UR Nation End of Month Regulatory News Summary

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As the month draws to a close here are a few of the more significant regulatory news stories from June.

Louisiana Court of Appeal Vacates Judge Johnson’s Injunction of the Louisiana Review Process

Last year, Judge Donald Johnson issued an injunction that declared the state workers’ comp review process unconstitutional. Specifically, Judge Johnson said the state was prohibited from using the regulations that established the system for administrative determinations using the Form 1009. Judge Johnson’s position was that the state scheme was a violation of the separation of powers doctrine.

Many insurance industry stakeholders, and the Louisiana Workforce Commission, were troubled by this ruling. But Judge Johnson stayed the imposition of his ruling so the Louisiana Workforce Commission could appeal the decision. The case was first appealed to the Supreme Court of Louisiana. They said that the case should have been appealed to the Louisiana Court of Appeal first. So the Louisiana Workforce Commission appealed the case to the Court of Appeal.

The Court of Appeal struck Judge Johnson’s injunction. In its opinion, the court said Judge Johnson should not have issued the injunction. In this context, an injunction would be something used to “maintain the status quo.” Here, Judge Johnson used it to substantively change the work comp system.  Thus, the injunction was improper. The injunction was defective in other areas as well. For example, a Louisiana judge may not declare a state statute unconstitutional in the context of a summary proceeding like a preliminary injunction hearing. Such a ruling should only come on the heels of a fully briefed and argued law and motion hearing.

Arizona Governor Doug Ducey Signed SB 1283 Requiring Physicians to Check AZ’s PDMP

As expected, Gov. Doug Ducey signed SB 1283 which requires prescribers to check the state’s prescription drug monitoring program (PDMP) before prescribing opioids. However, prescribers do not have to start checking the drug monitoring database until October 2017. So far, it is unclear why there is such a long time leading up to the October of 2017 implementation date). Many believe this will give the PDMP extra time to ramp up for the increased volume.

A New Analysis by CWCI Shows IMR Decisions for Q1 of 2016 Yield Consistent results.

A new analysis by CWCI shows that through the first quarter of 2016 the number of IMR determinations, uphold rate, types of services reviewed, and the number of physicians generating a disproportionate share of IMRs, are all fairly consistent with 2015 numbers. Of the 40,742 IMRs for Q1, 88.8 percent of IMR physicians agreed with the UR physician. That result closely matches the 88.6 percent uphold rate in 2015. Also, nearly half of IMR requests in Q1 addressed prescription drugs, similar to 2015. Opioids and compound medications made up 40 percent of the Q1 prescription drug IMRs, similar to 2015. Beyond pharmaceuticals, the Q1 data shows requests for PT, DME and injections remain at the top of the list of disputed medical services, similar to 2015. Lastly, as in 2015, 10 percent of the providers (553) generated 76 percent of the IMR requests.

Arizona Has Officially Adopted ODG for Opioids and Chronic Pain

Arizona proposed a rule to adopt ODG (including the Formulary) for managing chronic pain, and opioids have officially received approval from the AZ Governor’s Regulatory Review Council. Approval from the Council is the last step in the rulemaking process and the effective date is set for 10/1/2016. The Arizona Industrial Commission implemented ODG for the management of chronic pain and the use of opioids after the Commission voted to adopt them back in May of 2014. At the time, the state was contemplating a process for non-mandatory preauthorization, but now the adoption is formally incorporated into rules. The adoption also provides guidelines for preauthorization when requested. According to the rule, preauthorization is not required under the Act, but a provider may ask for it.

CA Insurance Commissioner David Jones Approved a 5 Percent Decrease in the Advisory Pure Premium for CA Comp

Commissioner David Jones announced that he has approved a 5 percent rate cut in the pure premium rate to $2.30 per $100 of payroll. This is welcome news for California businesses. This follows a long string of rate cuts going back to January of 2015. In January 2015, the pure premium rate was $2.74 per $100 of payroll. That fell to $2.47 in mid-2015 and to $2.42 in January 2016. Jones wrote in his decision order, “We are now observing medical loss experience that appears to be consistent with anticipated projections regarding savings under Independent Medical Review.”

Mark Sektnan, president of the Association of California Insurance Companies, said “It is a significant decrease… it shows SB 863 reforms are working as expected.”

National Guideline Clearinghouse Dropped ODG

Mary Nix, health science administrator for AHRQ, said that when Work Comp Data institute last submitted their revised ODG guidelines, the guidelines fell short of the new requirements. Specifically, ODG submitted new versions of their guidelines without removing older versions; a practice not accepted by AHRQ.  Also, the new requirements require more evidence-based guideline detail.

Phil Denniston, President of Work Loss Data Institute, said that they decided to no longer submit ODG to the clearinghouse because the clearinghouse’s emphasis “seems to be shifting to academic guidelines.”  The new requirements are “counterproductive to successful guidelines in the marketplace.” Denniston said ODG is “considerably more rigorous” and ODG guidelines are “actually used in the real world.” He said that “we measure our success by proven patient outcomes, which benefit both injured workers and their employers. We are not beholden to any one medical specialty.”

Another interesting fact is that ODG was the last independent for-profit guideline that was still in the clearinghouse before its recent removal. Other for-profit medical treatment guidelines not in the clearinghouse include Hearst, Milliman, MCG, Zynx, McKesson, Interqual, Dynamed and UpToDate. ACOEM has not been included in the clearinghouse as they have not submitted their guidelines in fear that they would be giving their product away.

So far it does not appear that the states using ODG are overly concerned. Steve Nichols, of the Insurance Council of Texas, said he didn’t think delisting the ODG guidelines would have an impact in Texas.  He said that the ODG treatment guideline meets the mandate of the Texas Labor Code. In addition, he said it is “well-received by those who use it on a routine basis.” Melissa Vince, spokeswoman for the Ohio Bureau of Workers’ Comp said “We believe ODG will continue to meet our needs as a tool for utilization review.”

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.