State of the States



Sandy Shtab, Healthesystems VP of Industry and State Affairs, comments on regulatory activity around the country.

Focusing on Mental Health – Emerging Trends in Workers’ Comp and Beyond

For many years our industry has been laser focused on the opioid epidemic. Workers’ comp was arguably first in healthcare to take meaningful steps to mitigate the crisis and work to reduce opioid utilization and opioids’ impact on disability duration and overall claim costs – long before commercial health or CMS adopted mandates on prescribing or dispensing policies.

The results of our industry’s focus are widely known today; opioid utilization was down (pre-COVID) by 19% through the end of 2017 compared with a decade prior.1 This could be attributed to several factors including the adoption of state-mandated formularies, opioid prescribing protocols, increasing acceptance of medical treatment guidelines, strengthening of prescription drug monitoring programs (PDMPs), and support from the insurer and employer community.

According to NCCI, insurers have utilized PBMs more and more throughout the years to curb opioid use.2 I am proud to say Healthesystems, along with other PBMs, played an integral role in helping to achieve these outcomes though our collaborative efforts to influence public policy and regulation, and in our partnerships with payers to support their pharmacy programs.

While opioid related deaths were down pre-COVID, the latest CDC data indicates there has been a 12-15% uptick in reported opioid-related deaths between September 2020 and Sept 2021.3 Clearly more work needs to happen to get back on the right track. Many experts have cited mental health as a precipitating factor in opioid overutilization, however it is not the only area where mental health has become an increasing focus.

There is a widespread public health effort to remove the stigma surrounding mental health and improve accessibility for those who are in need. Let’s consider some of the ways mental health has become more of a focus in workers’ compensation.

Stress and the Pandemic

The Kaiser Family Foundation recently reported new concerns around mental health and substance use. According to one survey, 53% of adults surveyed over the course of the pandemic reported symptoms of anxiety and depression, an increase from pre-pandemic levels which were stable at 40% prior to 2019.4

Generalized stress, anxiety and depression intensified during the pandemic, with many citing isolation, layoffs, economics, and health concerns as contributing factors. These were seen not only in the workforce but also reported at workers’ comp industry roundtables amongst the regulator community, insurers, and provider groups.

This increased visibility into real-life mental health challenges has helped reframe our industry’s disposition towards mental health and how it relates to our workforce and injured worker claims.

Depression and anxiety are no longer considered hot potato terms by claim organizations, and employers and insurers have begun to place more attention on wellness programs, early intervention, and employee assistance programs.

Employers and carriers have also prioritized mental health and psychosocial strategies into their claims management programs, as we heard from our recent Workers’ Comp Industry Insights Survey. These benefits have become more important than ever as many workers are leaving the workforce due to burnout, or simply changing jobs due to increased remote work opportunities.

Post-Traumatic Stress Disorder (PTSD)

Once recognized only as an incidental diagnosis to a physical/traumatic injury, PTSD is now gaining acceptance as a “stand-alone” diagnosis, sometimes called a “mental-mental” or “mental-only” injury.

This has resulted in easing the burden on some employees to prove the causal connection between their work and a PTSD diagnosis, mostly driven by the increasing influence of organized labor interests, especially those representing first responders.

According to NCCI, seven states completely exclude coverage for a stand-alone diagnosis of PTSD, while nine states are silent. The remaining thirty-four states allow PTSD coverage in workers’ compensation, either via case law or explicitly stated in the statute, though the burden of proof in most states remains with the injured worker to demonstrate causality to the workplace.

Florida lawmakers enacted a workers’ comp presumption for PTSD claims in 2018 and have more recently considered further extending the statute of limitation to claim these benefits. In early 2022, lawmakers introduced a bill which would enable first responders to file a claim for PTSD outside of the existing time limit, which is 52-weeks from the date of accident. The new amendment, which is likely to become law this year, would extend that time to 52-weeks from the time the first responder is diagnosed with PTSD, which could be many years after a precipitating event.

Does this increasing acceptance of PTSD in certain employee classes indicate other types of employees might soon be eligible for similar benefits? Only time will tell, however this is a subject of concern within the industry in that it creates two distinct classes of employees, with different thresholds for proof of compensability, despite what could be identical triggering events.

Telehealth and Mental Health

While telehealth has been an available method of delivering treatment in workers comp for some time, the pandemic was integral to increasing acceptance and adoption among many individuals and healthcare providers, including mental health clinicians, who might not have considered it a viable option pre-pandemic.

Proponents of telehealth services cite comfort, convenience, and privacy as driving factors in using telehealth services, although there are certainly drawbacks to consider. While the switch over to telehealth in workers’ comp happened quite abruptly, many clinicians report collecting cognitive and neurological data can more complex in a virtual setting.

One study published in May 2020 noted clinical videoconferencing for PTSD patients remains an efficacious and therapeutic process; however, it is important to note that many states made temporary or permanent rule changes to allow care to be delivered this way in the workers’ compensation system.6 It is promising that many of those temporary rules will become permanent in nature to allow for increased access to care, especially in more rural areas where services may be less available.

Looking Ahead

While the conversation about opioids in workers' comp remains highly relevant today, COVID-19 and the increasing mental health needs of our workforce has presented these new challenges for our industry.

We must collectively acknowledge the increasing impact mental and behavioral health services has on our claims processes, our regulatory environment, and workplaces. Mental health is one of the top cited concerns for industry executives, both regarding their own claims organizations and in the care of injured workers. It is a much-needed area of ongoing focus, one that will continue to show up in claims environments, both as a contributing factor to overall employee health and restoration of function for injured workers.

State of the states

WCIRB Releases COVID-19 Claim Data

The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) released a new report in early March on medical treatments and costs associated with COVID-19 claims. Nearly 40% of critical COVID-19 claims involving ICU care required ventilator support, and their average inpatient costs were 3.5 times that of the inpatient costs for other critical COVID-19 claims without ventilator support.

For claims with medical payments during the first six months of medical treatment, the average medical payments per COVID-19 claim were almost two times higher than those of non-COVID-19 claims. The cost differential was mostly driven by a significantly higher share of COVID-19 claims involving hospitalization and fatality (10%) than non-COVID-19 claims (about 1%).

Medical treatment patterns for COVID-19 patients with mild infections were similar between workers’ compensation and group health insurance, while the patterns for those that required hospitalization differed somewhat in the two insurance systems.

In regard to long COVID, over a four-month post-acute care period, about 11% of workers with mild infections received medical treatments for long COVID symptoms. Almost 40% of hospitalized COVID-19 patients continued to receive care for pulmonary conditions and about 15% received care for cardiac conditions over the four-month post-acute care period after hospital discharge, while about 20% of mild patients received care for shortness of breath and about 16% received care for pulmonary conditions

Workers with severe or critical infections who were previously hospitalized and subsequently had long COVID symptoms had on average about 16% higher claim costs than non-COVID-19 claims that involved hospitalization.

Potential Vaccine Mandate

After the federal vaccine mandate hit a roadblock, the California State Legislature introduced Assembly Bill 1993, which would require public and private employers to enforce a COVID-19 vaccine mandate for employees and independent contractors.

The bill would exempt workers with medical conditions or disabilities that prevent vaccination, or those who have sincere religious beliefs against the vaccine. Bill language states that the bill will automatically be repealed if the CDC determines in the future that COVID-19 vaccination is no longer necessary for the health and safety of individuals.

While it is too soon to know if this bill will progress, other states could follow California’s lead on the matter, leading to a patchwork of different ordinances to follow.

Generic Pricing Law Back with Stipulations

In 2019, California passed AB 824, a first-in-the-nation law, suspending “pay-to-delay” deals where large pharmaceutical companies pay or incentivize a competing company to keep generic drugs off the market. The intent of the law was to increase the flow of affordable generic drugs in the market and help keep prescription costs down.

In December, a federal district court granted a preliminary injunction that suspended this law. The court ruled that the law violates out-of-state commerce protections since it is not limited to settlement agreements entered into in California or between California entities.

Later, the California Attorney General asked the court to modify the injunction to permit AB 824’s in-state application and only prohibit the Attorney General from enforcing AB 824 against settlements with no connection to California. The federal court accepted, allowing lawmakers to enforce AB 824 once more, but only with respect to patent settlements negotiated, completed or entered into within California’s borders.

Physician Dispensed Drugs See Increase in Utilization

The Florida Division of Workers’ Compensation published their annual Results & Accomplishments Report, providing insight into the performance of the state’s workers’ comp system. While the report explored medical data, indemnity information, regulatory activities and other points of interest, key points of note came from the medical data.

Payments for physician-dispensed drugs – both repackaged and non-repackaged – continued to increase, illustrating a need for regulatory action. However, payments for compound drugs have decreased, both from pharmacies and physicians.

Medical Marijuana Legalized

Governor Tate Reeves officially signed Mississippi Senate Bill 2095 into law to create a medical cannabis program. This bill is over 400 pages long with a multitude of clauses and details, but among them is language that exempts payers (including workers’ comp) from paying for or reimbursing anyone for the cost of medical cannabis.

As for qualifying conditions, the list is long, but relevant to workers’ comp are the following conditions: PTSD, pain refractory to appropriate opioid management, diabetic/neuropathic pain, spinal cord disease or severe injury, or any debilitating disease/medical condition – or its treatment – which causes chronic pain, severe or intractable nausea, seizures, or severe and persistent muscle spasm.

Furthermore, the Mississippi Department of Health can add other qualifying conditions to this list.

OnBoard Claims Portal Launched, Along with Formulary Updates

The New York Workers’ Compensation Board (WCB) officially begun the implementation of their new claims management portal, OnBoard.

The implementation is in three phases, with phase one initiated on March 7th. Prescription refills and renewals of medications must comply with the Drug Formulary, and Medication Prior Authorization Requests (PARs) will be required via OnBoard. This replaces the current Drug Formulary prior authorization request process – including the manual process for medical marijuana. Health care providers will be required to use Form HP-1.0 to request a decision on unpaid medical bills via OnBoard.

Phase 2 began on April 4th, with an updated DME Fee Schedule going into effect. DME Prior Authorization Requests must be made via OnBoard.

Phase Three will begin May 2, 2022. New and updated Medical Treatment Guidelines (MTGs) will become effective, all Prior Authorization Requests (PARs) for Treatment/Testing will be required via OnBoard, and the C-4Auth, MG-1 and MG-2 forms will become obsolete with the implementation.

And to correspond with the launch of OnBoard, the WCB also adopted the 6th Edition of the Workers’ Compensation Drug Formulary List and Formulary Rules. The updated formulary adds 10 new Therapeutic Categories, while six other categories were deleted and moved to the new Antibiotics Therapeutic Category. Furthermore, the drug list was updated to align with Medical Treatment Guidelines.

Workers’ Comp Payers Exempted from Reimbursing Cannabis

Senate Bill 17 was signed into law after receiving overwhelming support in both legislative chambers, with a 34-0 vote in the Senate and a 65-3 vote in the House. The bill creates an exemption to the state’s existing medical cannabis program to exempt workers’ comp payers from reimbursing cannabis costs associated with a work-related injury.

Many bills proposing similar measures have been introduced around the country, and with other states introducing bills for medical marijuana programs, they are including language to prevent potential payer reimbursement as well.

COVID-19 Claim Data

The Texas Division of Workers’ Compensation (DWC) published an updated COVID-19 factsheet with information pulled from data calls across 74 carriers.

As of February 6, 2022, workers’ comp carriers reported over 78,000 COVID-19 claims and 422 fatalities. An estimated 48% of these claims and 52% of these fatalities involved first responders and correctional officers. One in five COVID-19 claims that received professional or hospital/facility services received these services beyond one month post-injury, hinting at post-COVID-19 conditions, while 75% of COVID-19 claims were for workers aged 20-49.

While COVID-19 caused shutdowns during the early stages of the pandemic, it appears the pandemic led to an overall increase in claim frequency. Claims were 15% higher from January 2020 through December 2021 when compared to January 2018 through December 2019.

Carriers in Texas paid a total of $35.1 million in medical costs, including $667,000 in pharmacy services and $6.7 million in professional services. The average medical cost for a COVID-19 claim at six months without hospital/facility services was $4,161 with pharmacy costs per claim at $383 and professional service costs per claim at $870.


  1. Prescribing practices: changes in opioid prescribing practices. Centers for Disease Control and Prevention. Last updated Aug 12, 2019.
  2. Moss RJ, Colon D. Drug formulary implementations – a look at impacts on workers compensation prescription drug experience. Dec 2021.
  3. Provisional drug overdose death counts. CDC. Feb 22, 2022.
  4. The implications of COVID-19 for mental health and substance use. Kaiser Family Foundation. Feb 10, 2021.
  5. 2022 Workers’ comp industry insights survey report. Healthesystems. March 2022.
  6. Advances in PTSD treatment delivery: review of findings and clinical considerations for the use of telehealth intervention for PTSD. May 30, 2020.


Since 2010, the semi-annual RxInformer clinical journal has been a trusted source of timely information and guidance for workers’ comp payers on how best to manage the care of injured worker claimants and plan for the challenges that lay ahead. The publication is an important part of Healthesystems’ proactive approach to advocating for quality care of injured workers while managing the costs associated with treatment.