Overall, I think this will benefit California physician work comp providers. The highlights of the new law are as follows:
1. It requires the Adm. Director of Workers Comp to “meet and consult with stakeholders”. Everyone will have a voice in the establishment of this “formulary”. The details, however, will probably be left up to physicians and pharmacists (see #5 below).
2. In reviewing formularies that are already in place in other states, I noticed that medications are listed in generic type format without regard to NDC #, strength, or manufacturer. Medications such as naproxen, Naprosyn, hydrocodone, tramadol, etc. are all listed in this general manner. If the prescribed medication falls into the drug category, it should be covered.
3. Per 4600, section 1. (e)….The use of this formulary is to further “the goal of providing appropriate medications expeditiously while minimizing administrative burden and associated administrative costs”.
My interpretation of this law is to eliminate the current nightmare in physician offices whereby the insurer is requiring the prescribing physician to submit an “RFA” (request for authorization) to the insurer for many commonly used medications (Norco, naproxen, tramadol, etc.). If the formulary is “evidence based”, most medications commonly seen in physician offices should have no problem making their way onto this new formulary. This will eliminate the need for the submittal of burdensome RFAs prior to dispensing or prior to prescribing medications which are included in the formulary.
4. Per section 4600.2 (a) …“Medicines provided pursuant to the contract shall be subject to the drug formulary adopted by the administrative director pursuant to Section 5307.27, and such contracts may not limit the availability of medications otherwise prescribed pursuant to the formulary based on whether the pharmacy services are provided within or outside a medical provider network”
This section above may increase the ability of physicians to dispense medications in their offices. I interpret this section to say when a physician provides “pharmacy services” outside the medical provider network (MPN), those services must be paid. I hope this is the case. Currently, many physicians are denied reimbursement by the insurer for their dispensed medications due to “medications must be provided by the patient’s drug program or contracted pharmacy”. Section 4600.2(a) makes it mandatory that if a “pharmacy service” is provided, and the medication is listed on the drug formulary, the insurer will have to allow for those medications whether provided “within or outside a medical provider network” (see yellow highlight above). The only question is if “pharmacy services” includes the dispensing of medications from a physician’s office. I feel this has been implied based on other parts of the labor code that describe “pharmacy services” along with physician dispensing [see section 5307.1 (g)] .
5. Per section 5307.29 (c) 1.
Thanks to someone’s common sense, this law requires an “independent pharmacy and therapeutics committee” comprised of six members: The Executive Medical Director of Workers Comp, medical doctors, and pharmacists. This committee will be responsible in updating the formulary based on efficacy, relative safety, and effectiveness of medications. No one from a PBM, Insurer, or a pharmacy manufacturer will be allowed on this committee . Their decisions will have to be evidence based and clinically appropriate. I have to assume their decisions will be based primarily on what is best for the patient.
Again, this is only my interpretation. These laws use very confusing, complex, and complicated language, therefore another person’s interpretation may vary. However, I feel this new law has great potential to provide the California work comp system with a reasonable formulary. It may provide patients with the best medications and reduce the current unreasonable burden to the physician and their patients. Overall, I think it supports physician dispensing with less hassle.
Feel free to call me if you have any questions,
Fred Y. Ganjian
Fred Y. Ganjian