Governor Signs WC Formulary Bill, Vetoes Gender Bias Apportionment Bill
Governor Brown today acted on the two most high-profile workers’ comp bills passed by the state Legislature this year, signing AB 1124 (Perea), the workers’ compensation formulary bill, and vetoing the California Applicants’ Attorneys Association-backed bill (AB 305, Gonzalez) that would have prohibited the use of certain gender-related characteristics in the calculation of PD benefits.
AB 1124, was introduced by Assemblyman Perea after CWCI research published last fall estimated that adopting a state-mandated formulary such as those used in Texas and Washington State could reduce California workers’ compensation pharmacy payments by an estimated $124 million to $420 million a year while simultaneously raising the quality of care for injured workers and reducing frictional costs in the system. The bill amends LC §§4600.1, 4600.2 and 5307.27 and adds LC §§5307.28 and 5307.29 to require the DWC to adopt a workers’ compensation prescription drug formulary by July 1, 2017. The formulary will be phased in for workers injured before the effective date to allow safe transition to formulary meds. Late session amendments to AB 1124 did the following:
1) added LC §5307.29 to require that the DWC Administrative Director, in developing the formulary, consult with an independent pharmacy and therapeutics committee to review available evidence about the safety and effectiveness of drugs;
2) eliminated the requirement that the DWC incorporate guidelines for developing a detox plan for IWs taking addictive drugs into the Medical Treatment Utilization Schedule; and
3) added a provision that, “This section does not affect the ability of employee-selected physicians to continue to prescribe and have the employer provide medicines subject to the drug formulary and medical supplies that the physicians deem reasonably required to cure or relieve the injured employee from the effects of the injury.”
The success of AB 1124 in assuring that medications provided to injured workers are appropriate and effective, and in controlling workers’ compensation prescription drug costs, will hinge on the regulations that will be developed in the coming months. During that process, the Institute will be using our formulary analysis model to simulate the impact of the proposed formulary, and as always, will compile comments from our members, and provide insight and comments to the DWC.
AB 305 would have prohibited apportioning physical or psychiatric injuries to pregnancy, menopause or osteoporosis and would have required that impairment ratings for breast cancer and its effects be the same as comparable ratings for prostate cancer and its effects. In vetoing the bill the governor noted that the bill was based on a misunderstanding of the AMA’s evidence-based standard, which is the foundation of PD ratings, and would have replaced it with “an ill-defined, and unscientific standard.”
The governor has until October 11 to sign or veto measures now on his desk. Any bill that he does not act on will automatically become law. As usual, CWCI will issue a Bulletin summarizing all the 2015 workers’ comp legislation signed by the governor this year once the signing deadline expires. Stay tuned.
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