How Drug Formularies Are Reducing Costs and Mitigating the Opioid Crisis

One result of the opioid crisis is the growing popularity of workers’ compensation drug formularies. Workers’ compensation drug formularies are in place in Arizona, Ohio, Oklahoma, Tennessee, Texas, and Washington. And they are currently working their way toward approval in the legislatures of Indiana, Kentucky, New York, California and Montana. Texas was the first state to adopt a workers’ compensation drug formulary in 2011. Since then, employers and insurers in Texas have experienced significant savings in prescription drug costs and a decrease in opioid prescriptions.

"The number of open claims in Texas where nonpreferred strong opioids were being received and utilized by injured workers decreased from almost 15,000 injured workers in 2009 to less than 500 injured workers in 2015," according to Trey Gillespie, Austin, Texas-based assistant vice president of workers’ compensation with the Property Casualty Insurers Association of America, in an interview with Business Insurance magazine.

Each state puts together its own workers’ compensation drug formulary, which has some flexibility. "It evolves over time either based upon guidelines or pharmacy and therapy committees or whatever mechanism each state chooses that dictates ‘here are the medications that are acceptable for treatment of injured worker conditions.’ If you need something that is not within that drug list or formulary, it requires preauthorization, depending on which state, or requires another form of heightened review," said Don Lipsy, Memphis, Tennessee-based managed care specialty products manager with Sedgwick Claims Management Services Inc., in an interview with Business Insurance magazine. 

Though the number of states with formularies is increasing, not all states are on board. 

"I think there has been a significant amount of misinformation about drug formularies," said Joe Paduda on his blog, Managed Care Matters. "There has been a lack of understanding that formularies enhance patient safety and promote return-to-work and healing... Instead, some people in the industry purport that formularies are a way to prevent patients from getting the treatment they need. I think there has also been fear on the parts of some people in the community who are injured-worker advocates that this would somehow be harmful to patients."

For more information on workers’ compensation drug formularies and how they affect your workers’ compensation claims, please contact the insurance professionals of EPIC’s CRA ProRental™ Insurance Program. Call us at: 800.234.6363.