UR Nation End of Month Regulatory News Summary

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announcement-updated_4-1-15
Louisiana Formulary Bill HB 592

Louisiana Rep. Kirk Talbot, R-River Ridge, has been promoting HB 592, which is a workers’ comp drug formulary based on ODG. The bill has passed the Labor and Industrial Relations Committee and House of Representatives. In the House, it passed 58-36, with six Democrats joining all but two Republicans. But even if HB 592 passes the Senate it still faces Democratic Gov. John Bel Edwards. And Gov. Edwards has said he plans to veto it.

Mark Pew, senior vice president at Prium, said “The more relevant point is that Gov. Edwards is a plaintiff’s attorney. So will he vote with his peers who have demonstrated a desire to maintain the status quo in Louisiana, or will he look at the evidence and decide that HB 592 should be the law of the land because we need to utilize all the potential tools at our disposal?”

After the bill passed the Labor and Industrial Relations Committee, Rep. Talbot said, “I think we’ve demonstrated to the majority of the committee that we’re going after a nationwide formulary that has data and results, and proven results, behind this. We’re not the first one trailblazing this formulary. There are other states that have done it.”

In addition to a likely veto by Gov. Edwards, another issue is that the Louisiana 2017 legislative session ends June 8.

AL Circuit Court Judge Declared AL Workers’ Comp Statute Unconstitutional

Alabama Jefferson County Circuit Court Judge Pat Ballard declared the entire Alabama workers’ comp system unconstitutional. Judge Ballard heard the case of Clower v. CVS Caremark Corporation. He took offense to the attorney fees cap and permanent partial disability benefits provision. He said that the law was “arbitrary, capricious, irrational” and “a clear violation of equal protection of the laws” under the U.S. Constitution. However, Judge Ballard also stayed enforcement of his order for 120 days in order to give lawmakers a chance to cure the “deficiencies he identified.”

But recently Judge Ballard stayed his own order which declared the entire Alabama workers’ comp system unconstitutional, and made the stay indefinite. Judge Ballard said that the Alabama Legislature needed more time as the current legislative session is closed. It effectively means system participants in Alabama can stand down from worrying that the Alabama workers’ comp system will come to a grinding halt.

Nebraska Resolution 168 Formulary Committee

While legislation to adopt a Nebraska workers’ compensation drug formulary appears dead, a committee of lawmakers may study the issue before the start of the 2018 legislative session. Resolution 168 has been referred to an interim committee, and per Sen. John Lowe, will study how a formulary:

  • Can affect or impact the opioid problem
  • Can lead to more system efficiencies
  • Provide cost savings
  • Increase return-to-work rates

Sen. Lowe was the same person who introduced Legislative Bill 408 (which would have created an evidence-based drug formulary). The Business and Labor Committee held a hearing on the bill but never took a vote. The Nebraska Legislature is scheduled to adjourn on June 2.

CA DWC Likely to Delay Implementation of Formulary to 2018

CA DWC spokesman Peter Melton said recently that the agency plans to revise proposed rules after the most recent comment period and is seriously considering delaying the implementation date to January 1, 2018. Melton said, “The DWC does plan on revisions and a 15 day comment period and is actively considering adopting the formulary in the coming weeks but delaying the effective date to Jan. 1, 2018.”

This comes as no surprise as many people who testified during the May 1 public hearing in Oakland asked the division to consider pushing back the effective date of the proposed formulary until the start of the new year. Those testifying said the extension was needed in order to give everyone more time to come to grips with the new rules. While AB 1124 requires the division to adopt a formulary by July 1, commentators said the division could satisfy that requirement by adopting rules before the deadline and postponing the effective date by six months.

Mark Pew was one of the individuals who testified at the public hearing on May 1. He said, “I stand by the oral comments that I made in Oakland, and what I blogged about three times, which is July 1 isn’t a feasible date to roll it out if you literally don’t know what the rules are until one or two weeks prior to the deadline.”

CA Senate Health Committee Passed ‘Healthy California’

California’s SB 562 “Healthy California” single payer health plan just passed the California Senate Health Committee. The bill will now move to the Senate Appropriations Committee. If it passes, it will go to the Senate floor.

When thinking about “Healthy California” think ColoradoCare. You may recall that last year Colorado had a ballot initiative whereby Colorado voters were asked to vote on a single payer health care system for all Colorado citizens. The reason it was so significant for system participants is because it would have covered work place injuries. In other words, the medical portion of a workers’ comp claim would no longer be in the workers’ comp system. Instead it would have been handled just like any other non-work related health claim. You may recall as well that Colorado voters voted down ColoradoCare by a large margin.

California’s “Healthy California” is similar to ColoradoCare in that the bill says that a 9-member board would be charged with developing coverage for health care services currently covered under the workers’ comp system. In other words, the bill would likely cover the medical portion of a workers’ compensation claim. The single payer system would be funded by a 15 percent payroll tax on employers, along with the roughly $200 billion California gets from the federal government for Medicare, Medicaid and other programs. The idea is that employers would get an offset by no longer having to provide health coverage for employees. However, the total new spend required under the bill would be between $50 billion and $100 billion per year.

Mark Sektnan, president of the Association of California Insurance Companies (ACIC), said ACIC is part of a coalition in opposition to the bill. Sektnan said “The language on workers’ compensation is unclear and troubling.”

Joe Paduda, principal of Health Strategy Associates, said “If we were building a health care system from scratch it would make a lot of sense, but you cannot simply blow up 18% of the nation’s economy and start over.”

Alexander Acosta Sworn is as Labor Secretary

President Donald Trump’s pick for labor secretary, R. Alexander Acosta, was sworn in on the last day of April. The Senate confirmed Acosta by a 60-38 vote. Alexander Acosta is a former U.S. Attorney and member of the National Labor Relations Board (NLRB).

Mark Walls, vice president of communications and strategy at Safety National, said that Acosta is a well respected business leader who has a strong background dealing with labor issues as a member of the NLRB, interacting heavily with business and labor. Acosta is a Miami native born to Cuban immigrants and is Trump’s first Hispanic nominee.

CA Appropriations Committee Passed AB 44

The new version of AB 44 has passed the CA Assembly Fiscal Committee. As you may recall, Assemblywoman Eloise Reyes initially sponsored AB 44 to prohibit utilization review for those who suffered from a terrorist attack or were the victim of workplace violence. You may also recall that Ms. Reyes made claims that this was necessary because the victims of the San Bernardino terrorist attack had been unreasonably denied treatment via UR.

But two things happened that likely caused Ms. Reyes to make changes to the bill. First, A.D. George Parisotto looked into the matter and found that the overwhelming majority of requests for treatment were approved. In addition, the County of San Bernardino reviewed 775 requests for authorization and found that only 12 percent were denied by way of the utilization review process. And of those denied, 33 were reviewed by IMR, and IMR upheld 32 of the 33 requests. That’s an IMR uphold rate of 97 percent.

So with the new amended AB 44, instead of exempting treatment requests from utilization review, victims of terrorist attacks or workplace violence would be afforded “advocacy services for employees” to help them obtain medical treatment. Furthermore, AB 44 would only apply when the governor has declared a state of emergency related to a terrorist act.

Tom Swiatek

Tom Swiatek

As Assistant Vice President of Regulatory Services, General Counsel, and Editor in Chief of UR Nation, Tom Swiatek draws on his experience as an insurance attorney on both the general liability side, as well as on workers’ compensation matters. As a California Workers’ Compensation Section Member, Tom is leading the discussion with respect to the regulatory challenges and opportunities facing the workers’ compensation system.