Hope, Concerns Over Drug Formulary for Workers’ Compensation
AB 1124 (Perea; 2015) was the subject of a recent joint hearing of the Senate Labor and Industrial Relations Committee and the Assembly Insurance Committee (materials available here). The bill, passed by a large majority in 2015, requires the Administrative Director of the Division of Workers’ Compensation (DWC) to establish a formulary for use in the workers’ compensation system by July 1, 2017.
A formulary is a list of medications and approved uses, and the concept is very common in group health plans and other types of health insurance. Beyond simply requiring a formulary, AB 1124 also requires DWC to meet with stakeholders, publish at least two interim reports, and update the formulary at least quarterly.
At the hearing, members heard from several staff members from the Department of Industrial Relations and the Division of Workers’ Compensation, as well as the California Workers’ Compensation Institute and stakeholders representing a wide variety of perspectives on workers’ compensation. Major points of discussion included whether or not utilization review and independent medical review should remain once a formulary is implemented, and how the process would work if a doctor wanted to prescribe something different (or “off formulary”). CSAC supports maintaining utilization review and independent medical reviews once a drug formulary is implemented in the workers’ compensation system.
Testifiers also discussed lessons learned from other states that have recently implemented drug formularies for workers’ compensation, such as Texas and Washington. Some raised concerns about timelines for implementation as well as for the process itself once the formulary is in place. There was a great deal of discussion about how a formulary would help reduce administrative costs and time burdens. Finally, issues of addiction, particularly for opioids, and options for detox came up.
The Division of Workers’ Compensation testified that they are on track to meet deadlines, so a prescription drug formulary will be coming soon to a workers’ compensation system near you.