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Workers Compensation Issues

Workers Compensation Treatment Guidelines: Obstacles and Opportunities

Mark Walls , Kimberly George | April 21, 2017

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Prescription pill bottles and loose pills

Workers compensation treatment guidelines can help prevent unnecessary medical procedures and the prescribing of potentially harmful medications. However, they are not all the same, nor are they without challenges. Understanding a jurisdiction's strengths/weaknesses, taking a strategic approach to developing guidelines, and using common sense can lead to better outcomes for injured workers—and, ultimately, lower costs for payers.

That's the view of workers compensation experts who spoke during our Out Front Ideas with Kimberley and Mark webinar, "Obstacles and Opportunities of Treatment Guidelines." 1 The panel included the following representatives from the regulatory, medical, pharmacy benefit management, and third-party administrator communities.

  • Amy Lee—special adviser to the Texas Department of Insurance, Division of Workers Compensation
  • Dr. Douglas Benner, MD—chief medical officer of EK Health and national medical director of Macy's, Inc, Claims Services
  • Mark Pew—senior vice president of PRIUM
  • Darrell Brown—executive vice president and chief claims officer of Sedgwick

Dr. Benner brought a unique and important viewpoint to the panel. First, he was a practicing physician for over 30 years, so he had first-hand experience practicing medicine under guidelines. Second, he has been involved in the development of treatment guidelines for both the Official Disability Guidelines and American College of Occupational and Environmental Medicine.

A majority of states now have some type of medical treatment or return-to-work guidelines in their workers compensation systems, and nearly half either have or are considering drug formularies. But there is some confusion about how they work within various jurisdictions as well as their effectiveness. The speakers gave us great insights to better understand how to develop and implement successful treatment guidelines and how to get the most out of them.

The Texas Example

Many in our industry look to Texas as a state with highly effective treatment guidelines. Texas is a state that had some of the highest workers compensation costs in the nation, along with some of the poorest return-to-work and patient satisfaction outcomes. After implementing treatment guidelines and a drug formulary, the state now boasts some of the best workers compensation outcomes in the nation as well as lower costs.

But the Texas story is not quite as simple or transferrable as you may think. As our panel explained, it took a multiyear, painstaking effort by representatives of literally all facets of the system to develop and implement the model now in place. It also required a deep understanding of the workers compensation system as it existed in Texas for the treatment guidelines to get to the point they did.

The changes in Texas began with legislative reforms in 2005. It would be 2 more years before the treatment guidelines were implemented and 3 years after that for the drug formulary to begin being phased in—first with new claims, then with legacy claims. One of the keys to Texas's success was a change to include evidence-based medicine (EBM) in the guidelines.

Evidence-Based Medicine

"Evidence-based medicine" is a term we hear often these days, but there's disagreement about what it truly means. Texas sought to clarify the issue by including a statutory definition in the treatment guidelines, so EBM is defined in Texas Labor Code Section 401.011 (18a) as "the use of current best quality scientific and medical evidence formulated from credible scientific studies, including peer-reviewed medical literature and other current scientifically based texts, and treatment and practice guidelines in making decisions about the care of individual patients."

Texas switched to basing the guidelines on EBM to reform the previous consensus-based model, which was perceived as allowing for too much unnecessary medical care. EBM was chosen as the standard for selecting treatment guidelines, return-to-work guidelines, and adjudicating claim level disputes on medical care. It is also the standard expected from healthcare providers, payers, and others.

The idea of EBM is to provide a systematic approach to treating injured workers based on the best available science. Ideally, medical providers should base their treatment regimens on EBM, although it is also important to consider the specific needs of each individual patient.

Unfortunately, some of the most pervasive medical conditions among injured workers have not been as heavily researched as other ailments, such as heart disease or hypertension. That means EBM is not the basis for every single medical condition. Generally, developers of EBM for workers compensation consider all available research, "weight it" in terms of quality, then fill in the "gaps" with a consensus of expert panels. That does not mean those particular guidelines are not scientific. For example, there is little research indicating someone with chest pains should undergo an electrocardiogram, but medical common sense dictates that is the appropriate action to take.


Ensuring injured workers are given the most appropriate medications for their conditions is, or should be, the goal of drug formularies in workers compensation, according to the panelists. Not all drug formularies are the same, and it is helpful to understand their differences.

As we learned in the webinar, drug formularies started in the group health area and were primarily a way to reduce costs, since out-of-pocket expenses are involved. There are different tiers to guide the best drug for the patients with the aim of finding the one that is the least expensive.

Because workers compensation does not typically include copays, the goal for many jurisdictions is clinical efficacy—finding the medication that will result in the best outcome for the injured worker and get him back to function and, ultimately, work.

States such as Texas have a "closed" drug formulary, although, compared to closed formularies in group health, it is not the same. Whereas, in the group health context, some medications will be disallowed in terms of reimbursement, formularies in workers comp instead require preauthorization for certain medications. The term "preferred drug list" is more appropriate for workers compensation.

Texas uses the Official Disability Guidelines for its list of "Y" and "N" drugs. All Food and Drug Administration-approved drugs are included, but those on the "N" list are not automatically paid for through the workers compensation system.

Almost immediately after Texas implemented its drug formulary, prescribing patterns changed. Physicians by and large prescribed more medications on the "Y" list, rather than having to justify the use of those on the "N" list. That was among the main goals of the drug formulary—to get prescribers to avoid prescribing opioids and other potentially dangerous drugs right from the start.

The formularies in workers compensation systems in other states differ; however, the goal is the same—to encourage providers and others to prescribe medications that are the best for the injured worker, considering his injury and any comorbid conditions. Patient safety should be the goal, rather than lower costs.

Many in the industry are closely watching California as it faces a summer deadline to finalize its drug formulary. There are estimates that the state could see about 25 percent of its currently prescribed medications put on the fast track for approval and thus avoid delays from utilization review once the formulary is implemented.

Challenges of Developing Workers Compensation Treatment Guidelines

Having heard about the many potential benefits of treatment guidelines, we then turned to the panelists to discuss some of the obstacles and how to overcome them. Educating all stakeholders was among the most important strategies they mentioned.

For example, a claims examiner may not see a recommended treatment in the guidelines for a particular jurisdiction and issue a denial for a requested procedure. But, upon further investigation, the treatment requested by the provider may be the best for all considered.

In a California case, a claim was halted for several years—with indemnity expenses continuing to be paid—as the parties awaited the outcome of a dispute over an MRI scan. The case points to the need for those involved in a claim to be flexible. While following the guidelines should be the general rule of thumb, it's also important that those overseeing a claim take a holistic approach and see what really makes sense for the injured worker.

Educating physicians on what to do to gain approval for treatments that stray from treatment guidelines is also seen as vital. Often, little or no explanation is provided as to why a particular patient needs a certain procedure or medication. Without complete information, the rate of denials increases. Texas took the unique step of implementing Appendix B to provide guidance to physicians on how to document exceptions to its guidelines.

The consistency—or lack thereof—of guidelines can be frustrating, especially for organizations that operate in multiple jurisdictions. Again, those involved in the claim need to be informed about the guidelines involved in each.

It is important that everyone involved in reviewing treatment recommendations, including claims examiners, nurses, physicians, and even administrative judges, understand the treatment guidelines and their limits for the jurisdictions in which they operate. The decisions each makes must be consistent for the guidelines to be most effective.

Keeping the guidelines current is another challenge for some jurisdictions. With medical science changing rapidly, it's best if jurisdictions find a way to get updated information published as soon as possible and make it easily accessible.

The Future

While a majority of states have medical treatment guidelines in their workers compensation systems, 21 did not at the time of the webinar. About 20 states either have or are considering drug formularies.

There are additional efforts underway on the state level to address medical care for injured workers. Several Northeastern states, for example, have placed limits on the number of days for which opioids can be prescribed. Some have limited it to 7 days, while New Jersey is imposing a 5-day limit. That trend is expected to continue.

Other states are looking at helping to wean injured workers off opioids. New York recently rolled out a new hearing process to address claims that involve problematic drug taking.

Progress is being made to improve injured workers' outcomes and treatment guidelines, and drug formularies are a big part of these efforts. The goals of better safety and clinical outcomes, quicker return to work, shorter treatment periods, and better overall outcomes should drive the conversations going forward.

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1 To listen to the complete Out Front Ideas with Kimberly and Mark webinar on this subject, please visit