Oakland – A new California Workers’ Compensation Institute (CWCI) analysis offers a preliminary look at Utilization Review (UR) and Independent Medical Review (IMR) outcomes involving pharmaceutical requests for California injured workers since the state implemented a workers’ comp formulary in January of this year.

In October 2015, Governor Brown signed AB 1124 mandating the adoption of an evidence-based formulary for medications prescribed to California injured workers and calling on the state Division of Workers’ Compensation to incorporate the formulary into its Medical Treatment Utilization Schedule (MTUS).  The intent of the legislation was twofold:  1) to ensure that medications provided to injured workers meet evidence-based standards; and 2) to reduce delays and frictional costs associated with pharmaceutical UR and IMR.

The CWCI analysis uses data from 141,643 pharmaceutical requests and UR decisions from the first five months of 2017 and 2018, and 58,604 IMR decisions from the first four months of those same two years to measure and compare pre- and post-formulary UR and IMR prescription drug outcomes. Specifically, the study measures the pre- to post-formulary changes in:

• the percentage of Utilization Reviews and Independent Medical Reviews involving pharmaceutical requests;
• the mix of pharmaceutical UR decisions involving requests for drugs categorized by the formulary as Exempt, Non-Exempt, or Not Listed, and the UR approval, modification, and denial rates for each category;
• the mix and approval rates for pharmaceutical IMR decisions involving Exempt, Non-Exempt, and Not Listed drugs;
• the proportion of Exempt drugs co-prescribed with Non-Exempt or Not Listed drugs that were reviewed by UR and IMR; and
• the proportion of UR and IMR decisions involving opioid requests and the UR approval and IMR uphold rates for those requests.

The findings show that the proportion of UR decisions involving prescription drug requests fell from 44.5 percent in the pre-formulary period to 40.7 percent in the first five months of 2018, a relative decline of 8.5 percent.  At the same time, the percentage of UR decisions in which a prescription drug request was denied was unchanged at 14.6 percent, while 85.4 percent were either approved as submitted or approved with a modification.  UR decisions involving opioid requests showed little change, edging down from 30.6 percent in the pre-formulary period to 30.0 percent after the formulary took effect, though the UR approval rate for opioids showed a sharper decline, falling from 72.3 percent to 68.8 percent.  Meanwhile, the percentage of IMR decisions involving UR modifications or denials of opioids increased from 29.2 percent prior to the formulary’s implementation to 33.6 percent under the formulary, while the IMR uphold rate for opioid modifications or denials showed a modest increase, rising from 90.1 percent to 91.4 percent.

The Institute study represents only a preliminary look at pharmaceutical UR and IMR data from the first few months that system stakeholders were transitioning into the formulary. More time is needed to identify changes in prescribing patterns and other aspects of the formulary regulations that could impact UR and IMR disputes, so CWCI will continue to monitor the results and take an expanded look at first-year formulary outcomes in a study scheduled for 2019.  In the meantime, CWCI has issued its initial analysis in a Spotlight Report, “Initial UR and IMR Prescription Drug Outcomes Under the California Workers’ Comp Formulary,” which is available to Institute members and subscribers in the Research section of the Institute’s website, www.cwci.org.  Others may purchase a copy of the study for $16 from the online store at www.cwci.org/store.html.