Gov. Signs Formulary Bill, Vetoes Others

Wednesday, October 7, 2015 | 13

California Gov. Jerry Brown on Tuesday signed into law measures requiring the Division of Workers' Compensation to adopt a prescription drug formulary by 2017 and to start making forms, notices and materials available in languages other than English and Spanish.

Gov. Jerry Brown

At the same time, the governor vetoed a bill to restore the clinical neuropsychology designation for qualified medical evaluators and a bill that would have prohibited apportioning physical and psychiatric injuries to menopause and pregnancy.

There was little doubt the governor would sign AB 1124, as the Division of Workers' Compensation already held its first public hearing to discuss implementing a formulary. Division officials said before the bill passed the Legislature that they have the authority to implement a prescription drug formulary through regulation without being told to do so by the Legislature.

But the bill by Assemblyman Henry Perea, D-Fresno, does include one provision that Department of Industrial Relations Director Christine Baker said was going to be important: It will allow the DWC to update the formulary to add or remove approved drugs without going through the formal rulemaking process, which requires a public comment period and hearing.

AB 1124 requires the DWC to implement the formulary by July 1, 2017, and to update it at least four times a year. The measure also creates a Pharmacy and Therapeutics Committee comprised of doctors, pharmacists and the DWC medical director to make recommendations about quarterly updates.

Perea's office on Tuesday released a statement that references a California Workers' Compensation Institute study finding a formulary could save up to $420 million a year.

"A drug formulary in California will ensure our workers are provided with safe and effective care to get them back to work while reducing unnecessary costs and savings California hundreds of millions of dollars," Perea said in the statement.

Perea's statement also included comments in support of the measure from the California Labor Federation, American Insurance Association, California Chamber of Commerce, Small Business California and Prium, a medical cost-containment services provider.

The Association of California Insurance Companies released a statement Tuesday saying the bill will help get a grip on overprescribing of opioids in the state's comp system. 

“Injured workers frequently grapple with pain from their injuries, only to then be hurt again by becoming addicted to their pain medication,” ACIC President Mark Sektnan said in the statement. “This bill provides injured workers the medication they need but also protects them from becoming addicted and having open-ended access to a drug that could kill them.”

ACIC also referenced a CWCI study finding that 43% of utilization reviews and 34% of independent medical reviews involved disputes over pharmaceuticals. Having a list of drugs that are approved for injured workers should cut down on those disputes and reduce delays in getting injured workers appropriate medications, ACIC said.

Ken Eichler, director of regulatory and outcome initiatives for the Work Loss Data Institute, on Tuesday said during a telephone interview the process of negotiating language for AB 1124 that involved talking to multiple system users should set the ground work for the DWC to take the next step of promulgating regulations.

He said there was good "back and forth" between lawmakers and regulators to make sure the language in the bill is workable, which is not the norm.

"Often in the legislative process, the regulatory agency inherits legislation that can't be translated into a working process," he said. "This was the opposite."

Eichler also said Labor Secretary David Lanier and Baker should be commended for actively reaching out to system users and encouraging comments about the best way to implement a formulary.

The governor also signed AB 438, by Assemblyman David Chiu, D-San Francisco, requiring the Department of Industrial Relations to make certain documents available in Chinese, Korean, Tagalog and Vietnamese by Jan. 1, 2018. Materials that must be available in the Asian languages as well as English and Spanish include:

• Workers' compensation claim forms.
• Applications for the $120 million Return-to-Work Supplement Program created by SB 863.
• The Supplemental Job Displacement Benefit voucher.
• Fact sheets about temporary and permanent disability benefits, qualified medical evaluators, the Uninsured Employers Benefits Trust Fund, utilization review, basic workers' compensation facts and a glossary of terms used in the comp system.

Mike Herald, a lobbyist for the California Applicants' Attorneys Association, said during a telephone interview that the bill increases access to information about the workers' compensation system.

"This is a significant step for injured workers so they understand what the law is and can get the benefits they need in a timely fashion," he said. 

CAAA sponsored AB 438.

Herald was less pleased with the governor's decisions to veto the apportionment measure and the bill that would have restored the QME designation for neuropsychologists.

Herald said the veto of AB 1542, co-authored by Assemblyman Devon Mathis, R-Visalia, and Sen. Ken Cooley, D-Rancho Cordova, would have required the DWC to bring back the QME specialty designation for neuropsychologists. 

DWC rules that took effect Sept. 1 moved neuropsychologists into the broader psychology designation. The division opposed the bill.

Neuropsychology is a specialty within the field of psychology that focuses on treating cognitive impairments caused by severe head and spinal cord injuries and lack of oxygen.

Brown said in his veto message that the bill "undermines" the authority of the DWC to use consistent standards when it determines eligible specialties for QME panels. 

"The division is not in the position to determine the validity of a physician's qualifications," the governor said. "That power resides with the physician's licensing board. If the Board of Psychology believes there is value in recognizing neuropsychology as a subspecialty, it should do so."

Herald said the veto message was difficult to understand.

"The people who need to see a neuropsychologist are among the most severely injured workers in California and we, rather than erecting barriers and road blocks to their medical care, ought to be clearing a path for them," he said.

Steve Cattolica, director of government affairs for bill sponsor the California Society for Industrial Medicine and Surgery, said that the governor's veto message is based on faulty reasoning. Most California licensing boards, including the medical and psychology boards, do not recognize specialties. Instead, they recognize accrediting organizations that themselves recognize specialties.

He said the Board of Psychology does recognize the American Psychological Association, which does recognize neuropsychology as a specialty.

There are QME designations for internal medicine, orthopedics and neurology, but the Medical Board of California doesn't recognize these specialties. Furthermore, the Board of Chiropractic Examiners does recognize several specialties, but the DWC does not recognize any of those designations for QMEs, Cattolica said.

Cattolica also said the bill would not have undermined the authority of the DWC, as the governor suggested. Instead it would have affirmed the agency's ability to provide direct access to neuropsychologists for workers with brain injuries. And it would have ratified the QME designations made during the 22 years that the DWC did recognize neuropsychology.

"His veto is an about-face on cost savings in apparent disregard for the increase in costs that a lack of access will cause," he said. "It is essential that brain injured workers receive a timely and accurate assessment of their impairment and employers should not be forced to pay for unnecessary exams by general psychologists and extended benefits while the parties search for a neuropsychologist. AB 1542 was a win-win-win for everyone."

Cattolica also said vetoing the bill is a departure for the governor, who last year signed a bill providing direct access to health care providers trained in concussions and head trauma for high school athletes.

"With his veto of AB 1542, the governor has performed a second, more serious about-face by stating unequivocally that first responders, those in the building trades, farm laborers and many others who suffer brain injuries in the course of their employment do not deserve that same direct access -- the direct access they have been afforded for the past 22 years," he said.

The governor also vetoed AB 305, by Assemblywoman Lorena Gonzalez, which would have prohibited apportioning physical and psychiatric injuries to menopause and pregnancy. The bill would have also required the impairment rating for "breast cancer and its sequelae" be no less than the rating for prostate cancer.

Brown said the workers' compensation system should be free of gender bias and no group should receive less in benefits based on immutable characteristics such as gender.

"However, this bill is based on a misunderstanding of the American Medical Association's evidence-based standard, which is the foundation for permanent disability ratings, and replaces it with an ill-defined and unscientific standard," he wrote in his veto message.

ACIC President Mark Sektnan said during a telephone interview that he thinks the governor was right and that evidence-based medicine should not and does not favor one group over another. 

Attempting to use the statute to make impairment ratings for breast cancer comparable to ratings for prostate cancer is a problem, he said, because it's "trying to equate two different things."

Gonzalez said in a statement the governor was "dead wrong" for vetoing the bill.

"With all due respect, a woman's breasts are worth as much as the prostate of a male coworker and they should be valued as such if they were lost in a workplace injury," she said in a statement.

Christel Schoenfelder, co-chair of CAAA's Women's Caucus, said the governor's veto message "literally adds insult to injury for California's working women."

She said by vetoing the bill, which CAAA sponsored, the governor has essentially endorsed gender bias in the state's workers' compensation system.

"When I read the veto message, to state the workers' compensation system must be free of gender bias, then to turn around and say the bill is based on a misunderstanding of the (American Medical Association Guides to the Evaluation of Permanent Impairment), just doesn't make any sense," Schoenfelder said. "We, as attorneys, I think, have a good idea of how the AMA guides work. We deal with them every day. I believe the veto message is appalling and offensive to all applicants' attorneys and certainly to women."

Schoenfelder said she was optimistic that the governor would sign the bill, but his veto message doesn't mean that CAAA is going to drop the issue.

"It means we're going to continue to fight," she said. "We're not going to give up on this issue. It would be detrimental to the women of California to give up on them. They should not be penalized for being women."