RESPONSE: The Commission disagrees that §134.502(d)(3) should be changed. Billing requirements are contained in §134.800 of this title as referenced. The pharmacy is responsible for compliance with the law and Commission rules and cannot transfer that responsibility by contract. Pharmacies can choose whether to contract with a billing entity and with whom they contract. Assurance that the law and Commission rules will be followed should be a major consideration in making that decision. Commission rules place restrictions on other entities submitting bills on behalf of health care providers. Specifically, §134.801(g)(1) requires any entity, including a health care provider that submits a bill to submit the bill for an amount that does not exceed the health care provider's usual and customary charge in accordance with Texas Labor Code §413.011.

COMMENT: Commenter believed that §134.502 forces the pharmacy (health care provider) to bill according to §134.800(d) but does not force the carriers to follow the bill-payment rules, including the rules when additional documentation can be requested. Commenter felt this allows the carrier to wait until the 45th day then request the statement of medical necessity, to which the doctor has 14 days to reply extending the deadline for payment beyond 45 days.

RESPONSE: The Commission disagrees. Carriers are required to abide by the timeframes found in §133.304. Additionally, language has been added to §134.502(e) clarifying that carrier requests for statements of medical necessity shall comply with the requirements found in §133.301(d)-(g). A request for a statement of medical necessity does not extend the time for payment of pharmaceutical bills.

COMMENT: Commenter stated proposed §134.502(d)(1) provides: "Healthcare providers shall bill using national drug codes (NDC) when billing for prescription drugs." The Commission is currently promulgating §134.203(a)(2) that adopts by reference the HCPCS Level II codes. The HCPCS codes are used to bill for medications. The Commission needs to decide which billing system they are going to use.

RESPONSE: The Commission disagrees that there is a conflict in the usage of the billing systems. Section 134.503(d) clearly states that the rule "applies to the dispensing of all drugs except for inpatient drugs and parenteral drugs." Drugs with HCPCS codes are typically administered to patients rather than dispensed. The billing requirement in §134.502(d)(1) has pharmacists and pharmacies in mind rather than physicians administering drugs in an office setting.

COMMENT: Commenter suggested that the following be added: " The provider shall bill the carrier at its lowest posted retail price (store or website) on the date the prescription is filled"

RESPONSE: The commission disagrees. Section 134.801 (g) requires the health care provider to bill their usual and customary charge for the product that was provided. The commission is mandated by Texas Labor Code §413.011 to establish guidelines as follows: "Guidelines for medical services fees must be fair and reasonable and designed to ensure the quality of medical care and to achieve effective medical cost control. The guidelines may not provide for payment of a fee in excess of the fee charged for similar treatment of an injured individual of an equivalent standard of living and paid by that individual or by someone acting on that individual's behalf." By billing their usual and customary charge for the service or product, health care providers assist the commission in producing meaningful statistics that are correct, consistent, and are of value when monitoring healthcare providers for compliance with law and rules and in the review of healthcare economic trends when establishing future reimbursement guidelines.

COMMENT: Commenter suggested adding the following to §134.502: "where the pharmacy stocks two or more pharmaceutically equivalent over-the-counter alternatives to a prescription drug, the prescription shall be filled with the lowest price product." Commenter also suggested that over-the-counter medications should be reimbursed at the provider's lowest posted retail price (store or web) on the date the prescription is filled.

RESPONSE: The Commission disagrees. The injured employee may select the over-the-counter product that has been prescribed and reimbursement is the retail price of the product chosen. Requiring the injured employee to compare multiple stores or products would be an unreasonable burden on the employee.

COMMENT: Carriers (not claimants) are legally responsible for paying all needed and necessary medical cost related with the compensable injury.

RESPONSE: The Commission agrees. If an injured employee pays for a medically necessary prescription medication, §134.504 provides the procedure for the injured employee to be reimbursed by the carrier.

§134.503 Reimbursement Methodology

COMMENT: Commenter questioned why a compounding fee is warranted and how it will reduce the system costs associated with prescription drugs. Commenter felt a compounding fee conflicts with the expressed intent of the Texas Legislature to reduce costs associated with medical benefits in the Texas workers' compensation system and may encourage fraud and abuse. Commenter recommended that the compounding fee be deleted. RESPONSE: The Commission disagrees. Because the compounding of drugs requires additional pharmacist time a compound fee is warranted to reimburse the pharmacist for additional time required. However, in reviewing the amount of the compounding fee the Commission has determined that it should be lowered from the $30.00 fee proposed to $15.00 per compound. During the rule-making process the pharmacy work group provided information to the rule development team indicating that generally, compounding fees are approximately $1.00 per minute and that compounding normally would require up to 30 minutes. An average time needed for compounding is estimated at approximately 15 minutes. Some compounds will require less time, some will require more. Therefore, $15.00 is a reasonable compounding fee.

COMMENT: Commenters felt that "reasonable retail value" of an over-the-counter item is rather vague and seems to allow the carrier to detail what is fair and reasonable. One commenter recommended including language emphasizing that the pharmacy shall bill and be reimbursed it's usual and customary charge that it would normally charge for a walk-in, non workers' compensation customer. Commenters pointed out that there are significant differences in price between brand name products sold in convenience stores vs. privately labeled items sold by chains and mass merchandisers and that the pharmacy's costs of dispensing, storage, inventory, and transportation of over-the-counter drugs are similar to those for prescription drugs. Commenters recommended that the rule establish the same standards for reimbursing over-the-counter drugs as prescription drugs. Commenters suggested that the rule clearly state that if the injured employee buys the item over-the-counter he/she should be paid for their out-of-pocket expense, and if a pharmacy dispenses it, it should be reimbursed at the prescription formula rate drug costs and dispensing fees. A commenter expressed concern that §134.502(a) and §134.503(c) set separate standards for reimbursement for over-the-counter medications.

RESPONSE: The Commission agrees in part and has modified the language to require reimbursement to match the retail price of the lowest package quantity reasonably available that will fill the prescription. As an example, the prescription is for two tablets, four times a day, for eight days, for a total of 64 tablets. The medication is available in bottles of 50 and 100. The prescription calls for 64; therefore, the injured employee must purchase the bottle of 100 in order to follow the doctor's prescription. The language allows the employee to receive the over-the-counter medication in the brand of their choice for the quantity prescribed. "Available" means available at the location where the injured employee goes to fill the prescription. "Reasonable available" means that the product should be purchased at a location that carries medications in appropriate quantities, not a wholesaler that only carries extremely large quantities of medications. The injured employee reimbursement is addressed in adopted §134.504. However, requiring the injured employee to compare multiple stores or products would be an unreasonable burden on the employee. The Commission disagrees that specific language relating to " usual and customary" is necessary because §134.801(g)(1) contains that directive. The Commission also disagrees that there is any conflict between §134.502(a) and §134.503(c) and that over-the-counter medication should be reimbursed under the same methodology as prescription drugs. If a pharmacy dispenses an over-the-counter medication it should be reimbursed at the retail price of the lowest package quantity reasonably available that will fill the prescription just as it is if the injured employee had purchased the medication. There is no added value to the system when an over-the-counter medication is dispensed by a pharmacy.

COMMENT: Commenter questioned whether the term "value" is synonymous with the term "price" as used in §134.503(c). The term "value" implies that the reimbursement would be based on usefulness of the over-the-counter to the compensable injury, where "price" is simply the amount paid.

RESPONSE: The Commission agrees and has changed the word "value" to "price."

COMMENT: The commenter felt that the phrase reasonable retail value has no clear meaning and suggested changing §134.503(c) to read: Reimbursement for over the counter drugs shall be the provider's lowest posted retail price (store or website) during the week and for the county in which the prescription is filled. The suggested language provides an objective standard for determining reimbursement. Another commenter questioned how the injured employee would know what reasonable retail value is.

RESPONSE: The Commission agrees in part and has changed subsection (c) to require reimbursement of "retail price of the lowest package quantity reasonably available that will fill the prescription." Reimbursement should be the actual amount paid whether or not it was the week's lowest price.

COMMENT: Commenter believed that §134.503 should include strict controls on who may dispense and receive reimbursement for over-the-counter medications. Commenter recommended adding language to subsection (c) that over-the-counter drugs are only reimbursable if prescribed by a physician and may not be reimbursed if purchased from or dispensed by the treating doctor, referral doctor, or other non-pharmacy health care provider.

RESPONSE: The Commission disagrees that the suggested language is necessary. The cost of over-the-counter medications is only reimbursable if they were prescribed in accordance with §134.502. The amount of reimbursement is the actual amount paid for the over-the-counter medication as prescribed. There is no restriction on where a medication can be purchased.

COMMENT: Commenter contended that the nationally recognized pharmaceutical data is too broad. Some pharmacists use the daily AWP updates provided by First Data, some use weekly, and some use the monthly publication. Commenters recommend that the Commission specify a specific pharmaceutical reimbursement system that insurers must use to determine the AWP of drugs. Since pricing can differ daily, this will result in uniformity of reimbursed amounts and should prevent many medical disputes.

Some commenters recommend that the Commission adopt by reference First Data Bank's monthly "Price Alert" as modified for the Medicare system, as the reimbursement system publication to be used by insurers and bill review agents since it has recently been adjusted to reflect accurate and lower AWPs.

RESPONSE: The Commission disagrees with the suggestion to select one source for AWP. The Commission wishes to allow flexibility for whichever nationally recognized pharmaceutical reimbursement system the carrier selects and will monitor to determine if future changes are warranted.

COMMENT: Commenters requested clarification regarding whether AWP should be updated weekly or daily. Commenter recommends updating daily.

RESPONSE: The Commission agrees with daily updating, but disagrees that clarification is necessary. Section 134.503(a)(2) states that reimbursement is based on the average wholesale price in effect on the day the prescription drug is dispensed.

COMMENT: Commenter suggested that "lowest" be inserted before "average" in §134.503(a)(2). Average wholesale prices quoted by Redbook or First Data Services differ. The carrier should be able to utilize the lower of the published AWP from a nationally recognized pharmacy reimbursement service.

RESPONSE: The Commission disagrees that the suggested language is needed. The carrier is required only to use a nationally recognized pharmaceutical reimbursement system. Which system they choose is up to them.

COMMENT: Commenter indicated that Medicaid has a standard for dispensing fees at $5.27 and asked that the Commission look at the justification for that.

RESPONSE: The Commission has found that while the Medicaid dispensing fee is higher than the Commission's, when the entire reimbursement calculation is taken into account, the Medicaid reimbursement rate is lower.

COMMENT: Commenter asked that the Commission reconfigure the reimbursement for prescription drugs so that the prescription of brand name drugs is not incentivized in accordance with the legislative purpose of HB-2600. Instead, incentives to dispense generics are being eliminated while the compensation for the dispensing of brand name drugs is being increased. Commenter observed that the rule as proposed only allows the pharmacy to bill one price regardless of generic or non-generic. It does not allow an injured employee to refuse a generic prescription and opt for a brand name drug by agreeing that the employee will pay additional cost or a co-payment as allowed in some other health care systems. Commenter felt a patient should have the right to pay out of pocket for brand name.

RESPONSE: The Commission agrees in part. The Commission disagrees that the reimbursement structure of §134.503 provides incentives for either brand name or generic drugs, or that the injured employee should be allowed to opt for brand name drugs if a brand name was not prescribed. Texas Labor Code §408.028 requires the Commission to adopt an open formulary that requires the use of generic pharmaceutical medications and over-the-counter medications unless the prescribing doctor specifically indicates otherwise. The decision of whether or not a generic or brand name drug should be dispensed is made by the prescribing doctor not by the pharmacist or the injured employee. Allowing the injured employee to pay the difference between the generic and the brand name drug would allow the injured employee to override the decision of the prescribing doctor and could put the pharmacist in the position of pursuing a private claim against the employee, which is prohibited by Texas Labor Code §413.042. The conversion factor for brand name drugs has been changed from the rule as proposed. See discussion later in this preamble.

COMMENT: Commenters requested clarification on how commission staff arrived at the conversion factor of 1.25 and how the adoption of the 1.25 conversion factor will reduce system costs associated with prescription drugs.

A commenter asked for an explanation of the relationship of the 1.25 conversion factor to Texas Labor Code §413.011 (b)

RESPONSE: Texas Labor Code §413.011(b) gives the Commission authority to develop conversion factors in determining appropriate fees. Currently, the Commission does not collect pharmacy data. Examining the conversion factors previously used by the Commission and discussions with members of the pharmacy community led the Commission to the proposed conversion factor of 1.25 for both brand name and generic drugs. While considering public comment, the Commission worked with the National Council of Compensation Insurance to look at possible savings from several different conversion factor scenarios. In the absence of Texas data, data from California was used. California pharmacy cost percentages are similar to Texas. This analysis revealed that in order to reduce pharmaceutical costs through the use of generic medications, the conversion factor for brand name drugs should not be raised from its current level of 1.09. Therefore, the conversion factor for brand name drugs remains at 1.09. The conversion factors are as follows: Generic drugs: ((AWP) x (number of units) x 1.25) + $4.00 dispensing fee = MAR; Brand name drugs: ((AWP) x (number of units) x 1.09) + $4.00 dispensing fee = MAR. This will provide fair and reasonable fees while effecting the medical cost control mandated by the statute.

COMMENT: Commenter asked if over-the-counter medications are to be filled with generic (store brand). There is a major cost difference between Tylenol brand acetaminophen and store brand acetaminophen. Since the carrier is only responsible for generics, does this apply to over-the-counter medications? Commenter felt over-the-counter medications should be treated the same as a prescription, where the " store brand" is covered the same as a generic and the "name brand" is treated as a brand drug and recommend that subsection (c) be changed to require the use of generic over-the-counter drugs when available. Commenter contended that this would help reduce system costs.

RESPONSE: The Commission disagrees. Requiring generic over-the-counter medications would create much confusion because in many cases the employee will be selecting the medications themselves and may not be aware of the differences between products. Requiring the injured employee to compare multiple stores or products would be an unreasonable burden on the employee. In addition, not all pharmacies or retail stores carry a "store brand." Savings are achieved by the use of the over-the-counter medications in lieu of a prescription medication.

COMMENT: Commenter suggested that the word "Privately" be added between "A" and "negotiated" in §134.503(a)(3) to mirror the Texas Labor Code.

RESPONSE: The Commission disagrees. The language is consistent with commission rule 133.1(a)(8)(C) of this title.

COMMENT: Commenter expressed concern that a provider of pharmaceutical services will be required to join a plan or network. Commenter asked if insurance companies have the right to require a membership before an entity could be a provider.

RESPONSE: Carriers do not have the right to require providers to join a plan or network.

COMMENT: Commenters commented that §134.503 should be clarified to make clear that reimbursement is subject to the requirement that the generic medication is reasonable and necessary and related to the compensable injury.

RESPONSE: The Commission disagrees that clarification is necessary. Reimbursement is always subject to medical necessity and relatedness to the compensable injury. These requirements are found elsewhere in the law and Commission rules.