What's Past is Not Prologue: Formularies Differ by State

I've recently heard predictions regarding California's forthcoming formulary that are based on the experience of Texas over the last five years.  Both are large states.  Both have well recognized, embedded utilization review processes.  And they have tertiary dispute resolution processes that, while not precise analogs, nonetheless look similar to one another (the Texas IRO process and the California IMR process).

So we might expect California, when it adopts it's drug formulary on or about July 1, to exhibit behaviors and results that are similar to the results Texas has achieved with its formulary (see my colleague Mark Pew's recent blog posts for insight into the CA timeline).  In Texas, prescriptions for "N" drugs fell by 81% and the costs for those same drugs dropped by 80%.  Total opioid scripts dropped by 8% and total drug costs in the state's work comp system fell by 15%.  All of this occurred with no discernible increase in loss adjustment expense (primarily, utilization review). So we might expect the same from California, right?  

I don't think so.  I offer three key data points in defense of that view:

First, the formularies are not the same.  Texas relies on Work Loss Data Institute's Official Disability Guidelines, Appendix A (which lists medications are either "N" or "Y" based on whether they are recommended for first-line therapy).  California has used as its starting point Reed Group's MDGuidelines in order to incorporate a formulary into MTUS.  The list of "non-preferred" drugs in these guidelines is a different, and frankly more restrictive, list than the ODG list of N drugs.  For instance, ODG has some opioid analgesics in the "Y" category.  The MDGuidelines categorized all opioid analgesics as "non-preferred." The two organizations take different approaches and I'm careful to avoid expressing preference for one or the other (PRIUM works closely with both sets of guidelines).  The important take-away here is that the two states are relying on different formulary approaches.

Second, about 38% of CA's lost-time claims have attorney representation.  That number for TX is 6%.  There are lots of reasons for this (attorney fee schedules come immediately to mind) that have nothing to do with formularies.  But adopting a formulary in a state with injured worker representation in the single digits is a fundamentally different proposition than adopting it in a state where 4 out of every 10 injured workers on indemnity have a lawyer.

Finally, loss adjustment expense in CA is already running at about 35% of total losses (which is 83% higher than the median in WCRI's latest study on LAE).  When the TX formulary came into full effect in 2013, the number of IRO decisions from 2013-2015 ranged in the 1200-1400 range per year over that three year period post-formulary implementation.  The number of IMR decisions in CA in 2016?  164,136.  And this is before the adoption of a formulary. Long term, as the prescriber community adjusts to the formulary list and its associated rules, the number of medication-related IMRs may in fact moderate.  But for the latter half of 2017, I wouldn't count on that happening.

Two different states, two different formularies, two different environments.  Beware of drawing conclusions regarding one based on the other.

Michael
On Twitter @PRIUM1

The Rule of Law: Laws Require Rules

Remember these two from when you were a kid?

Watching the video brings back fond memories... and highlights some pretty significant gaps in the process, as well.  

So it looks like California is putting the concept of a drug formulary into law (thanks, in no small part, to PRIUM's own Mark Pew and host of others that stayed close to the process, educated the stakeholders, answered a multitude of questions, and made the case clear that formularies are in the best interest of injured worker safety).  Assembly Bill 1124 passed through the California state legislature late on Friday night and will likely be signed by the governor sometime in the next few weeks.

Then what?

Then the hard work starts.  Where the charming childhood educational video ends, the real work of governing and public policy begins.  Most (though admittedly not all) laws are conceptual in nature.  AB 1124 is a good example.  The law instructs "the Administrative Director of the Department of Workers' Compensation to create an evidence-based drug formulary, with the maximum transparency possible, for use in the workers' compensation system..."  There are some other instructions and caveats in the bill, but this sums it up.

Perhaps you're wondering about that phrase "with the maximum transparency possible."  That language is a reminder to the DWC that the real work of creating regulatory infrastructure around the drug formulary needs to be an open, transparent process so that stakeholders throughout the system not only understand what's going to happen, but also have an opportunity to influence the ultimate outcome.

Some key questions that the rule-making process needs to address:

• What guidelines will we use?  In other words, what will be the "source" for determining inclusion / exclusion for specific drugs?
• How will the formulary leverage (or not) the existing utilization review and dispute resolution processes in California?  
• How will we deal with the concepts of dependence and addiction for long term, but medically inappropriate, opioid use?  
• How will the formulary balance the concepts of "authorization" and "access"?
• How will we measure the success or failure of the formulary?  

California needs a formulary.  The DWC now has a legislative mandate to create one.  Now we have to decide what it will look like and how it will work.  

Michael

On Twitter @PRIUM1 

California's Formulary: An Update from the Field

[Mark Pew, Senior Vice President of PRIUM, has been following, working, talking, meeting, eating, sleeping, and breathing California formulary for months - actually, years.  Mark's latest update below.]

The language has been approved (published late on Sep 4) for a bill to establish a Work Comp drug formulary in California - I will let you read it for yourself rather than restating it's contents here. AB 1124 should have its third reading on Sep 8, a vote on either Sep 9 or Sep 10, and with enough AYE votes Governor Brown will sign it into law shortly thereafter. I certainly don’t want to jinx it by unequivocally stating that a drug formulary will be implemented in California by July 1, 2017, but that possibility is as promising as it has ever been.

But … It hasn’t been easy. And I and others at PRIUM have had a front row seat to the entire process:

• In November 2009, we started following the development of the Texas drug formulary, staying engaged through the 9/1/11 and 9/1/13 implementations.
• On November 8, 2012 at the National Work Comp & Disability Conference in Las Vegas, I presented an overview of the Texas drug formulary and opined that California was a logical candidate to consider something similar.
• In December 2013, I had my first meeting with California’s Department of Workers’ Compensation (DWC) to present the concept of a drug formulary.
• In January 2014, I had my first meeting with leaders in the Assembly, Senate and Labor to discuss the concept of a drug formulary.
• In October 2014, the first major milestone in California’s discussion of a drug formulary came after the California Work Comp Institute (CWCI) published a whitepaper “Are Formularies a Viable Solution to Controlling Prescription Drug Utilization and Cost in California WC” with a tentative answer of “yes”.
• On March 5, 2015, the second major milestone occurred when Assemblyman Henry Perea (D-Fresno) introduced AB 1124 to direct the DWC’s Administrative Director to adopt a formulary (read about it in thisWorkCompCentral article that requires subscription.

Since that date, the process of filling in the details has been a consuming priority for me and many others involved in Work Comp in California. There have been many formal and informal meetings involving almost every stakeholder and constituent. There was a public hearing in the Assembly and then in the Senate, both interesting in their content and participants, from praise to guarded optimism to limited opposition. An advisory committee has been working directly with Assemblyman Perea’s office in July and August to develop the content of the bill. It has been an adventure in spirited dialogue and compromise in a decidedly non-antagonistic environment (though one not totally devoid of disagreement). The committee was comprised of representatives from every possible corner of Work Comp in California, and while the final version of the bill does not reflect all of the suggestions, the dialogue has been extremely helpful in establishing what will need to be addressed in the rule-making process. In collaboration with the DWC, the focus has been on crafting a bill to become law that mandates action but provides flexibility.

The third major milestone? July 23, 2015 at the CCWC conference in Anaheim where David Lanier (Secretary of the Labor and Workforce Development Agency) stated “Based on the work to date and the urgent need I have instructed Christine [Baker, Director of the Division of Industrial Relations] to move forward with creating a formulary as expeditiously as possible". This strategic statement sent an unmistakable message that a formulary was going to happen. Period. I still recall seeing people in the audience turning their heads and whispering to each other “did I just hear that right?” while I was writing notes to myself with exclamation marks.

And it got done (well, almost done). Think about it – from March 5, 2015 until now, all constituents in the California Work Comp system have basically agreed that a drug formulary is needed. In California! In less than six months! Amazing!

Of course, there is much work still to be done. And likely the hardest work to be done. Deciding on the concept of a drug formulary and some general parameters is one thing – crafting the actual rules and process to initiate intended consequences and mitigate unintended consequences are yet another. My July 2015 article on Claims Management magazine, "A Formulary for Success", will provide some insights into guiding principles that should be taken into account.

The first step to that is September 8, 2015 from 10:00am till Noon when a public hearing will be held to establish the goals of the DWC and listen to feedback from all interested parties. This meeting will just be the start of a long journey, and I will continue to be a technical adviser as the rules are developed. Unfortunately, I will not be able to attend as I had previously committed to speak at a North Bay Work Comp Association event in Santa Rosa, but if you’re interested go to the Elihu Harris State Office Building (Room 2, Second Floor, 1515 Clay Street, Oakland, CA 94612) on Tuesday.

The stated goals of the DWC are:

• Improve appropriate care through the dispensing of evidenced-based medicine
• Expedite pharmaceutical treatment for ill and injured workers
• Reduce delays, including reducing the need for elevated utilization review and independent medical review
• Improve efficient delivery of medical benefits and reduce administrative costs

Those are the lofty goals that have driven this entire process since the beginning, and one reason why consensus through compromise has been achieved so quickly.

The common theme I’ve heard throughout this process has been to ensure injured workers receive appropriate treatment with a renewed focus to limit the damage prescription drugs with very dangerous and even life-threatening effects can wreak. Part of that is to ensure those who have become reliant / dependent upon / addicted to dangerous polypharmacy regimens are not suddenly thrust into withdrawal but allowed to thoughtfully and carefully be tapered to a more appropriate drug regimen while being equipped with more robust coping skills to deal with the pain that remains.

In other words, whether it’s Labor or applicant attorneys or defense attorneys or physician groups or carriers or self-insured employers or legislators or PBM's or any other interested party, the focus has been squarely on combating the epidemic of over/misuse of prescription drugs and creating a path to less dangerous and more efficacious pain management for those that need it. And who can argue with that? Apparently, nobody.

Because there have been so many people integral to this process, I won’t even try to name them all. So, instead, I will just say “Kudos Cali”!

Mark

On Twitter @RxProfessor

Unpacking the California Closed Formulary

With ever greater frequency, I'm encountering questions regarding California's legislative attempt to create a closed formulary.  "What do you think?" is the intentionally loaded question.  This is one of those interrogatives that requires unpacking, like a suitcase that's been the companion of a traveler on a long road trip.  There are a lot of layers, some messier and more complicated than others.  Courage is required to unload the suitcase and it'll take a while to sort through all the laundry.  And yes... the "baggage" metaphor is intentional.  So much baggage.  

Should California adopt a closed formulary?
Of course they should.  All state workers' compensation systems should.  A well designed formulary, properly implemented, is the best and fastest way to disseminate clinical best practices and contemporary medical evidence throughout the provider community (a community that is, I might add - through no fault of their own - perennially behind the curve on the latest science regarding appropriate, safe, and efficacious use of medications).  Doctors and patients clearly benefit from the "guide rails" of a formulary.   

What will the California closed formulary look like?  How will it work?
I have no idea.  No one does.  And should you encounter someone that claims to know, tread carefully and remain skeptical.  The sausage-making process is in full swing in Sacramento and everyone wants a seat at the table.  What's clear at this point is that the usual suspects have taken their predictable positions (Chamber of Commerce likes it, applicant attorneys don't, etc.)  Also clear is that each amendment added to the current bill creates significant swings in support.  At this point, it's hard to even ascertain the score, much less who has the momentum.  

If (emphasis on that word "if) this happens, when will it go into effect?
Likely not until mid-year 2017 at the earliest.  Keep in mind that the Texas closed formulary was phased in starting in September of 2011 and applied to legacy claims in September of 2013... after the legislative mandate for the formulary was signed into law via HB 7 in 2005.  These things take time.  
What will this mean to you?
Well, CWCI says it could mean injured workers are treated more appropriately... to the tune of $120 million - $420 million in annual savings.  That's a lot of prescriptions never dispensed... a lot of drugs never taken... a lot of addiction never rearing its ugly head... a lot of injured workers saved from greater pain and suffering brought on by inappropriate treatment.

What are the chances?
Perhaps the most complicated question of all... because it's really two different questions.  What are the chances of something passing... something the state calls a "formulary"?  Pretty good, I think. What are the chances the resulting regulatory approach really creates a safer medical treatment environment for injured workers that subsequently saves payers millions of dollars?  It's possible... but not probable.  Like any major legislative/regulatory change, this will be flawed.  Let's hope it's not so flawed that it's not worth doing.  

Michael
Follow us on Twitter @PRIUM1  

A Legal Challenge to Prescription Drug Monitoring Databases?

Dr. Alwin Lewis was investigated by the Medical Board of California because of an odd diet he had apparently advised patients to undertake.  (The “five bite” diet… don’t eat breakfast, then eat five bites of food for the rest of the day.  I would have demanded an investigation, too.)  During the course of the investigation, the Medical Board uncovered inappropriate prescription patterns in California’s PDMP (the CURES database).  The Medical Board found that he had kept poor medical records and had over-prescribed medications to two patients.  He was placed on three years’ probation. 

And that’s when all heck broke loose…

Dr. Lewis took the case to court, arguing that the Board had gone too far in using information from the PDMP against him.  There’s a lot of confusion here, even by California standards.  Here are some key points to keep in mind:

First, the ACLU, civil rights attorneys, the California Medical Association (CMA), and several other groups are making a lot of noise about this case.  All of them are trying to push this issue far beyond the scope of the challenge that is actually being raised by the Dr. Lewis.  If Lewis prevails, the result will be a revision of the Medical Board’s investigation/disciplinary process, not an invalidation of the CURES statute.

Second, this case is not about protecting patients’ privacy; it’s about protecting patients’ privacy when doing so protects the doctor from a Board investigation.  Lewis has made it clear that this is not a facial challenge to the CURES statute; in fact, he concedes that in most instances, such as in an administrative audit of a pharmacist (but not a physician), pulling a patient’s prescription info is constitutional.  His position is that when a CURES audit is performed “for the express purpose of investigating physician practices,” the auditor should not be able to access patient records without a subpoena, warrant, or good cause.

Third, it’s also about protecting the doctor’s right to privacy.  Lewis is arguing that he has a direct, personal, right to privacy in regards to his prescribing patterns, and that the Board violated that right when they performed the CURES audit of his prescribing history without an administrative subpoena.  While that may sound like a terrible argument, this is California, and so there is actually appellate case law that supports him on that point.  This is actually a central theme in his petition.  He argues that when a pharmacy auditor looks at the medications dispensed to a patient by that pharmacist, neither the rights of the pharmacist nor the rights of the patient are violated; when a physician auditor views the medications prescribed to a patient by that physician, both the rights of the patient and the rights of the prescriber are violated.  Makes complete sense, right?  

The Board’s conduct – however excessive – was aimed at protecting patients.  The PDMP rules are aimed at protecting patients.  The only real danger to the patients’ interests came from the guy that is now trying to pose as their protector in order to get out of a disciplinary action. 

This case, regardless of what you might read elsewhere, shouldn't have a significant impact on PDMP use in California or any other state. 

Michael
Follow us on Twitter @PRIUM1