Public Hearing on California's Workers' Comp Drug Formulary

Posted by Danielle Jaffee on May 9, 2017 8:00:00 AM

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In 2015, the California legislature passed Assembly Bill No. 1124 which required the Division of Workers’ Compensation (DWC) to develop and implement a drug formulary by July 1, 2017.  Since it’s signing into law on October 6, 2015, the DWC has worked on developing a California specific drug formulary and the regulations to accompany it. 

Back in August 2016 they released a draft of the formulary and in March they released the proposed formulary and regulations.  Once it was released, a public comment period was open for 45 days to solicit comments from interested stakeholders. The public comment period concluded on May 1st, the day of the DWC’s public hearing on the formulary.

The hearing provided an opportunity for stakeholders to reiterate some of their key comments on the drug formulary before several DWC administrators, including the Division’s Medical Director and Acting Administrative Director.  Many of the comments made at the hearing focused on areas of concern with the formulary and groups that usually diverge on issues seemed to find common ground on these concerns. 

The biggest area of concern raised across the board was the close implementation date.  As of the hearing date, we were exactly 2 months away from the July 1, 2017 implementation - which concerned insurers, payers, providers, and injured workers because it left little to no time to understand and adapt to formulary.  This spurred many of the speakers at the hearing, and in their written comments, to call on the DWC to delay implementation - many suggesting a delay until January 1, 2018.  The delay would give the DWC time to make any possible changes and finalize the formulary, while also providing ample time for stakeholders to implement the formulary into their practice - whether it be in their prescribing habits or in their payment processes.

Other areas of concern for most of the stakeholders fell into two categories: concerns over a restrictive formulary and the handling of existing, or legacy, claim patients.  Concerns have been raised since the draft proposal last August that the California formulary may be overly restrictive, excluding many commonly prescribed medications for injured workers.  Some of those medications include anti-virals, antibiotics, and sleep aides.  Most stakeholders are concerned about a restrictive formulary because it hurts everyone involved.  Injured workers may face more hurdles to getting needed medications, doctors may feel their hands are tied to select a specific medication, and insurers/payers worry that a restrictive formulary will force more administrative work through prior-authorization and appeals.  And all sides agree, that a restrictive formulary such as this may lead to an increase of Utilization Review and Independent Medical Review as more and more medications are deemed “non-preferred”.

Finally, how to handle existing claimants who may be on a non-preferred, or not listed, medication.  In some of the other states that have implemented formularies they created two timelines: one for patients who are injured on or after the formulary effective date, and one for those already receiving treatment before the formulary goes into effect.  This staggered implementation is aimed at helping doctors, payers, and the patients, understand and adapt to the formulary as they see fit. This can mean tapering a patient off a drug, transitioning a patient to a new drug, or even seeking approval for the continued use of a non-preferred drug.  

However, under California’s proposed regulations the handling of these existing patients is left fairly open-ended.  The regulations call for the transition of a patient “for an extended period that is necessary” and prohibits a claims administrator from just rejecting a medication because it’s not okay under the formulary.  Several stakeholders raised concerns that this vague implementation plan would lead to confusion, inconsistency in application, and might hinder the impact of the formulary.  Without a clear timeline or guidance, doctors and payers have no clear understanding of how to enforce or handle existing claims, there’s no imperative to transition a patient and there is no uniformity by which a payer could enforce the regulation.

The DWC now has time to review the comments from the hearing as well as all those written comments submitted over the last 45 days.  After evaluating the comments it’s up to the DWC to determine if they want to make additional changes (which requires them to open up another, smaller, comment period) or move forward and finalize their proposal. 

In the meantime, all stakeholders can do is wait and wonder if their comments will prompt the DWC to make changes especially on the bigger issues.

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Topics: Legislative, Workers' Compensation