The politics of workers' compensation

2015 regulatory and legislative outlook

When opening gavels fell on legislative sessions around the country, it quickly became apparent that  workers’ compensation topics were going to be on the agenda this year. Here’s a summary of the regulatory and legislative outlook for 2015.

Pharmacy costs. New York, Wisconsin, Tennessee, Louisiana, Virginia, Pennsylvania, New Hampshire, and California have all announced a desire to seek out new ideas to help curb workers’ compensation costs in their states. Medical costs, including prescription medication costs, will factor heavily in all of these discussions.

Closed formularies. Implementation of some type of closed formulary will be a popular topic in Arkansas, Tennessee, Maine, Michigan, Louisiana, and California, as a method to address the use of opioid analgesics. All stakeholders stand to gain from broad clinical management that aligns closed formularies with utilization measures provided by Pharmacy Benefit Managers (PBMs), such as the
evidence-based, injury-specific medication plans and formularies that Helios offers.

Medical marijuana. In January 2015, Governor Hickenlooper of Colorado stated that the legalization of marijuana for recreational use was “reckless” because of the conflict with current federal law and the challenges in regulating the industry. As states continue to pass laws for both medicinal and recreational use of marijuana, look to see this push the federal agencies to craft some type of resolution. As a result, employers will need to adapt to these changes in marijuana use.

Physician dispensing and repackaged medications. Despite successful pricing reforms, a new  loophole has emerged. According to a January 2015 report by the Workers’ Compensation Research Institute (WCRI), manufacturers are making medications in different strengths in order to bypass pricing controls. For example, cyclobenzaprine HCL is traditionally prescribed in 5mg or 10mg strengths for $0.99 to $1.79 per pill. A new strength of 7.5mg has been created with a new Average Wholesale Price (AWP) of $3.79 per pill. According to the WCRI report, the 7.5mg strength was only being dispensed by physicians and was not found in retail pharmacy dispensing transactions. This creative approach to work around pricing controls for repackaged medication will require an equally creative policy discussion to close this loophole.

Prescription drug monitoring programs (PDMP). In 2015, PDMPs will be improved to play a bigger role in curbing the misuse and abuse of opioid analgesics. More states will require mandatory use of the database by prescribers and dispensers, and Missouri will finally adopt a PDMP. Additionally, we can expect to see more states adopt specific pain treatment guidelines that will include instructions on how and when opioid analgesics should be prescribed.

Compounded ​medications. The lack of any clear guidelines on reimbursement and medical necessity for compounded medications is being elevated to the attention of regulators and policymakers this year. Since many of these compounding pharmacies are marketing and sending prescriptions through the mail across the United States, it would not be surprising to see a federal agency weigh in as well.

Medication ​management. Appropriate pharmacy care is a large part of successful outcomes and proactive medication management can address a number of the policy challenges currently facing the workers’ compensation system. In 2015 and beyond, look for state policy to further evolve, incorporating the best practices for proactive medication management—a practice that is proving to be a valuable tool in helping to stabilize pharmacy use and costs when treating injured workers.

Political ​climate. Health care reform, budget deficits, and some lingering economic uncertainty are  combining to influence policy related to the various state workers’ compensation systems. Stakeholders in the workers’ compensation system must remain committed to working with legislators and policymakers to help them understand how to best influence costs and outcomes and create a statutory environment where positive results for both injured workers and employers can co-exist and thrive. As a result, better policy will drive better outcomes.

As regulatory and legislative changes unfold throughout the year, Helios will continue to engage with  stakeholders throughout the system, lighting the way forward to better outcomes, for everyone.