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You are here: Home . bulletins . 2011 . cc26

COMMISSIONER'S BULLETIN # B-0027-11

June 21, 2011


To: Workers' Compensation System Participants


Re: Passage of House Bill 528, Pharmacy Reimbursement for Pharmaceutical Services, and Pharmacy Informal and Voluntary Network Registration

The Texas Department of Insurance, Division of Workers' Compensation (TDI-DWC) reminds all workers' compensation system participants that House Bill 528, 82nd Legislature, Regular Session, 2011 (HB 528), effective June 17, 2011, imposes the following requirements on reimbursement for pharmaceutical services for network and non-network claims in the Texas workers' compensation system:

Reimbursement for Pharmaceutical Services

• Pursuant to Texas Labor Code §408.0281(b), insurance carriers must reimburse health care providers in accordance with the TDI-DWC's pharmacy fee guideline under 28 Texas Administrative Code (TAC) §134.503 or at a contracted rate. On June 29, 2011, however, the amendments to 28 TAC §134.503 adopted by the TDI-DWC on an emergency basis in December 2010 will expire. After this expiration, insurance carriers must reimburse health care providers for pharmaceutical services in accordance with the TDI-DWC's original Reimbursement Methodology under 28 TAC §134.503 until the TDI-DWC adopts a new pharmacy fee guideline rule.

• Insurance carriers may also reimburse health care providers for pharmaceutical services at rates inconsistent with the TDI-DWC's pharmacy fee guideline, meaning at rates greater than or less than those fee guidelines, if the insurance carrier has a contract with that health care provider that includes a specific fee schedule.

• Insurance carriers or their authorized agents may use a pharmacy informal or voluntary network, as defined in Texas Labor Code §408.0281(a), to obtain these contractual agreements with health care providers. If an insurance carrier chooses to use a pharmacy informal or voluntary network, there must be: (1) a contractual arrangement between the insurance carrier or its agent and the pharmacy informal or voluntary network authorizing the network to contract with health care providers for pharmaceuticals on the insurance carrier's behalf; and (2) a contract between the network and the health care providers that includes a specific fee schedule and complies with the health care provider notice requirements of Texas Labor Code §408.0281(d)-(e).

• An insurance carrier, its authorized agent or the pharmacy informal or voluntary network, as appropriate, must notify each health care provider, at least quarterly of any person, other than the injured employee, to which the network's contractual fee arrangements with the health care providers are sold, leased, transferred or conveyed. The notice must contain certain information listed in Texas Labor Code §408.0281(d)-(e) and the delivery of the notice must be documented. For contractual agreements with health care providers that are in effect on June 17, 2011, the initial notice must be sent not later than July 17, 2011 and subsequent notices sent on a quarterly basis. For contractual agreements with health care providers that are entered into after June 17, 2011 the initial notice must be sent not later than the 30th day after the effective date of the contract and subsequent notices sent on a quarterly basis.

• Failure to comply with the provisions of Texas Labor Code §408.0281, including health care provider notice requirements, is an administrative violation. Insurance carriers are responsible for any sanction imposed for these violations, regardless of whether the insurance carrier or its authorized agent committed the act or acts of noncompliance.


Pharmacy Informal and Voluntary Network Registration

• Pursuant to Texas Labor Code §408.0282(a), each informal or voluntary network that has contracts in effect on June 17, 2011 must report the information listed in Texas Labor Code §408.0282(a)(1)-(5) to the TDI-DWC by July 17, 2011. The TDI-DWC emphasizes that pharmacy informal or voluntary networks that previously registered with the TDI-DWC pursuant to Texas Labor Code §413.0115(c) must register again under Texas Labor Code §408.0282 in order to be in compliance. Furthermore, all pharmacy informal or voluntary networks established after June 17, 2011 must register with the TDI-DWC not later than thirty days after the network is established. All pharmacy informal or voluntary networks must report any changes in information previously reported to the TDI-DWC within thirty days of the change.

• Pharmacy informal and voluntary networks must report the information required by Texas Labor Code §408.0282 to the TDI-DWC through its online reporting system that can be found through the TDI website at https://wwwapps.tdi.state.tx.us/inter/perlroot/sasweb9/cgi-bin/broker.exe?_service=wcExt&_program=progext.pharm_networkreg.sas. For further information on this registration process, system participants should refer to the TDI-DWC's Frequently Asked Questions on this topic found on the TDI website at http://www.tdi.state.tx.us/wc/pharmacy/index.html#faqs.

• Failure for a pharmacy informal or voluntary network to comply with these registration requirements will result in an administrative violation.


Delivery of Prescription Medications or Services by a Political Subdivision or Certified Workers' Compensation Health Care Network

• The TDI-DWC reminds system participants that prescription medications or services may not be delivered by a certified workers' compensation health care network under Texas Insurance Code Chapter 1305 or by a political subdivision that directly contracts with health care providers pursuant to Texas Labor Code §504.053(b)(2).


The TDI-DWC emphasizes that these listed requirements do not address all the provisions of HB 528, and system participants should refer to the bill itself for full information on its requirements. For information regarding the reimbursement requirements for other health care services rendered on or after January 1, 2011, system participants should refer to Commissioner's Bulletin B-0006-11 and Subchapters A-D in Chapter 134 of the Texas Administrative Code.

If there are any questions regarding the information in this bulletin, contact Martha Luevano at (512) 804-4858 or Martha.Luevano@tdi.state.tx.us.

Rod Bordelon
Commissioner of Workers' Compensation
Texas Department of Insurance



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Last updated: 09/07/2014

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