Although the division has a responsibility to contain costs in the Texas workers' compensation system, the purpose of these adopted rule amendments is to focus on the medical necessity and efficacy of drugs created through compounding. Costs are a factor, but the purpose of preauthorization in the workers' compensation system is to determine the medical necessity and efficacy of proposed health care treatments and services before they are delivered to injured employees. At the conclusion of a preauthorization process, approval eliminates medical necessity as a rationale for a reimbursement denial.

General: A commenter recommended that the division create a "limited formulary of compounded medication products" whereby the division would "(i)dentify and make exceptions for compounded prescription therapy that provides an alternative to the abusive and addictive side effects of oral controlled substances." The commenter also recommended that the division "(d)evelop a list of active pharmaceutical ingredients (APIs) in compounds based on data that reflects improved outcomes and cost-effective alternatives to commercially available products;" "(i)dentify these APIs in a closed formulary; and provide incentives for identified patients with a history or potential for abuse and addiction to seek effective compounded medication treatment." The commenter stated that these recommendations "(offer) immediate access to effective alternative therapies that reduce drug costs in the system" which "benefit(s) carriers and injured workers."

Agency Response: The division declines to implement the commenter's recommendations. The division's adopted treatment guidelines are a compilation of the evidence basis for services provided within the Texas workers' compensation system. Currently, the ODG does not recommend the use of compounded drugs as a first line option for injured employees. If there is evidence related to the medical efficacy of a particular or specific compounded drug, that information should be submitted to ODG for evaluation and consideration in the context of treatment guidelines. This process for evaluating evidence is documented on the ODG website at the link titled "Suggest ODG Updates."

If there are reasons that a drug created through compounding should be considered an appropriate alternative to another drug or treatment protocol for a specific injured employee, that rationale should be documented and submitted with the preauthorization request. ODG's Appendix D- Documenting Exceptions to the Guidelines provides guidance on documenting exceptions to the guidelines.

General: A commenter advised the division to "recognize and account for reducing duplicate opioid therapy or other controlled substances from current practices."

Agency Response: The division clarifies that at the direction of the Legislature, the division has adopted evidence-based treatment guidelines and a pharmacy closed formulary. Further, the closed formulary rules apply to certified networks and the evidence-based guidelines applicable to the certified network. These actions have led to a significant decrease in the use of opioids and other dangerous drugs in the Texas workers' compensation system. The medical necessity justification of a drug created through compounding as an alternative to the use of another prescription drug, or another treatment, may be made through the preauthorization process.

General: A commenter recommended that the division should "(c)onsider 'maximum allowable costs' to appropriate therapy that meets the goals" of ensuring "effective and appropriate use of less risky alternatives" and "(a)ligns with the Texas Legislature's goal to reduce opioid use and addiction among Texans."

Agency Response: The division disagrees as this comment is outside the scope of the amended rules, which do not address reimbursement of pharmaceuticals. The changes to the closed formulary are primarily concerned with the medical efficacy and the medical necessity of drugs created through compounding. The division agrees that appropriate use of health care is important and believes that requiring preauthorization for drugs created through compounding assures the medical necessity of the prescribed compounded drug. The division implemented a closed formulary at the direction of the Legislature and as a result, use of drugs excluded from the closed formulary, including opioids, has declined significantly and has been identified as a model for other states' workers' compensation programs.

General: A commenter stated that "health plans often use prior authorization as a means of delaying, and likely denying care, ultimately interfering with appropriate clinical care." The commenter stated that "(p)hysicians who believe compounding medications are the most appropriate approach, will likely discontinue this course of treatment due to increased administrative challenges." Another commenter stated that "requiring preauthorization for all compounds is not in the best interest of the health and safety of our state's injured workers" because "it will only lead to more administrative costs for insurance carriers, pharmacists and health care providers, while also threatening the health and recovery of the state's injured workers."

Agency Response: The division disagrees that preauthorization interferes with appropriate clinical care. Since compounded drugs are not recommended as a first line therapy option in the division's adopted treatment guidelines, the utilization review process considers and evaluates evidence and clinical rationale submitted with the preauthorization request. Consequently, the adopted rule amendments will ensure that compounded drugs received by injured employees are medically necessary and reviewed prior to dispensing. This process of obtaining preauthorization for compounded drugs is the same as for any drug excluded from the closed formulary or other treatment or service that requires preauthorization. In short, preauthorization is not about delaying or denying care, nor is it intended to create administrative challenges. Rather, preauthorization is an opportunity to justify recommended health care for an injured employee while assuring their health and safety.

General: A commenter stated that compounded drugs benefit injured employees and "significantly improves pain and return-to-work timeframes."

Agency Response: Although the division has not been presented with any data that specifically supports this categorical statement, the statute requires that only medically necessary services be provided to injured employees. In general, medically necessary and appropriate health care leads to better treatment outcomes and return-to-work time frames. After medical necessity is determined using the preauthorization process, the preauthorized compounded drug is available to the injured employee.

General: A commenter wrote that "(d)ecisions on patient health should be determined through the triad relationship of patient, physician, and pharmacist."

Another commenter wrote that a pharmacist is best situated to obtain preauthorization because of his/her "in-depth knowledge of a prescribed compound and the duty to dispense medicine." The commenter continued that requiring a doctor to obtain preauthorization is outside "a doctor's scope of practice."

Agency Response: The division notes that the physician-patient relationship is the cornerstone of medical care. It is the responsibility of the prescribing physician to order compounded drugs and document their medical necessity. A pharmacist is not a physician; a pharmacist dispenses medication at the direction of a physician. The physician's duty is to the patient; the physician does not abdicate that responsibility to the pharmacist. However, the cooperation between health care providers and injured employee is important in developing the appropriate course of treatment to facilitate early and appropriate return-to-work. In the Texas workers' compensation system, the treating doctor is responsible for coordinating services necessary for the injured employee's recovery and is best positioned to understand the factors related to the injury and is best positioned to make the case for the medical necessity of a particular treatment or service. Pharmacists, like other ancillary health care providers, are available to assist and advise the treating doctor or prescribing doctor when appropriate.

General: Commenters stated that compounds are needed by injured employees unable to swallow oral medications, or are allergic to other medications, and those with burn injuries. A commenter stated that compounds are also a safe alternative to addictive drugs. Another commenter stated that "the Food and Drug Administration recognizes that compounding drugs can serve important patient needs."

Agency Response: The division agrees and restates that compounded drugs are not being excluded as a treatment option for injured employees. For example, in situations where an injured employee is unable to swallow oral medications or is allergic to other medications, compounded drugs may be appropriate for specific injured employees. This is consistent with the information concerning compounding contained in the ODG. The preauthorization process is the avenue for prescribing doctors to establish the medical necessity and appropriateness of the compounded drug.

General: A commenter opined that compounds used for pain relief improve return-to-work outcomes because they only affect the site of pain and are not systemic and therefore reduce the overall costs to the workers' compensation system. Another commenter stated that compounds that are made for transdermal pain relief can be delivered directly to the site of the injury without subsequent side effects and can lead to a faster recovery for the patient. Another commenter wrote that "(w)hen a compound is used for pain relief, it only affects the site of the pain and is not systemic."

Agency Response: The division disagrees. The division has received no data or documentation that identifies compounded drugs as a more effective treatment option than other services or treatments to improve return-to-work outcomes, and therefore, does not establish overall cost reduction to the system. Further, the division's medical advisor disagrees and notes that there is no published data that supports the notion that compounded drugs do not have a systemic effect.

General: A commenter wrote that preauthorization for all compounds delays the recovery of injured employees and their return-to-work because of the administrative costs and time involved in obtaining preauthorization which may be revoked later through retrospective review.

Agency Response: The division disagrees that preauthorization of compounded drugs will delay recovery and return-to-work of injured employees. The time frames for the approval of preauthorization of compounded drugs is consistent with the time frames for any prescription or service that requires preauthorization. Generally, this process is required to be completed within three working days. If preauthorization is obtained, medical necessity of the compounded drug is not subject to retrospective review. This activity assures that pharmacy bills are not denied by an insurance carrier for medical necessity purposes after the prescription has been dispensed to the injured employee. Billing for the claim must meet the requirements of the rules related to billing and reimbursement. However, the claim is subject to the other administrative questions of compensability, extent, and liability.

General: A commenter wrote that rather than requiring preauthorization for all compounds, "Texas (should) set a reasonable cap on compound medications and require preauthorization for any compound that exceeds the cap." The commenter stated that "(r)equiring preauthorization on the most expensive drugs will help ensure that the costs to the workers' compensation system are reduced, while not endangering an injured worker's access to needed medication."

Agency Response: The division disagrees that requiring preauthorization endangers an injured employee's access to compounded drugs. Injured employees have access to compounded drugs when medical necessity is determined. Compounded drugs will be treated like any other drug requiring preauthorization. Although the division has a responsibility to control costs in the Texas workers' compensation system, the primary reason for preauthorization is to assure that medically necessary and efficacious compounded drugs are available to injured employees. Medical necessity remains a constant while the cost of a compounded drug may be impacted by the volume or frequency of use of the compounded drug.

General: The commenter "believes the proposed changes have the potential to harm injured workers" and "will delay or deny access to health care for our state's injured workers."

Agency Response: The division disagrees. Preauthorization will assure that only medically necessary compounded drugs are dispensed to injured employees. The time frames for the approval of preauthorization of compounded drugs is consistent with the time frames for any prescription or service that requires preauthorization. Generally, this process is required to be completed within three working days. Details of these processes and time frames are contained in Texas Department of Insurance and division rules, specifically as outlined in Chapters 10, 19, 134, and 137 of this title (relating to Workers' Compensation Health Care Networks, Licensing and Regulation of Insurance Professionals, Benefits-Guidelines for Medical Services, Charges and Payments, and Disability Management, respectively). These time frames are not currently a barrier to the timely provision of health care, including prescriptions.

General: A commenter stated that it "believes that the division's decision to exclude prescriptions and refills that are written prior to July 1, 2018, will avoid disruptions in injured employees' medical treatment."

Agency Response: The division agrees and appreciates the supportive comment.

General: A commenter stated that the division has elected to rely on medical interlocutory orders under 28 TAC §134.550 to address the needs of injured employees with allergies or disabilities instead of providing exceptions in the body of the rule. The commenter noted that the process for seeking a medical interlocutory order is not simple since health care providers seeking medical interlocutory orders to obtain compounded drugs for injured employees must request preauthorization, submit a detailed request for a medical interlocutory order and submit a request to a utilization review agent. The commenter stated that none of these submissions are currently required for obtaining a compounded drug that does not contain an "N" status drug.

Agency Response: The division disagrees. The adopted rule requires prescribing doctors to submit a preauthorization request that outlines the medical necessity of a compounded drug. The division restates that compounded drugs are not being excluded as a treatment option for injured employees. For example, in situations where an injured employee is unable to swallow oral medications or is allergic to other medications, compounded drugs may be appropriate for specific injured employees. This is consistent with the information concerning compounding contained in the ODG.

The division clarifies that the preauthorization process is the avenue for prescribing doctors to establish the medical necessity and appropriateness of the compounded drug. Further, the division notes that a request for a medical interlocutory order for a compounded drug is only appropriate after a compounded drug has been previously prescribed and dispensed to an injured employee; an adverse determination has been made for a new prescription of the compounded drug; and the doctor states that there is the potential for an unreasonable risk of medical emergency for the injured employee.

General: A commenter suggested "that the Division develop a robust public education effort to insure that all injured employees, pharmacists and other medical providers are aware of the medical interlocutory order process and all the steps required to obtain an interlocutory order."

Agency Response: The division agrees that education of system participants is an important part of the rule implementation process. Toward that end, the division engaged in significant efforts to assure the successful implementation of the closed formulary and will continue to incorporate information regarding this and any other rule changes into its ongoing outreach activities to injured employees, health care providers and insurance carriers.

General: A commenter stated that "(c)ompounded drugs, including transdermal pain creams, contribute to the recovery of injured workers when they experience back pain." The commenter also stated that "(t)ransdermal compounds also provide an injured worker a safe alternative to some of our country's addictive drugs."

Agency Response: The division restates that injured employees continue to have access to medically necessary compounded drugs by pursuing preauthorization under the adopted rule. If a compounded drug is an appropriate medically necessary alternative to an addictive drug, the prescribing doctor should include that information and rationale for the use of the compounded drug in the preauthorization request.

General: Several commenters expressed opposition to the rule and provided information that endorsed use of compounds in their particular case and expressed concern that they would not be able to receive a compounded medication as a result of this rule. Another commenter urged the commissioner to continue making compounded drugs accessible without a requirement of preauthorization.

Agency Response: The division disagrees that injured employees will not be able to receive medically necessary compounded medications as a result of this rule. An injured employee who sustains a compensable injury is entitled by statute to receive "all health care reasonably required by the nature of the injury as and when needed." More specifically, an injured employee is entitled by statute to health care that "cures or relieves the effects naturally resulting from the compensable injury; promotes recovery; or enhances the ability of the employee to return to or retain employment."

While entitlement to health care does extend to, and includes, compounded drugs, compounded drugs are generally not recommended as a first-line therapy by the current edition of the division's adopted treatment guidelines, the ODG, and the medical necessity and efficacy of compounded drugs is not well-established per evidence-based medicine standards. Preauthorization of drugs created through compounding will assure that only medically necessary compounded drugs are dispensed to injured employees.

NAMES OF THOSE COMMENTING FOR AND AGAINST THE PROPOSAL