Prescription Formulary is on the Horizon for California Workers’ Compensation
A drug formulary is a list of prescription drugs, both generic and brand name, used by practitioners to identify drugs that offer the greatest overall value. A committee of physicians, nurse practitioners, and pharmacists maintain the formulary.
Drugs considered for the formulary are evaluated by a committee of local experts and are chosen for their safety and effectiveness. Clinical expertise and input is also sought from many other local physicians who are not committee members. The formulary, pre-service authorization parameters, and related procedures are updated as needed when new information becomes available.*
Assemblyman Henry T. Perea has introduced a Bill that will develop and maintain a prescription formulary for the California Workers’ Compensation system. First introduced on February 27, 2015 and after numerous amendments both the Assembly and Senate have signed. Assembly Bill No. 1124 currently sits on the Governor’s desk awaiting his approval and signature. The full bill can be found at http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1124.
The primary benefits of a formulary are cost-cutting and curtailing inappropriate treatment including possible unnecessary addiction or dependency. Such a plan requires proof that non-formulary drugs are medically necessary before they can be prescribed to injured workers. This makes it more difficult for physicians to prescribe some opioid painkillers, benzodiazepine psychoactive drugs, soma muscle relaxants and other medications that are often inappropriately utilized in workers’ compensation.**
Texas, Ohio, Washington and Oklahoma already have such plans in place. Both Ohio and Washington have credited their formularies for significant declines in opioid prescriptions.
According to the California Workers’ Compensation Institute, California could see pharmaceutical costs cut by $124 million. “Potential savings may in fact be greater, as the analysis did not account for any reductions in the absolute volume of prescriptions, nor did it estimate savings from reduced levels of affiliated services such as drug testing or reduced medical dispute resolution expenses for utilization review and independent medical review,” their report reads. In one example they cite, Opana, an opiod that costs $600 per prescription, would be prohibited from workers’ compensation claims under a closed formulary. Claimants who are deemed to need a strong painkiller would instead receive drugs such as tramadol, codeine, or levorphanol, which cost between $60 to $180 per prescription.***
More statistics and other information can be found at any of the three cited websites.
- * – http://www.wecareforwisconsin.com/members/formulary/what_is_a_drug_formulary
- ** – http://www.businessinsurance.com/article/20150208/NEWS08/150209861/more-states-look-to-closed-formularies-to-lower-workers-comp-costs?tags=%7C79%7C304
- *** – http://www.claimsjournal.com/news/national/2015/03/02/262063.htm