Implementing a Drug Formulary for California's Workers' Compensation Program

Abstract

California Assembly Bill 1124 required the state's Division of Workers' Compensation in the Department of Industrial Relations to establish a drug formulary for all injured workers covered by the state's workers' compensation program. Such formularies serve to reinforce safe and effective prescribing patterns for practitioners and payers. In California, the formulary will need to be consistent with the Medical Treatment Utilization Schedule guidelines that define medically appropriate care for California's injured workers, create incentives to encourage prescribing of medically appropriate drugs, and reduce the administrative burdens associated with utilization review and medical necessity disputes. The objective of this study is to support the Division of Workers' Compensation in establishing the formulary. The authors compare and evaluate the strengths and weaknesses of four existing formularies and the formulary used by California's Medicaid program. The authors then analyze the issues involved in structuring the drug formulary for California to be consistent with the treatment guidelines, explore related policies that should be addressed in implementing the formulary, and offer recommendations.