September Update: Don’t Miss These 3 Key Updates in Workers’ Comp Pharmacy

September 2026

Three developments this month are worth tracking for every workers’ compensation pharmacy professional. Maryland’s first-ever workers’ comp pharmacy fee schedule is now overdue, and it replaces list prices with acquisition cost. The fight over who can own a pharmacy has moved from statehouses to federal courts, with a divestment deadline looming in Tennessee. Regulators in four states are also tightening rules on topicals. Plus two quick notes on New York and AI compliance before you go.

Maryland’s First Pharmacy Fee Schedule Is Due, and It’s Based on Acquisition Cost

For the first time, Maryland has a statutory deadline of September 1 for a workers’ compensation pharmacy fee schedule to take effect. Senate Bill 306, passed in 2025 after the Commission’s Medical Fee Guide Committee spent two years battling pharmacy pricing disputes, requires the Workers’ Compensation Commission to adopt a schedule based on an acquisition-cost index, such as the National Average Drug Acquisition Cost (NADAC), plus a reasonable dispensing fee. It replaces the usual-and-customary-charge regime that made Maryland a haven for outlier pharmacy bills. Importantly, the schedule applies only to drugs dispensed by licensed pharmacies, not by dispensing physicians, so you can guess where the next Maryland battle will be.

This matters well beyond Maryland. Maryland is the latest jurisdiction to scrap list-price benchmarks (average wholesale price and usual-and-customary charges) in favor of what pharmacies actually pay for drugs. West Virginia capped PBM billing at NADAC this spring. Arizona’s draft fee schedule language shifts topical reimbursement to a percentage of documented acquisition cost. The message is clear: regulators have learned that AWP is a list price, not a cost, and they are rebuilding fee schedules around the real number. Payers and PBMs with Maryland exposure should make sure their bill review and adjudication logic is up to date, and everyone else should expect this template to spread.

Who Can Own a Pharmacy? The Structural Fight Moves to the Courts, and the Calendar

The most aggressive PBM legislation in the country is no longer about price. It’s about how a company is put together. Arkansas’s Act 624, the first law in the nation to prohibit PBMs from owning or operating pharmacies, was preliminarily enjoined by a federal judge before its January 1, 2026 effective date, on findings that it likely violates the dormant Commerce Clause and is preempted by TRICARE. The Eighth Circuit heard oral argument on Arkansas’s appeal on September 22, and its decision will shape the next wave of state laws. Meanwhile, Tennessee’s FAIR Rx Act requires PBMs and insurers to divest their Tennessee pharmacy holdings by July 1, 2028. CVS sued to block it the day it was signed, and the Arkansas appeal now pending in the Eighth Circuit will cast a shadow over that case.

All of this is playing out against a federal backdrop that shifted in February, when Congress passed PBM reform in the Consolidated Appropriations Act, 2026. Medicare Part D PBM compensation is “delinked” from drug prices and limited to bona fide service fees, and PBMs serving ERISA plans must pass through 100% of rebates and related remuneration, with the key provisions phasing in between 2028 and 2029. None of this directly regulates workers’ compensation, but don’t expect the vocabulary to stay in its lane. Payers will start asking their workers’ comp PBMs the same question Congress just answered for Part D: What exactly are we paying you, and for what service? Those conversations will be short for PBMs that already price their workers’ comp services as disclosed administrative and clinical fees. For the ones that don’t, they won’t be.

The Topical Squeeze Tightens in Four States at Once

As regular readers know, topicals are the fastest-growing cost category in comp pharmacy, and the rules got noticeably tighter this month. In Texas, the Division of Workers’ Compensation closed the comment period on its plan-based audit of topical analgesics on August 6 and has since approved the audit plan with edits. The audit will test prescribing against the Official Disability Guidelines, and its findings could drive changes to reimbursement rules. In Arizona, the Industrial Commission has released draft language for its next annual fee schedule cycle that would set a dollar threshold for prescription topical reimbursement and require providers to justify exceeding it. In Mississippi, a corrected fee schedule reinstating the $30-per-30-day cap on manufactured topicals took effect September 1, closing the loophole the June update opened by mistake. And California regulators are developing their own rules for topical medications, according to industry legislative trackers. Four states, four tools (an audit, a cap, a correction, and a rulemaking) aimed at the same drug category in the same month. If you still have unmanaged topical exposure in your book, the regulators are ahead of you.

Bonus: New York Keeps Hammering on the Network

New York remains the state to watch on pharmacy networks. The Workers’ Compensation Board’s amendments to its network pharmacy rules already let injured workers use out-of-network pharmacies when a carrier disputes a body part or condition, with penalties starting at $2,000 for notice violations. Now the Legislature wants to go further: Assembly Bill 10413 and its Senate companion would codify those regulations and require the Board to report on out-of-network pharmacy use within three years. Governor Hochul has already vetoed network bills twice. If one reaches her desk this fall, it will be round three, and the industry shouldn’t assume a third veto is automatic.

One More Thing to Watch: AI Compliance

AI just became a compliance issue for PBMs. In Kisting-Leung v. Cigna, a federal court in California allowed a proposed class action to proceed over Cigna’s PxDx algorithm, which allegedly denied hundreds of thousands of claims in batches, with doctors spending about 1.2 seconds per claim and no individual physician review. 

Every PBM should pay attention to the court’s reasoning: where the plan documents required a medical director to make medical-necessity determinations, handing that judgment to an algorithm was enough to support a breach-of-fiduciary-duty claim. Discovery closes September 30, and the lessons carry directly over to workers’ comp pharmacy, where prior authorization and utilization review are increasingly automated, and states are already legislating. Texas now restricts the use of automated decision systems in utilization review.

The point is not that PBMs should stay away from AI. It’s that they need written AI policies and procedures: clear rules on which decisions AI can make and which must be made by a licensed clinician, documentation of how the tools work, and audit trails that can show a court or a regulator that a human made the decision the plan or statute requires a human to make.

The through-line this month: Benchmarks are shifting to acquisition cost, structural questions are shifting to the courts, and topicals are running out of unregulated options. Workers’ comp pharmacy isn’t getting easier; it’s getting regulated.

Dennis M. Sponer, J.D., LL.M., MBA, founded SRX Advisors, a regulatory intelligence and consulting firm that helps PBMs and payers control workers' comp pharmacy costs. He is Of Counsel to Goldsand Friedberg, a health care law firm with offices in Washington, D.C., and Miami. Dennis founded and served as CEO of two PBMs, including ScripNet, which handled workers' comp pharmacy exclusively in all fifty states. This month, he spoke at the Elevate Work Comp Conference in San Diego (Sept. 21-23) and will speak at National Comp in Las Vegas (Sept. 29-Oct. 1), in joint sessions with colleagues from Optum, Outsource Consulting, NJM Insurance, Auto-Owners Insurance, and NCCI.

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