Texas Closed Formulary – 9/1/11, Phase 1

The first phase of the Texas Closed Formulary was made effective 9/1/11 and required the preauthorization of all Official Disability Guidelines (ODG) “N” drugs for new Work Comp claims.  This was a prudent approach for three different reasons:

1. Stopping the drugs from being dispensed at the Point of Sale (POS, aka the pharmacy) is the most reliable way to enforce change
2. Texas physicians were familiar with the preauthorization process after years of seeking approval for treatment such as physical therapy and spinal surgery
3. ODG is the most reliably updated reference on the appropriate use of drug therapy available and is the standard of care in Texas

This first phase certainly had its detours and obstacles over the past several years as the content of the rules were hashed and rehashed by the various stakeholders.  Implementing something this dramatic is not easy, and the negotiation process was sometimes controversial and messy.  To everyone’s credit, a consensus was reached and implementation completed.  And it is obvious after 3 months the new requirement is having an effect.

In my whitepaper, “Legacy Cleanup, Texas Style”, I document the fact that the use of “N” drugs within the first 90 days after Date of Injury (DOI) has been reduced by more than 50% because of Phase One.  For DOI’s 9/1/10 thru 8/31/11, the proportion of “N” drugs to all dispensed drugs was 7.38%.  For DOI’s 9/1/11 thru 12/22/11, that proportion dropped to 3.51%.  This is real data from a major Pharmacy Benefit Manager (PBM) operating in Texas.

This analysis is corroborated by the DWC, who mentioned while I was in Austin last week that preliminary analysis shows a two-thirds reduction in the use of “N” drugs since 9/1/11 (across all claims, year over year).

Time will tell whether this is an anomaly during the first few days or a permanent trend.  Regardless, this is REAL impact and REAL progress.  But this is only the first phase, as I will discuss more tomorrow.

In this together – Mark

On Twitter @PRIUM1