Texas Division of Workers’ Compensation Moves to Close Compound Drug Loophole

Optum Workers' Comp
| Jan 18, 2018

After gathering and analyzing data on the utilization and cost components of compounded medications in Texas under their Closed Formulary, the Texas Division of Workers’ Compensation (TDWC) is poised to make a positive rule change for Texas stakeholders. 

TDWC recently published formal proposed rule changes to amend existing segments of the closed formulary rule to now require preauthorization for all compounded medications.  Relying on their data, the Division indicated that while total payments for workers’ compensation prescriptions declined 38 percent from 2010 to 2015, payments for compounded medications increased by 98 percent.  TDWC also indicated that prior to implementation of the closed formulary, compounded medications represented 4 percent of all Texas workers’ comp. pharmacy reimbursements compared to 2015 when compounded medications represented 12 percent of all WC pharmacy reimbursements.

The proposed rule changes amend the Texas Administrative Code to define a compound as an excluded medication from the closed formulary requiring preauthorization though prospective utilization review.  Further, the proposed amendments will require preauthorization for any prescription medication created through compounding and is prescribed and dispensed on or after July 1, 2018.

Optum Workers’ Compensation and Auto No-Fault has been happy to work with TDWC in a supportive roll on development of the proposed rule. We strongly support this proposed change.  TDWC will be accepting comments on the proposed amendments through February 20, 2018. The proposed amendments can be found here: http://www.tdi.texas.gov/wc/rules/proposedrules/documents/prcompnd0118.pdf

We encourage our clients to review the proposal and provide comments in support to the Division.  Should you have any questions regarding this or any other public policy development, please contact Kevin Tribout, Executive Director of Government Affairs, at kevin.tribout@optum.com.

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