The coming Texas compound preauthorization requirement: Attention to grandfathered prescriptions

Optum for Workers' Compensation
| Jun 12, 2018

As previously communicated, the Texas Division of Workers’ Compensation adopted changes to its Closed Formulary to require preauthorization for all compounded medications, regardless of ingredient makeup. The new preauthorization requirement takes effect for prescriptions written and dispensed on or after July 1, 2018. This is a change from the current formulary that only requires preauthorization for compounded medications containing a medication ingredient identified with an ODG status of “N.” Please note, prescriptions for compounded medications with no “N” ingredients written before July 1, 2018 will not be impacted by this rule change.

In compliance with the rules, Optum Workers’ Compensation and Auto No-Fault Solutions will be implementing the new preauthorization requirement within our processes effective July 1. Given the fast approaching effective date, it is possible some pharmacy providers may attempt to take additional advantage of their ability to dispense compounded medications not yet subject to preauthorization until July 1. Factored into this should also be the additional grandfathering of compounded medications that do not include an “N” ingredient dispensed on or after July 1 but pursuant to a prescription written prior to that date, as they will not require preauthorization until their refills have been exhausted.

With this in mind, we encourage our clients to pay additional attention to compounded medications prescribed and dispensed to their injured workers in Texas for the next few months. Eventually all compounded medications will fall under the preauthorization requirement, but there will be a period of months where caution should be taken to ensure compliant processing for prescriptions written prior to July 1. As always under Texas rules, retrospective utilization review is still an option to review medications that may not require preauthorization to ensure their medical necessity.

A copy of the rule changes and the Division’s explanation of them can be viewed here. Should you have any questions on the regulatory requirements or other public policy development issues, please contact our Government Affairs team at If you have any questions specific to your claims, please contact your account manager, clinical liaison or our Clinical Services team at 1-877-275-7674 ext. 8612.

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