Texas Division of Workers’ Compensation has revised several forms removing the requirement for Social Security numbers altogether or limiting it to the last four digits. The changes were made “to better protect confidential information and streamline processes,” according to officials.

The DWC has also recently approved a medical quality review audit plan for 2017 to examine the quality of designated doctor reports and the appropriateness of magnetic-resonance imaging scans. Division officials said the Medical Quality Review Panel will also assist with the Performance Based Oversight Assessment of Health Care Providers, which is the division’s annual “report card” measuring system participants. The panel will evaluate documentation of why an injured employee is prevented from returning to work as reported on DWC Form-073, Work Status Report. The medical case reviews are excluded from the medical quality review process.

WATCHLIST: SB 10 would require insurance companies to reimburse doctors for the costs of medical causation narrative reports in disputing the extent of a compensable injury or if the worker disagrees with the designated doctor’s opinion. Also noteworthy, HB 2345, would require utilization review agents to use only Texas-licensed physicians to conduct URs.


Gov. Herbert signed into law a bill that allows the state-chartered Workers’ Compensation Fund (WCF) to convert into a mutual corporation. SB 92 requires the WCF to file amended articles of incorporation with the Department of Insurance by the end of the year. The fund will retain all current assets and liabilities and will continue to serve the residual market during a transition period. The insurance commissioner must execute a new contract to serve the residual market by Dec. 31, 2020, and will be required to solicit bids from other carriers that might be interested in the contract, including the mutualized WCF.

The governor also signed two bills targeting opioid analgesic prescribing. HB 50 limits the number of days for which an opiate may be prescribed, while HB 90 requires workers' compensation insurers to implement policies to minimize the risk of prescribing certain controlled substances.


WATCHLIST: SB 5355 would require Labor & Industries to provide access to telemedicine and reimburse providers for health care services provided to injured workers through telemedicine under workers’ compensation claims.


Gov. Justice signed into law the West Virginia Medical Cannabis Act, making the state the 29th to legalize marijuana for medicinal purposes. SB 386 permits use of cannabis in pill or topical form but does not allow smoking or consumption of edible products. The law also stipulates that its use is for “serious medical conditions,” providing a lengthy list of such ailments as cancer, post-traumatic stress disorder and neurological conditions. To obtain medical marijuana, a patient needs to obtain a certificate from the Bureau for Public Health and an identification card to present to a dispensary and have a product filled for a 30-day supply with a prescription. The law also requires that dispensaries track prescriptions. Physicians who wish to prescribe are required to attend a training course, according to the law, which goes into effect July 1, 2019.

WATCHLIST: The state legislature will again consider SB48 and SB 59 which creates a rebuttable presumption that certain diseases arise from firefighters' work.


A bill that allows the Wyoming Workers’ Compensation Division to enter payment plans with employers to collect unpaid premiums and penalties was recently signed by Gov. Mead. HB 84 will allow installment payment plans in cases where payment in a lump sum “would cause severe inconvenience to the employer.” Payments could be spread out over a period of up to 12 months and employers would not be charged interest on unpaid premiums or penalties if they comply with terms of the payment plans.  The measure would also reduce the monthly interest rate the DWC charges for unpaid premiums 2 percent to 1 percent. HB 84 takes effect July 1.


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