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California MTUS Drug Formulary Updates

—September 08, 2017
California MTUS Drug Formulary Updates

The California Division of Workers’ Compensation (DWC) released a revised draft MTUS Drug Formulary rule and opened a second 15-day comment period on the rule. The modifications made to the rule were based on comments submitted to the DWC during the first 15-day comment period. There are relatively few changes in this revised draft but the changes are significant and important to understand.




  • Section 9792.27.3 MTUS Drug Formulary Transition—In paragraph (2)(A), the word “safe” was replaced with the words “medically appropriate” in describing a treatment plan for weaning or transitioning a worker to a formulary drug. This clarifies that any weaning protocol follow medically accepted guidelines, which are more clearly defined than the word “safe”. There was also a technical reference fix in the section.
  • Section 9792.27.8 Physician-Dispensed Drugs—There was one minor textual change in this section that intended to close a potential loophole. In paragraph (d), the words “Pharmacy Benefit Network” were replaced with the words “pharmacy benefit” clarifying the type of contract that can prohibit a physician from dispensing medications. This is a critical distinction since very few physicians would have entered into a Pharmacy Benefit Network contract. The DWC estimates that nearly 50% of all prescriptions for injured workers in California are currently dispensed out of physician’s offices. This language clarification will help ensure that more medications will be dispensed within the managed pharmacy care system. In turn, this will make it easier to verify compliance with the formulary guidelines and make certain that clinical tools are uniformly applied.
  • Section 9792.27.9 Compounded Drugs—Paragraph (c) was added to this section, which states, “Nothing in this Article shall permit physician dispensing of compounded drugs where otherwise prohibited by a pharmacy benefit contract pursuant to subdivision (a) of Labor Code 4600.2.” This additional language closes another potential loophole and encourages the dispensing of medications within the managed care network.
  • Section 9792.27.10MTUS Drug List…—Paragraph (b)(3) was added to strengthen the controls on compounded medications and to close another potential loophole. The new language states, “Compounded drugs are subject to section 9792.27.9 even if one or more of the ingredients is listed as “Exempt” on the MTUS Drug List.”
  • Section 9792.27.11–Waiver of Prospective Review – There was one minor technical change in this section fixing a reference.
  • Section 9792.27.16 National Drug Codes, Unique Pharmaceutical Identifiers—MTUS Drug List – This section gives permission to the Administrative Director to maintain the MTUS drug list on the DWC website. The changes here clarify what is meant by “NDC” or “RxCUI” codes and changes “product” identifier to “pharmaceutical” identifier. These changes will help to remove any confusion on which source can be used. While this section gives permission to the Administrative Director to post a list, Mitchell will strongly encourage the posting of the list to help minimize potential conflicts in interpretation of which medications were intended to be included in the formulary.

The fifteen-day public comment period is underway. Written comments on the rule can be submitted to the DWC until 5pm PDT on September 22, 2017. We urge our customers to review the rule along with the new changes and to evaluate the impact on their current business practices.

It is clear from the two revisions and the public comment periods that the DWC is interested in hearing from stakeholders and subsequently developing a workable rule. Stakeholders in the California workers’ compensation system should be preparing now for the targeted implementation date of January 1, 2018. Mitchell is preparing for implementation of the MTUS Drug Formulary rule for our clients on that date.

The complete text of the latest draft version of the MTUS Drug Formulary rule can be found here.

The DWC rule notice can be found here.

For questions or comments about this alert, or other regulatory or legislative questions, please contact Brian Allen, Vice President of Government Affairs, at



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