This Month, don’t Miss these 3 Key Updates in Workers’ Comp Pharmacy

Every workers' compensation professional managing pharmacy or PBM programs should be aware of three regulatory changes that occurred in March. Two are actionable now, and one is coming in two weeks. 

The Florida Case Everyone is Talking About 

Florida has permanently changed how doctors can prescribe medication. On February 26, the Florida First District Court of Appeals issued Opinion 2023-0941, overturning a Division of Workers' Compensation rule that allowed doctors to be paid for administering drugs in WC cases. This decision takes effect immediately without an appeal or grace period. Now, Florida WC claimants can legally challenge the costs of drugs prescribed and dispensed by doctors. 

The underlying calculations are quite revealing. Doctor's offices were charging significantly more than retail pharmacies for common drugs like ondansetron, which cost only a few dollars. Enforcing this order consistently over the next five years could save payers in the state approximately $43 million. 

The Florida Legislature wrapped up its session on March 13 without passing any laws to reverse this decision. This makes the current situation particularly notable. Physician dispensing interests attempted to secure emergency statutory relief but failed. The court's ruling is solid for 2026. 

If you have Florida WC exposure, the question isn't whether to act, but whether your claims processes are set up to respond systematically. Inform your adjusters now. Review your network contracts now, as the ruling is already affecting practices. You simply need to be prepared to leverage it. 

Pennsylvania – What is AWP? 

AWP pricing  in PA is costing the market over $1 million weekly, giving carriers an opportunity to respond. The PA Commonwealth Court, in Federated Insurance v. Bureau of Workers' Compensation, ruled that Red Book AWP is not a reliable basis for setting  workers' compensation medication prices. Stakeholders told the Bureau of Labor and Industry to develop a new standard, yet over two years have passed without action. Meanwhile, WCRI studies reveal WC prescription costs are ten times higher than NADAC, a new benchmark that many payers are moving to. 

For example, a popular antiemetic was billed at $2,596 per claim, whereas the retail price is only $32. Many carriers and TPAs haven't yet realized that Federated's ruling provides a legal basis to challenge AWP-based bills today. You can begin adopting a Federated-based system to review and contest claims immediately, regardless of the Bureau’s future decisions. 

New DOL Regulations 

While workers’ compensation laws are primarily state-regulated, federal PBM transparency regulations may still influence the market. The U.S. Department of Labor has proposed rules requiring PBMs serving ERISA self-insured health plans to disclose spread pricing, manufacturer rebates, pharmacy clawbacks, and affiliate transaction margins. This initiative aims to increase transparency in PBM economics within employer health plans under ERISA. 

Notably, traditional workers’ compensation programs are exempt from ERISA, as it explicitly excludes plans maintained solely to comply with state WC laws. Nonetheless, the proposed disclosure requirements could significantly impact our market. Many PBMs serve multiple sectors—commercial health, Medicare, Medicaid, and workers’ compensation. If ERISA plans demand detailed disclosures, payers in WC may start asking similar questions. 

In effect, these federal rules aimed at ERISA could indirectly shape expectations and contracting practices in the workers’ compensation PBM space, despite WC regulations remaining state-based. 

The DOL rule is open for public comment through March 31. Stakeholders involved in PBM pricing—such as spread models, rebate arrangements, or affiliate relationships—are encouraged to review the proposal and submit comments before the rule becomes final. 

Other Highlights 

These three issues are the most urgent, but they are part of a rapidly evolving regulatory environment that many firms struggle to keep up with. Pending measures in New York, Oklahoma, and Tennessee would prohibit PBMs from owning mail-order facilities. California's fiduciary duty rules for PBMs under SB 41 are already effective. Meanwhile, Iowa’s law requiring a dispensing charge remains in ERISA court, where a resolution could come at any time. 

The organizations that excel in these circumstances are those that stay informed about these changes before they lead to claims issues. 

Each month, we publish a comprehensive Regulatory Risk Intelligence Monitor covering all six WC pharmacy and PBM sectors: PBM licensing, pharmacy fee schedules, care directives, physician dispensing, Nurse Case Manager Regulations, and TPA licensing. Subscribers receive clear guidance on client strategies, real-time tracking of bills across all 50 states, and immediate access to analysis of potential cost implications. 

Dennis M. Sponer, J.D., LL.M., MBA, is the founder of SRX Advisors, a firm specializing in regulatory intelligence and fractional general counsel services focused on pharmacy and PBM regulation in workers' compensation. 

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