2024 State Legislative Session Wrap Up: Workers’ Compensation Pharmacy Benefit Manager

It has been a busy year for state legislatures with many bills introduced that would impact the workers’ comp industry and pharmacy benefit managers (PBMs). Bills around PBM licensure, pricing, therapeutic psilocybin, and direction of care were a major focus for MyMatrixx as those topics directly impact our services and our clients.

All but 11 states have concluded their activity for 2024. The following summarizes the 2024 legislative session with the status the bills that have either failed, been vetoed, are still pending, or have been enacted.

You can also always track the status of the latest bills on our online Policy Tracking Map.

PBM Licensure Bills

Of the 48 PBM Licensure bills introduced in 2024, the following have greatest impact on the workers’ compensation marketplace.

Louisiana bill, LA HB 603 was enacted and went into effect August 1, 2024. This bill changes pharmacy auditing regulations for claims and records of pharmacies and pharmacists and includes standards for audits, claims and quality assurance reviews.

Oklahoma bill, SB 1670 was enacted and went into effect May 22, 2024. Focused on the Pharmacy Audit Integrity Act and pharmacy reimbursement, this bill provides for audits and reviews of pharmacy records and removes the potential requirement for a pharmacy to submit prescription copies for a review of a claim.

These remaining bills were not enacted in their respective states but may be reintroduced in future legislative sessions.

Direction of Care

The use of network pharmacies is a valuable tool to maintain transparent prescription management programs in place. This helps ensure medication safety for the injured worker and cost control for the employer. In 2024, several bills were introduced with the potential to negatively impact pharmacy networks.

While most of these bills were not enacted, New York bill, NY SB 1974 remains in review with the Governor. This bill would restrict an employer from directing an injured worker to use a network pharmacy under these conditions:

• The employer or insurance carrier refused payment of a medication through a network pharmacy as it wasn’t authorized within 72 hours of such request; or
• The employer or carrier failed to reauthorize a medication within 72 hours of the request for any of these reasons:
  • Lack of response to the reauthorization request
  • Medical reports not filed for reauthorization or contain a defect
  • Medical treatment guidelines do not support reauthorization
  • Independent medical examiner disagrees with reauthorization
  • Maximum medical improvement has been reached
  • The case is in the process of being settled

The non-network, chosen pharmacy that agrees to dispense the prescribed medication shall adhere to:

• Reimbursement amounts per state fee schedule;
• NY medical treatment guidelines for which the medication is prescribed;
• Follow NY pharmacy formulary; and
• Assume all liability for charges for such prescribed medication if a case is not established or if the prescribed medication is not later approved.

Pricing

Legislation on dispensing fees, pricing methodologies, and price adjustments are always of interest for employers, insurers, and the workers’ compensation industry. The following bills:

Pending Illinois bill, IL HB 4548 would prohibit spread pricing with PBM contracting. The bill includes medication reimbursement not lower than National Average Drug Acquisition Cost (NADAC) plus a professional dispensing fee of $10.49. Also includes rebate audit access at least once per plan year.

Louisiana bill, LA SB 640 was enacted and went into effect August 1, 2024. The bill states that No PBM shall reimburse a pharmacy or pharmacist in this state an amount less than the acquisition cost for the covered drug.

Kentucky bill, SB 188 was enacted and will go into effect January 1, 2025. This bill changes the definition of Health Plan and imposes reimbursement dispense fee at no lower than NADAC and not less than Medicaid, currently $10.64.

Therapeutic Psilocybin

Over the last few years, therapeutic psilocybin has been debated in the state houses as a treatment for mental health conditions such as end of life psychological distress, alcohol use disorder, depression, and anxiety. While Oregon and Colorado have already legalized psilocybin-assisted therapy and decriminalized the personal possession of drugs, it is still illegal on the federal level. It is under review by the Federal Drug Administration (FDA), and if approved, it will have an impact on some injured workers treatments. Until then, states grapple with how to legitimize this alternative treatment for patients.

Pending Alaska bill, AK HB 228 would establish a task force for the regulation of psychedelic medicines approved by the FDA. The task force would prepare for the potential medicalization of psychedelic medicines and make policy recommendations to the Alaska State Legislature concerning insurance and licensure.

Indiana bill, IN HB 1259 was enacted and will be in effect July 1, 2024 − July 1, 2025. The bill states that a research institution may apply for state financial assistance to conduct a clinical study to evaluate the efficacy of psilocybin as an alternative treatment for mental health and other conditions, including:

Group Health PBM Bills

MyMatrixx is dedicated to monitoring the legislative and regulatory activities that impact the workers’ comp industry and our clients. While the following PBM legislations are targeted for group health and currently do not impact workers compensation, we often find that what begins with group health PBMs, often makes its way to the workers’ compensation industry. It’s important for us to track these bills as well so we can inform clients of potential changes and advise on how to move forward as appropriate.

MyMatrixx Actions

MyMatrixx monitors the progress of all bills that impact the workers’ comp industry, and we will continue to advocate on behalf of our clients. If you have questions on any of the above bills, please contact your MyMatrixx Account Management team.

This communication is for informational purposes only and does not constitute legal advice. It should not be relied upon as legal advice.