In the Texas workers' compensation system, pharmacy benefits are based on a series of rules entitled Pharmaceutical Benefits [28 Texas Administrative Code (TAC) §134.500 through §134.550]. These rules cover commonly used definitions, initial pharmaceutical coverage, prescribing of generics and over-the-counter drugs in addition to brand name drugs, a pharmacy fee guideline, open and closed formularies, rules pertaining to the transition to a closed formulary from an open formulary, and other pharmaceutical provisions. Understanding the rules for pharmacy services and related resources are crucial to the clinically appropriate prescribing of prescriptions and successful reimbursement for both claims subject to certified workers' compensation health care networks (networks), and claims not subject to certified networks (non-network).
The Division of Workers' Compensation (DWC) has posted Appendix A, ODG Workers' Compensation Drug Formulary, from the Official Disability Guidelines - Treatment in Workers' Comp (ODG) . The DWC will update the listing monthly upon receipt from ODG. The online edition of the ODG is updated as new evidence becomes available and is the official source for DWC actions.
- Update: Change of “N” Status Drugs to Appendix A, ODG Workers’ Compensation Drug Formulary from the Official Disability Guidelines – Treatment in Workers’ Comp (ODG) 1/5/16
- Addition of Fentanyl transdermal patches and MS-Contin as “N” Status Drugs to Appendix A, ODG Workers’ Compensation Drug Formulary from the Official Disability Guidelines – Treatment in Workers’ Comp (ODG) 10/21/15
- Federal Reclassification of Hydrocodone Combination Drugs 9/23/14
- Insurance Carrier Pharmacy Closed Formulary Data Call Results on Legacy N-Drug Claims as of August 31, 2013
- Reminder on Direction of Care Prohibitions for Pharmacy Services 12/9/13
- Addition of Zohydro as an "N" Status Drug to Appendix A, ODG Workers' Compensation Drug Formulary from the Official Disability Guidelines - Treatment in Workers' Comp 12/5/13
Pharmacy Closed Formulary Diagram
As of September 1, 2013, the pharmacy closed formulary applies to all claims regardless of date of injury. Pharmacy closed formulary includes all FDA approved drugs. Preauthorization is required for drugs identified with a status of "N" in the current edition of the ODG , any compound that contains a drug identified with a status of "N", and any investigational or experimental drug as defined in Texas Labor Code §413.014(a).
Pharmacy Closed Formulary Bifurcated Timeline
Pharmacy closed formulary critical milestone dates are based on the adopted rules. Using a single track line, the first milestone is the start date of January 17, 2011, which is the effective date of the open formulary. The next milestone is September 1, 2011, and shows the rules taking two tracks. One track is the continuation of the open formulary for dates of injury prior to September 1, 2011, also termed "legacy" claims. The second track is the effective date of the closed formulary and medical interlocutory orders for dates of injury on or after September 1, 2011. The third and final milestone is September 1, 2013, which brings the closed formulary back to a single track line, showing the closed formulary to be applicable for all claims as of September 1, 2013 and beyond, regardless of dates of injury.
- §134.500, Definitions, includes key definitions pertaining to all pharmaceutical benefit rules.
- §134.501, Initial Pharmaceutical Coverage, provides for payment of pharmaceutical services sufficient for the first seven days following the date of injury.
- §134.502, Pharmaceutical Services, requires doctors to prescribe generics and over-the-counter alternatives when appropriate.
- §134. 503, Pharmacy Fee Guideline, concerns the reimbursement of pharmaceutical services for brand name and generic drugs which are based on the average wholesale price times a multiplier. Details of reimbursement methodologies for compounds and over-the-counter medications are described in this rule.
- §134.504, Pharmaceutical Expenses Incurred by the Injured Employee, provides a process for the claimant to obtain reimbursement for medications that have been purchased out-of-pocket.
- §134.506, Outpatient Open Formulary for Claims with Dates of Injury Prior to September 1, 2011, addresses the formulary that applies to "legacy claims."
- §134.510, Transition to the Use of the Closed Formulary for Claims with Dates of Injury Prior to September 1, 2011, addresses transition to the closed formulary for "legacy claims."
- §134.520, Outpatient Closed Formulary for Dates of Injury On or After September 1, 2011, applies the closed formulary to dates of injury September 1, 2011, and forward.
- §134.530, Requirements for Use of the Closed Formulary for Claims Not Subject to Certified Networks, describes the requirements for use of the closed formulary for non-network claims.
- §134.540, Requirements for Use of the Closed Formulary for Claims Subject to Certified Networks, describes the requirements for use of the closed formulary for certified network claims.
- §134.550, Medical Interlocutory Order, or MIO, provides a means for an injured employee to continue use of the previously prescribed and dispensed drug(s) throughout the duration of the appeals/dispute process after a preauthorization denial. A pharmacy or prescribing doctor can submit a request for an MIO using DWC Form-064, Medical Interlocutory Order Request.
- Check the DWC Public Outreach/Events and Training Calendar for a seminar in your area
- Pharmacy Formulary Rules Presentation (PDF)
The 79 th Texas Legislature passed House Bill 7, which amended Texas Labor Code §408.028 concerning Pharmaceutical Services. The pertinent provisions stated: "The commissioner by rule shall adopt a closed formulary under Section 413.011. Rules adopted by the commissioner shall allow an appeals process for claims in which a treating doctor determines and documents that a drug not included in the formulary is necessary to treat an injured employee's compensable injury."
March 2008 - August 2010
- Research and rule development
- System participant meetings
- August 25, 2008, March 5, 2009, and August 20, 2009
- Informal working drafts of the rules published on the agency's website
- December 16, 2008, June 12, 2009, and February 4, 2010
- Rule proposal and public hearing
- July 16, 2010, and August 16, 2010
Rule adoption - http://www.tdi.texas.gov/wc/rules/adopted/documents/aorx1210.pdf
Closed formulary applicable to new claims
The DWC prepared sample notification letters for insurance carriers to consider when fulfilling the notification requirement of 28 TAC §134.510. This insurance carrier notification activity applied to the claims with dates of injury prior to September 1, 2011, referred to as legacy claims.
- Notification Letter to the Prescribing Doctor
- Overview of the Pharmacy Closed Formulary
- Letter informing the Injured Employee English | Spanish
- Letter Informing the Pharmacy (if known)
Closed formulary applicable to all claims
The DWC prepared sample notification letters that insurance carriers may use for notifications. This insurance carrier notification activity applied to claims where injured employees were prescribed Fentanyl Transdermal Patches and/or MS-Contin.
- Notification Letter to the Prescribing Doctor (Word)
- Letter informing the Injured Employee English | Spanish (Word)
- Letter Informing the Pharmacy (if known) (Word)
If you have questions, contact Comp Connection for Health Care Providers at 800-252-7031, option 3.
For more information contact:
Last updated: 05/16/2016