Texas Workers’ Comp Division Accepting More Comments on Compounded Drug Rule

January 22, 2018

The Texas Department of Insurance – Division of Workers’ Compensation (TDI-DWC) is accepting comments through Feb. 20 on a compounded drug rule that was first proposed in June 2017.

On June 16, 2017, DWC announced an informal draft rule to require that compounded drugs be preauthorized. The rule was drafted at the request of the legislature after a DWC study found that the cost of compounded drugs doubled from 2010-2014, and the average cost per prescription had risen to $829 in 2016.

The numbers were concerning because compounded drugs aren’t recommended as first line medications in treatment guidelines for injured employees, the DWC said.

Concerns about compounded drugs aren’t unique to the Texas workers’ compensation system. In 2014, the Employee Retirement System of Texas began requiring preauthorization for all compounded drugs costing $300 or more. The change reduced ERS expenditures on those drugs from $35.7 million in Fiscal Year 2014 to $1.2 million in Fiscal Year 2015. ERS then tightened the requirements even more, requiring preauthorization for compounded drugs costing more than $50.

A May 2017 report by DWC’s Research and Evaluation group found that:

  • The number of compounded drugs increased from 18,020 prescriptions in 2010 to 26,380 in 2014.
  • The total cost of compounded drugs increased from $6 million in 2010 to $12 million in 2014.
  • The average cost per compounded drug prescription increased from $356 in 2010 to $829 in 2016.
  • Almost a third of compounded drug prescriptions were to treat back injuries.