The Texas Workers' Compensation Commission (the commission) proposes new §134.501, Initial Pharmaceutical Coverage.

This new rule is proposed to comply with statutory provisions of the Texas Labor Code (the Act). Prior to the 77th Texas Legislative Session, 2001, §408.028 required a health care practitioner providing care to an injured employee to prescribe any necessary prescription drugs in accordance with applicable state law. It also stated that an insurance carrier (carrier) could not require an employee to use pharmaceutical services designated by the carrier. House Bill 2600 (HB-2600), adopted during the 2001 Texas Legislative Session, amended §408.028, and added §413.0141, Initial Pharmaceutical Coverage. This new section of the Act allows the commission to adopt rules that will provide for payment of specified pharmaceutical services sufficient for the first seven days following the date of injury if the health care provider verifies insurance coverage and receives a verbal confirmation of an injury from the employer or from the insurance carrier. In addition, if the injury is determined to be non-compensable, the carrier is eligible for reimbursement from the subsequent injury fund (SIF) for such pharmaceutical services.

Proposed new §134.501 meets the statutory intent of §413.0141 by providing the requirements the health care provider must follow to ensure payment under this statute for prescription medication for the first seven days following the date of injury. The rule also provides the requirements the carrier must follow to obtain reimbursement from the subsequent injury fund if the injury is determined to be non-compensable. The Medical Advisory Committee (MAC) reviewed a draft of proposed §134.501 and provided advice and input for proposed §134.501. In addition, the House Bill 2600 legislative stakeholders group reviewed a draft of proposed §134.501 and provided comments. The commission's Medical Advisor also provided consultation and recommendations for this rule

Proposed new §134.501 establishes the process and requirements for reimbursement for prescription medication sufficient for the first seven days following the date of injury. If the health care provider documents verification of workers' compensation insurance coverage and receipt of a verbal confirmation that an injury has been reported to the employer or the carrier, the insurance carrier shall provide payment for pharmaceutical services sufficient for the first 7 days following the date of injury. If the injury is determined to be noncompensable, the carrier is eligible for reimbursement from the SIF pursuant to commission rules 116.11 and 116.12. HB-2600 gives the commission the authority to establish this process by adopting rules on or after September 1, 2002.

Subsection (a) of proposed new §134.501 defines the methodology for calculating the seven-day period following the date of injury and how reimbursement for the pharmaceutical services will be determined.

Subsection (b) of the proposed new §134.501 provides that the carrier may be eligible for reimbursement for payments made under subsection (a) from the subsequent injury fund (SIF) as provided in Chapter 116 of the commission rules.

Subsection (c) of the proposed new §134.501 states that the healthcare provider can verify insurance coverage and confirm a report of an on-the-job injury has occurred by calling the employer or the carrier. This section also establishes a requirement for the employer and/or the carrier, upon request, to verify insurance coverage and to confirm any report of an injury has been reported. Insurance coverage can also be confirmed by using the commission's Internet-based coverage verification system. When the health care provider has verified insurance coverage and has confirmed an injury has been reported, the health care provider is required to document how and from whom the verification and confirmation was received. When billing for the pharmaceutical services that were provided for the first seven days following the date of injury, the health care provider shall affirm on the bill for pharmaceutical services that the health care provider completed the required verification and confirmation.

Subsection (d) of proposed new §134.501 states that the health care provider may dispense the amount of medication ordered by the prescribing doctor in accordance with applicable laws. This will allow the dispensing health care provider to make the decision whether to dispense greater than the amount of pharmaceutical services sufficient for the first 7 days following the injury when the prescription is for a greater amount.

Subsection (e) of proposed new §134.501 allows voluntary certification of pharmaceutical services in accordance with Texas Labor Code §413.014(e) and §134.600 of this subtitle.

Subsection (f) describes the importance of communication in the prompt delivery of pharmaceutical services and encourages employees to promptly report injuries to their employer. This subsection encourages employers to provide the employee with a written statement that confirms that an injury has been reported, that identifies the date of injury and the name of the carrier. This subsection states that providing the information that verifies coverage and confirms that an injury was reported does not waive the employer's right to contest the compensability of the claim should the carrier accept liability for the claim. It also does not waive the insurance carrier's right to further review the claim under the Act and commission rules.

Judy Bruce, Director of Medical Review, has determined that for the first five-year period the proposed rule is in effect the fiscal implications for state or local governments as a result of enforcing or administering the rule are an increase in administrative costs to the commission resulting from the requests for reimbursement from the SIF. When the requests for reimbursement for initial pharmaceutical services are added to the other requests for reimbursement from the SIF, additional staff may be required to process all the requests for reimbursement from the SIF. There will be no impact on state revenue.

Reimbursing the carrier from the SIF for claims in which the injury is finally adjudicated to be not compensable will reduce the operating balance of the SIF. At some point, the SIF may not be able to reimburse at 100% all requests that qualify for reimbursement. Reimbursements from the SIF will be made in accordance with the provisions of the Act and commission §§116.11 and 116.12.

Local government and state government as a covered regulated entity will be impacted in the same manner as described later in this preamble for persons required to comply with the rules as proposed.

Ms. Bruce has also determined that for each year of the first five years the rules as proposed are in effect the public benefits anticipated as a result of enforcing the rules will be an improved system for pharmaceutical delivery within the first seven days after the injury, that will provide positive benefits to all participants in the system. The participants in the system are: injured employees, employers, insurance carriers and health care providers, including pharmacists.

The benefits of the proposed new rule to injured employees are the improved access to pharmaceutical services in the period immediately following their injuries.

The benefits of the proposed new rules to employers is the assurance that their injured employees are receiving appropriate and medically necessary medications in a timely manner for their compensable injury in anticipation of an early release-to-work as appropriate.

Insurance carriers will benefit from the proposed new rules because currently the carrier's first knowledge of an injury is sometimes the call from the pharmacy attempting to verify that benefits will be paid. In the current situation, the carriers are being asked to look at the issue of medical necessity while they are busy focusing on the compensability question. Carriers will now only need to confirm whether coverage exists and an injury has been reported. In addition, insurance carriers will benefit from the ability to seek reimbursement from the SIF for funds paid on claims determined not to be compensable claims.

Health care providers who provide pharmaceutical services will benefit from the security of payment for pharmaceutical services necessary for the initial seven days following the date of injury by following two simple steps (which can sometimes be completed at the same time).

There will be minimal anticipated economic costs to persons who are required to comply with the rules as proposed because employers and carriers are expected to verify coverage and confirm whether an injury has been reported under current rules while providers generally have to take the types of steps outlined in the rule in the normal course of providing pharmaceutical services.

Any additional cost to the HCP related to obtaining verification and confirmation should be offset by the required payment by the carrier for pharmaceutical services sufficient for the first seven days after the injury, regardless of any compensability issues. Although there is a potential for paying for up to seven days of pharmaceutical services on a claim later determined not to be compensable, this will not be an economic cost to employers and carriers because the payment is reimbursable by the SIF.

There will be no adverse economic impact on small businesses or on micro-businesses as a result of the proposed new rules. There will be no difference in the cost of compliance for small businesses and micro-businesses as compared to large businesses because the same basic processes and procedures apply to all entities regardless of size.

Comments on the proposal must be received by 5:00 p.m., September 9, 2002. You may comment via the Internet by accessing the commission's website at www.twcc.state.tx.us and then clicking on "Proposed Rules." This medium for commenting will help you organize your comments by rule chapter. You may also comment by emailing your comments to RuleComments@twcc.state.tx.us or by mailing or delivering your comments to Nell Cheslock at the Office of the General Counsel, Mailstop #4-D, Texas Workers' Compensation Commission, Southfield Building, 4000 South IH-35, Austin, Texas 78704-7491.

Commenters are requested to clearly identify by number the specific rule and paragraph commented upon. The commission may not be able to respond to comments that cannot be linked to a particular proposed rule. Along with your comment, it is suggested that you include the reasoning for the comment in order for commission staff to fully evaluate your recommendations.

Based upon various considerations, including comments received and the staff's or commissioners' review of those comments, or based upon the commissioners' action at the public meeting, the rule as adopted may be revised from the rule as proposed in whole or in part. Persons in support of the rule as proposed, in whole or in part, may wish to comment to that effect.

A public hearing on this proposal will be held on September 5, 2002, at the Austin central office of the commission (Southfield Building, 4000 South IH-35, Austin, Texas). Those persons interested in attending the public hearing should contact the commission's Office of Executive Communication at (512) 440-5690 to confirm the date, time, and location of the public hearing for this proposal. The public hearing schedule will also be available on the commission's website at www.twcc.state.tx.us.

The new rule is proposed under the following statutes: the Texas Labor Code §402.042, that authorizes the Executive Director to enter orders as authorized by the statute as well as to prescribe the form and manner and procedure for transmission of information to the commission; the Texas Labor Code §402.061, which authorizes the commission to adopt rules necessary to administer the Act; the Texas Labor Code §406.010, that authorizes the commission to adopt rules necessary to specify the requirements for carriers to provide claims service and establishes that a person commits a violation if the person violates a rule adopted under this section; the Texas Labor Code §408.021(a), that states an employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed; the Texas Labor Code §408.025, that requires the commission to specify by rule what reports a health care provider is required to file; the Texas Labor Code §408.028, as passed by the 77th Texas Legislature, that requires health care practitioners providing care to an employee to prescribe any necessary prescription drugs in accordance with applicable state law; the Texas Labor Code §413.002, that requires the commission to monitor health care providers and insurance carriers to ensure compliance with commission rules relating to health care including medical policies and fee guidelines; the Texas Labor Code §413.011, as passed by the 77th Texas Legislature, that requires the commission by rule to establish medical policies and guidelines relating to necessary treatments for injuries, and fees, designed to ensure the quality of medical care and to achieve effective medical cost control; the Texas Labor Code §413.012, that requires the commission to review and revise medical policies and fee guidelines at least every two years to reflect current medical treatment and fees that are reasonable and necessary; the Texas Labor Code §413.013 (1), (2), and (3), that require the commission by rule to establish a program for prospective, concurrent, and retrospective review and resolution of a dispute regarding health care treatments and services; a program for the systematic monitoring of the necessity of the treatments administered and fees charged and paid for medical treatments or services including the authorization of prospective, concurrent or retrospective review under the medical policies of the commission to ensure the medical policies and guidelines are not exceeded; and a program to detect practices and patterns by insurance carriers in unreasonably denying authorization of payment for medical services requested or performed if authorization is required by the medical policies of the commission; the Texas Labor Code §413.0141, as passed by the 77th Texas Legislature, regarding initial pharmaceutical coverage; the Texas Labor Code §413.017, that establishes presumption of reasonableness of medical services; the Texas Labor Code §413.031, as passed by the 77th Texas Legislature, that entitles a party, including a health care provider, to a review of a medical service for which authorization for payment has been denied or reduced; the Texas Labor Code §415.002, that establishes an administrative violation for an insurance carrier to: unreasonably dispute the reasonableness and necessity of health care, to violate a commission rule or to fail to comply with the Act; the Texas Labor Code §415.003, as passed by the 77th Texas Legislature, that establishes an administrative violation for a health care provider to: administer improper, unreasonable, or medically unnecessary treatment or services, to violate a commission rule, or to fail to comply with the act; and the Texas Labor Code §415.0035, that establishes an administrative violation for a provider or a carrier to violate any provision of the statute or rules.

The new rule is proposed under the Texas Labor Code §402.042, §402.061, §406.010, §408.021(a), §408.025, §408.028, §413.002, §413.011 §413.012, §413.013 (1) (2) and (3), §413.0141, §413.017, §413.031, §415.002, §415.003, §415.0035.

No other code, statute, or article is affected by this rule action.