legislative update

Legislative & Advocacy Efforts Making a Difference for Our Clients

A key part of our commitment to you as a business partner is to be your advocate in legislative matters impacting pharmacy workers' compensation. Toward this end, Perry Lewis, Vice President of Government Relations, spent the past twelve months traveling across the country addressing the wide range of workers' comp legislation and policy matters that affect pharmacists.

While we have worked to track developments in all states, we have been particularly active in eight key states (CA, MD, MN, NY, PA, TN, and TX) where workers' comp reform was a hot button issue. Through our efforts, government entities have been educated regarding the operational complexities of pharmacy workers' compensation, and positive results have been achieved for our partners.

Our strategy this year has been twofold; first, to be an early advocate for pharmacy workers' compensation issues; and second, to assist state pharmacy associations in being proactive to protect their interests in the workers' compensation business. When necessary, TPS has even engaged contract lobbyists and public relations firms to support its efforts, and to obtain the desired results.

Strategy in Motion

A perfect example of this strategy in action is our work in Tennessee .

When the Governor announced workers' comp reform as a legislative priority, and supported the development of a medical fee schedule as part of the reform, we immediately made contact with the Tennessee Pharmacy Association to offer our assistance. We also retained the services of a PR/Government Relations firm. Working together, this group was able to add a pharmacy representative to the agency charged with developing the fee schedule, thus playing a significant role in drafting the preliminary language of the legislation while maintaining strategic contact with key government officials throughout the process. While these efforts will not be come to fruition until 2005, we are proud to see the positive result garnered for our pharmacy partners through our early intervention.

Tennessee is but one example of our corporate objective to be proactive prior to the creation of bills, regulations or the passage of legislation rather than operate in a reactive mode.

Listed below are two examples of educational topics discussed with legislators, staff liaisons, workers' compensation bureau employees and stake holders regarding approaches to cost containment rather than reductions in reimbursements.

Using Legislation to Establish Pharmacy Fee Schedules

A number of state legislatures have considered legislation to establish pharmacy fee schedules. Fee schedules can be part of an effective cost containment strategy addressing controls over the unit price of prescription drugs (distinct from the more critical question of utilization controls). In 2001, 23 states had WC fee schedules for prescription drug payments. While establishing fee schedules is important, setting the appropriate fee levels is probably the most critical aspect. Setting fees to high will unnecessarily increase costs-setting fees too low may result in restricted access or increased utilization.

Using Legislation to Mandate Use of Generics

Another approach to managing the cost of prescription drugs has arisen in connection with calls to introduce legislation mandating the use of generic drugs where appropriate. This study showed that in 2001, brand-name drugs cost an average of 107% more than generics. Not only would direct cost savings be achieved through legislating the increased use of generics, but also the expense that many states incur by offering incentives, such as higher dispensing fees and/or percent of AWP paid to encourage pharmacists to dispense generic drugs would be eliminated.

Advocacy Efforts/Year in Review in Critical States:

California : It appears all eyes are locked on events transpiring in this pivotal state.

Advocacy and legislative efforts to date:

Initiated face to face meetings in legislators' offices to discuss the potentially negative effect of proposed reductions.
Coordinated efforts with pharmacy constituents via grassroots campaigns to lodge concerns over fee schedule reductions and the linking of workers' compensation to Medi-Cal rates.
Educated top state government officials regarding pharmacy as part of the workers' compensation system and the differences between pharmacy dispensing costs and pharmaceutical costs.
Engaged lobbyist to ascertain necessary strategy and obtain appropriate engagements.
Assisted in drafting language sponsored by Senator Margett specifically de-linking workers' compensation pharmacy from the Medi-Cal model.
Developed strategy for testimony and support of bill in hearings.
Scheduled meetings with New DWC Director to discuss potential access issues for injured workers and requested emergency rules updating higher reimbursement.

The above actions items represent but a few of the activities either completed or currently in process. Were we successful in our objective to de-link workers' compensation from Medi-Cal? Did we obtain the stay on pharmacy rates? Unfortunately, the answer to both questions is 'No'. The Governor's new budget passed in July, and the resulting changes in pharmacy reimbursement take effect September 1, 2004. At the same time, however, legislators in California will agree that our messages have been communicated, and that our advocacy efforts will continue.

New York : New York is a totally different breed compared to our constituents on the west coast. During this year's session several of the bills drafted directed the workers' compensation director to review all methodologies controlling medical reimbursement. Though pharmacy was not specifically mentioned in the bills, it was still a point of concern.

Advocacy efforts in New York included:

Meeting pharmacy constituents to gauge their involvement.
Hiring a lobbyist to immediately get access to key stake holders.
Coordinating meetings with influential members of the AFL-CIO to solicit their assistance in the development of bill language.
Drafting language for workers' comp bill.
Sponsoring key legislative efforts.

The 2004 Session ended without passage of bills but pharmacy is now at the table and advocacy & legislative efforts will continue during the next session.

Arizona : As in New York , bills were introduced and passed early in 2004 instructing the commissioner to form an advisory committee to review all provider reimbursement.

Advocacy efforts in Arizona included:

Coordination of an immediate meeting with key pharmacy stake holders to determine their connections and involvement with the commissioner.
Interviews with potential lobbyists if needed.

The commissioner is not moving quickly on this initiative. However, advocacy efforts in this state will continue to support pharmacy associations and their connections.

Texas : Resolution in last year's session directed pharmacy stake holders to work with TWCC on a study to quantify the incremental costs associated with dispensing workers' compensation prescriptions.

These efforts included:

Accruing expenses to UT Austin in preparation for and implementation of the study.
Providing ideas, suggestions and questions for survey and focus groups via meetings and hard copy exchanges.
Screening potential lobbyists in preparation for the 2005 legislative session.

Other potential hot spots for 2005:

In addition to the states previously mentioned, Pennsylvania , Maryland , Montana , Washington , New Jersey , Missouri , Hawaii and Minnesota have all communicated intent to seek alternative solutions to current issues during upcoming sessions.

Legislative Communication:

Until recently legislative updates have been distributed periodically via email when time permitted. In the future, our goal, as your partner in workers' compensation, is to communicate to you more frequently, providing accurate, up to date and informative information in a manner useful to your organization.

Toward that end, within the next few weeks, TPS will begin distribution of our legislative updates in a "state of the art" electronic program. When available you will receive an electronic link to connect you and your staff to this online service. Once connected drill down features will be available to link you to states important to your organization. In addition feature updates will highlight grassroots letters, advocacy suggestions, and hearing dates along with a whole assortment of options to locate your specific representatives by zip code.

e look forward to promoting this feature as part of our legislative efforts and request you take advantage of this exciting new tool.