Tag Archives: medical board of california

Would a Formulary Help in California?

Introducing a closed pharmaceutical formulary into California workers’ compensation could produce two main benefits. The first is to further lower the cost of pharmaceuticals by either restricting or eliminating certain medications. The second is to reduce the possibility of drug addiction.

An October 2014 California Workers’ Compensation Institute (“CWCI”) report titled, “Are Formularies a Viable Solution for Controlling Prescription Drug Utilization and Cost in California Workers’ Compensation” states that pharmaceutical costs could be reduced by 12%, or $124 million, by introducing the Texas workers’ compensation pharmaceutical formulary.

To achieve the second benefit, an assembly member introduced AB1124 to establish an evidence-based medication formulary and wrote, “The central purpose of our workers’ comp system is to ensure injured workers regain health and get back to work. When workers get addicted to dangerous medications, goals of the program are not met. An evidence-based formulary has proven to be an effective tool in other states and should be considered in California.”

To confirm whether these benefits could be achieved through the introduction of the Texas formulary, a review of the CWCI study and the opioid medications available under the Texas formulary was conducted. The findings, summarized below, suggest that the answer is no.

Although California does not restrict or limit medications in treating injured workers, it does limit the prices paid and provides an opportunity to question prescribed medications that appear to be out of the ordinary. Medi-Cal prices (California’s Medicaid health care program) are used for establishing the maximum prices for workers’ compensation medications, in contrast to states such as Texas, which use the average wholesale price (AWP).

A review of two cost-saving examples that referenced specific medications calculated projected savings based on CWCI’s ICIS payment data for prescriptions paid between Jan. 1, 2012 and June 30, 2013.

The first example compared 50mg Tramadol prices from five different suppliers. The highest was $190, followed by $23, $18, $12 and $8 per script. Here, CWCI suggested that the manufacturer of the highest-priced script be removed from the California formulary. From mid 2009 through 2013, however, the unit price for 50mg Tramadol from the supplier of brand name Ultram and at least 10 other suppliers in California was nine cents, so the AWP for a script was $2. So, overpaying for medications is an issue even if the $190 supplier is removed.

The Workers’ Compensation Research Institute (WCRI) also reported that California claims administrators paid a unit price of 35 cents for 5mg Cyclobenzaprine and 70 cents for 10mg while the unit price from Californian suppliers was 10 cents for 10mg and 15 cents for 5mg. Again, the prices suggest that California claims administrators were paying more than the maximum prices.

Based on randomly selected manufacturers and strengths of the top 20 medications identified in the 2013 NCCI prescription drug study, California’s prices were on average 20% lower than the AWP and in some cases as little as 1/24th the cost. California prices were found to be at the lowest retail price range compared with those published on goodrx.com. Pharmacies located in Los Angeles, Miami and Dallas were used for comparison. Findings suggested employers in California workers’ compensation are paying no more than the general public for medications, whereas in Texas employers are paying more by using the AWP.

The second example compared script prices of seven opioid agonists, including Tramadol and Oxymorphone. Oxymorphone was the highest-priced script at $600 and Tramadol the lowest at $60 per script, suggesting a saving of as much as $540 if Tramadol were to be prescribed instead of Oxymorphone.

But prescribing oxymorphone when tramadol could suffice or vice versa could be regarded as an act of gross negligence by the physician. On the World Health Organization (WHO) analgesic ladder, tramadol and codeine are weak opioids regarded as “step two” while acetaminophen and NSAIDs are “step one.” “Step three” opioids include medications such as morphine, oxycodone and oxymorphone, which all differ in their pharmacodynamics and pharmacokinetics, so choosing one or more to treat pain becomes a balance between possible adverse effects and the desired analgesic effect. Oxymorphone (stronger than morphine or oxycodone) is recommended for use only when a person has not responded to or cannot tolerate morphine or other analgesics to control their pain.

A list of opioid medications published by Purdue Pharma was used to identify which opioids were excluded from the Texas formulary. The list of more than 1,000 opioid analgesics was prepared by Purdue to comply with the state of Vermont law 33 V.S.A. section 2005a, requiring pharmaceutical manufacturers to provide physicians with a list of all drugs available in the same therapeutic class. Being in the same class, however, does not necessarily mean they are interchangeable or have the same efficacy or safety.

The list showed available strengths and included (1) immediate and extended release, (2) agonists such as fentanyl, oxycodone, hydrocodone, oxymorphone, tramadol, codeine, hydromorphone, methadone, morphine, tapentadol and levorphanol and (3) combinations such as acetaminophen with codeine, oxycodone with acetaminophen, oxycodone with asprin, oxycodone with ibuprofen, hydrocodone with acetaminophen, hydrocodone with ibuprofen, acetaminophen-caffeine with dihydrocodeine, aspirin-caffeine with dihydrocodeine and tramadol with acetaminophen.

It appears that extended-release medications used for around-the-clock treatment of severe chronic pain have been excluded or are not listed in the Texas formulary, with a few exceptions. For example, 80mg OxyContin (Oxycodone) ER 12 hour (AWP $18, Medi-Cal $15) is excluded. 120mg Hysingla (Hydrocodone) ER 24 hour (AWP $41, Medi-Cal $34) is not listed. However, 200mg MS Contin (Morphine) ER 12 hour (AWP $31, Medi-Cal $26) and 100mcg Fentanyl 72 hour transdermal patch in both brand name and generic forms are approved under the Texas formulary. Immediate-release generic medications such as oxycodone, hydromorphone and hydrocodone with acetaminophen in all strengths are approved, but immediate-release hydrocodone with ibuprofen and oxymorphone in either immediate or extended release are excluded.

Would the objective of AB1124 be achieved by utilizing the Texas formulary? The above review suggests it would not. All the opioid medications available through the Texas formulary have the potential to cause addiction and be abused, possibly leading to death either accidentally or intentionally. As an example, the executive director of the Medical Board of California has filed accusations against Dr. Henri Eugene Montandon for unprofessional conduct including gross negligence. His patient was found dead with three 100mcg fentanyl patches on his upper chest. The autopsy revealed he potentially had toxic levels of fentanyl, codeine and morphine in his bloodstream at time of death. These three opioids are available under the Texas formulary.

An article published on the website www.startribune.com described the challenges in treating returning soldiers from combat duty. The article discusses Zach Williams, decorated with two Purple Hearts who was found dead in his home from a fatal combination of fentanyl and venlafaxine, an antidepressant. Venlafaxine in both immediate- and extended-release form is approved in the Texas formulary. In addition, the following statement was made in a 2011 CWCI study into fentanyl: “Of the schedule II opioids included in the Institute’s study, the most potent is fentanyl, which is 75 to 100 times more powerful than oral morphine.”

The top 20 medications identified by the 2013 NCCI prescription drug study were also compared with the Texas formulary, and six medications were found to be excluded, including three extended-release opioids, OxyContin (Oxycodone), Opana ER (Oxymorphone) and the once-daily Kadian ER (Morphine). The twice-daily, extended-release morphine MS Contin, however, was approved. Flector, a non-steroidal anti-inflammatory transdermal patch used for acute pain from minor strains and sprains, was excluded, as was carisoprodol a muscle relaxant classified by the DEA as a Schedule IV medication (the same as Tramadol). The Lidocaine transdermal patch, which is a local anesthetic available in both brand name and generic. was also excluded. Lidocaine patches have been found to assist in controlling pain associated with carpal tunnel syndrome, lower back pain and sore muscles. Apart from carisoprodol, it would appear the remaining five were excluded from the Texas formulary because of their high price rather than concerns regarding their safety or potential for abuse.

The U.S. Food and Drug Administration (FDA) is responsible for the approval of all medications in the U.S. Its approved list is the U.S. pharmacy formulary (or closed formulary). California workers’ compensation uses this list for treatment and the Medi-Cal formulary for medication pricing. In comparison, Texas workers’ compensation uses its own formulary, which is a restricted list of FDA-approved medications, and pays a higher price for approved medications than California’s system does.

Implementing an evidence-based formulary, such as in Texas, may result in an injured worker’s not having the same choice of medications as a patient being treated for pain under California’s Medicaid healthcare program. How can this be morally justified? Will we see injured workers paying out-of-pocket to receive the medications necessary to control their pain?

Claims administrators can greatly reduce pharmaceutical costs through their own initiatives by (1) ensuring that they pay no more than the Department of Industrial Relations (DIR) published price for a medication, (2) ensuring that physicians within their medical provider network (MPN) treat pain using the established pharmacological frameworks such as the WHO analgesic ladder, (3) ensuring that quantities and medication strengths are monitored, along with how a person has responded to analgesics, (4) ensuring that, when controlling pain with opioids, there is a heightened awareness for potential abuse, misuse and addiction, (5) establishing a multimodal pain management regimen including non-pharmacological therapies such as acupuncture, aerobics, pilates, chiropractic and physical therapy tailored to a person’s medical condition and, (6) for chronic pain, considering introducing an Internet-delivered pain management program based on the principles of cognitive behavioral therapy.

The progress of many of these initiatives can be automatically monitored through a claims administrator’s technology solution, where a yellow or red flag is raised when prices paid exceed the legislated maximum amounts, when a pharmacological step therapy or progressive plan has been breached or when non-pharmacological therapy goals have not been achieved.

Using these initiatives, as opposed to restricting specific manufacturers or medications through a closed formulary, will undoubtedly yield a far better outcome for the injured worker and lower the cost to the employer, benefiting all involved.

Good Answer (Maybe) on Opioids in California

The California Workers’ Compensation Institute (CWCI) has added its voice to the growing national consensus that greater controls are needed over the use of Schedule II medications in workers’ compensation medical treatment and disability management. But the CWCI research must be analyzed in a broader context.

First, we continue to view the abuse of these medications in a “going forward” context – we focus on, how can we stop over-prescribing these medications on claims from the effective date of such reforms? Second, we inevitably take these recommendations out of the context of the state being analyzed — can we say that the Texas closed formulary will work in any state whose system otherwise doesn’t bear any resemblance to the Texas system?

One body of work and thought proclaims the overuse of Schedule II medications to treat industrial injuries is “bad medicine” and should be stopped as soon as possible. Guidelines from Ohio, Texas and Washington, however, recognize the need for prescriptions to relieve acute and chronic pain and provide detailed guidance on moving from acute to chronic pain management. Encompassed within that guidance is recognizing when weaning from these medications, or other early interventions, is appropriate and how to taper dosages to maximize clinical effectiveness and minimize adverse consequences to injured workers.

Many of these concepts are embodied in proposed guidelines from the California Division of Workers’ Compensation (DWC) and the Medical Board of California (MBC). It is encouraging that on Sept. 29 of this year the DWC presented its work to the MBC’s Prescription Task Force at a public hearing and that both agencies are moving forward with compatible guidelines. As seen in other states, notably Washington, inter-agency cooperation is critical so as not to create conflicts between the regulatory agencies that oversee benefit delivery systems and licensing agencies that oversee providers.

To take advantage of the potential cost savings in California’s complex workers’ compensation system identified by CWCI and the Workers Compensation Research Institute (WCRI), however, more needs to be done than adopting a closed formulary. That aspect of the Texas system requires prior authorization before prescribing an “N” drug, which includes Schedule II pain medications. After all, the California system already has: (1) claims administrators’ authority to direct medical care though the medical provider networks (MPNs); (2) the ability to adopt formularies through the MPN; (3) utilization review; (4) a medical treatment utilization schedule (MTUS) that sets forth presumptively correct guidelines for treatment, and; (5) post-Senate Bill 863 (DeLeón), independent medical review (IMR) for resolution of treatment disputes.

We are continuing to have the discussion  regarding Schedule II medications because over the past decade the controls that have been put in place to manage the care and cost of medical treatment more efficaciously and efficiently have not produced the desired results. Some of this can be attributed to the pre-SB 863 environment where the MTUS was regularly subverted through the med-legal process. Claims where high level of opioids and other medications were approved for continuing treatment are still in the system and are now subject to IMR. While the adoption of IMR may be viewed as beneficial from a payment standpoint, it is not automatically beneficial in terms of patient care. As the actions of other states have shown, for those who have become addicted or incapacitated because of their overuse of these medications – at the direction of their treating physician – necessary care means more than saying you shouldn’t have had these, or as much of these, so we’re cutting you off.

Also, more needs to be understood about the universe of claims that will be most immediately affected by a closed formulary – long-term, open claims and claims where compensability has been denied, whether completely or whether there is a dispute over a consequence of an accepted claim. As the DWC moves forward with its new Guideline for the Use of Opioids to Treat Work-Related Injuries, there needs to be more specific treatment of legacy claims or any claim where the liability of the employer is in dispute. The MBC’s Pain Management Guidelines, currently under revision, are applicable to all practitioners regardless of the nature of the injury or illness or the mechanism by which a provider is compensated. The DWC would do well to incorporate that work product into the MTUS as a reminder to all providers that, even if the claim is not accepted, it is not “off the grid,” and the MBC requirements still apply.

Finally, the claims administration community needs to take a long hard look at how we review these cases. There is a universe of claims where Schedule II medications are being approved that would not seem to be supported by best medical evidence. Payers are an integral part of the close monitoring of claims where pain management is indicated and determining when it is appropriate to start tapering use of opioids with a goal of returning the injured worker to employment. As noted by the MBC in its draft revised Pain Management Guidelines, when referring to workers’ compensation:

“The use of opioids in this population can be problematic. Some evidence suggests that early treatment with opioids may actually delay recovery and a return to work. Conflicts of motivation may also exist in patients on workers’ compensation, such as when a person may not want to return to an unsatisfying, difficult or hazardous job. Clinicians are advised to apply the same careful methods of assessment, creation of treatment plans and monitoring used for other pain patients but with added consideration of the psycho-social dynamics inherent in the workers’ compensation system. Injured workers should be afforded the full range of treatment options that are appropriate for the given condition causing the disability and impairment.”

As payers, we have the ultimate leverage to make certain treatment of injured workers meets this standard. But if we simply want to find a quicker, better way to say “no” when a request for authorization is faxed in, then a closed formulary will only be yet another attempt at lowering medical treatment costs that failed to meet expectations.

Prescription Drug Abuse – Progress In Sacramento

On May 30, the California Senate passed Senate Bill 809 (DeSaulnier) unanimously. This bill has as its primary goal the continued funding of the Controlled Substance Utilization Review and Evaluation System (CURES) in the California Department of Justice. Over the past year, considerable attention has been brought to the issue of abuse of prescription painkillers nationwide and across all benefit systems. Well-publicized research in California by the California Workers' Compensation Institute (CWCI) and multi-state analyses by the National Council on Compensation Insurance, Inc. (NCCI) and the Workers' Compensation Research Institute (WCRI) have quantified the tragic effects of over-prescribing these medications.

SB 809 seeks to do more, however, than simply develop a stable funding source for this program. The recent Senate action, while important, demonstrates that not all issues surrounding the CURES program are likely to be resolved in 2013. As a series of investigative reports done by the Los Angeles Times pointed out, participation in the CURES program by physicians is not mandatory, and there is no adequate mechanism in place to report unusual prescribing patterns by physicians to the Medical Board of California. While the funding legislation for CURES will address the latter problem, there is still no requirement that prescribers access the database before prescribing a Schedule II – IV controlled substance. However, all prescribers and dispensers will be required to register with the CURES system, which in and of itself is an important development for the Department of Justice and the Medical Board in their efforts to identify and investigate abusive prescription patterns and to combat diversion of the medications for illicit purposes.

Also, stripped from the bill was a tax on manufacturers of controlled substances that would have been used for enhanced law enforcement capabilities throughout the state. This was a critical development that policy makers still need to address, either in this legislation or through the budget process.

Even though a targeted tax on manufacturers is not palatable to the Legislature, the need to fund better enforcement of the laws governing illicit sales of prescription drugs remains a high priority. The funding in the current bill will allow the CURES program to be maintained and improved, but law enforcement will still not have what it needs to investigate physicians and pharmacists who are violating the law and bring them to justice.

While California's workers' compensation system does not have the same level of protections against prescription drug abuse as other state workers' compensation systems, there are resources at our disposal to limit the danger of these medications.

The Medical Treatment Utilization Schedule, utilization review, and Independent Medical Review (IMR) recently added by Senate Bill 863 will assist payers in their effort to curb overutilization of these medications while still addressing the very real clinical need for relief from acute pain and management of chronic pain resulting from an occupational injury. The Division of Workers' Compensation is expected to release new guidelines on pain management later this year that should further assist in this process. And the workers' compensation system, like all other healthcare financing programs, will benefit from the enactment of SB 809. It's a good start, but we are a long way away from declaring this problem solved.

The abuse of high powered prescription pain medication is a public health crisis with workers' compensation implications. The path to a solution requires the active participation of the medical and pharmacy communities, drug manufacturers, law enforcement, medical benefit payers — whether public programs, private group health plans or workers' compensation insurers and self-insured employers — and state and federal agencies and boards overseeing the development and use of these medications.

Progress is being made, but more work needs to be done. The goal is not simply for payers to be better able to say “no”. The goal is also not simply being able to avoid the costs of these medications and the complications their abuse creates and have those costs be borne somewhere else. The goal is delivering the highest quality treatment for an injured worker. A back injury, for example, doesn't automatically require surgery in all circumstances any more than it requires an injured worker to face the prospect of drug dependency.

If we use the tools at our disposal compassionately and intelligently and if we continue to press policy makers and regulators to take all steps necessary to protect patients from the improper use of these medications, then we will be able to measure success in more than dollars saved. If Governor Brown gets SB 809 on his desk and signs it, it will become effective immediately. That's a good first step, but there will still be much work to do.