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State moves that will affect workers’ comp

The state legislation that will MOST affect workers’ comp is often not ABOUT workers’ comp – rather it deals with other parts of the healthcare ecosystem.

For example:

Regulating Pharmacy Benefit Managers


At least 41 state legislatures introduced bills targeting pharmacy benefit managers (PBMs), which are third parties that help manage prescription drug benefits on behalf of both public and commercial insurers. That includes California, New Hampshire and Rhode Island, where bills have passed at least one legislative chamber and lawmakers are still in session.

Notably, governors in 13 states signed PBM reforms into law this year. For instance, Washington and Oregon banned spread pricing, in which prescription drug middlemen charge health plans more than they pay pharmacies and keep the difference. Idaho, meanwhile, implemented legislation requiring PBMs to transfer 100 percent of manufacturer rebates on to insurers.

Gotta say some of these are short-sighted and based on faulty understanding of the roe and actual practices of PBMs. That’s not to say PBMs are faultless…my firm has audited a number of work comp payers’ pharmacy programs…and suffice it to say there’s a lot of gaming out there.

By far the worst was the Federal program…

What this means – legislation may well lead to changes in WC PBM contracts and pricing.

Expanding Medicaid:

  • stabilizes hospital financials a lot,
  • helps ensure rural and inner-city facilities keep their ERs open,
  • improves the health of lower-income folks and workers, and
  • likely reduces hospitals’ and health systems’ shifting costs to workers’ comp payers.

One of the last holdouts is Mississippi, the poorest state with the worst health outcomes, highest infant mortality rate, and shortest life expectancy. Pushed by a broad coalition of business, not-for-profits, and consumer groups, at long last the state’s legislature is attempting to expand Medicaid, although it’s doubtful the bill will pass and be signed into law.

Nonetheless, one has to celebrate small victories, and the fact that the legislature is even considering expansion is good news. 

Frankly, detractors’ arguments against expansion are tissue-thin, not fact-based, and when questioned, beyond superficial.

What this means – Medicaid expansion -> healthier workers, more access to care and lower healthcare  costs. 

Hospital and provider consolidation

WaPo – A recent study found that hundreds of hospital mergers have escaped federal antitrust scrutiny in the past two decades because the Federal Trade Commission lacks the funding and staffing to crack down on all anticompetitive deals.

And, states are increasingly concerned about private equity investors’ impact on  healthcare access and cost. 16 state legislatures – both blue and red – have introduced bills dealing with this issue this year.

What this means – a possible slowdown of provider consolidation. 

ALSO – MCM will be changing from WordPress and MailChimp to Substack next week – if you don’t get a blog post notification by July 5 check your spam/junk/trash folder. 

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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