Drug formularies are common in the medical industry. Group health companies have used formularies for decades. In many cases, group policies allow companies to identify what types of medicine are included in the formulary (i.e. Viagra, etc.). Formularies don’t usually restrict the physician from prescribing a drug or a pharmacy from dispensing it, but they do create a scenario in which the payer doesn’t have to reimburse for the drug unless certain requirements have been met (i.e. utilization review for medical necessity).
Texas implemented a formulary for workers’ compensation in 2011 that most in the industry say was a game changer. Texas had been using the ODG guidelines since 2007 and added the ODG formulary where drugs are identified as “Y” or “N” drugs. “Y” drugs do not require utilization review (UR) while “N” drugs do. Many anticipated an increase in UR in Texas as a result of the formulary, but the expected increase never materialized. Instead, physicians changed their prescribing patterns and utilized the “Y” drug alternatives in an effort to keep things simple and expedient for their patients.
As part of the formulary roll out, Texas’ officials aggressively reached out to promote contact between carriers and treating physicians in advance of the implementation date. They encouraged them to wean patients from the “N” drugs listed in the formulary or to obtain an agreement with the insurer to continue the “N” drugs for a specified period of time. As the implementation date approached, physicians realized that they were going to have to change their prescribing methods.
Additionally, Texas had a multi-prong approach for the implementation based on the date of the claim which allowed legacy claims until 2013 to conform to the new rules. From all accounts, the formulary implementation has been successful, as the amount of opioid prescribing and the costs associated with opioids have dropped dramatically. Other states have reviewed the Texas process and have utilized or considered aspects of the Texas process.
California workers’ comp stakeholders are currently discussing their formulary process, and new rules are expected soon. What should we expect? We believe, based on the draft formulary rules from 2016, that the formulary will provide a list of drugs that are considered as generally appropriate for treatment and will therefore not require preauthorization. The formulary will be based on ACOEM guidelines and should reduce delays in obtaining drugs. We also think it will cause physicians to prescribe in accordance with approved guidelines. In other words, prescribing patterns will change.
In terms of a transition period for legacy claims, the proposed rules only describe a July 1, 2017 effective date, regardless of the date of injury. Specifically, Sec. 9792.27.3 says the formulary applies to drugs dispensed on or after July 1, 2017, regardless of the date of injury. The language says that for legacy claims the formulary should be “phased in” to ensure injured workers receiving ongoing treatment are not harmed by an abrupt cessation of drugs.
In this instance, the rules say that the physician shall either prepare a treatment plan to transition the injured worker to a preferred drug or submit the request for authorization to UR. The rules also specify that the physician is responsible for requesting a medically appropriate and safe course of treatment for the injured worker. Therefore, the creation of a safe course of treatment does not appear to be a duty that can be delegated to the UR doctor. However, it is somewhat unclear to me how this “treatment plan” or “safe course of treatment” will work.
In looking at what California is proposing, I think California may want to consider what Tennessee and Texas did in terms of their legacy claims. My opinion is that Tennessee got it right in terms of having the February 28, 2017 effective date for legacy claims occur about six months after the effective date for non-legacy claims. The Texas implementation date of 2011 for new injuries and 2013 for legacy claims was a little too long, but it still worked. What I noticed in Texas was that shortly after the 2011 implementation date, physicians starting prescribing in accordance with the formulary because they didn’t want to have to figure out if a particular patient was a legacy claim or newer claim. In other words, it was easier for the physician to simply prescribe according to the Texas formulary for all patients.
If I could wave a magic wand, I would probably have the California formulary apply to newer cases on the anticipated July 1, 2017 date. For legacy claims, I would have the formulary apply January 1, 2018. That would provide all system participants with a timeline and something that’s easy to follow. Looking at what we learned from Tennessee and Texas we can see that it worked for them and would probably work well for California.
At UR Nation, we believe that workers’ compensation drug formularies will continue to be the trend in helping contain the epidemic proportions of opioid usage and to contain costs related to other pharmacy items. In fact, I believe a drug formulary and mandatory prescription drug monitoring database (PDMP) are the one-two punch every state should implement to stamp out the opioid crisis once and for all.