State legislators have proposed and conditionally approved a model law that would tie reimbursement rates for prepackaged drugs dispensed by physicians for worker's compensation patients to the original manufacturer's average wholesale price.

A panel of the National Conference of Insurance Legislators (NCOIL) approved the proposed model at its spring meeting in Washington Saturday.

Some interested parties said the cost of prepackaged drugs could range from 10 percent to 90 percent above the cost of buying the drugs at a pharmacy. One speaker noted, “Is the convenience worth the cost?”

Rep. Bill Botzow, D-Vt., who chaired the workers' compensation committee meeting, said his panel approved the model contingent on amendments that will be introduced at NCOIL's July meeting.

The model law itself is based on Tennessee's approach, but NCOIL wants to incorporate best practices used by other states through the planned amendments.

Rita Nowak, vice president, commercial lines and workers compensation for the Property Casualty Insurers Association of America, said, “Let's base what we do on what really works.”

Eric Goldberg, an assistant vice president at the American Insurance Association, said prepackaged drugs are part of the health-cost issue that is a primary driver of the rising costs of providing workers' compensation insurance. He welcomed approval of the proposed model as an important step.

An allied issue discussed at the NCOIL meeting is how can NCOIL join in the effort to control, through a possible model law, the potential for abuse of opioid drugs that are dispensed to patients being treated through workers' compensation.

Other issues taken up at the meeting included proposals for model laws establishing a definition “public employment” communities could use for determining which members of volunteer fire organizations would be eligible for workers' compensation benefits if injured while not directly involved in an emergency response.

The model is based on provisions in Vermont law and includes a drafting note identifying various state approaches to fund volunteer firefighter coverage.

The panel also took up the issue of how to provide some uniformity to providing workers' comp coverage to agricultural migrant workers.

Special Reports /

NCOIL Considers Model Laws on Prepackaged Drugs, Opioid Abuse

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