Market Overview

CWCI Examines Prescription Drug UR/IMR Outcomes Under the California Workers' Comp Formulary


A new California Workers' Compensation Institute (CWCI) analysis offers
a preliminary look at Utilization Review (UR) and Independent Medical
Review (IMR) outcomes involving pharmaceutical requests for California
injured workers since the state implemented a workers' comp formulary in
January of this year.

In October 2015, Governor Brown signed AB 1124 mandating the adoption of
an evidence-based formulary for medications prescribed to California
injured workers and calling on the state Division of Workers'
Compensation to incorporate the formulary into its Medical Treatment
Utilization Schedule (MTUS). The intent of the legislation was twofold:
1) to ensure that medications provided to injured workers meet
evidence-based standards; and 2) to reduce delays and frictional costs
associated with pharmaceutical UR and IMR.

The CWCI analysis uses data from 141,643 pharmaceutical requests and UR
decisions from the first five months of 2017 and 2018, and 58,604 IMR
decisions from the first four months of those same two years to measure
and compare pre- and post-formulary UR and IMR prescription drug
outcomes. Specifically, the study measures the pre- to post-formulary
changes in:

  • the percentage of Utilization Reviews and Independent Medical Reviews
    involving pharmaceutical requests;
  • the mix of pharmaceutical UR decisions involving requests for drugs
    categorized by the formulary as Exempt, Non-Exempt, or Not Listed, and
    the UR approval, modification, and denial rates for each category;
  • the mix and approval rates for pharmaceutical IMR decisions involving
    Exempt, Non-Exempt, and Not Listed drugs;
  • the proportion of Exempt drugs co-prescribed with Non-Exempt or Not
    Listed drugs that were reviewed by UR and IMR; and
  • the proportion of UR and IMR decisions involving opioid requests and
    the UR approval and IMR uphold rates for those requests.

The findings show that the proportion of UR decisions involving
prescription drug requests fell from 44.5 percent in the pre-formulary
period to 40.7 percent in the first five months of 2018, a relative
decline of 8.5 percent. At the same time, the percentage of UR decisions
in which a prescription drug request was denied was unchanged at 14.6
percent, while 85.4 percent were either approved as submitted or
approved with a modification. UR decisions involving opioid requests
showed little change, edging down from 30.6 percent in the pre-formulary
period to 30.0 percent after the formulary took effect, though the UR
approval rate for opioids showed a sharper decline, falling from 72.3
percent to 68.8 percent. Meanwhile, the percentage of IMR decisions
involving UR modifications or denials of opioids increased from 29.2
percent prior to the formulary's implementation to 33.6 percent under
the formulary, while the IMR uphold rate for opioid modifications or
denials showed a modest increase, rising from 90.1 percent to 91.4

The Institute study represents only a preliminary look at pharmaceutical
UR and IMR data from the first few months that system stakeholders were
transitioning into the formulary. More time is needed to identify
changes in prescribing patterns and other aspects of the formulary
regulations that could impact UR and IMR disputes, so CWCI will continue
to monitor the results and take an expanded look at first-year formulary
outcomes in a study scheduled for 2019. In the meantime, CWCI has issued
its initial analysis in a Spotlight Report, "Initial UR and IMR
Prescription Drug Outcomes Under the California Workers' Comp
Formulary," which is available to Institute members and subscribers in
the Research section of the Institute's website,
Others may purchase a copy of the study for $16 from the online store at

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