How to avoid unintended consequences when new policies are implemented

Optum Workers Comp
| Feb 26, 2019

They say an ounce of prevention is worth a pound of cure. This axiom applies to collaborating on workers’ comp policy development with state and federal policymakers. Engaging policymakers early-on and throughout the process often leads to more balanced policy and prevents adverse consequences that impact business processes. Proactive involvement helps facilitate effective policies that benefit payers and claimants.

Lack of preemptive involvement and unintended consequences

Texas compound medications issue
An example from Texas’ history illustrates how lack of stakeholder input can lead to unintended and costly consequences. After initial rule implementation, Optum Workers’ Compensation and Auto No-fault (OWCA) and other stakeholders noticed a marked uptick in the utilization and costs associated with all Y-ingredient compounded medications ― which were exempt from preauthorization.

This prompted OWCA and others to voice concerns with the Texas Division of Workers’ Compensation (DWC) who then examined their own data and confirmed the negative trend. As a result, Texas implemented a policy change to require preauthorization for all compounds, regardless of ingredient makeup.

Colorado compound medications problem
Colorado also had a problem that required post-implementation intervention. The Colorado Division of Workers’ Compensation (DWC) adopted new unique billing codes for certain categories of compounded medications that caused billing transmission problems between pharmacies and PBMs, resulting in unintentional noncompliance in billing of compounds.

Understanding that the DWC needed unique billing codes for certain categories of compounded medications, OWCA worked with the national standard organization, NCPDP, to make changes in the NCPDP billing standards to enable transmission of the unique billing codes the DWC desired.

Billing requirements are a notable example of where it is usually best to coordinate with several other industry counterparts, including standards organizations, to address a common policy concern among many industry stakeholders.

Engaging early yields cost savings

A look back in Florida’s history shows how early intervention with policymakers can spark positive results. Physician-dispensed repackaged medications were a notable pain point for insurers and self-insured employers. The issue caused OWCA and others to seek legislative relief for the problem. The group of stakeholders worked with key state legislators, providing them with a wide array of perspectives and data. This proactive involvement resulted in compromise legislation that helped rein in those costs.

Collaboration motivates policymakers to seek input on new policy development    

The lessons learned from the Texas compound medications situation were emphasized as Tennessee developed its formulary. Consequently, the Tennessee formulary required preauthorization of all compounds ― at the outset.

More recently, the Tennessee Bureau of Workers’ Compensation requested OWCA share data with them on the positive results seen with reductions in compound utilization since formulary adoption.

Similarly, policymakers from another state where OWCA had previously been involved in policy development sought advice from us on ways to address a potential loophole in a prior regulation they adopted concerning medications.

These examples point out that engaging with policymakers early in the process and educating them on potential policy ramifications can help build a long-term relationship with them.

A partner and an advocate

We have always found it beneficial to engage policymakers throughout the process and often see positive results for our clients, the industry and for us. Consequently, we encourage our clients to stay active in policy development on issues that concern them. And where we share mutual concerns, we are always happy to coordinate efforts with our clients to achieve mutually positive results.


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