Sandy Shtab, Healthesystems AVP of Advocacy and Compliance, comments on regulatory activity around the country.
The COVID-19 pandemic continues after a long challenging year, and though the battle is not yet won, many are hopeful that the end is in sight as an estimated 2 million vaccines are administered daily.
While it will take several months to vaccinate enough of the population before we achieve herd immunity, there are positive signs of optimism. Some experts believe we will have turned a corner on COVID-19 by mid-2021, and this is showing up in many ways. Unemployment numbers, for example, are going back down from mid-2020.
This change is also visible in more subtle ways. If we compare the regulatory environment of 2021 to 2020, there is a clear evolution from a crisis management model to a growing focus on economic recovery and a return to normalcy.
In 2020 we saw regulators at state, federal, and local levels create hundreds of pandemic-related Executive Orders, rules, and non-binding guidance, ranging from general stay-at-home orders and mask mandates, to much more specific actions that impacted different populations and industries.
In workers’ compensation agencies and in stakeholder groups, virtual events became the norm – even dispute hearings. Telemedicine was encouraged via the relaxation of some regulatory requirements and by promoting payment parity, while pharmacy authorization and refill rules were tweaked to allow continuity of care. The pace of changes was broad reaching, impacting nearly every part of our industry.
Thus far in 2021, regulatory activity has not slowed down. States are focused on reviving their local economies and reducing unemployment. States like Florida, South Carolina, and Texas have lifted mask mandates or prohibited local municipalities from fining businesses or individuals for non-compliance. Many states have introduced liability bills meant to shield businesses from COVID-19-related lawsuits.
As regulators return their attention to issues which were more of a focus pre-pandemic, the legalization and reimbursement surrounding marijuana is returning to the spotlight, as is the issue of provider choice, employee classification, drug pricing, and so many other major concerns.
The light at the end of the tunnel may be visible for many, but the pandemic’s long-term effects will be felt for decades to come. For those who lost loved ones, for those who suffer from permanent health impairment from the virus, for the healthcare workers who lived through traumatic work environments, for industries that transformed themselves, and for the leaders that must take the lessons learned from this pandemic and apply them to how we move forward.
In the summer of 2020, Louisiana passed a series of COVID-19 liability laws that protected businesses, schools, and government entities from civil damages for injury and death related to real or alleged COVID-19 exposure in the course of business operations.
Exceptions exist for deliberate viral transmission or wanton negligence, but the intent was to free businesses from fears of litigation so they could continue to operate in a semi-normal fashion.
This law was followed swiftly by Executive Orders to the same effect in Arkansas. Then in February of 2021, Alabama and Montana enacted more of these COVID-19 liability protection laws, and now similar proposals have reached Florida, Georgia, Indiana, and South Carolina.
More states are likely to introduce their own COVID-19 liability bills, and the various proposals include different stipulations and language – for instance, the Montana law states that businesses are not required to uphold federal or state mandates surrounding mask requirements, temperature check rules, and vaccines – but the overall drive to limit COVID-19 liability is the same.
While the trend to expand presumption of compensability on COVID-19 and other conditions continues to gain traction, a different approach is being considered in states like California and Texas, who this year are considering legislation which would implement single payer health coverages. Though these types of bills are unlikely to pass, their introduction highlights one solution to the issue of who pays for conditions that are not clearly work related in all cases.
Riding high after the 2020 election legalized recreational and medical marijuana in several states, marijuana continues to gain more regulatory victories.
At the top of the list are rulings from two State Supreme Courts, which rule that payers must reimburse medical marijuana payments within workers’ comp claims when the drug is found to be medically necessary.
In the case of Quigley v. Village of East Aurora, the New York Supreme Court ruled that a police officer, classified as partially disabled after two work-related incidents, should be reimbursed for provider-prescribed marijuana meant to treat his pain and decrease his opioid use. His requests for reimbursement were turned down initially during various appeals, until the case made its way to the Supreme Court.
Meanwhile, in another case involving a police officer injured on the job and deemed permanently injured, the New Hampshire Supreme Court ruled that the workers’ comp insurer must reimburse the officer for medical marijuana payments after he was accepted into the state’s therapeutic cannabis program.
Currently, five other states – Connecticut, Maine, Minnesota, New Jersey, and New Mexico – have ruled that medical marijuana is reimbursable in workers’ comp, while three states – Florida, North Dakota, and Michigan – explicitly exempted insurers from payment for medical marijuana in workers’ comp claims.
The question of applicability and eligibility in workers’ comp is a slow-moving issue that has taken years for even these states to establish precedent, and it will likely take several more before a greater patchwork of laws is seen. However, this could change in response to a recent study from the National Bureau of Economics Research.
The study found that in adults aged 40-62, workers’ comp claim frequency declined in response to recreational marijuana laws, as did benefits paid. According to the research data, both claim frequency and benefits paid decreased by 20% from 2010 to 2018. Study authors claim that lower rates in non-traumatic workplace injury and work-limiting disabilities were due in part to these recreational marijuana laws.
The primary driver of these reductions is an improvement in work capacity, attributed to access to an additional form of pain management – marijuana.
It remains to be seen if research like this will add prompt policy change, but what is clear is that marijuana continues to make progress in a number of states.
Virginia, New York, and New Mexico passed laws legalizing recreational marijuana, which will also modify marijuana-related criminal penalties and provide automatic expungement for certain marijuana crimes. This marks 17 states with legalized recreational marijuana. The passage of these laws comes only months after the U.S. House of Representatives passed House Resolution 3884 – the MORE Act – written to decriminalize and tax marijuana at the federal level.
While this federal bill died in the Senate, it was still a momentous vote that paved the way for more action in the future, action which could be happening soon.
Changing demographics in the workers’ comp industry has been a popular topic for years, and the COVID-19 pandemic has made this trend even more prevalent.
In a report on remote work from the National Council on Compensation Insurance (NCCI), as of December 2020 approximately 35.5 million people – or 24% of the workforce – work from home, which has quadrupled when compared to pre-pandemic levels.
Many industries have learned they do not require physical spaces for their workforce to flourish, and many employees have settled into their home offices. While many positions can never transition to 100% remote work, several industries may permanently settle into a model that utilizes remote work more permanently, which will change how we think of work.
What new issues will emerge? What regulation will come from these new issues? We’re only one year into this new model, so many questions will be raised, especially as many employers choose to maintain their current work-from-home models for the foreseeable future.
But what about those who cannot work from home?
In another report on the COVID-19 recession, the NCCI found that four out of five lost jobs were concentrated in service sectors, and two out of five lost jobs are in Leisure and Hospitality. An increasing share of permanent layoffs are expected, along with economic distress among low-wage earners and small businesses.
As a result, U.S. employment, and by extension total workers comp premium, is likely to recover more slowly during 2021. It is also predicted that the post-COVID economy is likely to see employment shifts across industries, along with the intensification of existing trends toward digitization, automation, and contract work arrangements. Diffusion of economic activity away from city centers to suburban locales is also expected.
And all of this is expected to occur as the workforce continues to age.
The latest research found that the aging workforce (aged 65 and up) grew by 63% from 2009-2019, increasing from 6.5 million to 10.7 million. Estimates from the Bureau of Labor and Statistics project that by 2029, 16.5 million workers aged 65+ will be in the labor force, a 55% increase from now, making them 10% of the overall workforce.
Conversely, the 25 and under workforce declined. Pandemic impacts resulted in younger workers and those with less education to be the first laid off, or less likely to be hired at all. This age group experienced the largest employment decline.
However, the younger generation shouldn’t be forgotten. Their cultural differences have resulted in some notable trends.
Women’s employment is growing faster than men’s employment at younger ages, while men’s employment is growing faster than women’s employment at older ages. Unfortunately, women experienced larger employment declines at the height of the pandemic than other demographic groups.
Meanwhile, employment rose more for college graduates than other education groups before the pandemic and has fallen less for college graduates since the beginning of the pandemic.
A growing legislative trend across the nation is the introduction of bills that would allow patients the freedom to select their primary healthcare provider for workers’ comp claims.
In quick succession, Kansas, Montana, Indiana, and Colorado have all introduced similar bills, each with unique stipulations and rules. While these bills are not unheard of in the industry, as legislative sessions continue throughout the year it is possible that even more states will introduce bills such as these.
California Assembly Bill 1400 was introduced in late February, written to establish the California Guaranteed Health Care for All Program, or CalCare, which would provide comprehensive universal single-payer healthcare coverage and a healthcare cost control system for all Californians.
If passed, this bill would eliminate private health insurance and shift responsibility for administering and financing health coverage to the state government. A bill of this magnitude has many hurdles to overcome; a similar bill, with estimated costs of $400 billion annually, was introduced in 2017 but failed to advance.
Assembly Bill 399 is an effort to undo contract discounts between payers, medical provider networks (MPNs) and providers. Among other things, the bill would require all medical providers of professional and other non-pharmacy services to be reimbursed at the state fee schedule, eliminating the applicability of network discounts.
Healthesystems is working with our trade association and others to educate lawmakers on the impact this bill would have. Most insurers engaged public and private employers, and a number of business groups have been in opposition to this effort. It is unclear how or if the bill would benefit injured workers, but what is known is that there would be a significant financial impact to payers in lost discounts. Considering the economic impact this would have on the many self-funded and public employers in the state, the future of this bill is unclear at this time.
The Colorado Workers’ Compensation Division publishes its stakeholder agenda topics each year for consideration by its fee schedule advisory committee. This year the Division will be taking input from stakeholders on topics such as DME documentation, IMEs, Functional Assessments, and incorporating 2021 CPT changes to Evaluation & Management Coding. These meetings are open to members of the public and Healthesystems staff will participate in the discussions. These meetings have historically been a method for stakeholders to propose changes which might be needed in Rules 16 & 18.
Like many states, Florida voters passed a Constitutional Amendment five years ago, with 71% of voters in favor of legalization for medical use. However, Florida lawmakers are seeking to reverse course on its medical marijuana policy, advancing House Bill 1455, which would limit the percentage of THC allowed in smokable cannabis products. Supporters of the bill cited concerns around drug abuse, drawing comparisons to the opioid abuse epidemic despite a lack of any data, while physicians and others have criticized the effort as an arbitrary restriction on medical care with no basis in science, medicine or public health policy.
The Kentucky Department of Workers’ Claims (DWC) proposed rules to create a Medical Director position to adjudicate disputes over medical services and provider payments. This proposal would also update utilization review rules and the medical bill audit process. Under the proposal, employees and providers could appeal an adverse UR decision to the newly created Medical Director within 30 days of denial. The payer would be required to pay a $400 fee for each appeal submitted. Failure to pay the fee within 15 days would be construed as an admission that treatment shouldn’t have been denied and should be approved by the medical director. A public virtual hearing will be held on May 27th at 10:00 AM EST to discuss the proposed rules.
Montana Senate Bill 374 seeks to revise laws relating to physician dispensing, allowing providers to dispense drugs at their office or place of practice, only to their own patients, which are deemed necessary in the treatment of a condition for which the practitioner is attending the patient.
The bill states that the provider must offer to give a patient the prescription to have filled by a pharmacy, and that providers cannot dispense a controlled substance. Providers wishing to dispense drugs must register with the board of pharmacy.
In response to COVID-19, and to better coincide with the launch of the state’s new electronic claims management system – OnBoard – several delays have been issued surrounding the New York formulary.
Formulary compliance for refills will be established around the same time as the release of OnBoard in Q2 of 2021. The formulary will be updated in Q2 with Hand, Wrist and Forearm, Foot and Ankle, Asthma, Interstitial Lung Disease, Depression, PTSD, and TBI Medical Treatment Guidelines in Q2 of 2021, coinciding with scheduled OnBoard updates.
Several educational webinars have been hosted, with more to come. The Workers’ Compensation Board also hosts educational videos on their YouTube channel.
The recent budget bill proposal has language which may impact workers’ comp. One stipulation prohibits discrimination against employees who use medical marijuana, instead treating marijuana similar to alcohol, where concerns can only be raised if there are signs of impairment, at which point testing can be done. PBM regulation was also in the bill, but both the House and Senate rejected these sections. While PBM regulation was left out of the budget bills, oversight will be considered in other bills.
Governor Andrew Cuomo signed S.2588-A/A.3354-B, which modifies 196 C labor law, requiring all employers to provide up to four hours of paid leave to get a COVID-19 vaccine. Employees must be paid at their regular rate and are not required to provide proof of their vaccination. This law is effective immediately and not retroactively applicable.
The Texas Division of Workers’ Compensation (DWC) adopted amendments to 28 Texas Administrative Code §133.307 to allow health care providers and pharmacy processing agents to electronically submit requests for medical fee dispute resolution. Texas physicians and pharmacy processing agents will be able to request medical fee dispute resolutions through encrypted email, fax, or secure file transfer protocol (FTP). The new code is effective as of February 22, 2021.
The Texas Department of Insurance (TDI) published a draft rule related to workers’ comp healthcare networks, which aims to reduce reporting requirements and align network requirements with other TDI regulated networks by utilizing Insurance Code Chapter 4201, concerning Utilization and Independent Review.
The Draft Rule also seeks to decrease rule redundancy by adopting references to the Utilization Review Agent rules that will simplify Chapter 10, update rules to correct obsolete references to statutory and physical addresses, and shorten rules and simplify references to statutes and other rules to match current TDI language and comply with drafting requirements.