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Formulary management: a strategic safeguard for ensuring timely, effective care for injured workers

May 1, 2025

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Why formularies matter to injured workers

When an injured worker is prescribed medication to assist in their recovery, the expectation is simple: they should receive the correct treatment in a timely manner, without undue delays or hurdles. Workers’ compensation pharmacy benefits and formulary plan designs exist to support injured workers and ensure dependable access to safe, effective, and appropriate pharmaceutical care to support healing and recovery. By guiding the appropriate treatments for approved injuries and conditions, formularies are critical to effectively managing the return-to-work process for injured workers.

Throughout the workers’ compensation industry, there is a growing conversation about reducing the volume of requests for approval. Managed care vendors and healthcare providers send authorization requests to claims professionals for a variety of reasons: to adhere to state-based regulatory guidelines, to validate claims information prior to providing services, and to remain compliant with other requirements such as evidence-based care guidelines. There is an increasing demand to streamline the approval process and minimize administrative burdens.

But while eliminating unnecessary approval requests is a positive step toward improving the injured worker’s access to care and their overall healthcare experience, the conversation must remain balanced. We need to focus not only on volume reduction, but on ensuring that every existing request serves a clinical or therapeutic purpose.

When optimized properly, authorization decisions from the claims professional are more than just an administrative step in a time-sensitive process — they serve as a strategic safeguard to help protect injured workers from potentially inappropriate treatments that do not promote positive health outcomes and may result in excessive claim costs.

Authorization requests: a safety net, not a barrier

For an injured worker, access to the right medication(s) at the right time can be the difference between a smooth recovery and a potential slowdown. The primary purpose of authorization requests, sometimes referred to as prior authorizations, is to ensure that prescribed medications align with current clinical guidelines, medical evidence, state-based rules or formularies, and current best practices.

Another vital function of a well-structured authorization request process is to help confirm compensability — essentially making sure that all medications filled under a patient’s workers’ compensation claim are related to their employment-related injury. An issue seen in workers’ compensation occurs when non-compensable medications are inadvertently submitted under a workers’ compensation claim and then paid for or reimbursed.

Dispensing pharmacies operate with the best intentions in a fast-paced environment; however, the complexity of submitting workers’ compensation pharmacy claims can result in unintended billing errors. When an injured worker arrives at the pharmacy to fill their prescriptions, the dispensing pharmacy may not have the information needed to correctly identify which medications are related to the employment-related injury. The strategic use of authorization rejection in pharmacy adjudication helps provide an additional layer of oversight — ensuring that the injured worker receives all of their employment-related medications, while also maintaining the integrity of the claim.

Smarter, not just fewer, authorization requests

The pharmacy adjudication system operates much like a home security system. If every slight motion sets off an alarm, the system becomes ineffective, overwhelming those responsible for monitoring true threats. But if the system is removed entirely, it leaves individuals vulnerable to unfiltered risks. For a well-calibrated system, an equilibrium must be identified, reached, and maintained.

Instead of viewing authorization requests merely as an obstacle to obtaining medications, the following should be the goals of an optimized authorization process:

  • Reducing the frequency experienced by injured workers, while still providing proper oversight
  • Guiding injured workers toward safe, cost-effective, and clinically appropriate treatments
  • Improving dispensing integrity so that requests are evidence-based and serve a clear clinical or claim-related purpose
  • Ensuring essential medications are approved quickly, without unnecessary delays, so that injured workers stay on track for recovery
  • Making sure that critical safeguards remain in place so that medications requiring clinical review receive proper attention

The future in workers’ comp

Workers’ compensation pharmacy management shouldn’t be measured by how many authorization requests are eliminated, but by how well the adjudication process helps injured workers receive timely, clinically appropriate treatments.

By shifting the conversation from eliminating authorization requests to refining them, using both real-time and utilization data and analytics, our industry is presented with a real opportunity to help maintain the integrity of workers’ compensation claims and benefit programs with the injured worker at the center of our activity.

Optum Workers’ Compensation recognizes that individualized formulary designs and authorization requirements are not cumbersome steps, they are essential tools for making sure that injured workers receive the safest and most-effective care possible.

Learn more

Are you interested in hearing more about how Optum Workers’ Comp and Auto No-Fault uses client-customized formularies to drive appropriate, cost-effective treatment and help injured workers recover? Contact us at expectmore@optum.com.

Article disclaimer-WorkCompWire

Also published through our media partnership with WorkCompWire, an online news service offering valuable information regarding workers’ compensation and related issues.