2022’s Top Workers’ Comp Legal and Regulatory Trends
2021 saw practically all aspects of workers’ comp experience a state of flux – not least of which has been the legal and regulatory environment. At both the states and federal levels, changes are afoot that will have both short-term and long-term impacts on employers and workers’ comp payers.
Michele Hibbert, senior VP, regulatory compliance management with Mitchell, now part of Enlyte, was part of a four-person panel of experts that convened on Oct. 22 at National Comp in Las Vegas to highlight key legal and regulatory trends in workers’ comp.
Risk & Insurance® spoke with Hibbert before the presentation about what employers and payers should have on their radars moving into 2022.
Risk & Insurance: There are several key trends in federal legislation that employers and the workers’ comp industry should have on their radar right now. Let’s start with marijuana – we’ve read that federal legalization could move forward as early as 2022. What are the cannabis-related changes you’re looking at right now?
Michele Hibbert: We have been tracking marijuana regulations across the country — both at the state and national level — for years. At the federal level, we’ve seen Congress start to get serious about de-scheduling marijuana.
In August, Sens. Chuck Schumer, Cory Booker and Ron Wyden released a discussion draft of the Cannabis Administration and Opportunity Act which, if passed, would legalize marijuana federally, allowing states to determine their own cannabis laws.
In the meantime, the workers’ compensation industry is still struggling with ongoing questions and efficacy about the use and reimbursement of marijuana for medical purposes. Many state reimbursement policies are driven by case law versus administrative rules and/or regulations.
We’re watching states like New York and New Jersey closely, which are considering laws to require workers’ compensation and auto insurance payers to reimburse medical marijuana. [Ed. note: Both states currently allow reimbursement for medical marijuana but do not require it.]
R&I: The pandemic has had a significant impact on telemedicine regulations. Where do things stand right now and what do we need to watch for?
Hibbert: We all know telemedicine had a huge surge at the start of the pandemic, but ever since March and April 2021, we’ve seen utilization drop significantly in all sectors of insurance reimbursement. It is clear that when COVID rises, telemedicine services increase and [this] is more evident at the state levels than national for workers’ compensation claims.
While telemedicine has the potential to do a lot of good in our industry, it needs to overcome significant hurdles to have a lasting effect, including technology innovation and provider education. The significant projected use for telemedicine beyond 2021 is in long-term care settings, which have a limited impact in workers’ compensation claims.
On the regulatory side of things, telemedicine’s success will require permanent legislative updates that not only clearly define the appropriate type of treatments and visits that can be conducted virtually, but also answer some of the most pressing questions the industry is facing today, including how much a telemedicine appointment should cost compared to an in-person visit.
In addition, we are concerned that telemedicine services could add additional costs to the claim if not managed appropriately.
There is a lot of discussion and differing opinions on a national level — we’re keeping up with the conversation, especially any activity from the Centers for Medicare and Medicaid Services (CMS), to see what will come of telemedicine regulations after the pandemic.
R&I: What other federal trends should employers and payers be aware of moving into 2022?
Hibbert: One of the other biggest issues we’ve been watching is CMS activity around the elimination of inpatient-only procedures. This rule change by CMS is driven by cost, but even in outpatient settings, the same safety and quality standards will apply. Clinically, providers drive the care rendered to a patient, and if the reasoning to perform inpatient services is a benefit to a patient there can be exceptions.
The inpatient-only rule transition will occur over a three-year period that will start with elimination of approximately 300 services mainly related to musculoskeletal (i.e., joint replacement).
R&I: Presumption laws were somewhat narrowly drawn prior to the pandemic, but COVID pushed an unprecedented expansion of those laws. What are the significant long-term effects of that expansion?
Hibbert: Prior to the pandemic, workers’ compensation presumption laws were focused on first responders, for example, post-traumatic stress disorder for firefighters, and nearly all specifically excluded infectious diseases. We all know those laws were expanded significantly during the pandemic to include more types of employees and, of course, cover the COVID-19 virus.
While many of the presumption laws related to COVID-19 have an expiration date, we do expect these expansions will set a precedent for covering all essential workers and more infectious diseases beyond the pandemic.
R&I: What are the most significant ways that the pandemic has affected payer legislation across the states?
Hibbert: In recent months, many states across the country have begun discussing and implementing legislation that directly affects payers. For example, both Colorado and California are considering legislation that, if passed, would reverse the ability for employers to direct care, which would, of course, have a huge impact on workers’ compensation payers in those states.
Another trend we’ve seen in other states is the implementation of administrative rules that can lead to additional administrative burden and costs for payers to manage workers’ compensation claims.
R&I: What other legislative trends should be top of mind for payers right now?
Hibbert: Legislators are starting to play “catch up” on initiatives and issues that were being addressed prior to the pandemic. New fee schedules are being introduced and workshopped in several states and we are also seeing a renewed focus on drug costs and purchasing in new legislation.
R&I: Are there other trends on the horizon that you expect will become more significant moving into 2023?
Hibbert: Severity in relation to workers’ compensation claim costs needs to be addressed. Fee schedules alone are not enough to combat overutilization of services. Mitchell’s bill review data has indicated more than a 120% increase in [the] average charge per claimant since 2018, which is significantly higher than the overall medical consumer price index.
The drivers of these increases need to be critically examined to ensure appropriate review and payment of claims in the future. &