New York Moves Closer to a Workers Compensation Formulary

Following the lead of several other states, New York has been developing a Workers Compensation formulary for several years. The Workers Compensation Board released its initial proposal in November 2017. After public comment revealed a number of potentially serious issues with the new rules, the WCB went back to the drawing board last year. It released a significantly revised — and more complex — version of the formulary on Oct. 17, 2018. The comment period for the revision is now closed, so a final version of the formulary is expected soon.

What Is a Workers Compensation Formulary?

Formularlies, in general, are a set of rules that determine what drugs an insurer will pay for and under what circumstances. When properly designed and implemented, they provide important guidelines for prescribers regarding what drugs are most appropriate for treating certain conditions. They also deter over-prescribing by setting dosage and time limits for certain drugs (for example, opioids), and prevent prescribers from ordering two or more drugs that may have similar or synergistic effects (for example, opioids and benzodiazepines). Last but certainly not least, they help contain prescription drug costs.

Similarly, a Worker’s Compensation formulary sets statewide guidelines for prescribers who treat workplace injuries. Typically drawn from evidence-based medical practices, they often mirror guidelines issued by the U.S. Centers for Disease Control and Prevention or ODG. However, states are free to create their own guidelines as well.

A key feature of most Workers Compensation formularies is preauthorization. While some prescriptions may be filled automatically, Workers Compensation formularies typically require physicians to get approval from the insurer before prescribing certain drugs or prescribing drugs in excess of a predetermined dose. For example, the formularly might require preauthorization for a brand name medication if an effective generic medicine is available. Or it might require preauthorization for an opioid prescription if the patient has been taking opioids for more than 90 days.

Although many prescribers decry this practice, labeling it cumbersome and inefficient, the goal of preauthorization is (or should be) to deliver the safest, most effective care while simultaneously reducing costs.

Do Workers Compensation Formularies Work?  

The first statewide Workers Compensation formulary was implemented in Texas in 2011. Based on ODG prescribing guidelines, it allows unlimited prescribing of all FDA-approved drugs except:

Drugs in these three categories must be preauthorized.

Since Texas implemented its plan, various states have followed the progress of the model as they pondered implementing a similar formulary in their state. Then, in 2015, the Texas Department of Insurance published a research study detailing the impact of the state’s closed formulary on workers comp prescribing in that state. According to Versik, the study showed:

  • An 83 percent reduction of injured workers receiving nonapproved drugs in the first three years
  • An 85 percent drop in nonapproved drug prescriptions,
  • A $44 million decrease in opioid and non-opioid drug costs

These results prompted more research and, eventually, the adoption of a Workers Compensation formulary in 10 other states: Arizona, California, Delaware, Kentucky, North Dakota, Ohio, Oklahoma, Tennessee, Washington  and Wyoming. A few states, such as North Carolina, have implemented less restrictive opioid prescribing and pain management guidelines rather than a comprehensive drug formulary. Others, such as Pennsylvania, have tried and failed to pass legislation allowing a formulary for several years.

Proposed NY Workers Compensation Formulary

The latest version of the New York Workers Compensation formulary differs significantly from that of other states in that it restricts drug prescribing to certain “phases” or lengths of time as well as to certain drugs. The phasing structure is too complex to describe in detail in this article, but you can read the WCB proposal in its entirety here.

Other key components of the proposal include rules around preauthorization. In the current draft, preauthorization is required when the provider prescribes:

  • Any drug not included in the formulary
  • A brand name drug when a comparably effective generic is available
  • A brand name drug when a generic is available in a different dose or strength
  • A combination product not listed on the formulary
  • A compounded medication that contains a non-formulary ingredient(s)
  • Any drug prescribed for off-label (non FDA-approved) use or route

If a request for preauthorization is denied, the prescriber can request up to three reviews: two from the insurer and one from the WCB Medical Director’s office or its official designee. Third review decisions are final and cannot be appealed.

Insurers are not required to pay for medications unless preauthorization requirements are met.

About The Carmoon Group

The Carmoon Group Ltd. is an independent insurance broker located in Hicksville, New York. We offer a comprehensive array of business insurance products, including property insurance, liability insurance,umbrella insurance, business automobile insurance and workers compensation insurance at a price you can afford. So, why not give us a call today to set up an appointment for your insurance review? Or if you’re too busy to call, just reach out online and we’ll contact you at a convenient time.

Leave a Reply

Your email address will not be published. Required fields are marked *