The insurance industry is applauding the signing of legislationin Indiana to contain workers' compensation costs.

HB 1320 was inked by Gov. Mike Pence over the weekend. The lawimposes a fee schedule with a maximum reimbursement rate of 200percent of the Medicare rate for treatments and procedures toworkers' compensation claimants by medical service providers.

The American Insurance Association says the legislationaddresses “problems which have been steadily mounting in Indiana inrecent years.”

“This new standard will help control the increasing costs formedical care provided to injured workers in the state,” says, SteveSchneider, Midwest vice president for AIA, in a statement.

The AIA and Property Casualty Insurers Association of America(PCI) say the bill also tackles another big cost-driver—repackagedprescription drugs, which is a practice that “injects costs intothe system without any discernible benefits to injured workers,”says Ann Weber, vice president of state government relation forPCI, in a statement.

“The new law provides that the maximum price for a repacked drugcannot be higher than the average wholesale price set by theoriginal manufacturer,” explains Weber, who says the workers'compensation reform will begin to shift Indian in alignment withother states adopting similar fee schedules based on Medicarerates.

However, Weber says the reimbursement remains “very generous tohospitals.”