California Considering Drug Formulary for Workers’ Comp Program
California regulators are consulting with officials in other states in an effort to implement a closed prescription drug formulary in the state's workers' compensation program, Business Insurance reports (Gonzalez, Business Insurance, 8/13).
Drug formularies are standardized lists of approved prescription medications that workers are allowed to use. In some cases, they can limit variability in prices.
There currently is no drug formulary for California's workers' compensation program.
A 2014 report by the California Workers' Compensation Institute found that implementing a formulary similar to that in Texas or Washington state could cut pharmaceutical costs by up to $420 million annually (California Healthline, 10/9/14).
Details of Efforts
Christine Baker -- director of the state Department of Industrial Relations, which oversees the Division of Workers' Compensation -- said the department has been ordered by the California Labor and Workforce Development Agency to begin the process of establishing a formulary.
The process is set to begin in the fall, Business Insurance reports. According to Baker, regulators have the authority under state labor codes and regulations to implement a formulary without legislation.
According to Business Insurance, California regulators already have started talks with officials in other states -- such as Texas and Washington state -- that have curbed the overuse of certain medications by implementing formularies.
Calif. Senate Panel Considers Bill To Establish Formulary
Meanwhile, a California Senate committee on Monday is scheduled to consider a bill (AB 1124) that would establish a formulary in the state's workers' compensation program, Business Insurance reports.
AB 1124, by Assembly member Henry Perea (D-Fresno), would require an evidence-based drug formulary to be established by mid-2017.
The bill has been met with mixed reaction.
Robert Rassp, an attorney who represents compensation claimants, said a drug formulary could result in injured workers seeking drugs outside of the system.
Meanwhile, Steve Suchil, vice president of state affairs of the American Insurance Association in Sacramento, said the bill could restrict options for implementing a formulary by including various mandates. Still, Suchil said a formulary would benefit cost control and workers' quality of life (Business Insurance, 8/13).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.