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New York adopts workers comp drug formulary

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New York’s 2017-18 budget agreement, reached nine days beyond the state’s April 1 deadline, incorporated several workers compensation reforms, including a drug formulary requirement that topped the priority list for several insurance industry and employer groups.

Alison Cooper, vice president for the Washington-based American Insurance Association, pointed to recent studies that show formularies are effective at reining in prescription drug costs, including a 2014 study by the Cambridge, Massachusetts-based Workers Compensation Research Institute that suggested a drug formulary in New York could reduce drug costs by 29%, and a 2016 study from the Boca Raton, Florida-based National Council on Compensation Insurance Inc. that predicted formularies can save states at least 10% in drug costs.

The budget also caps the time limit for injured workers to reach maximum medical improvement at 2½ years by providing a credit to employers for temporary payments beyond that threshold, and guarantees development of new impairment guidelines that adhere to modern medical evidence and outcomes, employer advocates said.

Another provision of the budget relaxes requirements related to first responder workers comp claims for mental injuries due to work-related stress.

The New York State AFL-CIO called some of the workers comp reforms that were initially proposed in the budget an “all-out assault on injured workers” by cutting benefits for amputees, workers killed on the job and those who are permanently injured.

But President Mario Cilento said the organization successfully worked to maintain “benefits for the most seriously injured workers, which will allow them to continue to lead their lives with dignity after being injured on the job.”