WASHINGTON, D.C. – The California legislative session ended this weekend and today the American Insurance Association (AIA) commented that it is pleased the Legislature passed AB 378, compound drug reimbursement reform, during its 2011 Session. However, AIA will seek Governor Jerry Brown’s veto of three measures which would likely increase workers’ compensation costs if adopted into law.
“AIA is pleased that California legislators recognized the need for compound drug reimbursement reform,” said Marjorie Berte, AIA vice president of state affairs, Western region. “Insurers joined with organized labor and employers to pass this cost saving legislation. AIA urges Governor Brown to sign AB 378 which will take these added and unnecessary costs out of California’s workers’ compensation system.”
AB 378 removes the financial incentive for physician provision of compound drugs and limits physician reimbursement for compound drugs. In addition to limiting mark-ups for physician dispensed pharmacy goods, including compound drugs, the bill limits reimbursements to ingredients with a National Drug Code number.
“While AB 378 aims to reduce costs, unfortunately there were three measures passed by the legislature which will likely add costs,” said Berte. “AIA urges Governor Brown to veto these bills, AB 584, AB 947, and AB 1155, which will only serve to further financially burden California’s workers’ compensation system.”
AB 584 would require that utilization review physicians and psychologists be licensed in California and thereby likely increase system costs. AB 947 would permit the extension of the 104-week temporary disability cap while AB 1155 addresses apportionment in permanent disability cases. AB 947 and 1155 will likely lead to increased litigation and system costs.
The California Legislature’s 2011 Session official Sine Die adjournment date was September 10.