Tag Archives: North Dakota

Law Promoting Openness Regarding Pharmacy Benefit Managers Meets Industry Resistance

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

A North Dakota law attempting to promote openness about fees and prevent conflicts of interests with so-called pharmacy benefit managers (PBM) would seem non-controversial.

Non-controversial to everyone besides lobbyists for the PBMs who have sued the State of North Dakota in federal court claiming this commonsense legislation harms patient safety and is unconstitutional.

The North Dakota suit matters in the world of workers’ compensation because PBMs are an essential component of drug formularies which are popular with workers compensation insurers and have been touted as a way to prevent opioid abuse and control drug costs. Formularies are a list of approved drugs and dosages. Formularies are administered by the PBMs who buy the drugs, allegedly at a discount, from drug companies and pass along those savings onto users.

Drug formularies have come under criticism for issues addressed by the North Dakota legislation. First, a PBM may have a relationship with a particular drug maker which means that drugs are picked on for business reasons rather than medical reasons. Formularies also may not control drug costs as advertised.  In response to a drug formulary bill in Nebraska last session, the City of Omaha was concerned that formularies might increase drug costs because of the inability to use generic drugs.

Related to that concern, PBMs have been criticized for their role in helping drug companies pass along higher drug costs to consumers. PBMs are paid on what the discount they can negotiate, so drug companies have an incentive to inflate drug costs which benefits PBMs.

Lawmakers on a state or federal level are correct in having concerns about PBMs if they want to address drug costs and opioid use. The PBM industry has argue that state laws are “pre-empted” by federal laws regulating prescription drugs, so state laws are unconstitutional. Pre-emption is premised on the fact that federal laws are superior to state laws if there are federal and state laws on both subject matters.  Recently the U.S. Supreme Court has used pre-emption to strike down state-based consumer protection laws in favor of corporate defendants. The threat of successful litigation may scare states, especially smaller states, from passing laws to regulate PBMs.

But state laws regulating the use of PBMs in the context of workers’ compensation may be easier to defend from a legal standpoint. Workers compensation laws are enacted under a state’s police powers under the 10th Amendment. The constitutional basis of workers’ compensation laws is arguably a fluke of legal history but workers’ compensation is traditionally seen as a state law concern so federal courts may be less to strike down laws regulating PBMs in the context of workers’ compensation.

Increase in Work-Related Fatal Injuries in 2015 – North Dakota the Highest

Today’s post comes from guest author Anthony L. Lucas, from The Jernigan Law Firm.

According to the Census of Fatal Occupational Injuries, in 2015 the number of work-related fatal injuries increased nationally. There were 4,836 work-related fatal injuries in the United States and 150 work-related fatal injuries in North Carolina compared to 4,821 in 2014.

After the oil-and-gas industry’s sharp increase in work-related fatal injuries in 2014, the industry saw a 38 percent drop in 2015. The occupation with the most reported work-related fatal injuries was “heavy and tractor-trailer truck drivers” with 745. However, logging workers had the highest work-related fatal injury rate at 132.7 per 100,000 workers.

North Dakota reported the highest work-related fatal injury rate at 12.5 per 100,000 workers and Rhode Island recorded the lowest rate at 1.2 per 100,000 workers. North Carolina’s 2015 work-related fatal injury rate was 3.4 per 100,000 workers, with a total of 150 fatalities. In 2014, North Carolina had 137 work-related fatal injuries.

 

2015 Fatal Occupational Injuries Counts and Rates by State of Incident

 

Count

Rate per 100,000 Workers

Alabama

70

3.7

Alaska

14

4.1

Arizona

69

2.4

Arkansas

74

5.8

California

388

2.2

Colorado

75

2.9

Connecticut

44

2.6

Delaware

8

1.9

District of Columbia

8

2.4

Florida

272

3.1

Georgia

180

4.3

Hawaii

18

2.6

Idaho

36

4.8

Illinois

172

2.9

Indiana

115

3.9

Iowa

60

3.9

Kansas

60

4.4

Kentucky

99

5.5

Louisiana

112

5.8

Maine

15

2.5

Maryland

69

2.4

Massachusetts

69

2.1

Michigan

134

3.1

Minnesota

74

2.7

Mississippi

77

6.8

Missouri

117

4.3

Montana

36

7.5

Nebraska

50

5.4

Nevada

44

3.5

New Hampshire

18

2.7

New Jersey

97

2.3

New Mexico

35

4.1

New York

236

2.7

North Carolina

150

3.4

North Dakota

47

12.5

Ohio

202

3.9

Oklahoma

91

5.5

Oregon

44

2.6

Pennsylvania

173

3.0

Rhode Island

6

1.2

South Carolina

117

5.6

South Dakota

21

4.9

Tennessee

112

3.7

Texas

527

4.5

Utah

42

3.2

Vermont

9

2.9

Virginia

106

2.8

Washington

70

2.1

West Virginia

35

5.0

Wisconsin

104

3.6

Wyoming

34

12.0

 

 

 

Total

4,836

3.4

 

 

What About Workers’ Compensation In North Dakota?

Workers have flooded North Dakota to work in the booming oil industry.

Today’s post comes from guest author Jay Causey from Causey Law Firm.

A recent article in the New York Times (An Oil Boom Takes a Toll on Health Care, January 28, 2013) recounted the growing burden on North Dakota hospitals because of on-the-job injuries to workers who have flooded that state to work in the booming oil industry. Apparently North Dakota hospitals are swimming in debt from unpaid bills because, as the article by John Eligon states, “many of the new patients are transient men without health insurance or a permanent address in the area.”

“Swamped by uninsured laborers flocking to dangerous jobs in the oil industry, the hospitals here in the North Dakota oil patch are sinking under skyrocketing debt, a flood of gruesome injuries and bloated business costs from the inflated economy.” – John Eligon, New York Times

Mr. Eligon goes on to discuss actions by the governor and state legislature to increase medical training and medical facilities in North Dakota, and to obtain increased Medicaid financing for the state’s rural hospitals. Not only are medical facilities groaning from the increase of gruesome injuries associated with highly dangerous work environments, Mr. Eligon recounts the health issues that arise from the cramped housing scenarios in the work camps that have sprung up near the oil fields. This includes a significant increase in the incidence of sexually transmitted diseases.

The North Dakota Workforce Safety & Insurance site includes its catchy motto – “Putting Safety to Work.”

However, nowhere in Mr. Eligon’s article is there any mention of, or reference to, North Dakota’s workers compensation system which would seemingly provide the principal coverage for the injuries and conditions that are the subject of his article. Is the NYT oblivious to the fact of coverage for industrial injuries and conditions under each state’s workers compensation law? Or are workers injured in the new booming oil economy of North Dakota somehow being denied coverage under that state’s system, or being engineered out of coverage by the terms of their employment with the oil companies? It seems that a minimal inquiry, at least, on these points was owed by the NYT in its article.

Photo credit: nestor galina / Foter.com / CC BY