Winter 2021/2022

State of the States



Sandy Shtab, Healthesystems AVP of Advocacy and Compliance, comments on regulatory activity around the country.

Workers’ Compensation Continues to Be Impacted by COVID-19. How Will the Industry Respond?

Much has happened since our Summer 2021 issue of RxInformer. Earlier this year, there was speculation our economy was moving slowly into a post-pandemic recovery. While that may be true in some communities, we now know that many others will not move past COVID-19 so soon. The number of vaccinated adults hovers around 65% nationwide, not nearly high enough to establish herd immunity. More than 20 months into the pandemic, we have observed significant impacts on our industry. From a medical care perspective, our hospital systems are straining and healthcare workers are exiting the workforce due to emotional and mental burnout.

Employers also face challenges in employee recruitment, retention and satisfaction as the way we look at work – and how we work – has changed. Broad acceptance of remote work has led to increased opportunities for many workers, beyond the limits of what was possible pre-pandemic. Employers are also working to mitigate risk to their employees and organizations. Increasingly this can mean implementing vaccine mandates to work, travel or participate in onsite work events.    

With small steps, the workers’ compensation industry is moving forward as best we can. Months ago, employers and state governments, including workers’ compensation regulatory agencies, activated plans to return some employees to office-based work and to reinstate in-person hearings. Target dates ranged from July to September, a promising sign that things were getting better. A handful of in-person industry events resumed in places like Florida, Virginia, and even California. And even as we are cautiously optimistic about our businesses and communities rebounding, many business and civic leaders have dialed back those efforts as signs indicate we are not yet out of the grip of this public health crisis. 

The Vaccine Mandate

President Biden issued a massive vaccine mandate that is estimated to impact 100 million workers across the country. Businesses with 100 or more employees must require all workers to either be vaccinated or tested for COVID-19 once a week. Companies that do not comply would face thousands of dollars in fines per employee. Furthermore, all federal employees – including members of the U.S. military, long-term care workers who serve Medicare and Medicaid enrollees, and federal contractors – must receive a COVID-19 vaccine, and these workers cannot opt out of vaccination by receiving weekly COVID-19 tests.

This comes shortly after the FDA approval of the Pfizer COVID-19 vaccine, an approval widely anticipated by large sectors of the banking, energy, healthcare, hospitality, retail, tech, and telecom industries; many of whom have already adopted mandatory vaccination policies for employees as a condition of continued employment. In fact, prior to this mandate, an uptick in COVID-19 cases caused by the Delta variant led many state and local governments to impose mandatory vaccination requirements on civilian employees. These requirements predictably stirred up a number of legal battles contesting the authority of employers and government to mandate vaccines, but the new federal action will likely take precedence.

The new mandate takes pressure off employers as the “bad guy,” allowing them to quickly adjust to these new rules. Experts believe most employees would rather get vaccinated than to keep up with constant testing or the search for a new job. However, in healthcare and other industries such as hospitality and retail, staffing shortages are fueled by the newly dubbed phenomenon “The Great Resignation.”

If you haven’t heard of The Great Resignation, you’ve seen it in your community. Millions of workers are leaving or have left jobs for new opportunities or are simply exiting the workforce altogether. 

The Great Resignation

Employees who have worked remotely for the last year and a half have had a reckoning about their job satisfaction, balancing family with work and personal and professional growth.  We are seeing millions of employees leaving jobs, and this is translating into areas of labor shortage, in part driven by the very opportunities presented by remote work. Where once it might have been difficult to live in one city and work for a company located in another, those days are gone. Employers have reassessed their stance on remote work and now have access to a broader talent pool. Prospective job hunters are also benefiting, no longer restrained by community or family ties that might have put them out of the running for a job in another region of the country.    

And how might The Great Resignation impact workforce health and labor practices? Well, it already has for many employers, especially in healthcare. Federal payer programs like CMS and the VA have long-standing occupational standards protecting employees and patients. These standards must be met as a requirement for participation in CMS programs. However, if employers adhere to these standards via vaccination mandates, is the healthcare industry prepared for a mass exodus of employees?

We are already learning the answer. In Florida, where vaccination passports are prohibited by law, nursing home facilities are mandating vaccines for employees and facing mass employee walkouts for skilled nurses, certified nursing assistants, and other non-medical personnel. With about 12% of all nurses still unvaccinated and no plans to do so, nursing strikes are being threatened. One major hospital system in Houston recently prevailed in a legal challenge to its COVID-19 vaccine requirement. The court upheld the vaccination policy, resulting in more than 150 employees being terminated at once.  Considering the widely reported shortage of nursing and other medical personnel, it’s a challenge that hospitals especially must overcome. If they can’t navigate these uncharted waters, patients could be turned away, resulting in devastating losses.

Further Expanding COVID-19 Presumptions

Expanding COVID Presumptions

Workers’ compensation is no stranger to the “presumption” clause, and the pandemic is increasing presumed coverage for certain classes of employees, namely first responders, as it relates to compensability for COVID-19. Some states have pre-filed 2022 bills for consideration by the legislature which would apply retroactively to situations where a first responder sustained an adverse reaction to a COVID-19 vaccine required as a condition of employment. While first responders are undoubtedly on the front lines of interacting with the public, there are others deemed “essential workers” who are similarly exposed and do not have the same presumption, like emergency room nurses, physicians, store cashiers, and even teachers who are with hundreds of kids a day, and many of those children are not eligible for a vaccine. However, state legislators have historically favored adopting public policy that benefits firefighters, police, and other first responders as opposed to other classes of employees who might be similarly positioned from a risk perspective.

Some critics of presumptions say these policy choices by the legislature create two classes of employees with similar risk profiles, but a different decision process in determining compensability for the identical medical condition. Additionally, the increasing number of presumptions creeps very close to 24-hour type coverage and is a source of concern for the industry due to financial impacts such as uncollected premiums for increased, retroactive risk. One thing is certain: debate and discussion will continue as to the status of COVID-19, or any illness, as a qualifying condition and how that might expand in the future, pressing our industry outside its traditional guardrails and beyond its intended purpose.

Research & Regulator Policy Roundup

Expanding COVID Presumptions State regulators, legislators and other policymakers rely heavily on research and data to support the changes which impact the industry. Some of the latest research published is likely to drive conversations in a number of states on topics like COVID-19 coverages and presumptions, medical marijuana, physician prescribing behaviors, treatment guidelines and drug utilization, and the evolution of presumptions. Here’s a snapshot of the latest recommended reading in workers’ comp, and how it may drive policy change in 2022 and beyond. The California Workers’ Compensation Institute (CWCI) recently reported on COVID-19 claims statistics. According to a press release, new cases this summer were reported at nearly three times the rate as in prior months combined. Projections are that claims volumes will continue to rise in California at a rate nearly five times the projected number of claims the original projections made prior to the surge in Delta variant claims, seen this summer. The Delta variant has been identified as the primary driver of increasing COVID-19 claims, compounded by the fact that July was the first full month in which the California economy reopened, which included revised emergency health and safety standards, where vaccinated employees no longer required face coverings. CWCI has comprehensive data that demonstrates variances by industry and region, however the report highlighted that much of the summer surge in COVID-19 claims occurred in metropolitan job centers, particularly Los Angeles, where over 25% of jobs are held in the state. The transportation sector saw a six-fold increase in COVID-19 claims, though the public safety/government sector continues to see more claims than any other sector.

NCCI Updates Industry With Latest Developments on Marijuana Policy, Other Regulatory & Legislative Trends

NCCI continues to provide valuable industry insights, such as their recent reports on Marijuana Legalization and 2021 Regulatory and Legislative Trends. Key developments in marijuana legislation include changes which went into effect as of mid-2021. While marijuana remains illegal according to the DEA controlled substances schedule list, 19 states have passed legislation legalizing recreational marijuana use for adult, and 17 states have legalized medical use, increasing the number of states with legal medical use to 37. New York is the first of the states to incorporate an electronic submission for preauthorization (PAR) for marijuana through the state’s OnBoard Limited Release portal. State legislatures and courts continue to engage on issues surrounding the legalization of marijuana, including potential impacts on workers’ compensation benefits and reimbursement.   

In addition, NCCI released 2021 Regulatory and Legislative Trends, which covered COVID-19 presumptions, mental injuries, worker classification, single payer coverages and significant case law. Key highlights include:  

30 states and the District of Columbia have considered COVID-19 presumption and compensability legislation, and nine states have passed legislation
Nine states 
this year enacted legislation for workers’ comp coverage of mental injuries, with 68 bills addressing this topic
Four states 
have legalized recreational marijuana via legislation, bringing the total to 19 states
17 states 
proposed legislation or studies related to the use of single-payer health insurance systems, with nine states specifically referencing workers’ comp in proposed legislation
Independent contractor legislation 
was seen in 15 states, some of which included elements related to workers’ comp

Many speculate the current administration will be pressed to take some action towards rescheduling marijuana, considering the majority of states have adopted laws which legalize medical or recreational use, or both.

WCRI Digs into the Details of Drug Utilization, Opioids and Off-Label Use

The Workers’ Compensation Research Institute (WCRI) has published a number of studies on drug utilization. Off-Label Use of Gabapentinoids for Work-Related Injuries observed growing off-label use of gabapentinoids, which is indicated for treatment of seizures in patients with epilepsy and for nerve pain tied to shingles. However, the report examines how they were also commonly prescribed in workers’ compensation cases to treat pain. Considered an off-label usage, but still accepted practice among the medical community, some speculate this increase in off-label prescribing may be tied to a reduction in opioid utilization over time. The report examined the use of gabapentin and pregabalin in nearly 500,000 work-related injuries across 28 states. Both medications were in the top three most commonly dispensed drugs in terms of prescription drug spending nationally for the duration of the study.  

Effects of Opioid-Related Policies on Opioid Utilization, Nature of Medical Care, and Duration of Disability explored how policies limiting access to opioid prescriptions contributed to changes in opioid utilization and how they altered other medical care related to the management of pain.

This study analyzed data for workers injured over a nine-year period from 2009 to 2018 across 33 states, estimating the effects of state-level opioid policies by comparing outcomes in states that adopted the policies relative to states that did not, while accounting for other factors that could have influenced changes in opioid utilization and the other outcomes studied. Must-access prescription drug monitoring programs (PDMPs) reduced MME of opioids by 12%, while other limits on opioid prescriptions resulted in a 19% decrease in the MME amount of opioids among claims with opioids.

There was also some evidence that PDMPs led to substitutions from opioids towards other kinds of non-opioid pain prescriptions for certain injuries. It also found that PDMPs and limits on initial opioid prescriptions had little impact on the duration of temporary disability benefits captured at 12 months of injury.   

A third WCRI report, Topical Analgesic Use in Workers’ Compensation, indicates payment share for topicals across the country increased from 9% in the first quarter of 2015 to 19% in the first quarter of 2020. This study notes the users of topical analgesics were often older women and had a higher prevalence of inflammations, strains and sprains, and were more likely to have medications dispensed in their doctor’s office versus a pharmacy setting. These same patients also had higher total drug utilization versus other patient populations. The study will be informative for regulators who are responding to employers’ and insurers’ calls for action as it relates to needed price controls on high-cost topical pain relievers and physician-dispensed medications.

Texas Releases 2022 Research Agenda

The Texas DWC adopted their Fiscal Year 2022 Research Agenda of the Workers’ Compensation Research and Evaluation Group (REG). Texas Labor Code requires the REG to conduct research related to the operational effectiveness of the Texas workers’ compensation system and publish an agenda annually. The FY 2022 Agenda includes continued research on the impact of COVID-19 on the Texas workers’ compensation system along with updates to other biennial report studies on employer participation and system trends.

The DWC also extended the mandatory data call for information related to COVID-19 through December 2021. The data call was originally issued in June 2020, but was extended in June 2021 to ensure sufficient information is collected to determine the impact of COVID-19 injuries in the Texas workers’ compensation system. The DWC uses the information collected to update its COVID-19 Results Factsheet. The Factsheet provides a breakdown of medical payments, including payment distribution by service category, and separates COVID-19 claims by gender, age, and location.

On August 26th the DWC released its Compliance and Investigations Audit Plan to improve system performance in key areas including timely and accurate benefit delivery, medical reimbursement, and reporting of electronic data. The Texas Labor Code authorizes DWC to conduct audits on participants in the Texas workers’ compensation system relating to timely processing of medical bills, timely reporting of medical bill data, and accuracy of medical bill data.

New York and California Amend Medical Treatment Guidelines

The New York Workers’ Compensation Board adopted amendments that would incorporate new Medical Treatment Guidelines (MTGs) for Post-Traumatic Stress Disorder (PTSD) and Work-Related Depression/Depression Disorders. The Board also updated existing MTGs for Non-Acute Pain, Mid/Low Back, Neck, Knee, and Shoulder. These become effective November 1, 2021.

The California DWC held a public hearing on Friday, September 17, 2021 to discuss a proposal to incorporate the American College of Occupational and Environmental Medicine’s (ACOEM) Low Back Disorders Guideline into the Medical Treatment Utilization Schedule (MTUS). The proposed update to the guidelines represents current evidence-based standards of care.

American Medical Association Updates Impairment Rating Guidelines for First Time Since 2008

The American Medical Association (AMA) recently approved updates to their Guides to the Evaluation of Permanent Injury, 6th Edition, the first update to these guidelines since 2008, which are effective as of July 1, 2021.

Over 40 states utilize some version of the AMA’s impairment guidelines as the accepted authority to assess and rate permanent loss of function, and physicians use these guides to assess a patient’s impairment and document findings. Impairment rating reports appropriately produced using the AMA guidelines are considered a gold standard for documenting permanent impairment in insurance and legal proceedings.

It is important to note that these updates may not lead to immediate change across the nation. Currently 16 states require use of the 6th edition, 11 states require use of the 5th edition, and seven states require use of the 4th edition, which was published in 1993. While there is clear precedent in using the AMA’s impairment guidelines, this new update may be utilized in a patchwork fashion across the nation, based on regulatory activity conducted on a state-by-state basis.

A majority of the guideline changes focus on mental and behavioral conditions. This 2021 update adopts the Diagnostics and Statistics Manual of Mental Disorders version five (DSM-V), while the previous 2008 guides utilized the DSM-IV-TR, an older version of the DSM.

A major difference between the DSM-V and DSM-IV-TR includes the removal of a highly criticized assessment known as the Global Assessment of Functioning (GAF). With this assessment removed, the averaging of final impairment ratings is likely to change on a case-by-case basis, as other, more up-to-date assessments are utilized.


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.