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The New York Workers’ Compensation Board Will Establish a Drug Formulary by December 31, 2017—But Don’t Panic!

—November 09, 2017
The New York Workers’ Compensation Board Will Establish a Drug Formulary by December 31, 2017—But Don’t Panic!

By Brian Allen, VP of Government Affairs

The New York Workers’ Compensation Board (WCB) has been on a journey toward a drug formulary for injured workers for well over a year. In October 2016, the WCB released a discussion document (found here) that included widely varying concept points for what might be included in a workers’ compensation drug formulary. The New York legislature subsequently stepped in to ensure the WCB had appropriate rulemaking authority to implement a drug formulary. In the waning hours of the legislative session, a budget bill, AB3009 (found here, page 161), was amended to include some language from the drug formulary discussion document and mandating the WCB chair “shall establish a comprehensive prescription drug formulary on or before December thirty-first, two thousand seventeen.” Governor Cuomo signed that bill into law on April 10, 2017. That started the clock for the WCB staff to meet the December 31, 2017, deadline.

On July 24, 2017, the WCB released an RFP (found here) to request bids from vendors to “procure and implement a state-of-the-art drug formulary that will support the provision of high-quality, cost-effective pharmaceutical care. The selected formulary needs to be integrated into a set of comprehensive, evidence-based medical treatment guidelines (MTGs) that will support improved health outcomes.” These RFP objectives concerned many stakeholders about the legislative mandate to “establish” a drug formulary on or before December 31, 2017. Given the release date of the RFP, that left four months and a few days to evaluate submissions, select a vendor, negotiate a contract with a vendor and to “establish” the formulary. By the end of October, a vendor was selected but contract negotiations were still underway so the vendor was not announced.

Given the deadline, some stakeholders were concerned.

What it Means to “Establish” the Drug Formulary

We can define the word “establish” in a number of ways, but critical to this discussion is what the legislature meant when using the term “establish” in AB3009. A relevant definition from the Miriam-Webster dictionary is “to bring into existence” or to “bring about, effect.”

The WCB can “bring [the formulary] into existence” by finalizing the contracts with the selected vendor and announcing the vendor and its intended framework for the drug formulary. That would meet the legislative intent. What “establish” doesn’t mean in this context is to have the formulary fully operational or implemented. The WCB has confirmed this interpretation.

Implications

This is great news for a number of reasons. First, the WCB has already selected a vendor and will meet the intended context and timing of the legislative deadline. Even better news is that, following the announcement of the vendor and the product prior to December 31, 2017, the WCB will commence a rulemaking process that will allow several opportunities for public comment and discussion. This will afford all stakeholders the ability to add their input and ideas into the final development and launching of the drug formulary.

Additionally, this is the time where all involved can discuss and work out details like transitioning older claims, pre-authorization processes, exceptions, initial fills and dispute resolution rules. The rulemaking and implementation process will also provide the WCB some visibility into how the marketplace will adapt to the new drug formulary and how that adaptation will ultimately fit into their overall portal project. It will give companies such as Mitchell time to build strong implementation and integration plans for handling the new drug formulary in New York and any related changes to their medical treatment guidelines.

The Predicted Timeline for Implementation

The typical rulemaking timeline in New York is as follows:

  • Draft the rule
  • Release the rule for comment
  • Provide a mandatory minimum of a 45-day comment period after a rule is released
  • Conduct a staff review and compilation of the comments
  • Explore potential modifications of the rule based on comment
  • Provide another mandatory 30-day comment period regarding the changes
  • Review adoption of the rule and publish the rule

In the case of this formulary rule if the standard timeline was followed, we would anticipate the earliest rule publication to be at the end of May 2018. Once finalized, there will be a window of time for stakeholders to complete their implementation processes. That would seem to indicate a “go-live” date sometime in the late fourth quarter of 2018 or January 1, 2019. This process timeline should afford every stakeholder time to build out and implement their internal systems to handle the New York Drug Formulary.

The Mitchell government affairs team will be closely monitoring the drug formulary rule development in New York. We urge our customers and partners to engage with the WCB and provide constructive feedback to help shape the underlying policy and goals along with the rule language. The WCB is sincerely committed to developing a strong, successful formulary and therefore needs input from all of us. If you have any questions, please feel free to reach out to our Vice President of Government Affairs, Brian Allen, at Brian.Allen@mitchell.com or at 801-661-2922.

 

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