Legislative Updates

Resources Legislative Updates

StateWatch Summer 2017

Posted by Genex on July 12, 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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The Department of Labor suspended an Occupational Safety and Health Administration (OSHA) rule that would’ve required certain businesses to electronically submit their worker injury data by July 1. The rule would’ve made the injury information available to the public, in a move OSHA has said would “nudge” employers to focus on safety. An OSHA spokeswoman quoted in a Washington Post article the delay was implemented to address employers’ “concerns about meeting their reporting obligations” in time. The new electronic reporting compliance date is Dec. 1.

Surgery may not always be the best option according to a report that questions the value of arthroscopy and knee replacement for some common conditions. Published in the BMJ (formerly the British Medical Journal), Washington State Department of Labor and Industries (L&I) authored-piece advises against knee arthroscopy in nearly all patients with arthritic knees, even if accompanied by a meniscus tear, or symptoms such as joint locking, pain or swelling. Knees are among the most common body part injured in workplace accidents, behind backs and shoulders, said Gary Franklin, MD, MPH, medical director for the Washington DOL. The department updated its medical treatment guideline last year to no longer cover arthroscopic debridement and lavage of an arthritic knee. The issue of arthroscopic knee surgery may be gaining importance as the workforce is aging, potentially bringing a greater severity of arthritis. Older workers tend to have more rotator cuff and knee injuries, according to a report on the aging workforce from the National Council on Compensation Insurance.

The increased use of network physicians to treat injured workers is a leading factor for why workers’ compensation medical costs throughout the country have moderated in recent years, according to a recent National Council on Compensation Insurance report.

The FDA has approved a generic version of Roxicodone tablets. Oxycodone hydrochloride is an immediate-release opioid analgesic indicated to manage pain severe enough to require an opioid analgesic and for which alternative treatment options are inadequate. This generic oxycodone hydrochloride product will be available in 5 mg, 10 mg, 15, mg, 20 mg, and 30 mg tablets and manufactured by Pharma Major Lupin Limited (Lupin).

The FDA also released a request of Endo Pharmaceuticals to voluntarily remove its reformulated Opana ER (oxymorphone hydrochloride extended-release tablets) from the market. The request follows an FDA advisory committee review of all available post-marketing data determining the routes of abuse of Opana ER have dramatically changed; shifting from nasal to injection. Such abuse has been associated with an increase in cases of HIV and hepatitis C, as well as a serious blood disorder, thrombotic microangiopathy, in certain populations. In response, Endo officials said they are “reviewing the request and evaluating the full range of potential options,” but maintains the product is safe and effective when taken as prescribed.



On May 8, an Alabama Circuit Court judge declared the state’s entire workers' comp system unconstitutional. Judge Pat Ballard of the 10th Judicial Circuit in Jefferson County took issue with two statutory provisions that cap attorney fees and permanent partial disability benefits – but because the Alabama Workers’ Compensation Act contains a non-severability clause, he tossed the entire act. Ballard stayed enforcement of his order for 120 days to give lawmakers a chance to cure the deficiencies he identified in Alabama Code Sections 25-5-68 and 25-5-90.


On June 15, Gov. Walker signed into law HB 132 declaring drivers for transportation network companies (TNC) such as Uber and Lyft are independent contractors and not entitled to workers’ compensation benefits. This bill also establishes the state as the only political entity allowed to regulate the transportation network industry.


Gov. Ducey recently signed HB 2410, adding heart disorders and 12 cancers to the list of firefighter ailments presumed to be work-related. The law is designed to make it easier for firefighters who sustain an injury to their heart, lungs or blood vessels to collect workers' compensation benefits. Claimants will no longer have to prove their "heart-related, perivascular or pulmonary injury or illness" was caused by their employment. instead, they will be deemed automatically eligible for those benefits, providing they meet certain criteria and their employer does not successfully challenge the ailment's connection to work.  Additionally, HB 2161, also signed by the governor, adds buccal cavity and pharynx cancer, esophagus cancer, kidney cancer, large intestine cancer, lung cancer, malignant myeloma and several other cancers to the list.

Also, a measure to incorporate the term "full and final settlement" into Arizona’s workers' compensation law has been approved. SB 1332, which Gov. Ducey signed May 8, defines the term as a written agreement between the employer/carrier and employee that involves the employer/carrier making a lump sum payment in exchange for the worker signing away his right to reopen the medical portion of the claim. Under current law, Arizona workers have a lifetime right to reopen a workers' comp claim, even after signing a settlement, if they need additional treatment. As of Oct. 31, workers will have the option of waiving the right to future medical care when settling a claim. The full and final settlement would require workers represented by attorneys to indicate they understand the consequences of entering such a settlement and that "monies received for future medical treatment associated with the industrial injury should be set aside to ensure that the costs of such treatment will be paid.” If a worker is not represented by counsel, an administrative law judge would determine whether the full and final settlement is fair to the worker. All full and final settlements must be approved by the Industrial Commission, which must consider the permanency of the worker's injury and whether it has stabilized, before signing off on the settlement.

Gov. Ducey also signed SB 1331, which allows the state to adopt a tiered rating system for workers’ compensation insurers. The new system gives carriers more flexibility when setting workers' compensation insurance rates. Under the new system, carriers can apply for six deviations. If NCCI and the Department of Insurance approve of the deviations, the carrier can sell plans at any one of six rates.


WATCHLIST: The state’s Workers’ Compensation Commission held a public hearing in May for new rules for a drug formulary, new dispute resolution for providers and pharmacists and rules for reviewing and prescribing opioids. The commission accepted comments on the proposed rule change through June 14. The rule is tentatively scheduled to become effective for new claims filed after Sept. 1.


At the request of stakeholders, the California Division of Workers’ Compensation (DWC) has agreed to delay its new drug formulary to Jan. 1, 2018. According to WorkCompCentral, several stakeholders who commented to regulators on California’s proposed drug formulary said they need more time to adopt the new rules.

The California Department of Industrial Relations (DIR) has adopted new process standards for refineries aimed at preventing major accidents. The department called the new rule a “landmark regulation” that will strengthen workplace safety and health at oil refineries across the state. The DIR said it submitted the rules to the California Office of Administrative Law, which until Aug. 3 to review and approve it.

WATCHLIST: A bill that would create a single-payer health care system in California — potentially including coverage of workers’ comp medical expenses — would result in costs of about $400 billion a year, according to a recently released fiscal analysis. SB 562 proposes a universal health care system in which Californians would be covered for all medical care without co-pays or deductibles. Patients would not be restricted to networks in choosing a doctor, and wouldn’t need a referral to see a provider. Covered treatment would include inpatient, outpatient, emergency care, dental, vision, mental health and nursing home care. Under the bill, physicians and registered nurses would be free to override clinical practice guidelines “if, in their professional judgment, it is in the best interest of the patient and consistent with the patient’s wishes,” according to the bill's language. The so-called "Healthy California" program would be governed by a nine-member, unpaid board appointed by the governor and legislature, and a public advisory committee of doctors, nurses, other health care providers and consumers.       


On June 5, Gov. Hickenlooper signed into law bills that will create an Uninsured Employers Fund, and allow workers to be compensated for post-traumatic stress disorder and other mental impairments. HB 1119 will use penalties charged to companies illegally operating without workers’ compensation coverage to create a fund to provide benefits for workers whose employers were uninsured. The bill also revamps the process for the Division of Workers’ Compensation to penalize uninsured employers and requires the division to assess a minimum penalty of $250 per day when an employer faces a second charge of operating without insurance. But it also allows the division to accept a penalty of less than $250 after negotiating with the employer. The new rule also prohibits the division from charging penalties for violations that occurred more than three years before notifying an employer it did not have mandated coverage. Another signed bill, HB 1229, eliminates a statute limiting compensability for post-traumatic stress disorder (PTSD) claims to events not related to a worker’s typical job responsibilities. Supporters said the law will make it easier for police and other first responders to be compensated for PTSD.


Gov. Scott signed HB 1007, which requires all Florida insurers to maintain anti-fraud units (or contract for such services) and submit anti-fraud plans to state regulators by Dec. 31. It requires each insurer to designate one employee to implement HB 1007's requirements. The bill also tasks the Division of Investigative and Forensic Services with creating a report on the best practices for fighting insurance fraud by Dec. 31, 2018. The new law takes effect Sept. 1.


The Idaho Industrial Commission adopted emergency rules that delay until November an electronic data interchange update that was slated for July 1. The emergency rules push back until Nov. 4 the date by which carriers, third-party administrators and self-insured employers must start submitting claims data using EDI Claims Release 3.0.The commission decided on the delay after system users requested more time for testing and implementation.


On June 12, Gov. Edwards signed three pieces of legislation aimed at curbing Louisiana’s opioid epidemic. HB 192, which takes effect Aug. 1, will limit to a seven-day supply first-time opioid prescriptions to outpatients treating for acute pain. Exceptions would be allowed when determined to be medically necessary. The law will require doctors to explain to patients the risks associated with opioids and give them the option to be prescribed a smaller quantity. HB 490 will require the Drug Policy Board to establish an advisory council on heroin and opioid prevention and education. Under SB 55, adds continuing education requirements for physicians involved in controlled substance prescribing and addiction treatment. It will also require prescribers to check the prescription drug monitoring program before initially prescribing any opioid, or if the patient's course of treatment continues for more than 90 days.

WATCHLIST: HB 592, which would have established a workers’ comp drug formulary based on the Official Disability Guidelines, failed to attract the support of the Louisiana Senate committee before adjournment and wasn’t passed.


The Maryland Workers' Compensation Commission announced that injured workers can now submit a first report of injury form online. The online application allows workers the option to save their work and return later and sign the form with their mouse, if using a computer, or finger, if using a touch-screen device. Attorneys can access the form by logging in using their web-enacted file management system (WFMS) credentials.

In other news, Gov. Hogan signed SB 72 which creates a tiered rating system for workers' compensation carriers.


On June 12, the Department of Industrial Accidents announced the launch of its two-year pilot program to address the opioid crisis by giving stakeholders quicker access to medical professionals to make treatment decisions. The Opioid Alternative Treatment Pathway (OATP) is voluntary and will be available only when the injured worker has executed an approved lump-sum settlement but continues using opioids. Either the insurer or injured worker or his or her legal representative can trigger a request to participate in the program, which can be accessed through new online forms 110A and 108A. If both parties agree to participate, the insurer incurs the cost of the program, including alternative medical treatments for the injured worker as well as all referral fees.


The Mississippi Workers’ Compensation Commission has adopted an amendment to its 2017 fee schedule. The 15-page “Guidelines for the Prescription of Opiates” states there is insufficient data to show that the long-term use of opioids is an effective treatment for chronic nonmalignant pain and that such use presents serious risks.


Assembly Bill 12, which requires independent adjusters and those working for third-party administrators be licensed from the Division of Insurance before handling claims, was approved by Gov. Sandoval. The only exception is for salaried employees of an insurance company. These “company adjusters,” would be allowed to obtain a license but would not be required to do so. To obtain a license, adjusters must pass a background test as well as a licensing exam. Adjusters would need to accumulate 24 hours of continuing education credits every three years to be eligible for renewal.


WATCHLIST: A bill introduced May 18 would allow employers to refuse to pay for compounded drugs that have not been approved by the FDA. SB 6436 would also allow claimants to fill workers' compensation prescriptions at any licensed in-state pharmacy. Per the bill, employers must pay for those prescriptions as long as; 1) the worker fills them at a licensed in-state pharmacy and; 2) the prescription is not for a compounded drug that does not have FDA approval. If the worker fills the prescription at an out-of-state pharmacy, or if the prescription is for an unapproved compounded drug, "the employer or carrier shall have the right to deny any charges," the bill states. Under current law, employers can compel workers to fill prescriptions at a specific pharmacy. Under SB 6436, employers could merely "encourage" a worker to fill his prescription at a specific pharmacy.


Workforce Safety & Insurance (WSI) has revised five utilization review forms and is requiring providers to begin using them immediately. The revisions include general formatting and language changes, and a conversion to a user-friendly PDF version. The forms include Independent Exercise Form (C59a); Work Hardening/Conditioning Form (C59b); Utilization Review Request Form (UR-C), which includes revisions to Section 7, Injection Request, and Section 8, Therapy Request; Utilization Review Chiropractor Request Form (UT-Chiro), which includes changes to Section 3, Acute and Sub-acute Care, and Section 4, Palliative Care; and Medical Service Dispute Resolution Request Form (M2). WSI will return any forms not completed in their entirety, the agency said. For more information, call 888-777-5871.

Regulators have posted amended rules of procedure for the North Dakota Workers' Compensation Act relating to power mobility devices, physical therapy assistants, certified occupational therapy assistants and certified athletic trainers. The new rules, which took effect July 1, also amend attorney requirements, mileage and per diem for travel, rehabilitation services, definitions, medical necessity justifications, motor vehicle purchases, home modifications, who may be reimbursed, treatment requiring authorization, and costs of record copying.


WATCHLIST: The Bureau of Workers’ Compensation (BWC) is proposing several changes to its outpatient drug formulary, Rule 4123-6-21.3. Among the medications proposed for deletion from the formulary on Oct. 1 are all forms of alprazolam, fluoxetine tablets, Opana ER, Pexeva (paroxetine mesylate) and menthol 5% pads, and methyl salicylate liquid. Proposed formulary additions are Onfi (clobazam), all anti-diabetic medications, oral inhalation respiratory medications, Entresto, Xiidra and several over-the-counter topical analgesics. Medications with proposed changes in coverage include Marinol (dronabinol), which is used for nausea and vomiting, and would require preauthorization documenting a previous trial and therapeutic failure with either promethazine, ondansetron or meclizine; Lyrica; erectile dysfunction medications such as Viagra and Cialis, which would be limited to one product per month; and tiered coverage of medication used for the treatment of opioid-induced constipation. BWC also proposes the implementation of tiered coverage of topical medications containing lidocaine.


The Workers’ Compensation Commission posted a notice in the Oklahoma Register announcing all claim information must be submitted via electronic data interchange, effective Jan.1, 2018.


Gov. Brown recently signed into law a bill that would allow the Department of Consumer and Business Services to certify self-insurance programs created by intergovernmental agreements. HB 2816 addresses an issue dating back to 1985, when the Special Districts Association of Oregon created the Special Districts Insurance Service Trust through an intergovernmental agreement among its members.


On June 20, the Pennsylvania Supreme Court struck down the state’s impairment rating evaluation (IRE) process as unconstitutional. IREs had been governed by Section 306(a.2) of the Workers' Compensation Act, however, the justices, affirming an earlier decision by the Commonwealth Court, found the statute contained an impermissible delegation of legislative authority to the American Medical Association (AMA). According to both the High and Appeals courts, the problematic provision is the requirement that doctors use the “most recent” version of the AMA Guides for evaluating permanent impairment in worker disability ratings. As a result, the PA worker’s comp board has suspended all independent rating evaluations in reaction to the Supreme Court decision. The bureau sent a notice to stakeholders through its electronic claims filing system indicating that the agency will no longer designate physicians to perform IREs.


Gov. McMaster signed H3441 which allows payment of workers' compensation benefits by check or an electronic payment system. 


Texas A&M University, College Station, is conducting two surveys of Texas injured employees on behalf of the Department of Insurance’s Workers’ Compensation Research and Evaluation Group, and in support of the Biennial House Bill 7 Report and the Annual Network Report Card. The first survey will measure the impact of HB 7 on the Texas workers’ comp system, and the second will fulfill a major component of the Workers’ Compensation Health Care Network Report Card. The results of the survey will be reported in the Report Card, due Sept. 30. Approximately 4,000 injured employees will participate, but their names and answers will be kept confidential. They will be asked about access to medical care, satisfaction with medical care, and return-to-work and health outcomes.

While total pharmacy spend has dropped significantly, the cost of compounded drugs nearly doubled in Texas from 2010 to 2016, according to a new report by the Department of Insurance’s Workers’ Compensation Research and Evaluation Group. Pharmacy spending plummeted from $160 million in 2010 to $98 million last year, but compounded drug costs skyrocketed from $6 million to $11 million, with the average cost per prescription jumping 133 percent from $356 to $829, the report states. The authors of “Baseline Evaluation of the Utilization and Cost Patterns of Compounded Drugs” also determined the top five dispensing pharmacies based on number of prescriptions accounted for 86 percent of all compounded drugs dispensed last year — a 73 percent increase from 2010. Houston-area pharmacies alone accounted for two-thirds of all compounded drugs dispensed across the state, researchers said.

Recently signed SB 1494 is designed to rein in the overuse of work hardening and work conditioning by giving DWC discretion to require preapproval and concurrent review. The DWC has included these physical therapy services in a list of four research projects slated for fiscal 2017. The Workers’ Compensation Research and Evaluation Group will update its own 2003 study on the impact of accredited and non-accredited work-hardening and work-conditioning programs. Non-accredited facilities are required to be preauthorized as part of a “mandatory list” of treatment and services targeted by the Legislature in 2001 as part of a comprehensive reform package in House Bill 2600.

Another signed bill, HB 2060, removes the requirement that ombudsmen, who assist injured workers in navigating the claims system and answering non-legal questions, have “at least one year of demonstrated experience in the field of workers’ compensation.” The Office of Injured Employee Counsel sought the bill because it has had difficulty filling its ombudsman positions. Earlier this year, the OIEC had 17 ombudsman vacancies out of 95 positions.

Gov. Abbott also signed into law several workers’ compensation measures focusing on benefits for the state’s first responders.

Additionally, Gov. Abbott approved these new laws which focus on self-insurance in workers’ comp.

  • HB 1989 reduces the administrative burden on employers who withdraw from self-insurance by establishing such a purchase as an adequate workers’ compensation program for purposes of approval of the program by the commissioner before the authorized withdrawal.

The following recently passed laws focus on judicial and disciplinary actions in workers’ comp cases.

  • HB 451 waives immunity for public entities from lawsuits filed by first responders alleging employment discrimination in retaliation for filing workers’ compensation claims. The bill caps damages at $100,000 per person and $300,000 for each single occurrence.
  • SB 1895 requires the workers' compensation commissioner to consider additional factors before levying penalties for technical violations. It amends the Labor Code to require the commissioner to consider whether the violation has a negative impact on benefit delivery as well as the insurer’s compliance history with electronic data interchange requirements.
  • HB 2053 expands the purposes for which the DWC is required to maintain an investigation unit to conduct fraud probes. The law “authorizes the division to provide technical or litigation assistance to the authority to which the division refers persons involved in a case subject to an investigation for further investigation or the institution of appropriate proceedings.”

WATCHLIST: The Texas Division of Workers’ Compensation took a step toward closing a loophole in its drug formulary, proposing a rule that would require preauthorization for all prescription drugs created through compounding. Under current rules, preauthorization is not required for compound drugs that contain ingredients listed as “Y” drugs in the Official Disability Guidelines formulary. The DWC proposed to amend Sections 134.500, 134.530 and 134.540. of its rules to exclude compounded drugs from the “Y” list regardless of the ingredients used. 


Gov. Scott signed SB 56 designed to ease the process for employees filing for work-related mental conditions. The new law, which went into effect July 1, codifies a new standard for "mental-mental claims," also known as “workers' compensation claims for a mental injury or illness without a physical component.” The new standard holds that a claim arising from a work-related event or stress shall be compensable if the worker demonstrates that the event or stress was "extraordinary and unusual in comparison to pressures and tensions experienced by the average employee across all occupations." However, the event cannot be related to an employment action such as a job transfer or termination, unless the employment action was made in bad faith. SB 56 also codifies a presumption that first responders' post-traumatic stress disorder claims are related to work, so long as they file within three years of last working in these positions. 


Starting June 1, the state Department of Labor and Industry (L&I) has stopped covering artificial disc replacement (ADR) for degenerative disc disease (DDD), following the Health Technology Clinical Committee’s (HTCC) coverage determination. This ruling does not include cervical ADR, which remains a covered benefit with conditions. Additionally, L&I has adopted HTTC’s coverage determination to not cover pharmacogenomic testing for selected psychiatric conditions. This decision became effective July 1.

L&I has also recently adopted revised guidelines for treating carpal tunnel syndrome. The guidelines went into effect July 1.


Gov. Justice recently signed legislation allowing employers to drug-test employees at will and fire them if they refuse to submit. Under HB 2857, if an injured worker tests positive for drugs or alcohol or refuses to submit to a test, he forfeits workers' compensation indemnity and unemployment benefits. The bill’s language, which will be written into state statute July 7, specifies that testing "need not be limited to circumstances where there are indications of individual, job-related impairment" and can occur for virtually any reason. Employers can now order testing if they have distributed a written policy to all employees and abide by certain state-mandated testing criteria. 


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