Two-Year Checkup: MTUS Drug Formulary is Achieving Its Goals

April 27, 2021

The evidence-based Medical Treatment Utilization Schedule (MTUS) Drug Formulary was adopted by the California Division of Workers’ Compensation on January 1, 2018. Its purpose was to reduce frictional costs in the workers’ compensation system, restrict inappropriate prescribing, especially in relation to opioids, and ensure that injured workers receive medically necessary medications in a timely manner.

Frictional costs largely stemmed from utilization review (UR) and independent medical review (IMR) processes. To help reduce these costs, the MTUS Drug Formulary includes a list of approximately 300 drug ingredients, each categorized as exempt or non-exempt from UR authorization prior to dispensing.
Following adoption, the Workers' Compensation Insurance Rating Bureau of California (WCIRB) has continued to evaluate the cost impact of the MTUS Drug Formulary. Their most recent research brief was published in February 2021, and found the formulary is achieving its goals.

WCIRB’s key findings include:

  • Declines in pharmaceutical costs accelerated in 2018, after the initial implementation of the MTUS, and continued declining at a slower pace in 2019 and early 2020.

  • Drug prescriptions exempt from prospective UR continued to increase in 2019 and early 2020, while prescriptions for non-exempt drugs continued to decline, decreasing UR requests and costs.

  • Pharmaceutical payments for opioids, compounds, and brand name drugs with generic alternatives decreased sharply in 2018 and continued to drop at a similar rate in 2019 and early 2020.

According to DWC Executive Medical Director, Dr. Raymond Meister, “I believe that having a formulary and drug list that is directly tied into the MTUS-ACOEM treatment guidelines provides a solid evidence-based source for making the best treatment decisions for California’s injured workers.”

The impact of COVID-19 and stay-at-home orders on drug utilization and associated costs is more uncertain. WCIRB transaction data has shown an upward trend in prescription drug use and costs in the workers’ compensation system since the onset of the COVID-19 pandemic.
WCIRB will continue to monitor the pandemic’s impact on medical treatment costs, especially pharmaceutical costs, in the California workers’ compensation system.
Want to learn more about how to use MTUS treatment guidelines, the MTUS Drug Formulary, and how to improve medical outcomes for injured workers?
COEH Continuing Education has partnered with DWC to offer a free online course: Caring for California’s Injured Workers: Using California’s Medical Treatment Utilization Schedule (MTUS). Click here to learn more about this free resource.