UR Nation End of Month Regulatory News Summary

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announcement-updated_4-1-15
CA AB 2046 Would Increase Information Sharing in Fraud Cases

California AB 2046, sponsored by Assemblyman Tom Daly, D-Anaheim, would beef up language in the current law that merely authorizes state agencies with information relating to possible workers’ compensation fraud to release details to another agency. The bill would require government agencies to release information when requested by another agency. The act would also require an insurer or licensed rating organization to notify the local district attorney’s office and the California Department of Insurance fraud division of suspected cases of workers’ compensation fraud.

We believe this would result in more cases of reported fraud and more provider suspensions. We also believe this will greatly expand the list of providers who will be suspended by CA-DWC from participating in the workers’ compensation system.

Florida SB 8 and Colorado SB 22 Would Limit Opioid Prescribing

Florida SB 8 would limit opioid prescribing for acute pain to a 3-day supply, unless the prescriber believes a 7-day supply is medically necessary. In those instances the prescriber would need to indicate medical necessity and document such in the patient’s medical record why a longer prescription is needed. Prescribers would also be required to check Florida’s PDMP. SB 8 passed the Senate Rules Committee 11-0 and now moves to the Senate floor. Both SB 8 and a similar measure, HB 21, have come under fire by orthopedic groups, including the Florida Orthopaedic Society. Fraser Cobbe, executive director of the Florida Orthopaedic Society, said “How do we deal with a patient who has pain on day eight?” He said that society members could live with 7-day limit with an option for extensions as long as there is no requirement to re-evaluate the patient in person after 7 days. He said this would increase costs and be impractical for injured workers in pain.

Colorado SB 22 would limit opioid prescribing for acute pain to a 7-day supply, but the prescriber could prescribe an additional seven days if the patient has not had an opioid prescription within the past year. Exceptions are included for situations such as chronic pain, end of life care and surgical cases. Dr. Tom Denberg, senior medical director at Colorado-based Pinnacol Assurance, supports SB 22 but describes it as “weak.” He said a provider could just write a 7-day prescription for opioids and then write another 7-day prescription, so the prescribing limit is actually 14 days.

Indiana Lawmakers Pass Formulary Bill

The Indiana House of Representatives voted 67-28 to adopt a workers’ comp drug formulary based on ODG. Once members of the House and Senate confer and work out differences between each chamber’s version of the bill SB 369 will head to Governor Eric Holcomb’s desk. If Gov. Holcomb approves SB 369, Indiana will join Texas, Kansas, Montana, North Dakota, Vermont, California, New York, Wyoming, Tennessee, Delaware, Ohio, Oklahoma and Washington in adopting a workers’ comp drug formulary.

One sticking point has been the reference to ODG written into the bill. Rep. Chuck Moseley, D-Portage, proposed deleting the reference to ODG and replacing it with the words “closed prescription drug formulary.” This would have given the Workers’ Compensation Board more leeway to choose which formulary would be right for the state. Rep. Matt Lehman, R-Berne, helped defeat Moseley’s amendment, saying (with respect to ODG) “it has worked” in other states, and “in the year and a half before the formulary is adopted … administrators are welcome to discuss other options.” You may recall that the formulary effective date is July 1, 2020, so there is indeed a lot of time to discuss other options.

Iowa Court of Appeals Rules Worker Entitled to Mechanical Hand and Realistic Looking Passive Hand

In the interesting case of Nestle USA v. Allen Connell, the Iowa Court of Appeals ruled that Allen Connell was entitled to both a functional mechanical hand and a realistic looking passive hand.

Allen Connell repaired machines at Nestle USA’s plant in Waverly Iowa. On Nov. 2, 2010, Connell was clearing a jam from a bag sealing machine. During the process of clearing the jam, the machine closed on his left hand. His hand was badly mutilated and he was rushed to the hospital and received several surgeries to his hand and shoulder. Unfortunately, he lost most of his left hand’s natural function.

A workers’ compensation commissioner awarded Connell both a functioning mechanical hand and a realistic looking passive hand.  One of the reasons the commissioner awarded both the mechanical hand as well as the realistic looking passive hand is because Connell could only wear the mechanical hand for about four hours before it started to irritate his skin. Nestle, however, took issue with this as Iowa Code Section 85.27 limits workers to one set of reasonable and necessary prosthetics. A second commissioner ruled that both a mechanical hand and realistic looking passive hand constituted a violation of Section 85.27.

However, the Court of Appeals overruled, stating that the concept behind Section 85.27 is that an injured worker should be entitled to a prosthetic that provides use for an entire day. In other words, the mechanical hand and realistic looking passive hand were essentially a single device, to be used interchangeably as needed during a 24-hour day.

National Council of Insurance Legislators Proposes New Model Law on Compounds and Physician Dispensing

The National Council of Insurance Legislators (NCOIL) is proposing a new model law that would address compounding and physician dispensing. The draft rules for the model law were made part of NCOIL’s agenda for discussion for its upcoming spring meeting in Atlanta, March 2-4.

Under the proposed model law, compounding would require a finding of physician-documented medical necessity, or utilization review of the compounded drugs. In addition, employers, insurers and TPAs would be able to restrict reimbursement of compounds to specific pharmacies within a designated network. Brian Allen, vice president of government affairs at Mitchell, said that the model law could be strengthened by including an explicit requirement that all compounded drugs require preauthorization.

Physician dispensing would be limited to initial “first fill” treatment and would only allow for a 7-day supply. Brian Allen said that time limits on physician dispensing is an approach that states are considering, and one that he supports.

If the NCOIL workers’ comp committee approves the model law, it would then go to the NCOIL executive committee for final adoption. From there, lawmakers in individual states could choose to adopt the proposal as is or make amendments. The idea is that the document would serve as a useful starting point for discussions.

Ohio BWC Reports Progress in Reducing Opioid Dependence

BWC Pharmacy Director Nick Trego reported to the Ohio Medical Services and Safety committee that the number of injured workers who were dependent on opioids fell to 3,315 at the end of fiscal 2017. This represents a 19 percent decrease from 2016, and a 59 percent decrease from 2011 levels. This marks the 6th year in a row that the number has fallen since the BWC adopted a drug formulary.

Trego said, “That means we have 4,714 fewer injured workers at risk for opioid addiction, overdose and death than we had in 2011. These numbers are the direct result of our efforts to improve our protocols, more closely monitor our opioid population and encourage best practices from our prescribers.” Trego also said that he expects opioid numbers to continue to fall in the years ahead as prescription protocols evolve and alternative pain therapies emerge.

In another encouraging sign, Trego reported that BWC’s total drug cost fell to $86 million in 2017, which is $47 million less than it was in 2011. hat includes $24 million less spent on opioids.

Pennsylvania Formulary Bill Fails by Three Votes

SB 936 came up three votes short in a 98-98 vote in the House of Representatives. It takes 101 votes to pass the House. Prior to this the bill had passed the Senate 34-16, largely along party lines, with Republican support. SB 936, sponsored by Sen. Donald C. White, R-Indiana, was expected by most to reach the needed 101 votes. This is because there are 121 Republicans in the House versus 82 Democrats. So there were 23 Republicans who voted against the bill or were absent during the voting process.

Reps. Rob Kauffman, R-Franklin and Ryan Mackenzie, R-Leigh/Berks immediately asked that the bill be reconsidered in March.  Kauffman said “It’s one of those things were truths didn’t necessarily win out in the legislative process. It was a lot of throwing one misnomer up against the wall and seeing if it sticks and then throw up another one.”

Kevin Shivers, executive director of the National Federation of Independent Businesses in Pennsylvania, said “The trial lawyers and personal injury attorneys ran the day with convincing but not factual arguments attacking this bill. This is a big disappointment.”

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.