OCTOBER 2016
The Regulatory Bulletin is a select compilation of workers' compensation legislative and regulatory changes that directly impact the client programs administered by Xerox's medical care and cost management solutions group.
 
National News
Department of Labor, DFEC, 
puts a contingency on compound medication use

Summary: 
The Department of Labor, Division of Federal Employee's Compensation (DFEC), has implemented a new policy addressing the use of compound medications. This policy will require medical providers treating injured workers to complete a Certification Letter of Medical Necessity prior to the authorization of compound medications and will only allow for a 90 day supply with refills for a 30 day supply. This policy went into effect October 2016 in the face of evidence acknowledging safety issues for users of compound medications.

Impact: 
We will be working with our pharmacy benefit management companies (PBMs) in obtaining Medical Necessity letters on compound medications prior to the utilization review process. Collaborative training will ensue for our clinical team in conjunction with our PBM partners.  

Source: 
 
State News
Arizona
Arizona adopts ODG formulary for chronic pain management
  
Summary: 
The Industrial Commission of Arizona recently signed into effect Article 13, Section R20-5-1303, on the use of the Official Disability Guidelines (ODG) as the evidence-based medicine standard for the management of chronic pain and the use of opioids for all stages of pain management. The guidelines are prospective for cases after Oct. 1, 2016. No preauthorization is required under the act to ensure payment for reasonably required medical treatment or services. While preauthorization is not required under the act, a medical provider may seek preauthorization.  

The Industrial Commission has identified a workflow supporting the medical provider's use of the MRO-1 form in submitting a preauthorization request. The medical provider will submit this form directly to the payer for a decision on their request. The payer may use this form to communicate their decision on the initial preauthorization request and/or the reconsideration request. This workflow will enable the prompt access to appropriate medication in the treatment of chronic pain.
 
Impact: 
We are strategically aligned to provide utilization review for our clients in a consultative role, completing first-level reviews on medical necessity and appropriateness of the medication as requested by the payer or our client.

Source:
California
WCIRB reports on patterns of drug dispensing for California Workers' Compensation


Summary: 
In a recent analysis of California's drug dispensing, the Workers' Compensation Insurance Rating Bureau (WCIRB) has released a report titled "Patterns of Drug Dispensing in California Workers Compensation." This report analyzed $500 million in workers' compensation pharmaceutical payments from July 2012 through December 2015. 

A summary of the WCRIB findings after analyzing the data from this time period are:
  • Drug payments made directly to dispensing physicians compared to pharmacies declined by 20% across all types of drugs. This trend was driven by a drop in the number of prescriptions per claim , which explained an overall drop in drug spending per claim.
  • Physicians received higher unit payments for specific types of opiate analgesics and stomach discomfort drugs when compared to equivalent medications available at pharmacies.
Impact: 
Our PharmaDX program addresses physician dispensing for our clients in all states; for those claims that have dedicated nurse case management, we provide a communication to the injured worker on physician dispensing. With continued efforts, safe medication dispensing access will be ensured through the use of pharmacies instead of the physician dispensing medications. 

Source:


California's Official Medical Fee Schedule (OMFS) - Implementing AB 1124 Drug Formulary and update of MTUS guidelines
 

Summary:  
The California Division of Workers' Compensation (DWC) posted drug formulary draft regulations, including a proposed list of preferred drugs, on Aug. 26, 2016.

The goal of the DWC is to adopt an evidence-based drug formulary, consistent with California's Medical Treatment Utilization Schedule (MTUS), to augment the provision of high quality medical care, maximize health, and promote return to work in a timely fashion, while reducing administrative burden and cost. 

Assembly Bill 1124 (Statutes 2015, Chapter 525) requires the adoption of an evidence-based workers' compensation drug formulary into the Medical Treatment Utilization Schedule (MTUS) by July 1, 2017. DWC intends to concurrently adopt updated MTUS clinical topic guidelines to align with the drug formulary. The proposed updated guidelines are created by the American College of Occupational and Environmental Medicine (ACOEM), published by Reed Group, Ltd. The preferred drug list proposed in the draft regulations was created by DWC, in light of evidence-based drug recommendations in the guidelines.

Impact:
A draft copy of the regulations as well as the Rand Report and the ACOEM guidelines are posted on the state's website. While the comment period closed on Sept. 16, 2016, we continue to monitor this proposed legislation for updates.

Source:
California stands firm on utilization review changes

Summary:  
On Sept. 30, 2016, California SB 1160 was signed into law. This mandate requires organizations that conduct utilization review for workers' compensation to become accredited by July, 7, 2018, by a nationally recognized accreditor of choice. URAC is considered the national standard and is an accreditor for utilization review. In addition, the bill reduces most utilization review in the first 30 days following a work-related injury. SB1160 also requires lien holders to verify the legitimacy of their lien by filing a declaration of eligibility preventing fraudulent claim filing.

Impact:
We are fully accredited in Workers' Compensation Utilization Management (WCUM version 7.2) and have maintained continuous URAC accreditation since 2006 ---        the year our workers' compensation clinical services division first applied for and received utilization management program accreditation. In addition, our clients have been involved with a California identified approval program designed to facilitate appropriate medical care within the first 30 days after injury decreasing delays in care and improving outcomes.

Source:

Kentucky
Kentucky adopts new fee schedule, effective Oct. 7

Summary: 
The Kentucky Department of Workers' Claims (DWC) has completed the regulatory process for a new fee schedule. This fee schedule became effective Oct. 7, 2016. In addition to physician charges, it includes changes to the anesthesia time value, G codes associated with drug screening, J codes, dental codes, and charges for ground and air transportation. The updated 2016 Physician Fee Schedule may be ordered through the Department of Workers' Claims.

Impact:
Our bill review software applications have been updated with the applicable rate changes.

Source:
Mississippi
Mississippi Workers' Compensation Commission proposes changes to the medical fee schedule

Summary: 
The Mississippi Workers' Compensation Commission (WCC) filed proposed changes to the medical fee schedule with the Secretary of State on Aug. 12, 2016.  

Per the filing, "Certain provisions of the MS Workers' Compensation Medical Fee Schedule are being amended in order to maintain the efficiency of the Schedule as a cost containment tool. The Schedule was last updated in 2013, and since that time, changes in the way medical services are delivered and reimbursed make it necessary to update some of the rules contained in the Schedule. In addition, adjustments to the maximum fees allowed by the schedule are necessary." These new regulations and fees are to be effective on Nov. 1, 2016.  

Impact:
The new fee schedule will be available on the state's website the second week of November. Applicable rate changes and rule updates will be underway upon receipt of the new schedule.  
Source: 
New York
New York is considering a workers' compensation drug formulary

S ummary: 
The New York State Workers' Compensation Board will be developing a drug formulary in the near future. The Board has indicated that it will continue to review formulary opportunities such as commercially available formularies, the Medicaid formulary, creation of a hybrid program and/or development of a New York drug designed program. The formulary would provide guidelines for physician dispensing and create a specific utilization review process to include approvals, preauthorization and appeals. Although there has been continuous dialogue with many opinions on the subject, the goal to provide prompt access to medications that are safe and effective is supported by all parties.

Impact: 
We provide a comprehensive drug utilization review program using the Official Disability Guidelines (ODG) as an evidence-based medical resource for proactively managing medications including clinical peer reviews.

Source:

Ohio
Ohio joins other states in the management of opioids

Summary: 
On Oct. 1, 2016, the Ohio's Bureau of Workers Compensation (BWC) signed in a new rule governing the prescribing of opioids for the treatment of injured workers. This rule targets the prevention of opioid dependency through appropriate prescribing by certified physicians. This ruling encourages physician certification by the BWC. Medical providers will be required to develop individualized treatment plans with risk assessments and closely monitor the progress and improvement in function of the injured worker. A peer-to-peer review process will be used if the medical provider does not comply with the identified best practices. Reimbursement of opioids will be based on claims where best medical practices are followed. If opioid dependence occurs under the BWC's oversight, treatment for dependence will be recommended.
 
Impact: 
We partner with pharmacy benefit management groups (PBMs) in providing our clients medication utilization review and medical provider oversight in the management of drug use. Our PharmaDx program provides a menu of services that can be used in controlling opioid utilization.

Source:
Virginia
Virginia Workers' Compensation Commission develops timeline to develop medical fee schedule

Summary: 
The Virginia Workers' Compensation Commission (WCC) has selected a Melville, N.Y. based firm as the vendor to develop and implement a medical fee schedule that officials hope will reduce the 2,000 medical fee disputes that occur on average each year in the commonwealth.  
House Bill 378 directs the commission to adopt regulations effective Jan. 1, 2018, that establish fee schedules which set the maximum liability of employers for medical services provided to injured workers. Virginia is currently one of seven states with no medical fee schedule.

Impact: 
The commission has released a project plan timeline that is available for viewing via the link provided below, All meetings pertinent to this endeavor will be conducted at the state's Richmond headquarters. We will continue to monitor this initiative closely and will provide progress updates as they become available.

Source:
A workers' compensation medication management approach 
By Dawn Neininger, RN, BSN, CCM Nurse Manager

Medications have become a hot topic in workers' compensation for many reasons, foremost of which is the increased claim costs associated with prescription drug use. A related issue is the overutilization of certain medications, especially opioids, which typically results in costly medical complications for the injured worker.

Most employers have chosen to contract with pharmacy benefit management programs that use first-fills and point-of-service plans to manage upfront medication costs for injured workers. However, in spite of interventions put into place to manage medications and pharmacy cost, drug use and their associated costs continue to be a problem. 

Some of the issues at hand are out of our control ---       such as the increase in drug prices over the last several years. But not all issues are out of managed care's reach. There are ways to fix these medication issues.

A very effective approach is the implementation of client-specific pharmacy programs that target specific problem areas. These include, but are not limited to: management of physician dispensing, compound medication prescriptions reviews, utilization review of opioids, and multiple medication management. 

Another successful approach involves facilitating regularly scheduled multi-disciplinary team pharmacy claim reviews using specific case thresholds, such as MED greater than 120 milligrams/day, three or more medication prescriptions, multiple prescribers, or compounded medications. These reviews allow team members to openly discuss identified problematic pharmacy claims, focusing on each team members' area of expertise. Ultimately, these discussions end with an agreed upon action plan, often resulting in a decrease in medication costs or the elimination of pharmacy costs on claims altogether, while advancing the injured worker's well-being.  

Based on the literature reviews, the impact of workers' compensation claim costs specific to medications tends to negatively impact the end result of claims progressing toward resolution, especially those claims that require a Medicare Set Aside (MSA). High pharmacy costs, combined with long term use of medications, raise MSA projections. For example, we recently completed an MSA on a high pharmacy spend claim with a life expectancy of 17.6 years. Our team recommended a drug utilization review, which advocated a medication change to an equivalent, more cost ---      effective medication. The change was discussed with the treating medical provider, who agreed with the approach and supported a mail order program, resulting in a savings of over $63,000.00 for the MSA.  

Aside from decreasing pharmacy costs, creative medication management programs can also benefit injured employees by ensuring prescribed medication regimens prevent harm to the individual. Too often we hear of unsafe medication practices that result in poor outcomes and sometimes, unfortunately, death. For example, at a recent team meeting, an injured worker's use of Methadone ---      a highly addictive opioid  ---       and dosage regimens were discussed. The treating provider suggested a spinal cord stimulator as an effective surgical intervention in the long-term management of the patient's pain. With nurse case management intervention, the injured worker was supported through the process of stimulator placement, weaned off of Methadone, and a replacement medication was prescribed for long-term use, resulting in a successful, healthier outcome.  

Medication management programs with pharmacy-dedicated claim reviews add the extra layer of ensuring safety for our clients' employees, which ultimately, is the most important benefit these programs have proven to achieve. 


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BR16946
This information has been compiled by Xerox to update clients on recent changes in selected workers' compensation legislation. The information contained in this document is a summary based on interpretations of such legislation as of the date of this publication and is not intended to be considered as legal advice. Xerox assumes no obligation to provide updates to the information contained in this document. The information contained herein does not represent the provisions of legislation in their entirety. Readers should refer to the state legislative bills for more information on such workers' compensation legislation.