Workers’ Compensation Drug Formulary Adopted

The 2017-2018 budget agreement for New York state included numerous workers’ compensation reforms.  Among these reforms is a drug formulary requirement. Legislators cited a number of recent studies showing a drug formulary in workers’ compensation cases could slash costs in New York by nearly 30 percent. That’s big when you consider that, as noted by the National Council on Compensation Insurance, prescriptions account for 17 percent of all workers’ compensation costs nationally. On claims older than 10 years, prescriptions account for 45 to 50 percent of the costs.

The trend of introducing drug formularies into state workers’ compensation systems has become increasingly popular as the use and cost of prescription medications for injured workers has risen.

Just in 2014, prescription drug prices soared 11 percent, almost triple the decade yearly average of 4 percent.

What is a Drug Formulary

A drug formulary is a list of drugs with a reimbursement status. For example, certain drugs may be listed as preauthorized, while others may indicate they are not allowed/authorized. In some cases, certain drugs may be listed as both. On average in most formularies, about 24 percent of drugs are on the non-authorized list.

There are a few different goals with drug formularies in workers’ compensation cases. Those include:

• Contain drug costs
• Improve return rates
• Reduce incidence of overprescribing (opioids in particular)

Four of the 10 most expensive drugs listed by the NCCI are opioids, including oxycontin, oxycodone, Percocet and hydrocodone.

How Opioids Can Affect Those on Workers’ Compensation

Opioid use across the country has grown to what some describe as “epidemic” proportions. The National Safety Council specifically studied the effect on workers’ compensation claims. What they discovered was that opioid use beyond treatment of acute pain can actually hinder progress, and in the long run has high rates of addiction.

NPR launched an analysis of the issue last year, finding that a majority of workers’ compensation claims involving pain medications included opioids, which are highly addictive and potentially lethal if not taken exactly as directed. In New York, 73 percent of such claims involved opioids.

Prescription opioid abuse reportedly costs employers in the U.S. an estimated $25 billion annually. But the cost to workers is even more dire, with many suffering addiction, overdoses and even death. Some have even called it “the fatal cure.” Research by the Hazelden Betty Ford Foundation found that the more professional stature one has, the less likely one is to have their addictions checked.

There is some precedent for reimbursing workers or families for medication-related injuries when those drugs were taken as part of their workers’ compensation benefits. Although several such claims have been denied, a few have been approved.

Other cases have arisen when workers return to work, but are continuing to take their prescribed pain medication. Those individuals may not be as mentally sharp or reflexive, leaving them more prone to suffer another on-the-job injury.