Austin, TX – The Texas Department of Insurance, Division of Workers’ Compensation (DWC) first implemented a pharmacy closed formulary to manage drug prescriptions to injured employees in 2011. The closed pharmacy formulary includes all FDA-approved drugs, except investigational and experimental drugs. It excludes drugs listed as N-drugs (or “not recommended” drugs) and compounded drugs. The DWC’s Workers’ Compensation Research and Evaluation Group (REG) published previous studies that reported significant reductions in drug utilization and costs after the formulary took effect, especially among N-drugs.
The REG’s latest study compiles key measures on injured employee outcomes, such as return-to-work rates and health outcomes. Other factors in addition to the formulary, such as networks and economic conditions, could potentially impact trends in injured employee outcomes. The purpose of this study is not to measure the impact of the formulary on those outcomes, but to illustrate how those post-formulary outcomes occurred while the system experienced significant reductions in the utilization and cost of pharmaceuticals, particularly N-drugs and opioids not on the N-drug list.
The findings below summarize key utilization and cost impacts from previous studies, as well as injured employee outcome measures.
Background — Formulary Impact on Utilization and Costs:
- The total number of claims receiving pharmaceuticals decreased by 2 percent.
- The total number of claims receiving N-drugs decreased by 67 percent.
- The total number of claims receiving high levels of N-drug opioids decreased from almost 15,000 in 2009 to less than 500 in 2015.
- The total number of prescriptions decreased by 11 percent.
- The total number of N-drug prescriptions decreased by 77 percent.
Post-Formulary Changes — Injured Employee Outcomes:
- The average return-to-work rate for network and non-network employees increased after the pharmacy closed formulary took effect.
- The average mental functioning scores for network injured employees increased after the implementation of the pharmacy closed formulary, while the average for nonnetwork injured employees remained unchanged.
- The average physical functioning scores for network and non-network injured employees increased after the pharmacy closed formulary went into effect.
- The physical functioning scores for network and non-network injured employees increased since the pharmacy closed formulary.
Medical Disputes — 2009 to 2017:
- The number of workers’ compensation medical disputes decreased 38 percent from 2011 to 2017.
- Preauthorization disputes, which could include disputes over N-drug prescriptions, decreased from 41 percent of all medical disputes in 2010 to 17 percent in 2017.
- The decrease in disputes is related to several factors, such as fewer claims filed, the creation of health care networks in 2006, the adoption of DWC’s medical treatment guidelines in 2007, and DWC’s adoption of professional, inpatient and outpatient hospital, and ambulatory surgical center fee guidelines in 2008.
- About 78 percent of injured employees said they had no problem receiving their prescriptions, while an additional 10 percent said it was a small problem.
- Of the 163 Medical Interlocutory Orders (MIO) requested, 93 were approved, 62 denied, and eight withdrawn.
Read the full report: TDI-DWC REG 2019 Formulary Update