American Property Casualty Insurance Association
  • Staff Contact: Nicole Mahrt-Ganley     
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  • October 6, 2015
  • ACIC Applauds Gov. Brown’s Signature of Workers Compensation Formulary Legislation
  • ACIC Applauds Gov. Brown’s Signature of Workers Compensation Formulary Legislation

    SACRAMENTO, CA – With the stroke of his pen, Governor Jerry Brown just approved a law that will move California forward in curbing abuse of opioid medications in the workers compensation system, said the Association of California Insurance Companies (ACIC).  AB 1124 (Perea) requires the Administrative Director of the Division of Workers Compensation to establish a formulary for prescription medications in the workers compensation system. 

    “Gov. Brown should be applauded for signing AB 1124.  This bill will put California on track to create a scientifically valid, evidence-based formulary and will control the overprescribing of opioids,” said Mark Sektnan, ACIC President.  “Over doses from prescription medications have become an epidemic.  The Centers for Disease Control and Prevention reports deaths from overdose have been steadily on the rise.  Every day in the United States, 114 people die from drug overdose and another 6,748 are treated in emergency rooms.”

    The development of a formulary for the workers compensation system will ensure clinically appropriate medications are provided to injured workers and counter act the overutilization of dangerous and addictive drugs. A January 2014 study by the California Workers’ Compensation Institute (CWCI) identified pharmacy benefits as the most frequently disputed type of medical treatment in the workers’ compensation system, making up 43% of all Utilization Review (UR) events and 34% of all Independent Medical Review (IMR) events. While a strong majority (74.1%) of UR decisions approved the requested medication, the remaining 25.9% were either modified or denied. When those modifications or denials were elevated to IMR, the modification or denial was upheld 78.4% of the time. What is clear from this data is that inappropriate prescribing practices are resulting in significant delays in the delivery of medical care for injured workers and high administrative costs for California employers. A strong formulary will help resolve this tension by providing clarity regarding evidenced-based prescribing practices, thereby reducing delays and timely providing appropriate medications.

    “Injured workers frequently grapple with pain from their injuries, only to then be hurt again by becoming addicted to their pain medication,” said Sektnan.  “This bill provides injured workers the medication they need but also protects them becoming addicted and having open ended access to a drug that could kill them.” 

  • ACIC, the California voice of the Property Casualty Insurers Association of America, represents 363 property casualty insurance companies doing business in California. These members write $20.2 billion in premium in California insuring 36 percent of the property casualty insurance sold in the state. California members write 44 percent of personal auto insurance, 29 percent of homeowners insurance, 33 percent of commercial lines business insurance and 40 percent of private workers compensation insurance sold in California.
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