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
Showing posts with label workers compensation. Show all posts
Showing posts with label workers compensation. Show all posts
Tuesday, March 7, 2017
Monday, January 16, 2017
The Mistakes That States Make
As 2017 gets rolling, state legislatures are convening all over the country. Several of them are about to make mistakes in the area of medication management in workers' compensation.
My colleague, Mark Pew, and I have written and spoken extensively on the topic of drug formularies. And we're currently working, formally and informally, with regulators and other stakeholders in jurisdictions across the country on approaches that make sense for employers, doctors, pharmacists, and, most importantly, injured workers. While there's not a lot to be gained for any of us in calling out individual states, there's a great deal at stake for all of us in the successes and failures of drug formulary implementations. A failure (perceived or real) in one jurisdiction can lead another jurisdiction to delay its own attempt at a formulary - or to scrap it altogether.
So how can we tell if a law or rule set is headed in the right direction? Or, alternatively, if a state's efforts are more likely to lead to sub-optimal results? Here's a quick litmus test that you can apply to make your own determination:
1) Will the formulary rely on independent, 3rd party medical treatment guidelines?
There's a great deal of industry discussion surrounding this topic, mostly focused on the definition of 'evidence-based medicine.' While that conversation is interesting, it's not the critical factor in overall formulary success. The crucial questions are two-fold: First, will there be room for political influence in the formation of the guidelines? Second, will the guidelines be updated with sufficient frequency?
2) Does the formulary process build off of existing dispute resolution processes?
States that have successfully implemented drug formularies thus far have done so by relying on existing rules regarding resolution of medical treatment disputes. States that try to simultaneously create a formulary and new dispute resolution processes to support it are, in reality, trying to do two things at once. Not impossible, but certainly creates execution risk.
3) Does the formulary allow for a remediation period for legacy claims?
On the one hand, a single effective date creates chaos as employers and physicians try to figure out how to address legacy claims, which tend to be more complicated. On the other hand, only applying new rules to new injuries creates two standards of care within a workers’ compensation system, where an injured worker’s treatment plan is driven entirely by the date on which they were injured (which makes no clinical sense). I look for regulatory language that takes a balanced approach – an initial implementation date for new injuries, followed by a remediation period for legacy claims, followed by a fully effective date for new rules and all claims.
4) Is the formulary process scalable?
I always look to see if the dispute resolution process can stand up to a significant volume of cases. While the goal of any formulary adoption should be to streamline access to medically necessary medications for injured workers, states should take a 'hope for the best, plan for the worst' approach. Dispute resolution processes that rely on one individual or one office for ultimate resolution may lead to bottlenecks and, in a worst case scenario, undue influence. I always ask myself - what will this look like if there are more disputes than the state expects?
One bad apple can spoil the bunch. Let's get this right.
Michael
On Twitter @PRIUM1
My colleague, Mark Pew, and I have written and spoken extensively on the topic of drug formularies. And we're currently working, formally and informally, with regulators and other stakeholders in jurisdictions across the country on approaches that make sense for employers, doctors, pharmacists, and, most importantly, injured workers. While there's not a lot to be gained for any of us in calling out individual states, there's a great deal at stake for all of us in the successes and failures of drug formulary implementations. A failure (perceived or real) in one jurisdiction can lead another jurisdiction to delay its own attempt at a formulary - or to scrap it altogether.
So how can we tell if a law or rule set is headed in the right direction? Or, alternatively, if a state's efforts are more likely to lead to sub-optimal results? Here's a quick litmus test that you can apply to make your own determination:
1) Will the formulary rely on independent, 3rd party medical treatment guidelines?
There's a great deal of industry discussion surrounding this topic, mostly focused on the definition of 'evidence-based medicine.' While that conversation is interesting, it's not the critical factor in overall formulary success. The crucial questions are two-fold: First, will there be room for political influence in the formation of the guidelines? Second, will the guidelines be updated with sufficient frequency?
2) Does the formulary process build off of existing dispute resolution processes?
States that have successfully implemented drug formularies thus far have done so by relying on existing rules regarding resolution of medical treatment disputes. States that try to simultaneously create a formulary and new dispute resolution processes to support it are, in reality, trying to do two things at once. Not impossible, but certainly creates execution risk.
3) Does the formulary allow for a remediation period for legacy claims?
On the one hand, a single effective date creates chaos as employers and physicians try to figure out how to address legacy claims, which tend to be more complicated. On the other hand, only applying new rules to new injuries creates two standards of care within a workers’ compensation system, where an injured worker’s treatment plan is driven entirely by the date on which they were injured (which makes no clinical sense). I look for regulatory language that takes a balanced approach – an initial implementation date for new injuries, followed by a remediation period for legacy claims, followed by a fully effective date for new rules and all claims.
4) Is the formulary process scalable?
I always look to see if the dispute resolution process can stand up to a significant volume of cases. While the goal of any formulary adoption should be to streamline access to medically necessary medications for injured workers, states should take a 'hope for the best, plan for the worst' approach. Dispute resolution processes that rely on one individual or one office for ultimate resolution may lead to bottlenecks and, in a worst case scenario, undue influence. I always ask myself - what will this look like if there are more disputes than the state expects?
One bad apple can spoil the bunch. Let's get this right.
Michael
On Twitter @PRIUM1
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