Pharmacy

In the Texas workers’ compensation system, pharmacy benefits are based on a series of rules that are 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, including the requirements for pharmacy informal and voluntary network online registration, are crucial to the clinically appropriate prescribing of prescriptions and successful reimbursement for both claims subject to certified networks, and claims not subject to certified networks.

Pharmacy Formulary Rules | Legacy Claim Sample Notification Letters | Pharmacy Fee Guideline - §134.503 | Additional Rules - Pharmaceutical Benefits | Pharmacy Informal and Voluntary Network Online Reporting

Recent Items

Pharmacy Formulary Rules

Memo: Texas Workers’ Compensation System Adopts Pharmacy Closed Formulary (PDF) 8/1/11

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.”

Pharmacy Formulary Rules:

“N” Drugs in Official Disability Guidelines – Treatment in Workers’ Comp (ODG) / Appendix A, ODG Workers’ Compensation Drug Formulary

The Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) has posted a listing of status “N” drugs published in Official Disability Guidelines – Treatment in Workers’ Comp (ODG) / Appendix A, ODG Workers’ Compensation Drug Formulary. The TDI-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 TDI-DWC actions.

Pharmacy Closed Formulary 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 1/17/11, which is the effective date of the open formulary. The next milestone is 9/1/11, and shows the rules taking two tracks. One track is the continuation of the open formulary for dates of injury prior to 9/1/11, 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 9/1/11. The third and final milestone is 9/1/13, which brings the closed formulary back to a single track line, showing the closed formulary to be applicable for all claims as of 9/1/13 and beyond, regardless of dates of injury.

Medical Interlocutory Order (MIO) - §134.550

The 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.

Training Tools

Check the Events and Training calendar for a seminar in your area
Pharmacy Formulary Rules Presentation (PDF)

Legacy Claim Sample Notification Letters

TDI-DWC has prepared sample notification letters for insurance carriers to consider when fulfilling the notification requirement of 28 TAC §134.510. This insurance carrier notification activity applies to the claims with dates of injury prior to September 1, 2011, referred to as legacy claims.

Memo 7/24/12
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)

Pharmacy Fee Guideline - §134.503

Guidelines concerning the reimbursement of pharmaceutical services are found in 28 TAC §134.503. Reimbursement for brand name and generic drugs 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.

Additional Rules - Pharmaceutical Benefits

§134.501 - Initial Pharmaceutical Coverage

Implements Texas Labor Code §413.0141, Initial Pharmaceutical Coverage, which gives authority to the Commissioner of Workers’ Compensation to adopt rules to provide 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. Texas Labor Code §408.028, Pharmaceutical Services, provides that the Commissioner of Workers’ Compensation must require the use of generic medications and clinically appropriate over-the-counter alternatives to prescription drugs.

§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.

If you have questions, contact Comp Connection for Health Care Providers at 800-372-7713, option 3.

Pharmacy Informal and Voluntary Network Online Reporting

General

Texas Labor Code §408.0282(a) requires all pharmacy “informal” or “voluntary” networks (informal networks) to report to the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) the following information:

the name of the pharmacy informal network and FEIN;
an executive contact for official correspondence;
a toll-free telephone number;
a list of each insurance carrier with whom the pharmacy informal network contracts (name and FEIN); and
a list of each entity associated with the pharmacy informal network working on behalf of the insurance carrier, including contact information.

FAQs

What is a pharmacy informal network?

Texas Labor Code §408.0281(a) defines a pharmacy informal network as a network established under a contract between an insurance carrier or an insurance carrier’s authorized agent and health care provider for the provision of pharmaceutical services, that includes a specific fee schedule.

What is a pharmacy voluntary network?

Texas Labor Code §408.0281(a) defines a pharmacy voluntary network as a voluntary workers’ compensation health care delivery network established under former Texas Labor Code §408.0223, as that section existed before repeal by Chapter 265 (House Bill 7, 79th Legislature, Regular Session, 2005) by an insurance carrier for the provision of pharmaceutical services.

How do I know if my company is a pharmacy informal or voluntary network?
You need to review your company’s business operations and determine if you meet the definitions contained in the Texas Labor Code. If your company does not meet these definitions, you are not a pharmacy informal network and these reporting requirements do not apply.

When are reports to the TDI-DWC required?

Texas Labor Code §408.0282(b) requires that pharmacy informal networks that have a contract with an insurance carrier or the insurance carrier’s authorized agent and a health care provider in effect on June 17, 2011 must register no later than 30 days from that date. Pharmacy informal networks established after June 17, 2011 must register with the TDI-DWC within 30 days from the date the network is established using this tool. Changes to these reports are required to be reported not later than the 30th day after the effective date of the change.

Where do I get additional information about reporting and notification requirements?

For notification requirements, pharmacy informal networks should review the requirements of Texas Labor Code §408.0281(d). For reporting requirements, pharmacy informal networks should review the requirements of Texas Labor Code §408.0282.

Who do I contact with questions?

If you have any questions regarding this reporting tool, e-mail the TDI-DWC’s EDI Help Desk at TXComp.Help@tdi.texas.gov.

Online Reporting

Texas Labor Code §408.0282 requires pharmacy informal networks to use the TDI-DWC online reporting tool. Pharmacy Informal Networks can create an informal network profile and maintain a list of insurance carriers or other entities required to be reported. Once an informal network profile is established with the executive contact and profile contact information, the network will be able to access the following features:

real-time display and updates to the TDI-DWC database for the network;
a dynamic directory of all insurance carrier entities (sorted by either insurance carrier FEIN or name);
automated prompts for the information related to other entities (indirect contracts with insurance carriers);
password assistance; and
other user administration functions.

Access the online reporting tool on the TDI website.

To verify the data you have entered, see the Pharmacy Informal and Voluntary Network Data Report on the TDI website.

For more information contact:

Last updated: 03/27/2013

Texas Department of Insurance

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