RESPONSE: The Commission database does not contain pharmacy data. In order to have information upon which to base the rules, staff conducted information-gathering sessions in Houston, Dallas, Ft. Worth, San Antonio and El Paso. In addition, assistance and data concerning workers' compensation pharmacy was obtained from the Commission's Medical Advisor, The Texas Mutual Insurance Company (formerly the Texas Workers' Compensation Insurance Fund), the National Council on Compensation Insurance (NCCI), and stakeholder groups concerned with implementing HB-2600. The lack of pharmacy data in the database does not preclude adoption of a pharmacy fee guideline. With assistance and data from the above-mentioned sources and public comment, §134.500, §§134.502-504, and §134.506 have been revised to achieve standardization and uniformity with other health care delivery systems to the extent possible while meeting the requirements of the Texas Workers' Compensation Act and the needs of the workers' compensation system.

COMMENT: Commenters believed that the proposed rules violate patient privacy and require that prescribing doctors violate patient privacy by requiring the disclosure of medical information to pharmacies and to insurance carriers that they are not entitled to under the Texas Labor Code.

RESPONSE: The commission disagrees. Section 408.025 (d) of the Texas Workers Compensation Act states "A health care provider may disclose to the insurance carrier of an affected employer records relating to the diagnosis or treatment of the injured employee without the authorization of the injured employee to determine the amount of payment or the entitlement to payment." The requirements of the proposed rules are consistent with that section of the Texas Workers Compensation Act. The required information is being used to determine the amount of payment or the entitlement to payment. In addition, §562.052 of the Texas Occupations Code prohibits the release of confidential records by a pharmacist except in limited circumstances.

COMMENT: Commenter felt the preamble to the proposed rules misstates the requirement of §408.028 "to require that physicians and doctors order over-the-counter alternatives to prescription medications when clinically appropriate and applicable, in accordance with state law." This is not what Texas Labor Code §408.028 states. This section does not require that the prescribing doctor specify otherwise, i.e., favor a generic or over the counter alternative medication, or otherwise purport to interfere with his diagnosis and treatment of the patient. In other words, the new law is not authority to establish an automatic presumption against brand name drugs over generic and over the counter alternatives.

RESPONSE: The commission disagrees. Texas Labor Code §408.028 (b) states "The commission by rule shall develop an open formulary under §413.011 that requires the use of generic pharmaceutical medication and clinically appropriate over-the-counter alternatives to prescription medications unless otherwise specified by the prescribing doctor, in accordance with applicable state law."

COMMENT: Commenter believed that the proposed preamble illegally gives claims adjustors the authority for practicing medicine without a license and whoever wrote the proposed preamble is practicing medicine. Commenter felt that there are many inherent legal issues within the preamble.

RESPONSE: The commission disagrees. It is the role of the insurance carrier to retrospectively review all bills and pay for or deny payment for medical benefits in accordance with the Texas Labor Code, rules, and the appropriate Commission fee and treatment guidelines. This includes evaluating whether or not treatments or services were medically necessary based on supporting documentation submitted by the health care provider. Labor Code §413.011(f) states "The commission by rule shall establish medical policies or treatment guidelines relating to necessary treatments for injuries." Adopted new §134.500, §§134.502-134.504, and §134.506 are within the statutory authority granted to the commission to establish medical policies. In developing the new rules the Commission received input from many medical professionals including medical doctors and pharmacists. The Commission notes that a party, including a health care provider, is entitled to a review of a medical service provided or for which payment has been reduced or denied. Texas Labor Code §413.031(e) requires a review of the medical necessity of a service to be conducted by an independent review organization (IRO), and rule 28 TAC 12.201 of the Texas Department of Insurance requires that the review be conducted by physicians, dentists, or other health care providers, as appropriate.

COMMENT: Commenter suggested that before there can be any justification for challenging the prescription of a licensed, board-certified physician, the carrier must ensure that a true medical peer actually assessed all the medical records provided and compared them to the treatment guideline.

RESPONSE: The Commission disagrees. The statute and Texas Department of Insurance rules address utilization review and require that an adverse decision of a utilization review agent must be made by a physician.

COMMENT: Commenter felt that the proposed rules in general are confusing at best and in many cases seem to be arbitrary in nature. Commenter also stated that the proposed rules are an unduly burdensome addition to an already extremely burdensome system and that this becomes especially true when they are faced with a possible reduction in reimbursement.

RESPONSE: The commission disagrees. The proposed rules will increase communication among the participants in the Texas Workers' Compensation system. It is anticipated that the improved communication will reduce the instances of dispute as to pharmacy bills. The requirement for use of generic drugs and over-the-counter medications is mandated by statute.

COMMENT: Commenter believed that the rules would increase the cost to the injured worker.

RESPONSE: The commission disagrees. The proposed rules provide a method for the injured employee to recover out-of-pocket expenses for prescription medications and over-the-counter alternatives to prescription medications. The recovery of out-of-pocket expenses for these medications was not addressed previously by commission rule. The new rules should help injured employees recover out-of-pocket expenditures.

COMMENT: In general commenters felt that the commission has made too many concessions to the insurance carriers at the expense of the injured workers of Texas and the healthcare providers that treat them.

RESPONSE: The commission disagrees. The requirement for use of generic drugs and over-the-counter medications is mandated by statute. In addition, the commission met with stakeholder groups to ensure the adopted rules balance the interest of all participants in the Texas Workers' Compensation system. Many injured employees provided insight into the issues surrounding pharmaceutical delivery at information-gathering sessions that were conducted in major cities around the state. Injured employees will continue to receive quality health care under these rules, and health care providers will receive fair and reasonable payment.

COMMENT: Commenter recommended that the term "injured employee" be substituted for the term " patient" throughout the proposed pharmaceutical benefit rules.

RESPONSE: The commission agrees. The term "injured employee" is used as appropriate for consistency with the Texas Workers' Compensation Act and the rules of the Texas Workers' Compensation Commission.

COMMENT: Commenter recommended that a carrier should be able to direct the employee to a home pharmacy service if it can be shown there is a cost savings for the identical prescribed drugs or medical supplies throughout such service.

RESPONSE: The commission disagrees. Section 408.028(c) of the Texas Workers' Compensation Act states "Except as otherwise provided by this subtitle, an insurance carrier may not require an employee to use pharmaceutical services designated by the carrier."

COMMENT: Commenter recommended deleting the term "prescribing doctor" and replacing it with "prescribing practitioner." The term prescribing practitioner is descriptive of all health care providers that may legally sign a prescription for an injured employee and does not inadvertently penalize a patient for living in a rural or underserved area where a physician cannot be readily available.

RESPONSE: The commission disagrees. This rule does not prohibit a doctor from delegating prescription-signing authority to persons as permitted by law and license.

§134.500 Definitions

COMMENT: Commenter advocated the deletion of the term "device" from the definition of "compounding" and the inclusion of it as a separate definition. The reasons and/or method of "compounding" a "device" are not common knowledge leading to confusion among system participants and potential disputes. Since the Commission and staff are proposing the adoption of definitions from "Texas Occupations Code, Title III, Health Professions, Subtitle J. Pharmacy and Pharmacists, Chapter 551. General Provisions Section 551.003, Definitions" it is logical to import the corresponding definition of device.

RESPONSE: The Commission agrees in part and has removed the word "device" from the definitions in §134.500. The definition from Chapter 551 of the Pharmacy Act is too broad for the purposes of these rules, as it includes instruments, apparatuses, implements, machines, contrivances, implants, in vitro reagents, or other similar or related articles, including component parts or accessories. A definition of "device" is no longer needed because the term has been deleted from these rules.

COMMENT: Commenters suggested that a list of what should be included in the statement of medical necessity be added to clarify the essential contents of a statement of medical necessity for individual injured employees with individual injuries and diagnoses. Without a clear definition, non-descript, blanket statements and/or form letters or canned language would appear sufficient to establish medical necessity. A commenter inquired as to whether or not a similar definition would be included in durable medical equipment guidelines.

Commenter suggested the following wording:

Statement of Medical Necessity- A written and personally signed statement with supporting documentation from the prescribing doctor to establish medical necessity and relatedness to the compensable injury of a treatment or service, device, or prescription, including the medical necessity for a brand name drug, where applicable, and how the treatment, service, device, or prescription cures, relieves, promotes recovery or enhances the ability of the injured employee to return to or retain employment.

RESPONSE: The Commission agrees and has added language to clarify what information is to be included in a statement of medical necessity; however, the statement of medical necessity is not required to be personally signed, relatedness is not required to be addressed, the statement of medical necessity does not have to be a new or separate document if the required information is part of an existing document. Additionally, "or" was changed to read, " ...written statement AND supporting documentation..." to make clear the need for a clear statement addressing the medical necessity to accompany any documentation. The statement of medical necessity is not currently found in other Commission rules; however, providers may elect to use the statement of medical necessity for communication purposes.

COMMENT: Commenter suggested that implementation of the rules be delayed for as long as possible because the rules will require programming changes in computer systems, procedural changes, and possibly contractual changes. Commenter suggested that perhaps the effective dates of the rules should coincide with rules regarding the seven-day supply limits.

RESPONSE: The Commission disagrees. The legislative intent behind the delayed implementation of Texas Labor Code §413.0141, Initial Pharmaceutical Coverage, was that the business community wanted an opportunity to realize some of the costs savings anticipated from HB-2600 before they had to pick up this additional cost. Generics were a piece of the anticipated savings. The implementation dates were in effect directed by the legislation, which contains different effective dates for different portions of the bill.

COMMENT: Commenter suggested that in order to achieve standardization in payment methodologies for pharmaceuticals on or after March 1, 2002, language should be added that includes refills of medications that are initially prescribed prior to the date of implementation, but refilled thereafter.

RESPONSE: The Commission agrees. Language has been added to §134.500(b) to clarify that prescriptions initiated or refilled on or after March 1, 2002 are subject to these rules and that the Pharmaceutical Fee Guideline contained in the 1996 Medical Fee Guideline (§134.201) does not apply to prescriptions written or filled after March 1, 2002.

COMMENT: Commenter felt proposed §134.500(a)(1) is too broad and pointed out that some medications require mixing with water. Does that qualify for additional reimbursement? All medications require some assembly and all are required to be labeled and packaged. Commenter questioned whether this qualifies for additional reimbursement. Commenter recommended that the wording be changed to read " more than one drug or device that requires a pharmacist to combine said drugs or devices to fill a prescription."

RESPONSE: The Commission agrees clarification is needed and has deleted the word "device" , as explained above, and amended the definition of "compounding" to be more specific. Combining only one drug with water does not constitute compounding or qualify for additional reimbursement. There must be two or more drugs, or one drug combined with a substance other than water.

COMMENT: Commenters recommend adding the words "and vitamins" , "and botanicals," or "and vitamins, herbs, herbal supplements, homeopathic remedies, or other non-commercially available materials" at the end of the definition of the term open formulary. Commenters felt this addition would clarify that nutritional supplements, botanicals, and vitamins are considered to be non-drug items that are not covered under the Commission's open formulary. Leaving it limited to nutritional supplements appears to include these items by default.

RESPONSE: The Commission disagrees that additional language is necessary. It is more appropriate for examples of items that do not fall under the definition of "Open Formulary" to be mentioned in the preamble rather than the rule itself and with this in mind, the Commission has removed the example of nutritional supplements from §134.500(a)(4). Medications that lack FDA approval such as any of the above-mentioned items, including nutritional supplements, do not fall under the definition of "Open Formulary."

§134.502 Pharmaceutical Services

COMMENT: Commenter urges the Commission to implement this proposed rule and bring effective pharmaceutical cost savings and cost containment to the Texas workers' compensation system. Commenter felt that proposed §134.502 accomplishes the objectives of HB-2600, addresses many problems within the system, constrains rising pharmaceutical costs, creates system-wide savings that will benefit all parties, encourages the utilization of less costly generic drugs over higher-priced brand named drugs without interfering with the medical decision making of physician and pharmacist, and restricts the ability of the employee to refuse a generic prescription and opt for a brand name by agreeing to pay the additional cost.

RESPONSE: The Commission agrees.

COMMENT: Commenter suggested adding language to §134.502 that ties requesting a Statement of Medical Necessity to the time frames for requesting additional documentation found in §133.301 and final action found in §133.304.

RESPONSE: The Commission agrees. Language has been added to §134.502(e) to reflect the suggestion.

COMMENT: Commenters note that throughout this proposed rule there are extensive new duties imposed on physicians. The information required in the statement of medical necessity is quite extensive. Having the rationale within the body of the office notes should be sufficient- not a narrative. The carrier should have all the other information in their files. Shifting the costs of preparing and providing the duplicative documentation involved in these statements of medical necessity to the physician is redundant, ethically reprehensible, and intolerably burdensome. Commenter recommends deleting items 1-8 proposed in subsection (f).

RESPONSE: The Commission has removed items (1)-(8) of proposed §134.502(f); however, the definition of the statement of medical necessity found in §134.500 (2) has been changed to add what the statement must contain in general terms. The statement of medical necessity is an important communication tool and it is important to define and describe its use and contents by rule. If there is a "narrative" contained within an existing document, a separate document is not required to be prepared. However, it is not sufficient to simply provide documentation or product literature that is not clear or case-specific.

COMMENT: Commenters question the purpose of the statement of medical necessity if the carrier is under no obligation to place credence in it. Until more explicit criteria are established regarding the necessary qualifications of the carriers' representatives who will receive and review these statements, commenters felt that this concept has no benefit for the workers' compensation system.

RESPONSE: The Commission disagrees in part. The rule has been changed to place a requirement on the carrier to request the statement of medical necessity before denying a bill and to require the carrier to submit a copy of the request to the sender of the bill (the pharmacist). This, by rule, gives the prescribing doctor the opportunity to explain the prescription's medical necessity. It also notifies the pharmacist that the medical necessity of the prescription is being questioned.

COMMENT: Commenters questioned what happens when a doctor does not comply with the request for a letter of medical necessity. Prescribing practitioners will not always include all the requirements of medical necessity. This could be considered as a potential liability for the dispensing pharmacist. There must be consequences for the doctors who do not follow the rule and a mechanism for the pharmacist to get paid while the carrier and the doctor try to resolve their issues. Perhaps the wording of the rules could read that the doctor will be liable for prescription costs until the statement of medical necessity is submitted and that the carrier pays the pharmacists' bills, with the Doctor reimbursing the carrier for prescriptions that are not medically necessary. This would put the burden on the appropriate party when determining medical necessity.