Amended in Senate August 17, 2015

Amended in Senate July 14, 2015

Amended in Senate July 8, 2015

Amended in Assembly June 1, 2015

Amended in Assembly April 14, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1124

Introduced by Assembly Member Perea

February 27, 2015

An act to begin insert amend Sections 4600.1, 4600.2, and 5307.27 of, and to end insert add Sections 5307.28 and 5307.29 begin delete to end delete begin insert to, end insert the Labor Code, relating to workers’ compensation.

LEGISLATIVE COUNSEL’S DIGEST

AB 1124, as amended, Perea. Workers’ compensation: prescription medication formulary.

Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of employment. The administrative director is authorized to adopt, amend, or repeal, after public hearings, any rules and regulations that are reasonably necessary to enforce the state workers’ compensation provisions, except when that power is specifically reserved to the Workers’ Compensation Appeals Board. begin insert Existing law requires the administrative director to adopt a medical treatment utilization schedule that addresses the frequency, duration, intensity, and appropriateness of all common treatments performed in worker end insert begin insert s end insert begin insert ’ compensation cases. end insert

begin delete

This bill would require the administrative director to, on or before January 1, 2017, establish a medical evidence-based workers’ compensation drug formulary for medications prescribed in the workers’ compensation system, to be effective commencing July 1, 2017. The bill requires the administrative director to revise the formulary to adopt appropriate changes, as specified, and to publish any revisions on the Internet Web site of the Division of Workers’ Compensation. The bill would require the administrative director to convene a Workers’ Compensation Formulary Advisory Committee to assist in the development of the formulary, and would require the committee to study and make recommendations, as specified, on the development of a workers’ compensation formulary in California.

end delete begin insert

This bill would require the administrative director to establish an outpatient prescription drug formulary, on or before July 1, 2017, as part of the medical treatment utilization schedule, for medications prescribed in the workers’ compensation system. The bill would require the administrative director to make certain considerations, as specified, in establishing the formulary. The bill would require the administrative director to meet and consult with stakeholders, as specified, prior to the adoption of the formulary. The bill would require the administrative director to publish at least 2 interim reports on the Internet Web site of the Division of Workers’ Compensation describing the status of the establishment of the formulary, beginning July 1, 2016, until the formulary is effective. The bill would require the administrative director to update the formulary at least on a quarterly basis to allow for the availability of all appropriate medications, including medications newly approved for use. The bill would also make conforming changes to related code sections.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin delete

SECTION 1.  

Section 5307.28 is added to the Labor Code, to
read:

5307.28.  

(a) On or before January 1, 2017, the administrative
director shall establish a medical evidence-based workers’
compensation drug formulary for medications prescribed in the
workers’ compensation system, to be effective commencing July
1, 2017.

(b) The formulary shall be revised to adopt appropriate changes
no later than 60 days after the administrative director receives
recommendations from the Workers’ Compensation Formulary
Advisory Committee and determines that evidence-based revisions
are warranted. The administrative director shall determine the
effective date of the changes, and shall issue an order, exempt from
Sections 5307.3 and 5307.4 and the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code), informing the public of the changes and their effective date.
All orders issued pursuant to this subdivision shall be published
on the Internet Web site of the Division of Workers’ Compensation.

SEC. 2.  

Section 5307.29 is added to the Labor Code, to read:

5307.29.  

(a) The administrative director shall convene a
Workers’ Compensation Formulary Advisory Committee to assist
in the development of a formulary pursuant to Section 5307.28.
The committee shall be composed of members appointed by the
director and shall include, but not be limited to, health care
providers, insurers, employers, pharmacists, attorneys who
represent applicants, an appointee of the Speaker of the Assembly,
and an appointee of the Senate Rules Committee.

(b) The committee shall study and make recommendations on
the development of a workers’ compensation formulary in
California.

(c) The committee shall convene on a quarterly basis and provide
its recommendations to the administrative director on or before
December 31, 2016.

(d) The recommendations developed pursuant to subdivision
(c) shall ensure all of the following:

(1) Injured worker access to appropriate opioids, including those
with abuse-deterrent properties, other pain management
prescriptions, and off-label prescription drugs, when medically
necessary.

(2) A gradual detoxification plan for a worker receiving
potentially addictive prescription drug treatment.

(3) Timely formulary updates that minimize delays involved in
adding new drugs to the formulary.

end delete

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert It is the intent of the Legislature to establish an
outpatient prescription drug formulary for medications prescribed
in the workers’ compensation system, to be effective July 1, 2017.
In establishing the formulary, the Administrative Director of the
Division of Workers’ Compensation shall consider, with the
maximum transparency possible, a medical evidence-based
formulary, and, in addition to the provisions of this act, at least
all of the following: end insert

begin insert

(a) Medical evidence-based guidelines for access to appropriate
medication pursuant to pain management prescription drug
therapies.

end insert begin insert

(b) Medical evidence-based guidelines for access to off-label
prescription drugs when evidence-based and medically necessary.

end insert begin insert

(c) Guidance of utilization review, pursuant to Section 4610 of
the Labor Code, as applicable to medications within the established
formulary and circumstances that may warrant use of medications
outside the established formulary.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 4600.1 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

4600.1.  

(a) Subject to subdivision (b), any person or entity
that dispenses medicines and medical supplies, as required by
Section 4600, shall dispense the generic drug equivalent.

(b) A person or entity begin delete shall end delete begin insert is end insert not begin delete be end delete required to dispense a
generic drug equivalent under either of the following
circumstances:

(1) begin delete   end delete begin delete When end delete begin insert   end insert begin insert If end insert a generic drug equivalent is unavailable.

(2) begin delete   end delete begin delete When end delete begin insert   end insert begin insert If end insert the prescribing physician specifically provides in
writing that a nongeneric drug must be dispensed.

(c) For purposes of this section, “dispense” has the same
meaning as the definition contained in Section 4024 of the Business
and Professions Code.

(d)  begin delete Nothing in this end delete begin insert This end insert section begin delete shall be construed to end delete begin insert does not end insert
preclude a prescribing physician, who is also the dispensing
physician, from dispensing a generic drug equivalent.

begin insert

(e) This section applies only to medicines prescribed or
dispensed prior to the effective date of the outpatient prescription
drug formulary adopted pursuant to Section 5307.27.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 4600.2 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

4600.2.  

(a) Notwithstanding Section 4600, begin delete when end delete begin insert if end insert a
self-insured employer, group of self-insured employers, insurer of
an employer, or group of insurers contracts with a pharmacy, group
of pharmacies, or pharmacy benefit network to provide medicines
and medical supplies required by this article to be provided to
injured employees, those injured employees that are subject to the
contract shall be provided medicines and medical supplies in the
manner prescribed in the contract for as long as medicines or
medical supplies are reasonably required to cure or relieve the
injured employee from the effects of the injury. begin insert Medicines provided
pursuant to the contract are subject to the outpatient prescription
drug formulary adopted pursuant to Section 5307.27, and a
contract shall not limit the availability of medications otherwise
indicated pursuant to the formulary. end insert

begin delete

(b) Nothing in this section shall affect the ability of
employee-selected physicians to continue to prescribe and have
the employer provide medicines and medical supplies that the
physicians deem reasonably required to cure or relieve the injured
employee from the effects of the injury.

end delete begin delete

(c)

end delete

begin insert (b) end insert  Each contract described in subdivision (a) shall comply with
standards adopted by the administrative director. In adopting those
standards, the administrative director shall seek to reduce
pharmaceutical costs and may consult any relevant studies or
practices in other states. The standards shall provide for access to
a pharmacy within a reasonable geographic distance from an
injured employee’s residence.

begin delete

(d)

end delete begin insert

(c) An employer or insurer that has established a medical
provider network pursuant to Section 4616 is in compliance with
this section if pharmacy network services are included within its
medical provider network plan filed with the administrative
director pursuant to paragraph (1) of subdivision (b) of Section
4616.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 5307.27 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

5307.27.  

begin delete On or before December 1, 2004, the end delete begin insert (a) end insert begin insert   end insert begin insert The end insert
administrative director, in consultation with the Commission on
Health and Safety and Workers’ Compensation, shall adopt, after
public hearings, a medical treatment utilization schedule, that shall
incorporate the evidence-based, peer-reviewed, nationally
recognized standards of care recommended by the commission
pursuant to Section 77.5, and that shall address, at a minimum, the
frequency, duration, intensity, and appropriateness of all treatment
procedures and modalities commonly performed in workers’
compensation cases.

begin insert

(b) On or before July 1, 2017, the medical treatment utilization
schedule adopted by the administrative director shall include an
outpatient prescription drug formulary. This section does not
prohibit the authorization of medications that are not in the
formulary when the variance is demonstrated, in accordance with
subdivision (a) of Section 4604.5, to cure or relieve the injured
worker from the effects of his or her injury.

end insert begin insert

(c) The outpatient prescription drug formulary shall include a
phased implementation for workers injured prior to July 1, 2017,
in order to ensure injured workers safely transition to medications
on the formulary. This section does not prohibit medically
necessary tapering or weaning of medications to treat workers
injured on or after July 1, 2017.

end insert begin insert

(d) On or before July 1, 2017, the medical treatment utilization
schedule shall include guidelines for the development of a
detoxification plan for an injured worker receiving potentially
addictive prescription drug treatment or drug treatment if a
detoxification plan is necessary for patient safety.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 5307.28 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 5307.28. end insert   

(a)  Prior to the adoption of an outpatient
prescription drug formulary as required by Section 5307.27, the
administrative director shall meet and consult regarding the
establishment of a formulary with stakeholders, including, but not
limited to, employers, insurers, private sector employee
representatives, public sector employee representatives, treating
physicians actively practicing medicine, pharmacists, pharmacy
benefit managers, attorneys who represent applicants, and injured
workers.

(b) The administrative director may meet and consult with an
ad hoc group of physicians and pharmacists to address proposed
updates after the formulary is implemented.

(c) Beginning July 1, 2016, and concluding with the effective
date of the formulary, the administrative director shall publish at
least two interim reports on the Internet Web site of the Division
of Workers’ Compensation describing the status of the
establishment of the formulary.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 5307.29 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 5307.29. end insert   

The administrative director shall update the outpatient
prescription drug formulary at least on a quarterly basis to allow
for the availability of all appropriate medications, including
medications newly approved for use.

end insert