Another State Eyes Creation of Drug Formulary
Friday, December 23, 2016 | 0
The Florida Division of Workers’ Compensation will ask its governing Three-Member Panel on Jan. 5 to seek legislative approval for rule-making authority to create a drug formulary.
If adopted, Florida would be the ninth state to mandate a formulary, the Workers Compensation Research Institute said Thursday.
Insurers and employers support the concept, while Florida claimants’ attorneys do not because they say a formulary is another tool to deny injured workers treatment.
Conditions for a proposed formulary are that it must be “generally accepted” by Florida’s employers, insurers, health care providers and injured worker advocates; provide reasonable assurance in reducing or mitigating prescription drug costs; and ensure appropriate and effective treatment is provided to injured workers, a draft proposal by the DWC states.
The Workers’ Compensation Three-Member Panel includes Chairman and Insurance Commissioner David Altmaier, who was designated to serve on the board by Chief Financial Officer Jeff Atwater, and two gubernatorial appointees who represent employers and workers.
Gov. Rick Scott in April appointed as the employer representative Tammy Perdue, general counsel of Associated Industries of Florida. The worker representative position remains vacant.
“I think that this would simplify the Florida process for the vast majority of injured workers, physicians and carriers,” said David Langham, chief deputy judge of the Florida Office of Judges of Compensation Claims. “The efficiency would be beneficial. If that also results in cost savings, it’s an added bonus.”
WCRI in 2014 studied the effectiveness of Texas’ closed formulary and then examined what effect it would have if adopted by 23 study states, including Florida.
It concluded that Florida would save 19% in prescription costs.
In Florida, Connecticut and Maryland, where physician dispensing is prevalent, 13% to 14% of prescriptions were written in 2011-12 for non-formulary drugs, but the cost share was 24% to 26%, WCRI found. A quarter of Florida’s non-formulary prescriptions were for muscle relaxants, the study says.
DWC will present the Three-Member Panel with a 45-page report by the International Association of Industrial Boards and Commissions’ Medical Issues Committee. Members of the committee ranged from insurers to regulators to an official with the medical management firm Prium.
“It’s gratifying to see that our report actually ended up being something that maybe Florida considered,” said Mark Pew, Prium senior vice president.
Formularies are in effect in Texas, Washington state, North Dakota, Ohio, Delaware, Oklahoma, Tennessee and Nevada, WCRI says. California has a legislative mandate to create a formulary by July 1. Arizona also is looking to adopt a formulary by the fall of next year, Pew said.
Georgia, North Carolina, Louisiana, Nebraska, Montana, New York and Arkansas are “kicking the tires” of the concept, said Pew, who added he has spoken with officials in those states about how to develop a formulary.
The key, Pew said, is a strong dispute-resolution process and medical treatment guidelines, the latter of which do not yet exist in Florida.
“The goal is to create better clinical outcomes and change prescribing behavior so that workers get better and less dangerous care,” he said. “It will be interesting to see how it proceeds in Florida. Adopting a drug formulary sounds easy, but the actual flesh, muscle and ligaments around the bones is where it becomes more complicated. A bad formulary is worse than no formulary.
“You can rush something through that would create chaos and additional delay in patient care,” Pew said. “The worst-case scenario is an increase in friction” and treatment delays that can last days or even weeks.
Mark Touby, a claimants’ attorney and president of Florida Workers’ Advocates, and Paul Jess, deputy executive director and general counsel of the Florida Justice Association, said their organizations are taking no positions on a formulary at this time.
Calls to the Florida Medical Association were not returned.
Miami claimants’ attorney Mark Zientz called the formulary proposal “just another way to tie the hands of the authorized doctors from treating with medically necessary drugs that just don’t happen to be on the formulary.”
He said the reason is the high costs and belief among insurers and regulators that “injured workers are not entitled to the best medical care.”
Winter Park defense attorney Rogers Turner of Hurley Rogner Miller, Cox & Waranch said, “I am all for anything that would standardize” prescriptions and rid the system of excessive charges for compounded drug and creams.
“I think someone has to address the issues of compounded meds and all the other areas where people gouge the system,” he said.
The DWC’s draft biennial report says the agency “has detected a rise in the use and cost of compound drugs” and that those drugs are not FDA approved, “meaning the FDA does not verify the safety, or effectiveness of compounded drugs.”
A table within the report does show a rise in the spending on compound drugs, from approximately $1.9 million in 2011 to $10 million in 2013, but spending on compounds decreased in 2014 and dipped even more to about $7.6 million in 2015.
The American Insurance Association and the Property Casualty Insurers Association of America both said they strongly support a Florida formulary.
“Florida has already made strides in reducing the overutilization of opioids through its pill mill legislation and its ban on physician-dispensing of strong opioids,” said Trey Gillespie, PCIAA assistant vice president of workers’ compensation. “Adoption of an evidence-based closed formulary can further protect injured workers from overutilization of opioids and other dangerous drugs, including benzodiazepines.”
AIA Southeast region Vice President Ron Jackson said in an emailed statement: “AIA supports the adoption of objective, scientifically based medical treatment guidelines including a closed drug formulary, which has proven to reduce system costs, while ensuring that the injured worker receives the proper treatment.”
The National Council on Compensation Insurance said it would need a specific rule from Florida before it could estimate the implementation costs and potential savings.
“Drug formularies are becoming more thought of as a means of controlling medical costs and in particular limiting opioid prescriptions. We priced a proposal last year in Tennessee, and it led to an overall system cost reduction,” said Dean Dimke, NCCI marketing communications manager. “We don’t take a public policy position on these programs, but we would be open to analyzing and pricing any such proposal provided to us by an insurance or work comp administrator.”
DWC spokesman Joel Brown said Friday that the agency will not elaborate on the formulary concept until stakeholders and the Three-Member Panel have had time to “chew on it.”
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