The State of the States

Regulatory Review

A round-up of nationwide regulatory changes affecting the workers' compensation industry.
By: | August 7, 2014 • 4 min read


Medical Treatment Utilization Schedule

The Division of Workers’ Compensation proposed amendments to the medical treatment utilization schedule. The proposed regulation revises regulatory definitions of “evidence-based medicine,” “functional improvement,” “nationally recognized,” “peer reviewed,” and “scientifically based.” The rules clarify that the schedule constitutes the standard for the provision of medical care. The rules set forth the process to determine if medical care is reasonable and necessary when the schedule is silent on a particular medical condition or diagnostic test or when the schedule is successfully rebutted. The rules establish a minimum standard for conducting a medical literature search.


The rules also explicitly set forth a systematic methodology to determine the strength of evidence used to support the recommendations of a medical condition. The rules also amend the composition of the Medical Evidence Evaluation Advisory Committee to include two additional members, one from the pharmacology field and one from the nursing field. The division scheduled a public hearing on July 1.


Medical Billing

The Division of Workers’ Compensation proposed rules regarding medical services billing, filing, and reporting. The division rewrote and reorganized the current rule into five proposed rules. The proposed rules include revised billing instructions for dispensing practitioners when billing for dispensed medications. The proposed rules also incorporate revised form completion instructions for pharmacies and pharmacists, hospitals, ambulatory surgical centers, health care providers, work hardening programs, nursing homes, and home health agencies. Those with questions should contact [email protected]


Outpatient Medication Formulary

The Bureau of Workers’ Compensation proposed amendments to the outpatient medication formulary rule. The proposed rule adds reimbursement for the sustained release gabapentin agents Gabapentin and Gabapentin Encarbil. Reimbursement for these agents will require a prior authorization that reflects a 30-day trial and clinical failure of the immediate release forms of gabapentin. The rule also adds reimbursement for ziconotide. Reimbursement requires previous approval of the use of an implanted pain pump. The rule limits reimbursement for all testosterone products to claims that have medical allowances that involve the genitourinary or endocrine systems. The rule allows reimbursement for treatment with transdermal forms of Fentanyl and Buprenorphine as initial sustained release opiates in claims with clinical documentation of an inability to swallow or absorb oral medications.


The rule revises the description of coverage of the proton pump inhibitor drug class to clarify what over-the-counter products and prescription products would be covered. The bureau proposed for the rule to go into effect on Sept. 1.

Vocational Rehabilitation Fee Schedule

The Bureau of Workers’ Compensation proposed amendments to the vocational rehabilitation provider fee schedule. The proposal increases all vocational rehabilitation base service fees by 2.36 percent. The rules also implement reimbursement codes and protocols that reflect a multi-tiered payment approach based on type of services provided. Standard services include the assessment of an injured worker’s readiness and potential for vocational rehabilitation services focused on return to work, and well as physical restorative services and retraining. Employment services are to assist an injured worker to seek employment with a different employer. Plan implementation services are provided when the vocational rehabilitation case manager’s comprehensive vocational rehabilitation plan has been authorized and implementation and monitoring of the injured worker’s progress begins. The bureau plans to implement the new fee schedule on Dec. 1.


Electronic Medical Billing

The Workers’ Compensation Division proposed to adopt new rules to establish standards for electronic medical billing. The rules adopt national-level electronic medical billing standards and define terms used to explain the standards. The rules provide an option for an insurer to become exempt from the requirement to accept electronic medical bills. The rules allow for use of alternative billing formats if those formats include all of the data elements required under the standard. The rules also describe how to track and submit related documentation. The rules prescribe standards for electronic medical bill acknowledgements, remittance advice, and explanations of benefits. The rules explain the potential for application of civil penalties.


Farm Internship Program Classifications

The Department of Labor and Industries issued a preproposal statement of inquiry regarding rulemaking to establish rates for farm internship program classifications and update reporting rules for workers’ compensation insurance. Without the rulemaking, rates for the farm internship classifications could not become effective. New rates and the updated reporting rule are necessary to ensure proper reporting of hours and collection of premiums for employers participating in the program. Comments should be submitted to [email protected]

Multiple Classifications

The DLI adopted a rule allowing employers to use the same employees in more than one basic risk classification as long as work records are kept and the rules allow.


For example, more than one basic risk classification can be assigned when a single classification does not describe all of the employer’s business operations because employer has multiple enterprises. Also, multiple classifications can be assigned when the employer is a contractor with workers performing more than one phase of construction or the employer operates a farm that raises more than one type of crop or animal. The rule also removes the need to identify the governing class and simplifies reporting.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]