Drug Formularies Good For Comp

A formulary is coming to your workers' compensation system soon.

Formularies are lists of preferred generic and brand-name drugs.

Washington and Texas use formularies to control drug use and curb inappropriate treatment practices. The formularies also reduce drug contra-indications and play a major role in lowering prescription drug costs in these states.

Prescription drug formularies will become a part of the American College of Occupational and Environmental Medicine's Practice Guidelines.

The Reed Group, publisher of the ACOEM guidelines, released the "beta," or preliminary version of its new formulary. ACOEM uses the Food and Drug Administration's National Drug Code numbering and drug-listing data, and incorporates the ACOEM Practice Guidelines' 600-plus medication-related recommendations, according to the organization.

Mark Pew, senior vice president of product development for medical management firm Prium, told WorkCompCentral that Texas' success with its closed formulary, which is Work Loss Data Institute's product, is prompting other states to begin looking at adopting forumularies.

Simplicity and clarity are two of the reasons for the success of the Work Loss Data Institute's Texas formulary, Pew said. He noted that the Work Loss Data Institute classifies drugs into categories of "Y" or "N" to indicate whether it is recommended.

"It made it very easy for pharmacists, for doctors, for utilization-review companies like us, for pharmacy benefit managers, to know what was supposed to happen and to know how to implement it because it was relatively binary," he said. "If it is 'N', Texas said you have to preauthorize it. If it was 'Y', Texas said you do not have to preauthorize it." Ergo, physicians not wanting the extra paperwork and hassle of arguing against the standard go with the standard alleviating a big chunk of treatment dispute.

While this is a competitive move for the Reed Group and ACOEM, since the the Work Loss Data Institute's Official Disability Guidelines already have a formulary that is linked directly to the ODG Treatment Guidelines, the timing could not have been more prescient because I believe the biggest workers' compensation state, California, is on the cusp of needing, reviewing, and potentially adopting, formularies to get some control over its current utilization review and Independent Medical Review issues.

I've been advised that denied requests for prescription drugs are a big driver in UR appeals to IMR.

According to the California Division of Workers' Compensation about 80% of IMR decisions that have been issued upheld the UR decision denying treatment. But one area of utilization control that is not accounted for in the current Medical Treatment Utilization Schedule, which has its origins in ACOEM, is prescription drugs. Because these are not in a formulary there is room for debate and appeal on whether or not such a treatment request will, or will not, be approved. Obviously this is going to drive UR to IMR volume.

A closed drug formulary, if as easy to use as Pew says the Texas system is to use, would go a long way towards alleviating treatment disputes because physicians, their patients and claims administrators would know well in advance what is going to fly and what isn't.

The test, of course, is whether California politics would permit adoption of a closed formulary. Opponents will argue that adopting a formulary inhibits medical treatment because then drugs can not be prescribed for off label use that may be beneficial to treatment.

Off label means that a drug has not been approved for treatment of a particular condition. Physicians are typically free to prescribe any drug for whatever condition they deem necessary - this practice has come under fire as the nation's opioid addiction reaches a crisis stage and some physicians face discipline for over-prescribing the drugs.

But workers' compensation is not about experimenting with medicine. The treatment guaranteed in workers' compensation is that which is reasonable and necessary to cure or relieve. The key is "reasonable" and there is a very good argument that off label is not reasonable since such usage does not have the scrutiny and blessing of the Food and Drug Administration's rigorous approval process.

Stay tuned - the debate on drug formularies, and particularly in California, is going to heat up and likely will be a top workers' compensation topic in the state in 2014.

Happy New Year.