By Michael Reed, MPA, MBA, Director of Healthcare Delivery Systems
Texas Medical Association

Compensation won't achieve its projected December 2008 deadline for adopting a closed pharmacy formulary for workers' compensation patients. The Senate Committee heard reports from Betts, Insurance Commissioner Mike Geeslin and Public Counsel Norman Darwin of the Office of Injured Employee Counsel as part of the committee's duties of monitoring implementations of House Bill 7, the workers' compensation reform measure passed in 2005. Chairman Robert Duncan, R-Lubbock, told the three agency heads the committee plans to invite them back to hearings in September for additional updates, specifically including the DWC's next round of "report cards" on workers' compensation insurance carriers and providers and performance of workers' compensation health care networks in assuring access to care for injured workers and improving return-to-work outcomes.

Among the reforms ordered under HB 7 was creation of a closed formulary to help reduce costs and ensure that prescriptions reach injured workers promptly. A status report on the formulary work, including a possible timeline for the work, is expected to be released in the near future. The division reported earlier this year that it intended to establish a closed formulary -- listing medications eligible for use and reimbursement. However, Betts told the committee that DWC is "not going to meet that December date," but did not indicate a new date for completing the work. Betts reported the division is reviewing formularies and treatment guidelines for prescription drugs in use in other states and is consulting with stakeholders. DWC's medical director, Dr. Howard Smith, is working with stakeholders on the project. The division plans to hold stakeholder meetings on the issue throughout the summer. Sen. Chris Harris, R-Arlington, questioned how having a formulary would affect providing "specialty drugs," which were not on the formulary list, to injured workers. Betts said the formulary is "not intended to be exclusive" as to the drugs which can be prescribed but is intended to make it easier for system participants to know what drugs are expected to be approved for use in particular situations. Sen. Leticia Van de Putte, D-San Antonio, a pharmacist, urged Betts to look at the amount of time required for pharmacies to deal with workers' compensation prescriptions when drafting the formulary and treatment guidelines. Filling an initial workers' compensation prescription can take pharmacy staff members 20 minutes and refilling prescriptions also takes longer compared to those for health care plans, Van de Putte said.

Data on pharmaceutical usage in Texas has been collected and published in a pharmaceutical descriptive analysis by the Department of Insurance's Workers' Compensation Research and Evaluation Group. The group is assisting DWC with data support for developing the formulary. The Legislature mandated that the formulary include a fee schedule that is fair and reasonable, helps ensure adequate access to medications and services for injured workers and minimizes drug costs to employees and insurance carriers. A recently released report by PMSI showed national workers' comp drug costs increased 12% in 2007 and according to the report the increases were mostly due increased utilization. Last November the National Council on Compensation Insurance reported growth in use of generic prescriptions and withdrawal of some popular drugs from the market appeared to have helped stabilize drug costs as a share of total workers' compensation medical costs, but warned that the trend might be temporary and that prescription drug costs were continuing to rise. Alabama, California, Delaware, Kentucky, Louisiana, Montana, New Hampshire and Texas were listed by the council as "high-cost states" for prescription drug use in workers' compensation. The Centers for Medicare and Medicaid Services reported the national growth rate in spending on prescription drugs dropped from a peak of 18.1% in 1999 to 5.8% in 2005. The annual growth rate in the nation's overall health expenditures declined from a high of approximately 8% in 2002 to a little more than 6% in 2005, the centers noted.

The Texas Medical Association will continue to monitor the implementation of closing the drug formulary in workers' compensation. The Association's guiding principles continues to be that injured workers in Texas deserve clinically appropriate and cost-effective health care. TMA also believes that health care should be accessible to injured workers in a timely manner within a reasonable geographic proximity. Workers' compensation rules should be clearly defined, fair, simple to understand, accountable, and easily accessible to all parties involved.
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slot left open due to former Sen. Kyle Janek's retirement.

Governor Perry recently appointed Andres Alcantar to the Texas Workforce Commission.  Alcantar is currently the deputy director of the governor's Budget, Planning and Policy division.

The special election to fill the vacancy in House District 55 will be held on November 4^th, the general election date. The seat was left vacant by the resignation of Rep. Dianne Delisi.  Voters will choose a person to complete Delisi's current term as well as a person to fill the seat in January.

The Governor's Competitiveness Council, a group of 29 public and private sector leaders who were tasked with identifying the issues affecting Texas' competitiveness in the global marketplace, recently issued two reports.  One report suggests an energy plan to address maintaining a reliable energy supply and giving Texas consumers tools to manage their energy consumption.  The Council's Report to the Governor is broad based, addressing a variety of issues from education to the use of technology.  Both reports can be viewed on Governor's Perry's website by clicking here.
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