Changes to Drug Formulary Starting January 1, 2018

After a worker sustains a work-related injury, he or she will receive a treatment from a large range of providers, depending on the type of the injury. The type of treatment can range from psychological treatment to surgery to chiropractic treatment. Often, the treatment often includes prescription medication to treat and address any number of conditions that may have arisen from the work-related injury and subsequent treatment. In recognition of the widespread use of prescription medication in treatment of work-related injuries in the workers’ compensation system, the California legislature has created new laws with requirements to adopt a new drug formulary.

Drug formularies are used in both health insurance and workers’ compensation insurance fields. A drug formulary is, quite simply, a list of medications. The list will provide what types of mediations are approved and covered under the insurance and what type are not. Just because a worker is prescribed a medication that is not on the approved list of a drug formulary does not mean that the medication will not be covered under workers’ compensation, merely that the worker may have to take additional steps to have the cost of the medication covered. The purpose of a drug formulary is to attempt to cut costs to the workers’ compensation system and in some other states has seen other benefits such as a reduction in the number of opioid prescriptions.

Assembly Bill 1124 mandated the adoption of an evidence-based formulary by the DWC. After an initial comment period, the DWC has modified the proposed regulations in order to make them more clear and to add more detail. The comment period ended on August 2, 2017. There are many changes the DWC is considering making. These changes include:

  • Making the effective date for the new formulary January 1, 2018;
  • Changing drug designations from “preferred and non-preferred” to “exempt and non-exempt;”
  • Phased implementation for the formulary;
  • Clarification of particular dispute resolution processes; and
  • Updated the drug listings.

When treating an injured worker, a medical provider may reference the drug formulary, or he or she may not. It is up to the insurance company to determine whether or not the drug is on the exempt or non-exempt list and whether the company may require additional steps from the injured worker before covering the cost of the medication.

If you have questions about your business whether it is required to cover the cost of certain medication for injured employees, contact me today at (714) 516-8188. We can discuss your business and your responsibilities.

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