441 Formulary

441.1 Definitions. Contains definitions of the following terms: Compound drug, Disability event, Dispense, FDA-approved drug, FDA OTC Monograph, Generic drug, Carrier’s Physician, Formulary, Unlisted Drug, Perioperative Formulary drug, Phase A Drug, Phase B drug, Prior Authorization process, Prior Authorization and URAC.

441.2 New York Workers’ Compensation Formulary. Incorporates the three lists of the Formulary by reference into this Part and describes the lists: Phase A lists Formulary drugs that may be prescribed during the first 30 days; Phase B lists Formulary drugs that may be prescribed after the 30th day or when accepted by the insurance carrier. This section also describes how to obtain copies of the Formulary lists.

441.3 Effective Dates and Notice. Sets forth that new prescriptions must be prescribed pursuant to the Formulary within 6 months of the effective date of the Formulary; that refills and renewals must be prescribed pursuant to the Formulary within 12 months of the effective date of the Formulary; that Notice must be given to claimants on non-Formulary agents and their providers within 6 months of the effective date of the Formulary.

441.4 Application of Formulary. This section describes in detail how drugs may be prescribed consistent with Phase A, B or the Perioperative Formulary. This section also identifies when Prior Authorization may be required.

441.5 Prior Authorization Process. This section details when Prior Authorization is required. It details the process for requesting Prior Authorization from the Carrier and describes the rules governing the insurance carrier’s review of such requests.

441.6 Review by the Board of a Prior Authorization Denial. This section sets forth the process for review by the Board’s Medical Director’s Office of a carrier denial of a Prior Authorization request.

441.7 Changes to the Formulary. This section describes the process for requesting changes to the drugs listed in the Formulary and the timing thereof.

441.8 Medical Treatment Guidelines and Formulary. This sections states that should there be an inconsistency or conflict between the Formulary and the Medical Treatment Guidelines (MTG), the MTG shall govern.

A revised Regulatory Impact Statement is not required because the changes made to the last published rule do not necessitate revision to the previously published document. The changes to the text still seek to adopt a comprehensive drug formulary in a way that accomplishes the goals highlighted in the Regulatory Impact Statement. These changes, while some of them are substantial, do not affect the meaning of any statements in the document.

A revised Regulatory Flexibility Analysis is not required because the changes made to the last published rule do not necessitate revision to the previously published document. The changes to the text still seek to adopt a comprehensive drug formulary in a way that accomplishes the goals highlighted in the Regulatory Impact Statement. These changes, while some of them are substantial, do not affect the meaning of any statements in the document.

A revised Rural Area Flexibility Analysis is not required because the changes made to the last published rule do not necessitate revision to the previously published document. The changes to the text still seek to adopt a comprehensive drug formulary in a way that accomplishes the goals highlighted in the Regulatory Impact Statement. These changes, while some of them are substantial, do not affect the meaning of any statements in the document.

A revised Job Impact Statement is not required because the changes made to the last published rule do not necessitate revision to the previously published document. The changes to the text still seek to adopt a comprehensive drug formulary in a way that accomplishes the goals highlighted in the Regulatory Impact Statement. These changes, while some of them are substantial, do not affect the meaning of any statements in the document.

The Chair and the Board received approximately 32 unique written comments and 39 form letters in response to the revised proposed adoption of Part 441 of 12 NYCRR and the Formulary incorporated by reference therein. The public comment period remained open through November 16, 2018.

Multiple commenters commended the Board on the proposed Formulary.

Several commenters generally disagreed with the establishment of a Formulary on the ground that it would hurt claimants and medical providers. One such commenter suggested that the Board create a new formulary, in which all prescription drugs not included as first- or second-line therapies would be authorized if they are prescribed in accordance with the Medical Treatment Guidelines (MTGs). In response, the Board notes that it is statutorily required to implement a comprehensive drug formulary, pursuant to Workers’ Compensation Law section 13-p.

Several commenters expressed concern that the proposed Formulary and regulations contradict the MTGs. Section 441.8 of the proposed regulations provide that where a conflict between the Formulary and MTGs exists, and the MTGs are applicable, the MTGs prevail. Accordingly, no changes are necessary in response to this comment.

Several parties questioned whether carriers are required to pay for drugs when the claim is controverted, and asked that the regulations provide clarification. Section 441.3(b) provides that the Formulary applies to prescriptions for accidents or injuries that are controverted by the insurance carrier or self-insured employer. Section 441.3(c) further provides that the Pharmacy Fee Schedule set forth in Part 440 of 12 NYCRR remains in effect and includes pricing for prescriptions including payments for prescriptions when the claim is controverted. Accordingly, the Board finds that no changes are necessary.

One pharmacy requested that pharmacy benefit managers (PBMs) be permitted to use their own proprietary tools in addition to the NYS Formulary. The Board notes that nothing in the regulation prohibits PBMs from using proprietary tools that are consistent with the Formulary. Therefore, no changes have been made to the proposed regulations as a result of this comment.

One medical provider group requested that the Formulary be free of charge and easily accessible online to all providers in NYS. The Board notes that the Formulary will be posted, free of charge, on the Board’s website, and will also be available on the Board’s Medical Portal.

One medical provider group expressed concern that the regulations do not incorporate “step therapy protocols” as set forth in the Insurance Law and Public Health Law. Step therapy protocols are not applicable to Workers’ Compensation Insurance. Accordingly, no changes have been made to the revised proposed regulations as a result of this comment.

One pharmacy recommended that the Formulary and its instructions be updated to include the specific NCCI or ICD?128;10 codes associated with each of the diagnosis categories. The suggestion is beyond the scope of the Formulary. Accordingly, no changes have been made to the revised proposed regulations as a result of this comment.

One pharmacy asked the Board to clarify whether the Formulary is intended to cover all forms and strengths of particular drug. The Formulary has been clarified on this point with respect to different dosages in brand name versus generic form.

One insurance company recommended that the regulations limit the number of providers that can prescribe drugs for a claimant, so there is no risk in multiple providers prescribing medications for the same body part or injury. The Formulary and New York State Public Health Law provide safeguards regarding over-prescribing. It is noted that the Formulary is not a Treatment Guideline. Accordingly, no change has been made as a result of this comment.

One pharmacy expressed concern that the pharmacy fee schedule, when read in conjunction with the proposed Formulary, suggests that claimants will have to pay out of pocket for over-the-counter drugs, even if they are listed on the Formulary in the applicable Phase. In response, the Board notes that section 441.4 of the proposed Formulary regulation provides that “[o]ver-the-counter Formulary drugs when prescribed by a Board authorized practitioner should be billed directly to the carrier or its pharmacy benefits manager.” Accordingly, the Board finds that no changes are necessary to this regulation or the Formulary.

One insurance company recommended that the Formulary also include pricing fee(s) for compound drugs, which ideally would be a single dispensing fee for compound medications. Comments regarding drug pricing apply to a separate regulation, the proposed Pharmacy Fee Schedule regulation. As such, the Board finds that no changes are necessary to this regulation or the Formulary incorporated by reference therein.

441.1 Definitions

Multiple parties suggested that the Board redefine “carrier’s physician” to make it clear that a carrier may designate more than one physician. One pharmacy also recommended that this definition be changed to remove the requirement that the physician not be employed by a PBM. The Board has amended the definition of “carrier’s physician” in section 441.1(g) of the revised proposal to clarify that it may include multiple physicians. Due to conflict of interest concerns, however, the Board declines to omit the requirement that a carrier’s physician not be employed or contracted by the carrier’s PBM.

Several commenters expressed confusion about the definition of “disability event.” The Board acknowledges these concerns and no longer uses the term “disability event” in the regulations. Section 441.1(b) of the revised proposed regulations now uses the term “accident or injury.”

One workers’ compensation consultant group recommended expanding the definition of “Prior Authorization.” The Board finds changes unnecessary given the detailed description of the Prior Authorization process, set forth in section 441.5 of the revised proposed regulations.

Several commenters asked that the definition of “compound drug” be amended to state that all compound medications, regardless whether the compound includes a Formulary drug, require Prior Authorization. Section 441.5(a) of the revised proposal requires Prior Authorization for all non-Formulary drugs. Therefore, if a compound is comprised of any non-Formulary drugs, Prior Authorization will still be required. Accordingly, the Board finds that no changes are necessary as a result of this comment.

One workers’ compensation consultant group recommended that the Board amend that part of the definition of “generic drug” which references drugs “in a different strength/dosage.” The commenter noted that this phrase is unnecessary because stakeholders already know when a brand name drug can be substituted for a generic drug. The Board finds that no changes are necessary as a result of this comment, as the Board believes that the phrase “in a different strength/dosage” provides greater clarity for all stakeholders, including those less familiar with generic drug dispensing rules.

441.3 Applicability, Effective Dates and Notice

Several commenters disagreed with the requirement that carriers and self-insured employers notify claimants and medical providers that the claimant is prescribed a non-Formulary drug and identify equivalent Formulary drugs. The Board has modified the proposed regulation in response to these comments.

Several commenters asked that the applicability of the Formulary to refill and renewal prescriptions be clarified. One such commenter specifically asked that the regulations clarify that the 12-month extension applies only to refills and renewals of drugs last prescribed prior to the effective date of the Formulary, otherwise the regulation could be interpreted to apply to the refill or renewal of a medication that was originally prescribed after the effective date of the Formulary. In response to this comment, sections 441.1(q) and (r) of the revised proposed regulations now define “refill” and “renewal” prescriptions. The Board believes that the addition of these definitions clarifies the Formulary’s applicability to such prescriptions.

One insurance company recommended that the regulations expressly state that the Formulary applies to no fault insurance claims. The Workers’ Compensation Board does not have jurisdiction over no fault insurance claims; no fault insurance is regulated by the New York State Department of Financial Services. As such, the Board cannot implement the suggested change.

One workers’ compensation consultant group asked that the regulations clarify whether the Formulary applies when a medical provider dispenses the medication directly to the claimant during an office visit. In response to this comment, the revised proposal adds sections 441.3(d) and (e), regarding the applicability of the Formulary to medical provider dispensing.

One law firm asked that the regulations clarify whether the Formulary applies to out-of-state providers. In response to this comment, the Board notes that the introductory paragraph in section 441.3 of the revised proposal states that the Formulary applies “regardless of where the claimant lives.” The is no similar statement that the Formulary applies regardless of where the claimant seeks treatment. Therefore, no changes have been made as a result of this comment.

441.5 Prior Authorization Process

A number of commenters expressed that the Prior Authorization process would be too burdensome. As the statute requires the Board to include a process for Prior Authorizations, insofar as it is necessary to ensure that those claimants whose needs cannot be met through a Formulary drug have other treatment options, the Prior Authorization process remains included in the revised proposed regulation.

Several parties requested that the Board develop the format to request Prior Authorization prior to the adoption of the regulations. The Board finds that no changes are needed to the regulations as a result of this comment. As with other Board-prescribed forms, the Board will establish the format with ample time for stakeholders to integrate it into their systems.

Multiple commenters recommended that Prior Authorization also be required for drugs that are prescribed for off-label uses. In response, the Board notes that it cannot prohibit medically-necessary off-label use of drugs.

Several commenters asked the Board to clarify whether “4 days” means business or calendar days. The Board acknowledges this concern and has clarified throughout the revised proposal that the timeframe is 4 calendar days.

A number of parties commented that reviewing Prior Authorization requests in 4 calendar days is too burdensome, and many requested that the length of time be extended to at least 4 business days. The Board consulted with stakeholders in drafting the proposed regulation and finds that 4 calendar days is an appropriate amount of time to decide Prior Authorization requests. Moreover, some stakeholders have requested a shorter review period. In balancing these comments, the Board finds it is best to leave the review timeline as 4 calendar days.

Several commenters opined that 4 calendar days is too long and requested a shorter Prior Authorization approval period, such as 72-hours. As indicated above, the Board consulted with stakeholders in drafting the proposed regulation and finds that 4 calendar days is an appropriate amount of time to decide Prior Authorization requests. To balance all concerns, the Board declines to change the Prior Authorization review timeline.

One workers’ compensation consultant group was generally supportive of the Prior Authorization process.

One insurance company commended the Board for no longer expressly allowing oral submission of a Prior Authorization request.

Multiple parties asked that the regulations clarify whether the carrier’s physician could also include a registered nurse. No change has been made as a result of this comment. The Board notes that the proposed regulation permits the carrier to retain more than one physician.

A number of commenters requested additional development with respect to requirement for carriers and self-insured employers to designate a contact person for Prior Authorization requests. Additionally, several commenters asked the Board to penalize carriers/self-insured employers for failure to timely designate a contact person. In response to these comments, the Board has further developed section 441.5(c) of the revised proposal.

One insurance company requested that the maximum duration of a Prior Authorization approval be shortened from 365 days to 180 days. The Board has not made a change as the result of this comment but notes that carriers have the ability to partially approve a request and shorten the duration.

One workers’ consultant group recommended including “topical creams or patches” as types of compound drugs requiring Prior Authorization, that Prior Authorization be sought both before the drug is prescribed and before it is dispensed, and that Prior Authorization requests also be submitted to a designated entity, PBM, or pharmacy network. The Board believes the drafted proposed regulations provide sufficient processes to ensure that drugs are prescribed and dispensed correctly and as such has not made any changes as a result of these comments.

Multiple commenters requested that the regulations clarify how the Board will enforce the 4-day review deadline for Prior Authorization requests. In response, section 441.5(d)(3)(ii) and 441.5(e)(4) have been added to clarify that a request for Prior Authorization that is not responded to in a timely manner may be approved for the period requested upon issuance of an Order of the Chair.

One law firm asked what penalties carriers and self-insured employers can face for failure to designate a contact person for Prior Authorization. In response, the Board has included section 441.5(c) of the revised proposed regulation, which details penalties the insurer may be subject to.

One law firm asked the Board to clarify whether all forms of a generic need to be tried before a brand name can be prescribed. When there is an available generic, a brand name drug may not be prescribed without Prior Authorization. No change has been made as a result of this comment.

One law firm recommended that, for those claimants who have been on long-term opiates, further opiate prescriptions that do not increase the morphine equivalent dosage (MED) do not require Prior Authorization unless directed by a workers’ compensation law judge. Providers with claimants on long-term opioids are able to use the Prior Authorization process in order to request that a claimant be continued on their opioid regimen. No change has been made as a result of this comment.

441.6 Review by the Board of a Prior Authorization Denial

A number of commenters requested that the regulations impose a deadline for review by the Board’s Medical Director’s Office (i.e., third level review). The Board declines to permit a Prior Authorization request to be deemed approved at this final level of review. The Chair has reserved the right of the Board to enlist assistance for review of Prior Authorization request to ensure timely responses. Accordingly, no change has been made as a result of this comment.

Several commenters asked that all parties be permitted to appeal a decision of the Medical Director’s Office. The right to request a hearing has only been extended to the claimant as he or she does not participate in the three levels of prior review. The three levels of review available to medical providers and carriers is sufficient to meet due process considerations.

441.7 Changes to the Formulary

One medical provider group suggested that the regulations include a 60-day implementation period between the notice of a Formulary change and the change’s effective date to allow stakeholders a reasonable time to program their systems. The Board will consult with affected parties prior to implementation of any changes to the Formulary to ensure adequate time is provided to implement the change and anticipates that the amount of time needed may vary based on the extent of the changes. Accordingly, no change has been made to the proposed regulation.

The Board also received a comment requesting that the MDO or Chair's “designee” be defined as a medical doctor who will certify that a conflict of interest for services provided under the Formulary does not exist. The Board also received a comment requesting that the decision to include, exclude, or restrict certain drugs on the Formulary should be based on principles of evidence-based medicine to support better clinical outcomes. WCL § 13-p sets forth the criteria for consideration of new drugs and how drugs should be added to the Formulary. While the suggestions of the commenters are valuable, the Board declines to make any changes that may limit its ability to modify the Formulary as needed.

Formulary

A number of stakeholders requested that certain drugs be included in or removed from the proposed Formulary. Several commenters also opposed the use of four different formularies (Phases A through C and the Perioperative period). Due to these comments, the Board has substantially revised its prior proposal. Particularly, the Board has reduced the Formulary from four distinct lists to three lists (now Phase A, B, and Perioperative), and has substantially revised the Phase A and B Formularies and the Perioperative Formulary.

One insurance company requested that, with respect to the Perioperative Formulary, the regulations clarify how a provider will notify the carrier of the surgery date. The proposed regulation has been modified in response to this comment.

Several commenters noted that the Formulary omits many body parts, conditions, and illnesses. In particular, one such commenter noted that conditions such as headaches, dizziness, depression, anxiety and insomnia are not listed in the Formulary. These commenters asserted that no medications can be prescribed for unlisted body parts and conditions without Prior Authorization, which is burdensome. This is incorrect. Any Formulary drug may be prescribed for body parts or conditions that do not have a corresponding Medical Treatment Guidelines.