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Legislatures across the United States during the first quarter of 2017 considered reform proposals that focused on containing workers compensation costs, addressing the growing prescription opioid problem and pondering increased coverage for first responder mental stress injuries.
“One of the major trends in 2017 is that a lot of legislatures are looking seriously at ways to effect positive medical cost containment,” said Steve Bennett, associate general counsel and director of workers compensation programs at the Washington-based American Insurance Association.
Workers comp reform efforts are typically political, said Christie Hayes, a Johnson City, Tennessee-based shareholder with law firm Baker, Donelson, Bearman, Caldwell & Berkowitz P.C. She said legislators feel pressure to enact regulations designed to make their states more attractive to employers and competitive with neighboring states.
Adam Brackemyre, vice president of state government relations at the Washingtonbased Self-Insurance Institute of America Inc., agreed that workers comp reform is often politically driven and in many cases is a result of fraud the state is trying to address through legislation.
“I would say generally we see more reform attempts in the legislative period just after an election,” said Mr. Brackemyre. “The bigger issue is the exploding cost of workers comp. If a program is growing, they need to address how to fund it.”
Several common themes appeared in workers comp reform proposals being considered nationwide.
Formularies adopted by Texas and Washington state have served as prototypes for formularies being implemented or considered by other states. California is currently implementing a workers comp drug formulary under legislation it passed in 2015, said Jeremy Merz, Sacramento, California-based vice president of AIA’s Western region. That formulary is expected to be fully implemented by July 1.
Last month, New York passed a state budget that includes a workers comp drug formulary, and Louisiana also is considering two separate bills that would create a drug formulary, both of which were still under consideration late last month.
AIA’s Mr. Bennett noted drug formularies are also being discussed by lawmakers in Illinois, Kentucky, Nebraska and Pennsylvania.
Beyond formularies, some states have aimed to implement other ways to curtail abuse and addiction stemming from opioid use. For instance, a joint-legislation bill introduced in North Carolina would require doctors to prescribe opioids electronically and would limit prescriptions to a five-day supply, among other proposed reforms. Both the state House and Senate are calling the legislation the Strengthen Opioid Misuse Prevention Act of 2017, or STOP. Drafts of H.B. 243 and S.B. 175 are identical and would require prescribers and pharmacies to adhere to new reporting standards that include electronic prescriptions, investigations into the patient’s prescription history and, in some cases, documented rationale for prescribing.
Iowa attracted national attention in March when lawmakers introduced a workers comp reform bill that would have limited benefits for older workers at retirement age. The bill ultimately passed when that language was removed, but limitations on compensation for shoulder injuries, as well as closer scrutiny when intoxication is suspected to have resulted in a work injury, were passed by the Iowa Legislature. The bill was signed into law by Iowa Gov. Terry Branstad, who said the law rebalanced the state workers comp system to ensure injured workers are fairly compensated but abuses are curtailed.
New Mexico also sought to limit workers comp total temporary disability and permanent partial disability benefits for certain injured workers who leave their current employers for another company or fail to accept a job offer. Senate Bill 155 also ends disability benefits for workers terminated for misconduct unrelated to the workplace injury. Signed into law by Gov. Susana Martinez and effective July 1, it is expected to result in minimal administrative costs.
On the Arkansas Senate docket since early March is Senate Bill 653, a shell bill that calls for an optional alternative system for workers comp health, disability and death benefits outside of the state system to finance and administer benefits for injured workers. Late last month, there had been no movement on the bill.
AIA’s Mr. Bennett said there has been a noteworthy absence this year in workers comp opt-out legislation in other states. Opt-out efforts typically gain momentum in at least a couple of states each year, he said, noting that most states this year have focused instead on more targeted initiatives.
Several states took up legislation aimed at increasing coverage for first responders by lowering the bar for receiving benefits for mental health injuries or establishing presumption for PTSD and certain cancers.
New York was a notable example when it included a provision in its 2017-18 budget that would make it easier for first responders to receive workers comp disability benefits for mental injuries.
Montana also saw progress on a bill that would provide coverage for presumptive illnesses for firefighters under specific circumstances. That bill was passed by the state Senate but tabled by its House of Representatives.
Workers compensation experts say the industry is bracing for side effects and growing pains as more states aim to put opioid prescribing in check.