Workers’ Compensation Advisory Council Addresses Formulary Bill, Other Pending Legislation at April Meeting

The Governor’s Workers’ Compensation Advisory Council (WCAC) meeting yesterday included a preliminary vote on the current crop of workers’ comp-related bills that have been filed for this Legislative Session. SB256, the bill that would institute a closed formulary for drugs prescribed in the workers’ compensation system across the state, dominated most of the conversation, but three other major bills were also considered.

Louisiana Comp Blog’s coverage of the whole list of bills we are tracking is available every Monday throughout the 2015 Legislative Session, which concludes no later than June 11th. Read the full details on that list and access the full text of the bills here.

The WCAC, which was revitalized several sessions ago by Representative Chris Broadwater, is tasked with reviewing comp bills and either recommending, opposing, or taking no position on them before they are brought before the Labor and Industrial Relations Committees for further discussion. The Council’s decisions are considered the first hurdle for every piece of comp legislation.

Senate Bill 107: unanimously approved

Senate Bill 107, sponsored by Senator Peacock, was considered first yesterday, and extends the current Second Injury Fund exclusions another five years to July 1st, 2020, as present law delineating exclusions at the first 104 weeks of indemnity and $25,000 worth of medical expenses will expire on July 1st, 2015. The WCAC members assembled unanimously supported the bill without significant comment.

House Bill 393: unanimously approved

House Bill 393, sponsored by Representative Lorusso, was next up for the Council. This bill provides for an expansion of the allowable investments of group self-insurance funds for workers’ compensation in the state. Steve Queyrouze, of the Louisiana Restaurant Association, spoke on behalf of Lorusso and the measure before the Council.

Queyrouze explained succinctly, “This basically just expands the investments funds can make for the first time since the 1980s. Right now [group self-insurance funds] can only buy bonds that are issued by the state of Louisiana, [HB393] would allow us to buy bonds that are issued by other states, rated A. It would also allow us to invest in commercially-backed securities that are triple A rated, and it would allow us to invest in triple B corporate bonds rather than the just the A ones we have now. This would allow the return on funds to increase by an average of 50-75 basis points.”

In response to Queyrouze’s testimony, some Council members, including OWC Director Patrick Robinson, admitted a lack of sophisticated technical knowledge associated with investments, but the overarching question was solvency. “We just want to confirm, from our perspective [at the OWC] that this isn’t going to adversely impact the solvency of group self-insurance funds,” Robinson said. To quell that concern, Queyrouze confirmed that the state Department of Insurance supports the bill as filed. The Council then voted unanimously to approve the bill.

The two more controversial measures: HB205 and SB256, created a significantly more conflicted atmosphere amongst the Council and members of the public than the initial two bills.

House Bill 205: split vote

House Bill 205, sponsored by Representative Gaines, shortens several timelines from 30 days to 15 days with respect to disputes over medical treatment under the state Medical Treatment Guidelines, (MTGs) as determined by the Medical Director, (MD) and provides guidance for courts on new medical evidence not considered by the MD.

HB205 also addresses inconsistencies in recent court decisions related to new evidence that was not in the possession of the Medical Director when the MD rendered a decision on the treatment. As filed, the bill provides for the consideration of new evidence at the 1008 level, but requires the workers’ comp judge (WCJ) to remand to the MD if he did not previously consider it. The bill places a burden (“shall”) on the MD to render a decision within 15 days, but if that decision does not occur timely, the WCJ will decide based on the entire record, including the new evidence.

Claimant attorney Trey Mustian testified on behalf of Lorusso and the bill to the Council explaining, “The bill is directed at a few main things: making the Medical Treatment Guidelines more user-friendly by extending some deadlines, giving the courts some guidance in evidentiary matters since there’s nothing in the current statute that does that…and finally, providing a mechanism for using the official court records when a Medical Director appeal is taken to the workers’ comp court.”

Much of the discussion surrounding the measure had to do with tacit denials on the part of carriers, which, Mustian asserted, create confusion for claimants and their representatives as they run through the 15 day deadline, with no penalty for carriers. The bill specifically addresses this by extending the delay for filing a 1009 from 15 to 30 days after “written notice of denial” rather than tacit denial. It also would suspend that proposed 30 day delay in cases of tacit denial until written notice has been received. Mustian also stated that he expects the measure to improve the functioning of the OWC, because the office would receive fewer 1009s with inadequate documentation with the longer deadline in place.

However, the employer and labor sides of the WCAC clashed over the significance of the tacit denial problem, plus general concern over injured workers languishing in the system without proper treatment. Troy Prevot, Council member and Administrator of LCTA, expressed issues with expanding the deadlines in terms of the associated potential for disability to increase over time as treatment is delayed. Meanwhile, Michael Morris, Council member representing the Louisiana Home Builders Association, questioned whether there should be language inserted into the bill that would allow employers to take a second look at the new medical evidence being submitted to the MD, so that the carrier could possibly approve the treatment without further conflict.

All agreed with Patrick Robinson’s assertion “that something must be done to discourage tacit denials” and Council member Greg Hubachek offered up the notion that the bill would only punish those “who are not participating in the system” by failing to issue written denials, but the parties disagreed that tacit denials were a common barrier. Jan Cleary, Director of the Medical Services division of the OWC, was brought up to clarify the matter and testified that “the tacits are not a huge problem” and that there were only 119 tacits from January 1st-March 31st of this year, 38 percent of which were from one provider. She suggested that the problem could be solved on the provider side with education.

Hubachek suggested toward the end of the discussion a potential compromise amendment to the bill that would keep the delays at 15 days, but save the other language in the bill addressing that such delays do not begin until written notice is received, thus providing the claimant and claimant’s representative the full time period to prepare the appeal. Mustian indicated that such an amendment would be acceptable. However, the Council ultimately disagreed over the 30 days and the perpetual suspension if written notice is never provided, with motions to oppose and take no position split 6 to 4 respectively. As per Council standard, a lack of a 75 percent majority on either side resulted in a simple report to the Committee, rather than any position on HB205.

Senate Bill 256: unanimously opposed in current form

The formulary bill, SB256 sponsored by Senator Martiny, was the last and possibly the most controversial piece of legislation taken up in the meeting yesterday. Jennifer Marusak, with the Louisiana State Medical Society, testified on behalf of the bill, expressing frustration throughout her testimony that the current form “does not resemble the legislation that I gave to staff.”

Marusak also stated that “for the first time in fifteen years” she was not given the document to review or approve. This discrepancy between the text of the bill as filed and the elements that Marusak had originally included or excluded in her draft created confusion throughout the discussion surrounding the bill, although most Council members indicated that they would not support it as filed.

Focusing on the intent of the legislation, Marusak said that the bill, with amendments, would reduce “the hassle factor” for many common drugs and create better access to care. She also suggested that the new draft would not require a list of “N” drugs because any non-“Y” drug would be treated under the current 1010 process for approval.

Marusak headed off concerns about the lack of a “shut off valve” for “Y” drugs without formal approval by assuring the Council that the new draft will clarify that issue. Additionally, Marusak questioned whether the bill should be considered under the Labor and Industrial Committee, since it is now assigned to Health and Welfare even though it deals with workers’ comp.

While the Council generally agreed that a formulary could help address Louisiana’s significant problems with opioid abuse and over-prescribing, the primary concern on the payer side was the ability of Louisiana’s Medical Treatment Guidelines to support the existence of a formulary, with Prevot indicating that the MTGs would need a significant and troublesome overhaul in order to maintain it properly. Concurrently, Patrick Robinson questioned the new formulary panel provided for in the bill, as Louisiana’s workers’ comp system already utilizes the advice of the Medical Advisory Council, the purposes of which are entirely clinical. “It’s a care issue not a cost issue [with the MAC], so I question whether it’s necessary to have an entirely separate panel,” Robinson said.

In an effort to address Prevot’s hesitation about the MTGs’ ability to support a formulary, Marusak offered up the fact that the legislation is intended to utilize an already existing formulary and build it into the MTGs. “At the end of the day, this clinical group will either approve or not approve changes to another formulary that’s already in place,” she explained. “They can meet however they want: either every quarter, every six months, every year…My providers believe that the formulary that Texas is using is positive and the one in Washington state is positive.”

Given the absence of the original draft from the State Medical Society and the attendant confusion, the Council voted unanimously to oppose SB256 in current form and, in reaction to a suggestion by Hubachek, reinstated the WCAC’s closed pharmacy formulary task force to consider the issue more thoroughly once the substitute bill is available from the State Medical Society.

“I don’t think we are overestimating this problem with opioids and pharmacy in the state,” Robinson said, by way of summary after the vote.


Image Credit: LexisNexis

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