The Workers’ Compensation Research Institute (WCRI) issued a FlashReport on Tuesday which attempts to show how a Texas-like closed formulary, such as the Work Loss Data Institute’s “Official Disability Guidelines” formulary, might affect the prevalence and costs of drugs prescribed to Louisiana state employees. Louisiana Comp Blog reached out to local stakeholders to get their take on whether or not Louisiana prescribers would respond to a formulary the way Texas has and the way WCRI ponders in the report.
WCRI offers four scenarios in the FlashReport that assess cost savings if a formulary were implemented in Louisiana, using state comp claims. The first scenario is deemed the “Texas-like experience,” in which non-formulary (n drug) prescriptions declined by 70 percent with a 0 percent substitution rate. That is, formulary-approved (y drug) prescriptions were not utilized in place of the restricted medications. WCRI predicts that the state could have saved $2,270,725 in that case. The other three scenarios (which involved y drug substitutions for n prescriptions or a less precipitous decline in prescriptions) all offered more modest savings.
Regarding these scenarios, Sheral Kellar, Director of the Office of Workers’ Compensation Administration (OWCA), was unimpressed. Though she noted in emailed comments that “formularies are not intrinsically bad,” Kellar was adamant that imitating Texas’ strategy is not a magic bullet. “This report makes a lot of assumptions based on hypothetical situations and outdated information,” she said. “I suggest that Louisiana can accomplish the same goal, a decrease in the cost and utilization of drugs, without a formulary. A generic mandate policy and a policy against physician dispensing of drugs would immediately result in substantial cost savings to the state.”
Asked his opinion about the cost issue, Trey Mustian, attorney with Stanga & Mustian and President of Louisiana Workers’ Advocates, said he still opposes a formulary for Louisiana injured workers generally. “There is no question that formularies save large amounts of money, that is the only reason carriers want them,” he said. “I suspect that frustration with an inability to prescribe as they see fit if Louisiana gets a formulary will only add to the physician exodus from the system. Texas is not a model to which Louisiana should aspire.”
WCRI does note in the FlashReport that this information “does not study the impact of a drug formulary on patient outcomes and overall medical costs or estimate the potential cost savings for all workers’ compensation claims in the state.” However, workers’ compensation carriers and some Louisiana lawmakers – notably Chris Broadwater and Kirk Talbot – have been pushing for a formulary over the last two legislative sessions using WCRI’s data from past reports.
Director Kellar zeroed in on the patient outcomes component of the debate. “If patients cannot get the drugs prescribed, naturally cost and utilization would significantly decrease,” she explained. “The question still remains as to whether these decreases are realized at the expense of increased pain and unacceptable patient outcomes. To that, we do not know the answer and before any measures are implemented to save costs, we should know how they would affect the injured worker.”
For his part, Dr. Douglas Lurie, board-certified orthopaedic surgeon with Orthopaedic Associates of New Orleans, believes that having a formulary in Louisiana would streamline processes in his office, but that everyone would need to buy in.
“My life in some scenarios would be a lot simpler with a formulary because right now, it’s very inconsistent – every company has different rules for prior authorizations. I probably would write for fewer n drugs if we had a formulary to avoid that hassle,” Lurie said. “On the other side of the coin though, if claimant attorneys and the administration don’t support a formulary and the n drugs get overturned by the Medical Director, then a formulary would be a miserable failure and the costs savings likely wouldn’t materialize. The Legislature can pass whatever they want, but if opposition is still like it is now, there’s no point.”
The administrative concern was top of mind for Steve Wanko, claimant representative with his own Wanko Law Firm, as well. He used the difficulty of getting a variance under the Medical Treatment Guidelines which passed in 2011 as an example of how a formulary could backfire and make treatment slower and worse. “Our biggest concern has been the lack of ability or even process to get variances approved, so physicians’ hands then become tied. Medicine is not an exact science, but a formulary attempts to institute such a practice.”
Image Credit: WCRI