UR Nation End of Month Regulatory News Summary

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announcement-updated_4-1-15
CA DWC Posts Revised Formulary Rules and Updates Drug List

In violation of AB 1244, the July 1, 2017 date for adoption of a California formulary came and went. Many system participants, including us at UR Nation, were disappointed that CA DWC had not published new proposed rules by that date. However, about three weeks into July, CA DWC did publish its latest proposed formulary rules. The new rules have an effective date of January 1, 2018. As with the previously published rules, there is a 15-day public comment period. The number of changes surprised us, as there were more than expected.

Following is a summary of the changes to the Revised Formulary Rules:

  1. Changes the definition of “brand name drug” by tying it to FDA approval of drugs under an original New Drug Application or Biologic License Application.
  2. Changes the definition of “compounded drug” to a drug that is subject to the California Board of Pharmacy compounding regulations, or federal compounding law. Specifically CCR Article 4.5 – Compounding (starting with section 1735) or Article 7: Sterile Compounding (section 1751).
  3. Changes “preferred” and “non-preferred” drugs to “exempt” and “non-exempt” – meaning exempt from utilization review. Specifically, an exempt drug is defined as a drug on the MTUS Drug List that does not require authorization through prospective review prior to dispensing, given it complies with MTUS guidelines.
  4. Adds a new definition of “generic drug” to drugs approved by the FDA and further adds language so a generic may be substituted for therapeutic equivalent brand name drugs. Generic drugs are defined as those produced or distributed under an FDA Abbreviated New Drug Application (ANDA) and approved by the FDA. Substitution must be done according to applicable state and federal laws and regulations.
  5. The formulary is effective January 1, 2018 for all drugs dispensed for outpatient use on or after that date. It applies to all dates of injury (DOIs).
  6. For injuries prior to January 1, 2018 a physician must submit Sec. 9785 Progress Report with an RFA for a non-exempt drug, unlisted drug, or compound drug, which includes a weaning program. Report must either include a treatment plan that sets forth safe weaning or transition to a drug or provide supporting documentation to substantiate the medical necessity and authorization for the drug, both pursuant to MTUS. Reports must be submitted at the time the next progress report is due under §9785(f)(8), which is approximately 45 days from the last report, and if that is not feasible no later than 4/1/2018. Previously approved drug treatment cannot be terminated or denied except as may be allowed by MTUS and in accordance with utilization review and Independent Medical Review (IMR) regulations. The treatment plan and RFA have to be processed according to a utilization review plan.
  7. Physician must submit RFA showing patient specific factors before brand name drug will be dispensed when less expensive generic is available.
  8. “First fill” allowed for non-exempt or unlisted drugs for up to 7-day supply if within seven days of injury. This section does not allow physician dispensing where prohibited by a PBM contract.
  9. Physician must submit RFA for any compounded drug.
  10. Utilization review plan may include non-exempt or unlisted drugs as part of a prior authorization process.
  11. Disputes now follow utilization review and IMR regulatory provisions (instead of 10 days to request IMR).
  12. Drug product list is modified to use RxCUI (National Library of Medicine drug coding system) or other unique product identifier in addition to (or alternate to) National Drug Codes.
  13. Administrative Director can consult the P&T Committee as needed to update the drug list.
  14. All provisions that referenced retrospective reviews have been deleted. In other words, those sections that talked about the ability to deny payment of a non-exempt drug that was not authorized or an exempt or Special Fill or Perioperative Fill drug because it was not medically necessary, using retrospective review, have been deleted.

FDA Commissioner Contemplating Mandatory Education for Opioid Prescribers

FDA Commissioner Scott Gottlieb spoke at an FDA meeting on abuse-deterrent opioids and said the FDA is considering mandatory opioid education for prescribers. Mr. Gottlieb’s prepared statement was part of the FDA’s meeting on Data and Methods for Evaluating the Impact of Opioid Formulations with Properties Designed to Deter Abuse in the Post Market Setting.

Gottlieb said, “Based on the feedback we’ve received from two public meetings over the past year, we’re actively exploring the question of whether, in the future, there should be mandatory provider education, and how we’d operationalize such a condition.”

The FDA currently provides opioid education for prescribers through its Risk Evaluation and Mitigation Strategy. This educational program, funded by drug companies, helps doctors obtain information about opioid prescribing. However, the opioid education is not mandatory.

CA DWC Report Shows IMR Uphold Rate for 2016 Above 91%

A new report by Administrative Director George Parisotto and the CA DWC shows that the IMR uphold rate for 2016 was 91.6 percent. In 2015 it was 89 percent.

In total, IMR vendor Maximus Federal Services received 249,436 IMR applications in 2016. Of those, 172,452 were eligible for IMR. The rest had defects including failure to include the utilization review decision, the application for IMR not signed, request not timely, and other defects. The 172,452 number of eligible IMR requests was actually higher than the 165,427 seen in 2015.

As you might suspect, pharmaceuticals comprised by far the most common treatment request. The report said that 43.5 percent of all IMR decisions were drug reviews. Rehabilitation services came in 2nd at 13.6 percent of IMR decisions, while diagnostic testing finished 3rd at 13.3 percent

Maximus Federal Services continues to improve its turnaround time for issuing IMR decisions.  At the start of 2016 it took an average of 24 days for Maximus to make its decision after being assigned an IMR. By the end of 2016 the average number of days had dropped to 14.

PDMP Helps Police Bust Opiate Ring

In addition to allowing New Jersey physicians to identify potential substance abuse, New Jersey’s PDMP has helped police arrest an Essex County physician and 17 co-conspirators.  Specifically, Dr. Craig Gialanella was arrested and charged with narcotics distribution.  Prosecutors said that the drug ring was led by Douglas Patterson. Prescriptions written for Patterson, which included different dates of birth in an alleged attempt to avoid PDMP detection, first attracted the attention of an Atlantic County pharmacist. When the pharmacist began to see an excessive amount of other prescriptions also written by Dr. Gialanella he called the attorney general’s office, which prompted an investigation in December.

The investigation revealed that Dr. Gialanella wrote more than 400 prescriptions to 30 people from the Atlantic County area in 2016 alone, providing them access to about 50,000 oxycodone pills. During the past four and a half years Dr. Gialenella wrote prescriptions for more than 350,000 oxycodone pills, which would fetch more than $7 million if sold on the street. As part of the scheme, Dr. Gialenella allegedly charged patients $100 for a brief office visit and, without performing an exam, would write them as many as five undated prescriptions at a time, each for hundreds of opioids and anti-anxiety medicines.

Elie Honig, director of the Division of Criminal Justice, which oversaw the probe, said “We’ll continue to bring these cases and hammer home the message that these corrupt healthcare professionals are just as culpable as the heroin dealers, gang leaders, and cartel members who profit from the epidemic of opiate addiction.”

Kentucky Classifying Gabapentin as a Schedule 5 Drug Has Raised Awareness of its Dangers

On July 1, Kentucky classified Gabapentin as a Schedule V drug; this was the first time a state has made such a designation. This means that medical providers must be licensed and registered with the U.S. Drug Enforcement Agency to prescribe the drug.

What this has done is raise awareness of Gabapentin’s potential for addiction and abuse, as the drug increases the euphoric effects abusers experience when taking opioids.  Gabapentin is sold as a generic and under brand names including Neurontin. It is an anti-seizure drug often prescribed off-label to treat neuropathic pain, for which it is considered a first line treatment. The street name for Gabapentin is “gabby.”

A drug trend report by Optum ranked Neurontin tablets at No. 8 in terms of percentage of workers’ comp drug spend last year, and Neurontin capsules at No. 10.

Phil Walls, chief clinical officer at PMB myMatrixx said Gabapentin can be effective for treating neuropathic pain, but it has mood-altering properties that can be dangerous. He said it doesn’t make sense that the DEA has not yet classified it as a Schedule V drug like Pregabalin, a drug structurally similar to Gabapentin that is sold under the brand name Lyrica.

Non-Opioid Pain Medication Tanezumab On FDA Fast Track for Review

The U.S. Food and Drug Administration has granted fast-track status for Tanezumab for the treatment of chronic pain. This non-opioid medication, jointly created by Pfizer Inc. and Eli Lilly, is an antibody that binds to and inhibits nerve growth factor (NGF). NGF levels increase in the body as a result of injury and inflammation. By inhibiting NGF, Tanezumab may help to keep pain signals produced by muscles, skin and organs from reaching the spinal cord and brain.  Tanezumab also works in a way that is different from other analgesics, including nonsteroidal anti-inflammatory drugs, or NSAIDs.

Tom Swiatek

Tom Swiatek

As Assistant Vice President of Regulatory Services, General Counsel, and Editor in Chief of UR Nation, Tom Swiatek draws on his experience as an insurance attorney on both the general liability side, as well as on workers’ compensation matters. As a California Workers’ Compensation Section Member, Tom is leading the discussion with respect to the regulatory challenges and opportunities facing the workers’ compensation system.