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Nancy Grover

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at

Non-Formulary Drugs

Closed Formulary Could Decrease Use of ‘N’ Drugs

The recent success of the closed pharmacy formulary in the Texas workers’ comp system shows promise for other states, especially in regions where non-formulary drugs are prevalent.
By: | July 21, 2014 • 3 min read

The recent success of the closed pharmacy formulary in the Texas workers’ comp system has caught the attention of practitioners in other states. A new report from the Workers Compensation Research Institute concludes that, all things being equal, other states could see similar results.

Texas was the first multi-payor state to adopt a formulary that requires pre-authorization for certain medications deemed as investigational, experimental, and those with “N” drug status under the Official Disability Guidelines, including many opioids. A study by the Texas Department of Insurance last year showed the formulary resulted in a decrease of about 80 percent in payments made for non-formulary drug prescriptions.

“If other states are able to successfully implement a Texas-like formulary, there is a huge potential for decreasing the utilization of the drugs designated as non-formulary drugs by Texas,” the report says, “which may in turn lead to substantial prescription cost savings in all states, particularly New York.”

The study looked at 23 states in terms of how a closed formulary might affect the prevalence and costs of drugs. Non-formulary drugs — those requiring pre-authorization in the Texas system — were most prevalent in New York.

The Texas study found physicians reduced prescriptions for non-formulary drugs by 70 percent and infrequently substituted formulary drugs for non-formulary drugs in response to the closed formulary. In assessing the potential impact of a closed formulary in the other states, the authors considered various alternative assumptions about how physician prescribing practices might change.

In the scenario where the response of physicians in other states is similar to that of their Texas counterparts, total prescription costs could be reduced by 14-29 percent among the study states with New York on the higher end. “Other states that could realize potential prescription cost savings of 20 percent and higher are New Jersey, Virginia, Massachusetts, Pennsylvania, Connecticut, and Maryland,” the report said. “Even at the lower end, states like California and Missouri might reduce their prescription drug spending by 14 percent.”

Some states may instead see physicians substitute with formulary drugs more frequently than Texas physicians did. “States may realize sizable but lower cost savings if all non-formulary drugs are substituted with other drugs,” the report states. “We estimated that within-class substitution of all non-formulary drugs with formulary drugs may reduce prescription costs by 4 to 16 percent in other study states.”

Cost savings could be greater in states where brand name medications are common. Even if physicians substituted all non-formulary drugs with cheaper generic alternatives, there could be substantial cost savings.

The researchers noted that the formulary is only one aspect of the Texas workers’ comp system that may differ from those in other states. States that do not have a “well-defined” utilization review process might see less cost savings due to the increased litigation.

Nonetheless, the authors said non-formulary drugs were prevalent in the 23 states studied, which could result in at least some cost savings. “States with higher prevalence [of non-formulary drugs] like New York, and Louisiana, have a larger scope for reducing the use of non-formulary drugs. In these states, workers’ compensation payors have an opportunity for more active management of prescribing patterns.”

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at
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The Impact of Marijuana

WC Payers More Likely To Face Reimbursement Requirements for Pot

A New Mexico appeals court decision ordering an employer and insurer to reimburse an injured worker for his medical marijuana is believed to be the first such court ruling in the nation.
By: | July 21, 2014 • 4 min read
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Peter D. White is compiling receipts and other financial transactions to determine how much his client has spent on medical marijuana since a state workers’ comp judge OK’d reimbursement last year. Once done, the New Mexico attorney will submit the information for payment of past and ongoing use of the drug to the employer and insurer — with the backing of the New Mexico Court of Appeals.

The case has drawn a plethora of comments and reactions from workers’ comp practitioners. While the case may not generate major changes in the near future, the issue is not going away anytime soon.

“To be honest, it’s a matter of timing as much as anything,” White said of the ruling. “It’s the tide in this country.”

White noted that the U.S. House of Representatives recently voted to restrict the Drug Enforcement Administration from using funds to enforce the federal ban on the drug against state-licensed medical marijuana patients and providers.

“I think this [case] would certainly serve as a model,” he said. “I would hope that would be the trend.”

The case, Gregory Vialpando v. Ben’s Automotive Services and Redwood Fire & Casualty, involved a worker whose lower back injury in 2000 resulted in multiple surgical procedures. All parties to the case ultimately agreed he had a 99 percent permanent partial disability.

Last year, a New Mexico workers’ compensation judge found that Vialpando was qualified to participate in New Mexico’s Medical Cannabis Program authorized by the state’s Compassionate Use Act. The WCJ also ordered his employer and the insurer to reimburse the worker for the medical marijuana. The appeals court upheld the decision.

Several factors likely contributed to the ruling, White and others said. One of the factors is that another client of White’s has been getting medical marijuana for the past four years. In that case, the workers’ comp judge ordered the employer — the state of New Mexico — to reimburse the injured worker for the drug rather than pay for it outright.

“We used the order from his case and think it mattered that there had not been any issues that had arisen,” White said.

A unique aspect of the case is that there was no divergence of medical opinion as to whether the claimant would benefit from the use of medical marijuana.

The court also considered medical marijuana more of a service than a medication. “In New Mexico, workers’ comp physicians do recommend a lot of things that are not medications such as therapy and acupuncture,” White said. “The idea being that this is part of the overall picture of reasonable and necessary medicine.”

In its appeal, the employer said the WCJ’s order was illegal and unenforceable under federal law, and that the state act and regulations promulgated pursuant to it do not recognize reimbursement for medical marijuana. But the appeals court disagreed (see box).

“I kind of felt it gave a little short shrift to the issue,” said Albert B. Randall Jr., a Baltimore-based attorney with Franklin & Prokopik PC. “Rather than the court trying to find out what was the correct answer, it pointed to the attorney saying ‘if you didn’t raise the issue or supply enough information, we’re going to rule the way we are going to rule.”

Looking Into the Future

If the same scenario were presented again, Randall does not necessarily believe there would be a different outcome. “I find it hard to believe that the Court of Appeals will rule on the constitutionality of the Compassionate Use Act within the context of a workers’ compensation claim; rather, I think that would have to be a separate challenge addressed by the court.”

Other attorneys were not so sure. “The employer apparently did an inadequate job of making the argument because the appellate court could not identify any federal law that was being violated,” said Colorado attorney Ronda K. Cordova of Ritsema & Lyon PC. “This seems like an argument that could be explored further.”

Another workers’ comp attorney concurs that a more definitive defense could have been mounted. James Pocius, a shareholder with Marshall Dennehey Warner Coleman & Goggin in Philadephia, believes a criminal attorney or workers’ comp attorney with a more extensive background in other areas of the law could determine that requiring reimbursement would make the employer an accomplice by violating a federal law.

“If the federal argument is not made more clearly, you could have another state make the same decision,” Pocius said. “I think it will be incumbent on the person with the next case to argue it correctly.”

As to whether the ruling will prompt similar litigation, Randall believes it will open the flood gates. “There is no question any savvy claimant’s attorney will use this in support of his argument,” he said. “I think this is going to be a groundbreaking case and likely will be cited throughout the country in support of the use of medical marijuana in workers’ compensation claims.”

This is the first of a two-part series exploring the potential legal and practical ramifications of the order. In part two, experts weigh in on the likelihood the case may spur more requests for medical marijuana in the workers’ comp system and issues surrounding reimbursement.

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at
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Opioid Trends

Reports Show Little Change in Opioid Prescribing, Treating Behaviors

Opioid prescribing rates have grown in Michigan, but remain unchanged in most other states, according to the latest report.
By: | July 14, 2014 • 4 min read
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Average injured workers receiving opioids in Louisiana and New York were prescribed an amount that was double the median of 25 states studied, says a new report. The more than 3,600 milligrams of morphine equivalent narcotics per claim for the two states was three to four times the number in the states with the lowest opioid use.

The report, Interstate Variations in Use of Narcotics, 2nd Edition, was one of two produced recently by the Workers Compensation Research Institute. The first builds on a previous report and compares states’ use of prescribing patterns in workers’ comp for opioids and non-narcotic pain medications. It is based on approximately 264,000 claims and 1.5 million prescriptions associated with injuries from October 2009 to September 30, 2010, and prescriptions filled through March 31, 2012.


“Over the study period from 2008/2010 to 2010/2012, the amount of narcotics received by injured workers changed little in all but three states, Michigan, Connecticut, and Virginia,” according to the report. “Michigan saw rapid growth in the amount of narcotics received per claim, and there was a decline in narcotics per claim in Connecticut and Virginia.” The authors did not speculate on reasons for the changes in Michigan and Connecticut. However, they said Virginia’s prescription drug monitoring program saw a significant increase in registered users, which coincided with the study period.

Overall during the two-year study period, the amount of opioids received by the typical injured worker increased by 14 percent. In Michigan, however, the increase was 32 percent. “An increase in the number of narcotic prescriptions per claim; claims with stronger, Schedule II narcotics; and the number of narcotic prescriptions among claims with Schedule II narcotics contributed to the increase in the amount of narcotics per claim,” it said.

Connecticut saw a 23 percent decrease in the amount of narcotics received per claim by an average injured worker during the two-year period.

The states studied were Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin. The researchers compared the frequency and amounts of opioids prescribed in the 25 states. They put Louisiana and New York at the top of the list in terms of the amount of opioids received.

“To illustrate, a morphine equivalent amount of 3,600 milligrams per claim is equivalent to an injured worker taking a 5 milligram Vicodin tablet every four hours for four months continuously, or a 120 milligram morphine equivalent daily dose for an entire month,” the report says. “Considering our underlying sample of nonsurgical claims, the amount of opioids used by an average injured worker in Louisiana and New York is striking.”

In terms of the frequency of opioids, the report said between 65 and 85 percent of injured workers receiving pain medications were prescribed opioids as opposed to non-narcotic medications. Louisiana was at the high end of that ranking as 87 percent of its injured workers on pain medications were prescribed opioids. Arkansas was the highest at 88 percent.

When the frequency and amount of opioids were combined, Arkansas, Louisiana, New York, and Pennsylvania were at the top of the list. New Jersey had low frequency of opioid use, and injured workers there also received a lower than typical amount. Other states with lower frequency and use of opioids included Connecticut, Illinois, and Missouri.

One positive change was an increase in the prescribing of non-narcotic pain medications in most of the study states. “Among narcotic prescriptions, prescribing of Schedule II narcotics decreased or was stable in most study states, except Massachusetts, New York, Arkansas, and Kansas,” according to the report. “Connecticut had the highest increase in use of non-opioid medications, 5 percentage points. Non-opioid pain medications also increased by 4 percentage points in Florida, Missouri, New York, Pennsylvania, and Virginia. In Arkansas, prescribing of non-opioid pain medications decreased over the study period by 6 percentage points.”


A separate report shows the prevalence of longer term use of opioids and how often medical treatment guidelines are followed. Longer term use of opioids was defined as those claims that had narcotics within the first three months after the injury and had at least three visits to fill the prescriptions between the seventh and 12th months.

Once again, Louisiana topped the list with 1 in 6 injured workers identified as having longer term use of opioids in the 2010/2012 period.

As with the previous report, there was little change among most of the study states in the prevalence of longer term use of opioids. Michigan, however, saw the percentage of these claims increase by more than 2 percentage points over the two-year period. On the opposite end, the frequency of longer term opioid use decreased in Connecticut from 8.8 percent in 2080/2010 to 6.3 percent in 2010/2012.

Most medical treatment guidelines recommend urine drug testing and psychological evaluation and treatment of injured workers on opioid therapy. However, both services were infrequently received by injured workers.

While most states showed at least one drug testing service, the testing was less frequent than recommended by the guidelines.

Few longer term users of opioids had the recommended psychological evaluation, treatment, and reports, the authors noted. Ten percent or less of the users received psychological evaluation in all states except Indiana (11 percent), Wisconsin (16 percent), Minnesota (19 percent), and Texas (32 percent). The use of psychological treatment services was infrequent in all study states.4

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at
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