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, a closed 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).
Appendix A | Pharmacy rules | Reminder on direction of care prohibitions for pharmacy services | Related links
Appendix A
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 updates the Appendix A listing monthly upon receipt from ODG, just as the online edition of the ODG is updated as new evidence becomes available and is the official source for DWC actions.
As of September 1, 2013, the pharmacy closed formulary applies to all claims regardless of date of injury. The 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 an “N status, and any investigational or experimental drug as defined in Texas Labor Code §413.014(a).
The definition of the closed formulary was amended in April of 2018 to exclude from the closed formulary any prescription drug created through compounding. Consequently, all new prescriptions for drugs created through compounding after July 1, 2018 will require preauthorization.
Pharmacy rules:
- §134.500, Definitions, includes key definitions pertaining to all pharmaceutical benefit rules. Amended April 2018.
- §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. Amended April 2018.
- §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. Amended April 2018.
- §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.
Reminder on direction of care prohibitions for pharmacy services
Texas workers' compensation system participants are reminded that insurance carriers, including their agents, are prohibited from requiring that injured employees receive pharmacy services from certain pharmacies. Injured employees may fill prescriptions at the pharmacy of their choice as long as the pharmacy accepts workers' compensation. The Texas Labor Code specifically addresses this as follows:
§408.028. Pharmaceutical Services.
(c) Except as otherwise provided by this subtitle, an insurance carrier may not require an employee to use pharmaceutical services designated by the carrier.
§408.0281 . Reimbursement for Pharmaceutical Services; Administrative Violation.
(b) Notwithstanding any provision of Chapter 1305, Insurance Code, or §504.053 of this code, prescription medication or services, as defined by §401.011(19)(E):
Related links
- Pharmacy Formulary Rules Presentation (PDF)
- Informal/Voluntary Networks
- Preauthorization
- Pharmacy-Related Studies - Workers' Compensation Research and Evaluation Group
If you have questions, contact Comp Connection for Health Care Providers at 800-252-7031, option 3.