Board Bulletins and Subject Numbers

Supersedes Subject Number 046-1759, Published June 11, 2025

June 27, 2025

Amendment to Network Pharmacy Regulations - Unestablished Injuries

The Chair has adopted the amendments to Sections 440.3, 440.4, and 441.3 of 12 NYCRR to provide a path for claimants to obtain medically necessary medication either through use of a network pharmacy or by notice of their ability to use an out-of-network pharmacy.

The Notice of Proposed Rule Making was published in the December 31, 2024, edition of the State Register. The Notice of Adoption was published in the June 11, 2025, edition of the State Register. The amendments will take effect July 11, 2025.

Pursuant to Section 13(i)(5) of the Workers' Compensation Law, a payer may designate a pharmacy network and require claimants to obtain all prescribed medicines from that designated pharmacy network. The amendments to Sections 440.3, 440.4, and 441.3 of 12 NYCRR apply to all claims, regardless of the date of accident or disablement, in which the payer provides notice pursuant to 12 NYCRR 440.4(b) that the claimant is required to obtain all causally related prescription medication from a pharmacy network designated by the payer. In such cases, the payer must also provide notice to the claimant that the payer may choose not to pay for prescription medication for any additional body part or condition that has not been established and for which the payer has not accepted liability until liability for the additional body part or condition is established (12 NYCRR 440.3[d]).

Notice

The Board has not promulgated a form for the notice required by 12 NYCRR 440.3(d) with respect to additional body parts or conditions, but such notice must include the following information:

• That the designated network pharmacy may elect not to dispense, and the payer may elect not to reimburse the cost of prescription medication for any additional body part or condition that has not been established and for which the payer has not accepted liability, until liability for the additional body part or condition is established.
• If, after the claimant attempts to obtain a prescription medication for any additional body part or condition at a designated network pharmacy and the network pharmacy refuses to dispense the medication, the claimant may go outside the designated pharmacy network to obtain that medication.
• That thereafter, during the pendency of any dispute concerning the payer's liability for the additional body part or condition or any legal objection to the medication, the claimant may go outside the network pharmacy to obtain the medication for an additional body part or condition that the pharmacy network refused to dispense.
• That following the amendment of the claim to include the additional body part or condition, the payer must re-serve the claimant with the notice required in Section 440.4(b) of Title 12 NYCRR to require a claimant to use a designated network pharmacy to obtain prescription medication for that additional body part or condition.
• A contact phone number for the claimant to call with questions. Additional contact information, such as an email address, is optional.

Controverted Claims

These amendments do not change the requirement that a payer must give notice to the claimant pursuant to 12 NYCRR 440.3(d) that it is controverting a claim and that while the controversy is pending, the claimant may go outside the pharmacy network to obtain prescription medication that is causally related to the controverted claim. In addition, the penalty, re-service and surcharge provisions discussed below are applicable when a claim is controverted, as well as when with respect to additional body part or condition.

Penalty

If a payer fails to provide notice to the claimant as required by 12 NYCRR 440.3(d) and their designated network pharmacy does not dispense prescribed medication consistent with the Formulary, the payer will be subject "to penalties under section 114-a (3) of the Workers" Compensation Law of at least two-thousand dollars, with increased penalties thereafter for any subsequent failures to dispense." (12 NYCRR 440.3[d][1]).

Re-Service

When a payer has previously served the claimant with the prescribed notice required by 12 NYCRR 440.3(d), the payer "must re-serve the claimant with the notice required" in 12 NYCRR 440.4(b) after the claim or additional part or condition is established, "in order to require a claimant to resume use of a designated pharmacy." (12 NYCRR 440.4[c]).

Surcharge

When a payer elects not to dispense or pay for prescription medication after providing the notice required by 12 NYCRR 440.3(d) and the claim or the additional body part or condition is later found to be compensable, the payer will be liable for the cost of any prescription medication dispensed by a non-network pharmacy during the controversy at the pharmacy fee schedule rate plus a surcharge or 25% (12 NYCRR 440.3[d][2]; 12 NYCRR 440.5[a][2]).