Workers’ Comp Prescription Drug Formularies – A Hot Topic at the 2015 NWCDC

| | Utilization Review

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This year’s National Workers’ Compensation & Disability Conference (NWCDC) featured many interesting speakers and sessions. The key note speaker was Arthur Southam, MD, the leader of Kaiser’s health plan operations, who Joe Paduda of Managed Care Matters said was “a great choice.” Speaking of Joe Paduda, he squared off in the “Perspectives From the Industry’s Favorite Bloggers,” which also featured David DePaolo, Rebecca Safer and Robert Wilson.

The regulatory sessions were notable, including “Opt-Out Alternatives,” “Fraud Detection Strategies” and an engaging session on “Extreme Violence in the Workplace.” A session called “Regulatory Success Stories: Lessons From Two Bell Weather States” was superb, featuring Amy Lee, deputy commissioner for policy and research at Texas Department of Insurance (TDI).

Ms. Lee described how TDI collected data for several years in preparation for creating a workers’ comp prescription drug formulary. The speakers then focused on a major problem: injured workers with old injuries that had been taking N drugs for many years (many of them addicted). In this instance, Ms. Lee described how it would not be wise or compassionate to force these N drug users off the N drugs as it could result in extreme withdrawals with possible medical emergencies. So they decided on a two-tiered approach.

New claims had to comply with the new drug formulary in September of 2011. Legacy claims would have two more years to come into compliance. While she did say “they definitely needed the two years,” there was a surprising and significant benefit they had not anticipated. States like California should pay close attention to this. In gearing up for the new formulary rules (where N drugs would have to go through utilization review, they saw a significant drop in N drug prescribing on the legacy claims.

Because prescribers were seeking to comply with the new September 2011 formulary rules, those same prescribers were also changing their prescribing patterns for the legacy claims. In other words, even on legacy claims, where there was no duty to immediately curtail N drug prescriptions, the amount of N drug prescriptions started dropping.

Another nugget of insight Ms. Lee gave was how to help the pharmacies comply with the new drug formulary. She said that pharmacies do not want to subscribe to an evidence-based treatment guideline (like Appendix A of ODG) in order to try to figure out if a drug is on the N drug list because workers’ comp is only a fraction of pharmacy business.

To assist pharmacies in complying, TDI received permission to post Appendix A of ODG on its website. This means that a pharmacy does not need a full subscription to ODG in order to find out if a prescribed drug requires Utilization Review. The TDI web page is also a convenient site for TDI to give updates, like Fentanyl transdermal patches and MS-Contin going on the N drug list in 2016.

Lastly, Lee shared that the numbers pre- and post- formulary implementation have been staggering. Since the formulary rules went into effect in September 2011, the number of N drug prescriptions for new claims has dropped 65 percent. For situations where N drugs were prescribed on new claims and approved in utilization review, the cost of those N drugs has dropped a whopping 83 percent. Lastly, since the implementation date, overall pharmacy costs for all drugs, for both new and legacy claims, have dropped 15 percent.

If you have a chance to attend NWCDC in 2016, I can’t recommend it enough. We’re saving the date now and hope to you see you next year in New Orleans!

2016 NWCDC New Orleans Info
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.