The Division of Workers’ Compensation has posted an interim status report on its efforts to promulgate regulations for an evidence-based workers’ compensation drug formulary as required by Assembly Bill 1124. The drug formulary must be adopted by July 1, 2017, and must be consistent with California’s Medical Treatment Utilization Schedule (MTUS), for medications prescribed in the workers’ compensation system.

Assembly Bill 1124 (Statutes 2015, Chapter 525) requires DWC adopt the evidence-based workers’ compensation drug formulary in consultation with the Commission on Health and Safety and Workers’ Compensation, and that DWC’s administrative director meet and consult with stakeholders. The legislation further requires posting of a minimum of two interim reports describing the status of the formulary’s creation.

The goal is to adopt an evidence-based drug formulary, consistent with California’s Medical Treatment Utilization Schedule (MTUS), to augment the provision of high-quality medical care, maximize health, and promote return to work in a timely fashion, while reducing administrative burden and cost.

The report says that the DWC has been considering a variety of approaches to the formulary in light of the goals and preliminary criteria. In consultation with RAND, the DWC has been gathering information from workers’ compensation system participants, as well as other jurisdictions and payment systems, to identify formulary issues and best practices.

After AB 1124 was passed, a public meeting was held on February 17, 2016, to discuss its implementation. RAND researcher Barbara Wynn presented an overview of the formulary project. All stakeholders had the opportunity to provide input on development of the formulary and implementation of the bill.

The Director of the Department of Industrial Relations Christine Baker, DWC Acting Administrative Director George Parisotto, and DWC Executive Medical Director Raymond Meister, M.D., testified at the state capitol before committees of the Senate Labor and Industrial Relations Committee and the Assembly Insurance Committee. The March 2, 2016, hearing on “Implementing AB 1124 (2015): A Joint Hearing of the Senate Labor and Industrial Relations Committee and Assembly Insurance Committee on the Creation of a Workers’ Compensation Formulary” provided an opportunity for the Department to present the legislature and the public with a status report and overview of issues involved in developing the formulary.

The DWC is considering the input from stakeholders and evaluating information and analysis provided by RAND. Within the next few weeks, the DWC is expected to open another public comment period to allow all interested stakeholders to present further input on the development of a formulary. The DWC will post draft formulary regulations and the pre-publication RAND formulary report on the DWC Forum webpage for public review and discussion. Formal rulemaking is expected to begin later this year so that the formulary can be adopted before the July 1, 2017, statutory deadline.

While workers’ compensation pharmacy benefit managers have been utilizing drug formularies for a long time, only Washington, Texas, Ohio and Oklahoma have state-regulated drug formularies in place. The recent success of the closed pharmacy formulary in the Texas workers’ comp system shows promise for other states, especially in regions where non-formulary drugs are prevalent. A report from the Workers Compensation Research Institute concludes that, all things being equal, other states could see similar results.

Additional information on implementation of the drug formulary is posted on DWC’s forum and MTUS webpages.