The State of the States

Regulatory Review

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


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]

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