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

Guidelines: How to Make Them Matter

There has been a lot of talk in the last couple of weeks about medical treatment guidelines.  North Carolina, Tennessee, Arizona, and several other states are looking into adoption of guidelines.

There is a lot of discussion about "evidence-based" vs. "consensus-based" guidelines as well.  While I'm an outspoken proponent of the evidence-based variety, I recognize that local political conditions can make adoption of such 3rd party guidelines difficult.  Politics is a poor excuse - states can benefit significantly not only from the credibility of 3rd party guidelines, but also from the fact that providers of such guidelines work constantly to ensure those guidelines reflect the most contemporary view of the medical evidence.  Consensus-based guidelines (where a state medical director or agency gathers a bunch of stakeholders and they all decide what's best for injured workers in a given state) tend to be static - they age... and they tend not to age well.  They also tend to be subject to influence from outside parties with vested economic interests (see Louisiana as an example).

But the debate between the two competing approaches to guidelines is actually a sideshow, a distraction that prevents regulators from focusing on what matters most: enforcement.

When reading proposed or adopted treatment guidelines for a given state, make sure you explore the extent to which you can successfully challenge treatment that falls outside of the guidelines.  For instance, let's say a medical treatment guideline states that prescribing opioid analgesics in excess of 50 mg MED daily is not recommended (as the ACOEM guidelines suggest).  And assume you have a case where the doctor is prescribing 250 mg MED daily... and that doctor has been unresponsive to requests for discussion regarding the case and has not provided the rationale for why he's prescribing outside of the evidence based guidelines.  Question: Now what?  

There are states that have good answers to this question.

In Texas, if those opioids are N drugs, the answer is required pre-authorization based on a 3rd party guideline (Official Disability Guidelines) and a utilization review process that is statutorily supported and has clearly defined dispute resolution mechanisms.

I was encouraged to read that in Tennessee, the goal is to ensure that any adoption of treatment guidelines is consistent with existing utilization review regulations (which include the ability for a payer to subject any schedule II-IV medication used for the purposes of pain management for more than 90 days to utilization review).

Those are guidelines with enforcement mechanisms.  If the adoption of guidelines doesn't come with enforcement mechanisms, they're still worth having (because good doctors will still be responsive to guidelines).  But those guidelines won't be as valuable as they could be if appropriate enforcement mechanisms are in place (because not-so-good doctors will ignore contemporary medical evidence and continue to administer sub-optimal treatment until the payer stops paying for it).

Michael
On Twitter @PRIUM1