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Legislative Memo

Lev Ginsburg
Director of Government Afairs
T 518.465.7511 x207
www.bcnys.org

BILL:

S.2978-B (Savino)

Support

SUBJECT:

Permits workers' compensation claimants to fill prescriptions outside plan's pharmacy network

 

DATE:

June 30, 2010

 

The Business Council of NYS opposes this legislation which undermines a key reform included as part of the 2007 workers' compensation reforms. The bill permits workers' compensation claimants to use other than in-network pharmacies to fill prescriptions; requires employers and carriers which have established pharmacy network contracts to submit to the Workers' Compensation Board (WCB) details of those contracts; and allows pharmacies to recover payments due including interest, pursuant to regulations to be drafted by the WCB.

The workers' compensation reforms negotiated and enacted in 2007 included historic benefit increases coupled with different process improvements which would generate cost savings to support the benefit increases.  Those workers' compensation process improvements included providing the option to employers to establish pharmacy networks and the implementation of medical treatment guidelines.  The value of a network is to allow for negotiated pricing which may be different than the pharmacy fee schedule generating cost savings while not compromising quality of care to the injured worker.  

The full extent of the 2007 reforms have yet to be implemented – including those reforms which would support cost savings to fund the benefit increases. In the three years since the 2007 reforms were signed into law, three annual increases in the maximum workers' compensation benefit have been realized, and a fourth is scheduled to take effect in July, 2010. 

This bill seeks to upend one of the few reforms contained in the 2007 legislation — negotiated between labor and business — which has been implemented, and provides no rational basis or data in support of its purpose.  The agreement between labor and business to support benefit increases was premised on the understanding that cost savings could be realized without compromising a claimant's health care.  The establishment of a pharmacy network within the scope of the WCB's regulations does not compromise a claimant's health care.

The Business Council opposes legislation which seeks to undo parts of the 2007 reforms before the full extent of the 2007 reforms are fully implemented and evaluated.