The current wave of legislative activity in the workers’ compensation world is the introduction of legislation creating formularies. As a practical matter, this means that a doctor will be required to prescribe a medicine on the formulary as opposed to a medicine that he or she prefers. And these formularies are often connected to “treatment guidelines” which instruct the treating doctor in the medical protocol to be followed with respect to a particular injury. Hence, the combination of treatment guidelines/medicine formularies means the clinical decisions are being effectively dictated by insurance protocols.

The primary question is whether a doctor should decide on the treatments and medicines necessary for his or her patients or have to abide by protocols dictated by insurers and employers who have no responsibility for the proper care of the injured patient.

According to the most recent review, nine (9) states have enacted formulary provisions in their workers’ compensation law (California, New York, Arkansas, Texas, Ohio, Tennessee, Washington, Oklahoma, and Arizona). J. Todd Foster, 2017 In Review,, Dec. 27, 2017. Various other sources claim that that 7 other states have formularies (North Dakota, New Mexico, Nevada, Wyoming, Delaware, Montana, and Utah) but these states are not mentioned in Foster’s summary.

In some states, a for profit company known as ODG has been selected to provide the formulary and the related “treatment guidelines.” ODG is a wholly-owned subsidiary of the Hearst Corporation. ODG’s leading state is Texas and its best selling point because of the cost savings it claims to have effected. ODG sells “subscriptions” to participants, including doctors who treat workers’ compensation patients, and the “subscriptions” allow the doctor to know the treatment that he or she is to follow and the medicines which are allowed.

ODG’s main business rival is ACOEM/Reed (Reed), a subsidiary of Guardian Life Insurance Company. Reed was just awarded the contract in New York.

Three states (Washington, Ohio and Arkansas) have developed their own formularies and the treatment guidelines for one of those (Washington) is recognized by the National Guideline Clearing House (see below). Arkansas recently rejected “national” models in favor of a state specific model.

The opioid crisis is now being used by the “formulary industry” as a reason to enact “formularies” in the various states. However, very few of the” formulary” medicines are opioids. The ODG formulary allows for certain opioids to be “yes” medicines but does not allow longer acting opioids, contrary to the advice of the Centers for Disease Control as outlined by Dr. Mark Loev below. Of course, commentators in the “formulary industry” argue that opioids should never be a “yes” medicine ( ) and ignore the fact that opioids, properly used, are necessary medicine for many chronic pain patients.

There is nothing inherently wrong with medical treatment guidelines so long as they remain “guidelines” rather than inflexible rules. A doctor will usually follow accepted treatment guidelines but knows when a particular guideline is not appropriate from a clinical point of view or for the patient in front of the doctor. Unfortunately, insurance adjusters do not have clinical expertise nor are they treating a particular individual. Hence, in the insurance world, “guidelines” become inflexible rules and that is the problem which doctors and their patients face.


NGC: The Gold Standard


The National Guideline Clearinghouse (NGC) is the creation of the United States Department of Health and Human Services under its Agency for Healthcare Research and Quality (AHRQ). The NGC is the “gold standard” for treatment guidelines and it recognizes any number of medical specialties in the treatment of multiple conditions.

ODG will not file its treatment guidelines with the NGC and maintains that it is not appropriate for a “subscription service” such as that provided by ODG. Interestingly, the Reed Group has filed two of its guidelines with the National Clearinghouse and uses that to distinguish itself from ODG. Reed was just awarded the New York contract because the New York law requires treatment guidelines to be validated by the NGC. At this point only two Reed guidelines are approved, but Reed has artfully shut ODG out of the New York contract. “Formulary Criteria Tailor Made for One Commercial Vendor Over the Other” (J. Todd Foster,, June 13, 2017).  Unfortunately, as of July 1, 2018, funding for the “gold standard” was deleted from the federal budget.  Hence, tying the enactment of formularies to federal approval is no longer appropriate.


Why Formularies?


The question is why are formularies and related treatment guidelines necessary at all? Medicine is constantly evolving so a proper treatment today may not be thought appropriate in 5 years. This is one reason that doctors must complete CME credits every year in order to maintain licensure and regularly read their specialty journals. Are all doctors up to date? Probably not; but are the “evidence based” guidelines and formularies always up to date and, more importantly, are they “good” medicine?

The Reed subscription contract is 10 pages long but only one portion (Section 10) is capitalized and reads in part: “REED GROUP DOES NOT DIRECTLY OR INDIRECTLY PRACTICE MEDICINE OR DISPENSE MEDICAL SERVICES…”  However, it is clear to any neutral observer that treatment guidelines/medicine selection are the core aspects in the “practice of medicine.”

These workers’ compensation treatment guidelines/medicine formularies are a “rerun” of the dispute between HMOs and treating doctors in the 1990s. At that time, HMO Medical Directors were overseeing the treatment of clinicians and deciding whether to allow or reimburse. There, too, HMOs maintained their Medical Directors were not “practicing medicine” although it was abundantly clear that non-treating “Medical Directors” who were directing treating doctors were, in fact, “practicing medicine.”

ODG and Reed and other proprietary companies are the classic “middlemen” seen often in the health system. In the health insurance world, the drug “middlemen” are Pharmacy Benefit Managers (PBMs) which promise to save money on drug costs but it appears that the “savings” may be imagined and not real and the source of robust profits for the PBMs. “How ‘Price Cutting’ Middlemen Are Making Crucial Drugs Vastly More Expensive” (Michael Hiltzik, Los Angeles Times June 11, 2017).

While ODG, Reed and others mouth the phrase “evidence based,” their bottom line selling point is that they save their clients’ money.

ODG touts its cost-cutting effectiveness in Texas as a reason for other states to adopt its formulary/treatment guidelines program. And, indeed Texas has low workers’ compensation premiums. According to the most recent Oregon report (2016, see Archive section of this website), Texas ranks number 40 out of 51 states and the District of Columbia in cost-effectiveness. However, Maryland – which has no formulary, no treatment guidelines and no pharmaceutical schedule – ranks as the state just above Texas. Texas and Maryland were also side by side in 2014. 

Formularies should not be touted as the reason for modest insurance premiums any more than the No Formulary / No Treatment Guidelines / No Fee Schedule model in Maryland necessarily explains its modest premiums.

There is a question about whether ODG is as “evidenced based” as it claims. The ODG guidelines were subject to review by RAND in 2017. While ODG touts its guidelines as “evidence-based,” RAND was not very complementary. In Technical Quality, Rand gave ODG a 58% rating out of a possible 100%. In Clinical Acceptance, RAND gave ODG a “fair/good” rating. The principal criticism was that the ODG guidelines were, in many cases, not “evidence-based” at all and not supported by peer-reviewed literature. See

The fundamental question is whether treatment guidelines and medicine selections should be made by insurance companies or their proxies as opposed to treating doctors who actually see and examine the patient. Formularies are a method to “save” money. There is no evidence that such treatment guidelines/medicine formularies are “better”” medicine or “better” for the patient. Indeed, fair-minded people can easily discern that “formularies” are cost mechanisms and not better care mechanisms.


Does It Matter?


The question is whether formularies end up in conflict with proper patient care. The answer appears to be “yes” when practicing and well respected clinicians are asked.

PRI engaged Marc Loev, M.D. to review the ODG Texas formulary. Dr. Loev is board-certified in Anesthesiology and Pain Management, having trained at the University of Pennsylvania. He has been practicing pain management for 19 years and was founder and CEO of National Spine and Pain Centers, an affiliated group of over 120 pain clinicians. Some of his comments on the ODG formulary:

  1. Opioids: It is concerning that there is a limited list of approved medications and ODG has chosen only short acting opioids which are fine for acute pain and rescue dosing of chronic pain. However, per the Centers For Disease Control 2016 Opioid Dosing Guidelines, the appropriate use of both short and long acting opioids “is critical in reversing the cycle of opioid pain medication misuse that contribute to the opioid overdose epidemic.” In addition, and of great importance, is that none of the ODG approved meds have any of the abuse deterrent characteristics that exist in some of the medications that they have disapproved.
  2. Topical Analgesics: Capsaicin, Voltaren Gel, and Topical Lidoderm are not approved but Ben Gay is approved ‒ yet has limited analgesic properties. The use of topical options is one of the first line non-systemic treatments for many topical and muscular conditions. These medicines allow the avoidance of NASIDs, muscle relaxants and opioids, all of which have significant side effects and should be avoided if possible.
  3. Injectable Nerve and Muscular Pain: Botulinum Toxin is a unique and long lasting pain medication which should be available when systemic muscle relaxants are ineffective. Eliminating this line of medications may result in chronic use of pain medication by patients.
  4. Anti-Constipation (Movantic): This is a new, unique and very effective medication used to work reverse opioid induced constipation, a very common side effect. Bulk laxatives frequently do not work and can compound the problem. An alternative such as Movantic needs to be available.

Dr. Loev’s analysis was echoed by Dr. Jennifer Christian in her article of November 28, 2017 entitled “Avoid ‘One-Size-Fits-All’ Thinking In Evidence Based Medicine”, Dr. Christian described the “remarkable blind spot” in evidence -based medicine.

Dr. Christian’s comments were picked up by workcompcentral on December 8, 2017 in an article entitled “The Debate Over Evidence Based Guidelines Heats Up”

Legislators should be very concerned about leaving patient care in the hands of out-of-state proprietary companies and not in the hands of locally licensed and treating doctors.