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Texas to move forward with compound preauthorization requirement

Optum Workers' Comp
| Oct 12, 2017

Recent indication from Texas is the state’s Division of Workers’ Compensation will be moving forward with a formal rule proposal by the end of the year to require preauthorization for all compounds. As previously noted, the Division originally released an informal draft rule in June of this year proposing an amendment to the existing closed formulary definition to exclude any compound. Excluded medications can only be prescribed and dispensed following a formal preauthorization process.

This proposed solution aims to fix a notable loophole coming to light after implementation of the then novel Texas closed formulary (the first such formulary of its kind in a non-monopolistic state). Currently, only compounds containing an “N” ingredient, as identified in the Official Disability Guidelines (ODG) Appendix A, are excluded from the closed formulary and require preauthorization. This, as demonstrated previously in private payer and pharmacy benefit manager (PBM) data and more recently in Division accumulated data, has led to an increase in the use of “Y”-ingredient-only compounds and associated costs. This proposed change follows several years of effort by our government affairs team and other Texas stakeholders to persuade the Division to require preauthorization for all compounds.

We are appreciative of the Division for all of their recent efforts in this area and look forward to participating in the coming rule-making process, including again submitting comments in support of requiring preauthorization for compounds. We encourage interested stakeholders to do likewise.

More information will come later this year once the Division initiates the formal rule-making process. Should you have questions about this topic, please contact Kevin Tribout at 1-813-627-2445 or our Government Affairs team at