Modeling the Economic Impact of a California Workers' Compensation Formulary
Jul 17, 2017
California Assembly Bill 1124 required the state's Division of Workers' Compensation to establish a formulary for all drugs provided to injured workers under the state's workers' compensation program. To aid in that effort, this report compares and evaluates the strengths and weaknesses of existing state workers' compensation formularies and analyzes the issues and options for structuring and implementing an evidence-based formulary.
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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 report 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.
An Overview of Outpatient Drugs Furnished to Injured Workers
Comparison of Existing Drug Formularies
Comparison of Formulary Ground Rules
Formulary Implementation Policies
Formulary Updating Process and Policies
Preliminary Implementation Plan
Detailed Methods and Results for Chapter Four
The research reported here was conducted in the RAND Institute for Civil Justice (ICJ), a part of the Justice Policy Program within RAND Justice, Infrastructure, and Environment.
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