State Governments Begin Sessions at Robust Pace NY Governor Focused on Fraud and Access to Care in 2026
As state legislatures settle into their first month of session, the pace quickly shifts from ceremonial openings to intense policy work, with workers’ compensation emerging as an early focal point across the country. Committees fill with bills aimed at modernizing claims processes, addressing medical cost pressures, expanding presumptive coverage, or refining return‐to‐work programs. Stakeholders – from labor groups to employers and insurers – mobilize rapidly, responding to draft proposals, fiscal notes, and amendments that often shift the landscape week by week.
While some states pursue incremental updates and others debate deeper reforms, the opening weeks set a familiar yet pivotal tone: workers’ compensation may not dominate headlines, but it consistently drives some of the most consequential negotiations of the early legislative season.
New York Governor’s State of the State Focuses on Fraud and Access-to-Care
New York Governor Kathy Hochul’s 2026 State of the State address emphasized affordability and consumer protection, including a major initiative to crack down on insurance fraud to reduce costs for New Yorkers. Building on that theme, the Executive Budget advances legislation to combat workers’ compensation fraud by allowing the Workers’ Compensation Board to use employer assessments to fund a $17 million grant program enabling district attorneys to establish dedicated workers’ compensation fraud units – an effort designed to protect injured workers and control systemwide costs.
The Governor also highlighted the need to preserve access to care, a priority reflected in her broader agenda to safeguard essential services for vulnerable populations. In alignment with that priority, the Governor proposes expanding access to medical care for injured workers by permitting “any eligible licensed medical provider in good standing to treat workers’ compensation claimants if they choose,” significantly reducing delays caused by the current limited provider pool.
These combined reforms signal a comprehensive push to strengthen system integrity, improve care delivery, and reduce administrative barriers across New York’s workers’ compensation landscape.
New York Workers’ Compensation Board Issues Proposed 2026 Fee Schedule and Rules Update
On January 5, 2026 the New York Workers’ Compensation Board announced proposed updates to the state’s workers’ compensation medical fee schedules. The Notice of Proposed Rule Making was published in the January 14, 2026, edition of the State Register. Updates are being proposed to the Medical Fee Schedule, the Acupuncture and Physical Therapy and Occupational Therapy Fee Schedule, the Behavioral Health Fee Schedule, the Podiatry Fee Schedule, and the Chiropractic Fee Schedule.
Comments on the proposals should be submitted via email to regulations@wcb.ny.gov and will be accepted for 60 days after publication.
California Adopts Updated DMEPOS Fee Schedule Effective January 1, 2026
The California Division of Workers’ Compensation has issued an order updating the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) section of the Official Medical Fee Schedule, effective for services on or after January 1, 2026.
The update aligns state reimbursement levels with the Medicare Calendar Year 2026 Quarter 1 DMEPOS Fee Schedule, setting maximum reasonable fees at 120% of the applicable California Medicare amounts, with distinctions for rural and non‑rural ZIP codes. The full order can be found on the Division of Workers’ Compensation’s DMEPOS webpage.
CMS Expands Prior Authorization & Face‑to‑Face Requirements for Some DMEPOS
On January 13, 2026, the Centers for Medicare and Medicaid Services announced significant updates to the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) oversight process, aimed at intensifying efforts to curb fraud, waste, and abuse across Medicare and related programs.
Beginning April 13, 2026, CMS will subject 15 additional DME items to heightened scrutiny – eight codes will now require face-to-face encounters and written orders prior to delivery, while seven additional codes will require prior authorization. CMS is also adding 18 items to the broader Master List of DMEPOS categories considered vulnerable to fraud, which determines future additions to authorization and encounter requirements. The Master List is “a library of items that have been clocked as vulnerable to fraud and have the potential to be placed on either the [Face-to-Face Encounter and Written Order Prior to Delivery] or Required Prior Authorization lists.”
Read a detailed summary here.
U.S. House Passes Health Care Minibus, Senate Passage Pending
On January 22, 2026, the United States House of Representatives passed a fiscal year 2026 minibus package that included funding for various health care programs. Included in the minibus is a two-year extension of telehealth flexibilities originally created during the COVID-19 pandemic.
The minibus extends for two years the expanded telehealth flexibilities related to geographic requirements for originating sites and the types of practitioners eligible to practice via telehealth. The package also includes Pharmacy Benefit Managers (PBM) reforms. It would prohibit PBMs and their affiliates from deriving remuneration based on drug prices in Medicare Part D, require full pass-through of rebates and discounts to employer plans for new or renewed contracts, strengthen reporting and audit requirements, and make targeted changes to pharmacy network access standards. The Senate will need to vote on this package when it returns to session the last week of January.