SACRAMENTO, Calif. – The Association of California Insurance Companies (ACIC) urged members of the Senate Labor & Industrial Relations Committee (Committee) to support a bill that will close a loophole and bring predictability back to the pricing of compound drugs. AB 378, authored by Assemblyman Jose Solario, will make compound medications subject to a fee schedule, like Federal Drug Administration (FDA) approved medicines. This bill will also add pharmacy products to the list of medical services under the physician self-referral law.
“It is well documented that costs are rising in California’s workers compensation system and that pharmacy costs are a major driver of these increases. AB 378 is a common-sense measure supported by employers, labor and insurers that will stop these disproportionate costs,” said Mark Sektnan, ACIC, president. “Compound medications are a combination of other medications and they present unique billing issues. Insurers are seeing many instances where the bill for a compounded drug is several times higher than the comparable oral, FDA-approved, commercially available oral dosage. One insurer reported their costs for compounded drugs increased from 9.6 percent to 44 percent of their pharmacy costs.”
ACIC also testified before the Committee in opposition to two important measures impacting California’s workers compensation system. AB 228, authored by Assemblyman Felipe Fuentes, would allow the State Compensation Insurance Fund (SCIF) to expand its jurisdiction and enable it to provide coverage to out-of-state employees of California employers.
“Allowing SCIF to use its beneficial tax status that it receives because of its mandate as the insurer of last resort is unfair to private carriers and other state funds that pay all their federal taxes,” said Sektnan. “As a matter of fairness, ACIC believes that if SCIF is going to act like a private carrier, it should be regulated the same way as private insurance companies. This bill presents a major policy shift and more study of its consequences is warranted.”
AB 1155, authored by Assemblyman Luis Alejo, would prohibit race, religious creed, color, national origin, age, gender, sex, sexual orientation or genetic characteristics from being considered a cause or factor of a disability regarding an apportionment determination.
“Apportionment is a very important part of the workers compensation system that is founded on the principal that an injured worker has a right to be compensated for a work related injury. However, an employer’s obligation to compensate an injured employee does not extend to payment of compensation for a disability that is not work-related,” said Sektnan. “AB 1155 could be interpreted to mean that whenever any of the characteristics listed in the bill has an arguable relationship to a disability, that disability can’t be used in an apportionment determination. We appreciate the intent of AB 1155, however, we believe workers compensation judges have the authority to overturn apportionment determinations and have the competency and tools to make rational determination on apportionment and protect any injured worker from any bias due to their race, sex, marital status or genetic predisposition.”