California Medical Treatment Utilization Schedule Regulatory Amendment for Workers’ Compensation Drug Formulary

California Drug Formulary

Newsline No.: 2017-115 Date: December 7, 2017 - DWC Announces Final Approval to Adopt a Drug Formulary for the Medical Treatment of Injured Workers

Oakland—The Division of Workers’ Compensation (DWC) has adopted an evidence-based drug formulary for medical providers treating injured workers beginning January 1, 2018. 

Please click on this text to access the Final Drug Formulary Regulations.

The new drug formulary requirements are applicable to all workers’ compensation injuries and include the following:

  • The effective date is January 1, 2018, regardless of the date of injury.
  • All new injuries and claims must have a physicians’ Request for Authorization (RFA) where prescriptions are involved that are compliant to the drug formulary.
  • For existing claims prior to January 1, 2018, physicians must submit a new RFA by April 1, 2018 with a treatment plan for transition to the drug formulary.
  • The DWC has established a MTUS Drug List with drug designations called “Exempt and Non-Exempt”.
  • RFAs with “Exempt” drug designations do NOT require Utilization Review (UR), unless there is a dispute on the body part or other compensability determinations.
    • RFAs with “Non-Exempt” or unlisted drug designations will require UR.
    • Prospective UR is required for physician issuance of compound drugs and physician dispensed drugs.

Why a Drug Formulary?

California has not had a formulary for its workers compensation (WC) system. Pharmaceuticals are a significant point of WC costs. Nearly half (42%) of all Independent Review (IMR) medical disputes involve pharmaceuticals, dwarfing all other categories. These disputes delay medical treatment for injured workers, and are also time consuming and expensive for medical providers and payors. Source: California Senate Committee on Labor and Industrial Relations.

The California Workers’ Compensation Institute (CWCI) estimates that 73% of all prescriptions in CA workers’ compensation will be “Non-Exempt” or “unlisted”. This represents about 78% of the total annual drug spend. Source: Swedlow, A. and Hayes, S. “California’s Proposed Workers’ Compensation Formulary Part 1.

The Rand Corporation estimates that after the drug formulary is effective, prescription drug spending will decrease by 10.4%. Source: Rand Corporation – Modeling the Economic Impact of a California Worker’s Compensation Formulary.

GB’s Management of New and Existing Claims As of January 1, 2018

For new claims and existing claims with non-exempt and unlisted prescriptions, GB pharmacy benefit managers (PBM) will implement drug blocks and alerts to the Resolution Managers which will assure compliance to the drug formulary regulations.

GB Utilization Review Processes will continue to be compliant with the California treatment guidelines and statutory timeline requirements, while implementing prospective reviews where physician RFAs include: compound drugs, physician dispensed drugs, opioids/narcotics, branded drugs where there are generic equivalents, and Naloxone.