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Sheral Kellar is right about formularies.

Formularies that always allow opioids make no sense. That should be obvious to anyone, and it is to Ms Kellar.

(I’m basing this on an article in today’s WorkCompCentral, which stated:

“A pharmacy formulary is a tool that can be used to address the opioid issue. But it is not the only tool. In fact, Dr. Marcus Dillender, a Ph.D. from W.E. Upjohn Institute for Employment Research, suggests that careful management by insurers and administrators can achieve the same result,”

Sheral Kellar, Esq. is the Director of Louisiana’s Office of Workers’ Compensation Administration; deeply experienced, thoughtful and competent. I met Ms Kellar at CompPharma’s annual meeting last fall when she and several other state regulators spoke about formularies and managing drug usage.

Ms Kellar’s state has the second highest rate of opioid usage among workers comp patients, so she is keenly aware of the issue. She also knows a formulary is NOT a panacea, rather just one tool in the armamentarium.

  • Prescription drug monitoring programs that require and facilitate pharmacist and physician participation,
  • Strong and well-designed utilization review programs,
  • Flexibility for PBMs and payers to customize medication therapy to ensure patients get ready access to appropriate drugs and reduce risks from inappropriate medications,
  • Carefully-planned implementation,
  • Drug testing, opioid agreements, and addiction/dependency treatment

are all key to the solution.

I hesitate to pick on one issue as THE problem – however any formulary that always allows hydrocodone is not what Louisiana’s workers need. According to WCRI

  • A higher proportion of injured workers prescribed pain medications in Louisiana (85 percent) received opioids.
  • Among study states, LA had the second highest rate of patients taking two or more opioids
  • LA had the highest morphine equivalents per claim. – 3540 MEDs, more than double the average.

When you have docs using opioids as first-line pain meds – which clearly is the case in Louisiana, and they prescribe more than twice as much as the average state (which is already too high), and they prescribe more than one opioid most of the time, a formulary that automatically allows docs to prescribe hydrocodone – the most commonly used opioid in LA – is not part of the solution.

What does this mean for you?

Yes, solutions require a multi-pronged approach, but those “prongs” should “first do no harm.”



29 thoughts on “Sheral Kellar is right about formularies.”

  1. While a closed formulary is not the only necessary tool needed to address the drug problem we have in workers’ compensation, it is a tool. I am always amazed when a regulatory would rather not have any tools in place rather than having a least one tool. It is important to make a start in the war on drugs and passing a closed formulary sends a clear and loud message to the medical community that the state is serious about attacking the problem and not sitting idly by while large numbers of workers are lost to addiction. It is not the total solution but it is a start. If you are going to tear down a house would you rather do it bear handed or at least have a claw hammer.

  2. Formularies should be supported by EBM and be specific for the injury/illness. No medication is appropriate for all injuries/illnesses, particularly opioids. In jurisdictions where EBM Guidelines have been adopted, that is also supported by UR/Peer Review – the framework is there with or without a formulary to manage clinically appropriate medications.

  3. Denise/Todd you are dead on correct. Joe I am dissapointed that you have been sucked up in the politics and misinformation on this bill by many. I wasn’t a proponent of the initial bill filed till several good amendments were placed to dramatically improve it. One of those was to lock in the EBM guidelines associated with the formulary. That is clearly presented in the current bill. Absolutely agree a formulary is not a “panacea” but a tool which is why changes were made. Another bill moving through that the governor will sign is a great complement to this bill following CDC recommendations and putting more teeth into the use of the PMP (good tool but not required to use). It is also a tool and not a panacea. One of the things that national writers tend to do as well is issue standardized responses to problems in WC. As comp is a state driven system so are its problems. LA is a plaintiff bar driven system and all the additional tools you mention are present but difficult to use as intended in the LA system but we keep trying. I have been practicing for over thirty years and how treatment of pain has evolved is the main problem. Blame big Pharma all you want but they don’t prescribe. While i wish opiates didn’t exist I also know that a 3 level back fusion needs short term relief with few non narcotic alternatives if any effective. EBM has provided a path to manage these situations if providers would follow them. Come be part of the legislative process down here and you might change your mind about how well the system might be working

    1. Troy – thanks for the note, always good to hear from you.

      I disagree with your statement that I’ve been “sucked up in the politics and misinformation on this bill”; you know me better than that.

      I’d suggest you re-read my post – I NEVER said the LA legislative process or WC system is working. In fact, my post is purposely quite narrowly focused – on the formulary itself. As I noted – in detail – a formulary is “just one tool in the armamentarium.”

      Of course WC is a state system, I’ve been in this business for three decades and am well aware of this. Your statement that “One of the things that national writers tend to do as well is issue standardized responses to problems in WC. As comp is a state driven system so are its problems.” isn’t accurate or fair; I’ve written hundreds of posts and given dozens of speeches and talks and presentations that are state specific.

      Fact is, a formulary that automatically approves hydrocodone is the wrong answer.

      a formulary that does NOT automatically approve opioids is a far better answer.

      And that’s all my post was about.

      1. Joe I have always greatly respected your opinions and writings. what is lost by folks is this formulary in LA does not auto approve. it still has to go through UR and be evidenced based. The “Y” is only clarifying that it is a drug that “can” be used in WC in LA. that is not to say that it can be auto UR but it still has to be evidenced based and the ODG criteria for acute and chronic use is very detailed. The first three lines of Criteria are all centered around “non-opioid” treatment being used first among other criteria then screening for addiction and utilizing the other tools mentioned in your original posts. I have always appreciated your approach and recommended your wisdom to many but was surprised at what I perceived was blanket support of opposition to the bill. thanks T

        PS great to hear from you as well

        1. Troy – thanks for the note and clarification.

          My concern with the Y/N formulary as potentially implemented in LA is this – most payers are likely to just blanket approve all Ys and deny all Ns. They aren’t going to take the time or go thru the process you describe. I’d suggest that providers are going to be confused when a “Y” drug is denied as well.

          The other concern is there are going to be instances when “N” drugs are appropriate for specific patients. In those instances, will they go thru a different approval process? If not, why are there Y and N drugs? If yes, more opportunity for confusion.

          My other concern w ODG is it isn’t disease-state specific – but that’s a separate issue…

          1. I cant disagree at all with the confusion. Most of the domestic carriers use PBM’s and flag opiates for UR but that is not foolproof.
            Last but not least some stakeholders have pushed the effort that payors only want this as a vehicle for cost containment which may exist for some large carriers. Many that are domesticated here care about the patients/claimants they are responsible for. A formulary with EBM running behind it is and should be designed for appropriateness of care and shortened disability. All you have to do is think about who benefits from lengthened disability to see why there is difficulty with this issue.

            As a provider of 30+ years I would love to have some dialogue on the disease specific issue. The ease of use for providers is very important. thanks T

      2. Joe, interestingly both formularies prominent in WC, ODG and ACOEM, recommend hydrocodone. A guideline is simply a guideline and just because it’s “recommended” or listed as “Y” drug, doesn’t necessarily mean the prescriber has to treat with that particular medication. In ACOEM, hydrocodone reads “recommended, insufficient evidence” for many conditions in both the acute and chronic phase.

        1. John – thanks for the note and welcome to MCM.

          The difference between ODG and ACOEM is ACOEM is not a binary formulary with Y/N drugs for any and all maladies.

          In current usage, no precert is required for hydrocodone under ODG, while a precert is required for most conditions under ACOEM.

          1. Re: HYDROCODONE
            Joe, I just emailed you a screenshot of the 54 times ACOEM says “Yes”, under “Evidence Support.” I’d post it here but this only allows text (not screenshot).

          2. Tom – of course ACOEM’s guidelines approve hydrocodone FOR SPECIFIC DISEASE STATES not for ALL conditions and injuries. Post surgical recovery – yes, sprained thumb, no.

          3. Thanks for your reply, Joe, but 54 times it is recommended. Is that not a blanket “Yes?”

          4. You’re welcome Tom.

            That is not a blanket yes. How many “not recommended”s did you count?

          5. Post surgery and sprained thumb still are both pain related, and wouldn’t the pain level be the deciding factor, as opposed to the cause of the pain?

          6. Tom – no. If someone with a sprained thumb claims a 10 pain level, something else is going on.

        2. Hello again John – We agree that prescriber doesn’t have to treat with that medication; for payers, formularies are guides to what should and should not be used in most circumstances.

          As to ACOEM’s hydrocodone status, it is indeed recommended however that is for specific conditions e.g. post-surgical recovery – unlike ODG, which provides blanket approval for all conditions.

          1. Joe, thank you for the warm welcome! It appears that you are definitely a proponent of the condition-based formulary, which in theory seems to have a lot of common sense and practicality, but may not be as usable in the real world as one would expect. If I didn’t know better, I would have thought you were selling the product :) Are there limitations to a binary formulary, of course, just like any product but the formulary is just one piece of the total solution. You joked about ACOEM not recommending hydrocodone for a thumb sprain (not a covered condition in ACOEM), but ACOEM does recommend hydrocodone with insufficient evidence for elbow sprains, ankle sprains, wrist sprains, low back, knee pain, shoulder pain, carpal tunnel, and the list goes on.

            I urge you and others to look past the marketing and dig a bit deeper into the ACOEM condition based formulary. Here are a few points that will demonstrate why a condition based formulary such as ACOEM also has limitations and ultimately will be hard to implement in the workers’ comp system.

            1.) Usability: Someone else pointed this out, but the bottom line is a formulary needs to be easy to use in order to get provider engagement at the point of care. It’s very time consuming and non-realistic to expect a doctor to open up a third party website such as ACOEM, log in, search for the drug, find the condition and phase, find the recommendation, and then additionally have to read the supporting text. It’s unfortunate, but doctors already have limited time with their patients. An unusable formulary is like not having one at all.

            2.) Proven Track Record –Again, I am not claiming that the ODG binary list formulary solves everything, but ODG works, and has been proven to work in multiple jurisdictions, whereas the ACOEM condition based formula has yet to be implemented or seen success. In fact, Reed Group claims the ACOEM formulary was selected by California, yet the proposed MTUS formulary reflects or mimics more of an ODG list type formulary with medications either by preferred and non-preferred status. I presume they opted for the ODG list type format over the condition-based format for a reason.

            3.) Evidence: Reed marketers and bloggers may be telling you that the product is completely evidence based, but again I urge you to dig deeper. When looking at the ACOEM condition based formulary for hydrocodone, a majority of the recommendations are “recommended with insufficient evidence” or “limited evidence”.

            I refer you to the ACOEM definition of “recommended, with insufficient evidence” which in summary is, in the absence of evidence; these recommendations are based on expert opinion. “The intervention is recommended for appropriate patients and has nominal costs and essentially no potential for harm. The EBPP feels that the intervention constitutes best medical practice to acquire or provide information in order to best diagnose and treat a health condition and restore function in an expedited manner. The EBPP believes based on the body of evidence, first principles, or collective experience that patients are best served by these practices, although the evidence is insufficient for an evidence-based recommendation.

            The epistemology of evidence-based medicine categorizes expert opinion as the lowest form of medical evidence, superseded even by methodologically flawed clinical research. I am curious to see the overall percentage of recommendations in ACOEM that are “insufficient evidence” or “expert opinion”?

            4.) Ownership of Guidelines: Guardian Insurance owns the Reed Group and Reed Group owns the ACOEM formulary. There are many large carriers and TPA’s in comp and disability markets that directly compete with Reed Group, who may not want to be forced/mandated by a state to buy a product from a competing company. Reed Group ultimately controls the pricing and they can’t isolate the ACOEM guidelines so companies are forced to buy their non mandated return to work guidelines. MCG Health, part of the Hearst Health Network, is the parent company to Work Loss Data Institute, publisher of ODG. MCG’s core business for over 25 years is evidence-based guidelines and does not have this competitive angle to it.
            Bottom line is that while ODG’s formulary certainly doesn’t resolve every issue, it has been proven to work in multiple jurisdictions. Time may tell, but currently we don’t have any outcomes, success stories, or track record to look at what the ACOEM condition based formulary can achieve from an implementation and adoption standpoint. I would think states and regulators may be a tad hesitant to go out on a limb to adopt a product like ACOEM without a proven track record when there is one readily available that is proven to work, ODG.
            I know this is pretty long so I apologize, but fundamentally, I hope we all agree that formularies and guidelines are intended to get people the right treatments, the right medications, and at the right time in order to help injured workers back to functional restoration and improvement in their life. The cost containment is just a byproduct.

          2. John – rest assured I have dug deep into guidelines – two of my initial consulting clients were Interqual and HRM, followed by McKesson, way back in the nineties. Before that I reviewed and implemented guidelines at the Travelers. So, yeah, I understand this business.

            As to your recommendations that I not focus on marketing, I’d encourage you to read a few hundred of the thousands of posts here. You’ll see that I am adept at getting the real story.

            I disagree with your characterization of ODG. Just because something is simple doesn’t mean it’s right. Re “evidence-based”, I’m quite familiar with the issue, and would note that ACOEM tracks the IOM standards for evidence based, while ODG does not.

            A couple other points In point of fact, ACOEM has been the backbone of MTUS for years, and has been instrumental in reducing inappropriate medical care. And, your comments on who owns whom strike me as tangential at best. Stick to the science and reality.

            Finally, I don’t know better, what is your affiliation with ODG?

          3. Joe, I’m sorry as you seem a bit confrontational about this subject and it certainly was not my intention, so let me apologize again if you were offended by my difference of opinion. I certainly have a lot of respect for you, what you have accomplished in the industry, and I have been following your blog for sometime now . My statement around who you are working for was initially joking around seeing how much passion you had for the ACOEM formulary, hence the emoji.

            With that said, and now with your reply, it does beg the question. “Tangential at best” means what exactly? You seem to have taken my lighthearted suggestion seriously. Having been a paid consultant for other guidelines, perhaps you are in fact working for Reed Group. Please state unequivocally that you are not affiliated with Reed/ACOEM (or that you are) so that the conversation can continue with the proper context.

            For full disclosure, which I am happy to represent, I am part owner in a company called Peers Health. Peers Health consults, creates, and distributes information technology that has a measurable impact on people’s health and productivity. One of the companies we are working with is ODG, but I was also the Director of Guidelines at Reed Group for the MDGuidelines and ACOEM product line from 2007 to 2015 and have worked in the EBM guidelines industry for over 12 years. I don’t claim to be a seasoned vet in the industry, but I am very familiar with evidence-based guidelines, both ODG and ACOEM.

          4. John you confuse confrontational with blunt.

            I always disclose who my clients are. Given this discussion, if I was working with any of the parties I would have done so.

            It would have been helpful to know of your business relationship with WLDI/ODG at the outset.

  4. There has been an effort to impose a formulary on our system for several years. SB 256 in 2015 attempted to do so. Opiates were never mentioned as a reason we needed a formulary. Various stakeholders have worked behind the scenes for years to try to get OWC on board with a formulary and it never had a thing to do with opiates. What it has to do with then and today is saving lots of money. It is a shame that the opiate problem is being used as a pretext for what is simply a push to save big bucks. The governor ‘s task force rejected a formulary in comp. Several bills that will reach the governor ‘s desk deal directly with the opiate problem. The most direct is HB 192 authored by Reps Moreno and Talbot. It is telling that Rep. Moreno , who is at the forefront in addressing the opiate problem , voted against HB 592. Let’s try a little honesty for a change , formulary proponents!

    1. Trey – We only traffic in honesty here.

      I’d be interested in any validation you have of your statement re a formulary, to wit: “What it has to do with then and today is saving lots of money. It is a shame that the opiate problem is being used as a pretext for what is simply a push to save big bucks.”

      The people I know and trust do NOT talk about cost savings as the reason for formularies, it is about ensuring quick access to the right drugs and preventing inappropriate medication. Yes, formularies do save money, and that’s fine – if access to the right meds isn’t affected.

      1. The formulary push only purported to be about opiate abuse very recently. As I said earlier , SB 256 in 2015 was never sold as having anything to do with opiate abuse . I have seen emails going back over five years ago in which a particular pharmacy provider was trying to get the director at that time on board with the formulary concept and there was no discussion of opiates. The ODG formulary in Texas has been a huge cost saver. The proponents of the current bill speak as if their only motivation is to prevent opiate abuse among injured workers and it is simply not true. I believe that a secondary motivation of the current bill is to integrate the formulary with the medical treatment guidelines as a precursor to bringing the discredited ODG to Louisiana as the primary standard for the guidelines as well. Can you point to anyone using the opiate crisis as a pitch to sell the formulary before the past year or so? I believe it is a pretext.

        1. Trey – If you will allow a little legal humor, don’t ask a question you don’t already know the answer to.

          In fact, there have been dozens if not scores of articles, presentations, speeches, and blog posts recommending formularies and noting the opioid crisis as a key driver over the last decade.

          I’ve said as much on this blog many times. As has John Hanna of BWC, Gary Franklin MD of L&I, myself in a talk in LA several years ago, TX regulators many many times. I’d suggest google can provide more.

  5. Joe, I just emailed you a screenshot of the 54 times ACOEM says “Yes”, under “Evidence Support.” I’d post it here but this only allows text (not screenshot).

  6. I’m pretty tired of being told that those of us who represent injured workers oppose the formulary because we are trying to lengthen our clients ‘ disabilities. Believe it or not we care about our clients as much or more than carriers do. And we have seen the frustration and delay in treatment caused by the advent of the medical treatment guidelines. Many of us help our clients traverse the guidelines minefield and are not compensated for doing so. The formulary will compound our clients’ problems in getting treated. To paraphrase a prior statement , one need only look at who reaps huge cost savings from formularies to understand who promotes them. Most attorneys I know who represent injured workers care very much about our clients and we’re pretty tired of being told that we don’t .

    1. Trey – that’s understandable, although no one mentioned it here so it’s a non sequitur. I am tired of being told that my clients – which include a number of PBMs – that actually lose money because drug utilization typically declines under formularies , but still support formularies – are somehow profiting from this.

      And i resent your implication that I, as a strong advocate for formularies, somehow profits from them. That is categorically bullshit.

  7. Trey is 100% correct. Since passage of the medical treatment guidelines in Louisiana, the biggest problem we have in the rural portions of the state is getting injured workers to a competent doctor before they are hogtied, steered and lied to by nurse case managers to disreputable and biased physical medicine clinics and other hacks. In the depopulated rural areas, we are up close and personal with our clients and live through the misery of a WC system with them, case after case. If carriers would simply get injured workers to real doctors and other health care providers promptly, my practice would dry up. Instead, our lobby fills up daily with new cases of abuse that precede any substance abuse. The formulary is only about money and control. It is not about helping human beings.

    1. Mr Benoist – Welcome to MCM.

      I don’t doubt many employers don’t do the right thing by their workers. That is reprehensible.

      I also know thousands of patients who get opioids should not, and many tragedies have resulted from over prescribing. Clearly reform is required.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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