Closing the Formulary
By Ken Ortolon Texas Medicine February 2011

  Workers' Comp to Require Preauthorization of Some Prescriptions

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Medical Economics Feature – February 2011

Tex Med. 2011;107(2):39-41.

By Ken Ortolon
Senior Editor

In 2005 and 2006, pharmacy payments accounted for close to 14 percent each year of the overall cost of the Texas workers' compensation program, according to data from the Division of Workers' Compensation (DWC) at the Texas Department of Insurance (TDI). That's twice the percentage that California's workers' compensation system spent on prescription drugs in 2005.    

But those drug costs soon could come down as a result of a pharmacy closed formulary the DWC is scheduled to implement on Sept. 1.

Under the formulary, physicians must get preauthorization from workers' compensation carriers before prescribing nearly 70 different drugs, most of which are opioids, analgesics, muscle relaxants, or antidepressants.

While Texas Medical Association officials do not expect the new formulary to be overly burdensome, physicians who practice within the workers' compensation system say it will be just one more hassle to deal with.

"Anytime you have to get preauthorization for anything, it slows down the process and it increases the administrative burden for the provider," said San Antonio occupational medicine specialist Bernard T. Swift, DO, MPH. "And that's true whether it's a drug formulary or physical therapy or an MRI."

Weaning the Narcotic Habit

The legislature mandated the new closed drug formulary for workers' compensation in House Bill 7, passed in 2005. That law also consolidated the former Workers' Compensation Commission into TDI.

TMA officials say the legislature's intent was to reduce a perceived overutilization of pain medications and other drugs that are highly addictive and were being prescribed for injured workers over extended periods of time.

Austin orthopedic surgeon Stephen Norwood, MD, says Texas is "way ahead of the national medians" in terms of the amount of prescription medications used in the workers' compensation system and that a large percentage of those drugs are narcotics.

"The big overarching issue is whether people should stay on narcotics for years and years," said Dr. Norwood, who practices within the workers' compensation system and does peer review for DWC. "The question is, Is that the best form of treatment? In many cases, it's not."

The DWC data, the latest data the department has, show that in 2005 and 2006, some 50 percent of all injured workers' in the Texas workers' compensation system received some type of prescription medication, and 75 percent of pharmaceutical costs in 2006 involved injuries that occurred before 2005. In fact, 33 percent of those injuries occurred between 1991 and 2001, the data show.

In 2006, seven drug groups accounted for 80 percent of all prescriptions filled. Opioids and anti-inflammatory analgesics accounted for 50 percent of both prescriptions written and dollars spent.

In 2007, the workers' compensation program spent $135 million on prescription drugs, including $40.9 million on opioids, $17.5 million on anti-inflammatory drugs, $17 million on musculoskeletal therapy agents, and $15.1 million on anticonvulsants.

Getting Preauthorization 

DWC officials have worked since at least 2008 to develop the new formulary rules, published in the Texas Register in July 2010 with a proposed effective date of Jan. 1, 2011.

Christopher Voegele, DWC senior policy and research specialist, says DWC Commissioner Rod Bordelon likely delayed that implementation date to September at the request of various groups, including physicians, insurance carriers, and pharmacists. He says their concerns largely revolve around wanting plenty of time for participants to be aware of the rules, train staff, and prepare for implementing the formulary.

He says the commissioner "is aware of that and sympathetic" to those concerns because the agency wants to insure that implementation goes smoothly.

DWC officials say the workers' compensation formulary will be far different from the one the Texas Medicaid program previously adopted. That formulary has a preferred drug list based largely on drug manufacturers' willingness to give the state discounts on their pharmaceuticals.

The workers' compensation formulary, Mr. Voegele says, will include all pharmaceuticals the Food and Drug Administration (FDA) approved for use in the United States. But some 70 of those drugs that have been given an "N" status under Appendix A of the Official Disability Guidelines -- Treatment in Workers' Comp (ODG) will require preauthorization.

DWC adopted the ODG as its official treatment guidelines in 2007, but had not previously adopted the Appendix A drug list.

The so-called N drugs include antidepressants, antiepilespy drugs, botulinum toxin, muscle relaxants, nonsteroidal anti-inflammatory drugs (NSAIDs), opioids, sedative-hypnotics, topical analgesics, and more.

While they anticipate some cost savings as a result of the formulary, he says the actual cost of the drug may not be as big a factor against using it as will the addictive nature.

"In some instances, the drugs themselves are relatively inexpensive," Mr. Voegele said. "The generic version of Soma, for example, is a relatively inexpensive drug, but the potential for addiction to that drug is very strong, and the weaning methodologies are on a case-by-case basis. There's not a clear weaning set up once you're taking that particular drug. So even though it's a relatively inexpensive drug, it may not be the drug we prefer. There are other alternatives available."

Garnering Support 

DWC has worked closely with TMA to educate physicians about the new formulary. During September and October, DWC officials met with TMA officials and physicians in five different cities to discuss the proposed rules.

Mr. Voegele says physicians have generally supported the formulary because it is evidence based.

"It's not an arbitrary list. It has a connection to the treatment guidelines and the evidence that's included in those guidelines," he said. "The other thing that has helped as we've been able to talk to physicians and pharmacists and PBMs [pharmacy benefit managers] is that the formulary is very inclusive from the standpoint that it includes all FDA-approved drugs. There's not a limited panel of pharmaceuticals a physician can pick from."

Also, DWC has set up a bifurcated implementation schedule. While physicians prescribing drugs for all new injuries that occur after the implementation date will have to follow the formulary and seek preauthorization for the N status drugs, they will not be subject to the formulary for older injuries for two years.

Mr. Voegele says there are more than 20,000 injured workers, many with multiple prescriptions, who would be affected if the formulary was applied to them immediately upon implementation.

 "The thing we didn't want to do was have these claims that are referred to as legacy claims and, in the first month of the process, have 20,000 claims that have multiple scripts and all require preauthorization," he said. "Two years in the closed formulary will become applicable to those legacy claims. During that two-year period we're hoping that carriers and prescribing doctors will be able to look at those legacy claims, evaluate their use of drugs that are excluded from the closed formulary, and come up with a plan to either continue using those drugs or move injured employees to drugs that are included in the closed formulary or have some other treatment alternative."

Addressing Acute Injuries

While Drs. Norwood and Swift say getting a handle on the use of addictive narcotics likely is a good thing, Dr. Swift questions how the new formulary might impact injured workers' who present with an acute injury.

"If we see a patient in a primary care setting who is acutely injured and we would otherwise have given him a shot of Toradol, we now can't do that without getting prior authorization," Dr. Swift said. "In an acute situation, I would argue that that's a good example of not being able to prescribe somebody necessary medication in a timely fashion to relieve their symptoms.

"The bigger picture is that we have been trying to establish a balance between trying to avoid over-treatment – the formulary being but one example – versus too much administrative burden for the providers. As we increase the number of preauthorization events, we are tipping the scale in favor of more administrative burden. That tends to make physicians not want to participate in the system."

Ken Ortolon can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by e-mail.

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Last Updated On

November 09, 2017

Originally Published On

January 25, 2011

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