BILL NUMBER: AB 1124 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 4, 2015
AMENDED IN SENATE AUGUST 31, 2015
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
INTRODUCED BY Assembly Member Perea
FEBRUARY 27, 2015
An act to amend Sections 4600.1, 4600.2, and 5307.27 of, and to
add Sections 5307.28 and 5307.29 to, 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.
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 workers' compensation cases.
This bill would require the administrative director to establish a
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. implemented. The bill would require
the administrative director to update the formulary at least on a
quarterly basis to allow for the availability
provision of all appropriate medications, including
medications newly approved for use. new to
the market. The bill would exempt an order updating the
formulary from the Administrative Procedure Act and other provisions,
as specified. The bill would require the administrative
director to establish an independent pharmacy and therapeutics
committee to review and consult with the administrative director in
connection with updating the formulary, as specified. The bill
would also make conforming changes to related code sections.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature that the
Administrative Director of the Division of Workers' Compensation
create an evidence-based drug formulary, with the maximum
transparency possible, for use in the workers' compensation
system. The formulary shall go into effect on or before July 1, 2017,
and shall include, in addition to the provisions of this act, at
least all of the following: system, and that the
formulary include the following in addition to the provisions of this
act:
(a) Evidence-based guidelines for access to appropriate
medications pursuant to pain management prescription drug therapies.
(b) Guidance regarding the manner in which a physician
may present medical evidence to document how an
injured worker's need for worker may access
off-label use of prescription drugs.
drugs, when evidenced-based and medically necessary.
(c) Guidance regarding the manner in which utilization review
applies to formulary medications and circumstances that may warrant
the use of medications outside the established formulary, including,
but not limited to, emergent and inpatient care.
(c) Use of generic or generic-equivalent drugs in the formulary
pursuant to evidence-based practices, with consideration being given
to use of brand name medication when its use is cost-effective,
medically necessary, and evidence-based.
(d) The drug formulary shall not apply to care provided in an
emergency department or inpatient setting.
(e) Guidance on the use of the formulary to further the goal of
providing appropriate medications expeditiously while minimizing
administrative burden and associated administrative costs.
SEC. 2. Section 4600.1 of the Labor Code is amended to read:
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 is not required to dispense a generic drug
equivalent under either of the following circumstances:
(1) If When a generic drug
equivalent is unavailable.
(2) If When 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) This section does not Nothing in this
section shall be construed to preclude a prescribing physician,
who is also the dispensing physician, from dispensing a generic drug
equivalent.
(e) This section applies shall only
apply to medicines dispensed prior to the
effective operative date of the drug formulary
adopted pursuant to Section 5307.27.
SEC. 3. Section 4600.2 of the Labor Code is amended to read:
4600.2. (a) Notwithstanding Section 4600, if 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. Medicines provided pursuant to the contract shall be
subject to the drug formulary adopted by the administrative director
pursuant to Section 5307.27, and a contract shall
such contracts may not limit the availability of
medications otherwise prescribed pursuant to the formulary based on
whether the pharmacy services are provided within or outside a
medical provider network.
(b) This section does not Nothing in this
section shall affect the ability of employee-selected
physicians to continue to prescribe and have the employer provide
medicines subject to the drug formulary and medical supplies that the
physicians deem reasonably required to cure or relieve the injured
employee from the effects of the injury.
(c) 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.
SEC. 4. Section 5307.27 of the Labor Code is amended to read:
5307.27. (a) The 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.
(b) On or before July 1, 2017, the medical treatment utilization
schedule adopted by the administrative director shall include a drug
formulary using evidence-based medicine. This section does
not Nothing in this section shall prohibit the
authorization of medications that are not in the formulary when the
variance is demonstrated, consistent with subdivision (a) of Section
4604.5.
(c) The 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
pursuant to the formulary.
(d) This section shall apply to all prescribers and dispensers of
medications serving injured workers under the workers' compensation
system.
SEC. 5. Section 5307.28 is added to the Labor Code, to read:
5307.28. (a) Prior to the adoption of a 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 include an independent
research organization and an ad hoc group of physicians and
pharmacists to meet, and consult with, to address proposed updates
after the formulary is implemented.
(c) Beginning
(b) Commencing July 1, 2016, and
concluding with the effective date
implementation 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 creation of the
formulary.
SEC. 6. Section 5307.29 is added to the Labor Code, to read:
5307.29. 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. Formulary updates shall be made
through an order exempt from Sections 5307.3, 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 changes and their
effective date. All orders issued pursuant to this section shall be
published on the Internet Web site of the Division of Workers'
Compensation.
5307.29. (a) The administrative director shall
make provision for no less than quarterly updates to the drug
formulary to allow for the provision of all appropriate medications,
including those new to the market.
(b) Changes made to the list of drugs in the drug formulary
described in Section 5307.27 shall be made through 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.
(c) The administrative director shall establish an independent
pharmacy and therapeutics committee to review and consult with the
administrative director on available evidence of the relative safety,
efficacy, and effectiveness of drugs within a class of drugs in the
updating of an evidence-based drug formulary, as required by Section
5307.27.
(1) The committee shall consist of six members and the Executive
Medical Director of the Division of Workers' Compensation. The
committee shall consist of medical doctors or doctors of osteopathy
holding a physician and surgeon license pursuant to Chapter 5
(commencing with Section 2000) of Division 2 of the Business and
Professions Code, and pharmacists licensed pursuant to Chapter 9
(commencing with Section 4000) of Division 2 of the Business and
Professions Code. A committee member shall have knowledge or
expertise in one or more of the following:
(A) Clinically appropriate prescribing of covered drugs.
(B) Clinically appropriate dispensing and monitoring of covered
drugs.
(C) Drug use review.
(D) Evidence-based medicine.
(2) Committee members shall not be employed by a pharmaceutical
manufacturer, a pharmacy benefits management company, or a company
engaged in the development of a pharmaceutical formulary for
commercial sale during his or her term, and shall not have been so
employed for 12 months prior to his or her appointment.
(3) A committee member shall not have a substantial financial
conflict of interest pursuant to standards established by the
administrative director. The administrative director may, in his or
her sole discretion, disqualify a potential or current member of the
committee if the administrative director determines that a
substantial conflict of interest exists.
(4) A committee member shall agree to keep all proprietary
information confidential to the extent required by existing law.