Insurance trade associations voiced support for a proposed rule by the Texas Department of Insurance, Division of Workers Compensation, that would require all compounded medications to go through a preauthorization process to be eligible for reimbursement.

Meanwhile, the Texas Office of Injured Employee Counsel has asked for changes to the proposal that would address the need for compounded medications in emergency and other situations when preauthorization is not possible.

The Texas Department of Insurance, Division of Workers Compensation, said that “the proposed rule changes are not intended to prohibit the use of medically necessary compound medications in the workers compensation system. Rather, they are intended to ensure that injured employees have access to all health care reasonably required by the nature of the injury as and when needed,” according to a memo from the division.

“OIEC is not opposed to the Texas Department of Insurance, Division of Workers’ Compensation’s rule. ... OIEC recognizes the significant increase in the cost of compound drugs to the workers’ compensation system,” Jessica Barta, Austin, Texas-based public counsel for the OIEC said Monday in a statement to Business Insurance. “OIEC shares the division’s goal of controlling costs and overutilization within the Texas workers’ compensation system so employers can afford coverage and injured employees can receive medical care. Our goal is to improve the division’s rule by highlighting circumstances where a small population of injured employees might be impacted in ways the division did not anticipate. We made suggestions to enhance the division’s proposed rule language to protect injured employees while addressing the increasing costs of compound drugs. All system participants, including injured employees, benefit from a system that offers reasonable and medically necessary medical treatment in a prompt, cost effective manner.” 

The OIEC suggestions focused on injured employees who have health needs which require compounding or are in an emergency situation, “for example, injured employees who have disabilities and are unable to swallow pills and injured employees who are allergic to certain drug additives, such as dyes, require compounding. We also wanted the division to address compounding required to administer anesthesia or in emergency situations. We suggested adding exemptions for injured employees who have allergies to certain drug additives, disabilities or emergencies which require compounding,” said Ms. Barta.

Insurance trade associations like the Property Casualty Insurers Association of America support the current proposal. 

“Generally, the preauthorization process is reserved for medical treatments that are experimental and have no well-developed scientific evidence behind its efficacy,” Trey Gillespie, Austin, Texas-based assistant vice president, workers compensation at Property Casualty Insurers Association of America said Monday. “Also, the preauthorization process potentially applies to treatments that are usually expensive. The compounded medicine fits into both of those buckets. In general, compounded medication doesn’t go through (U.S. Food and Drug Administration) approval so there is not proven efficacy for most of the products that are being pushed, especially in the workers compensation system, and the price that is attached to these products is extraordinary high.” 

The American Insurance Association’s “number one goal is to ensure that injured workers receive the highest quality and most appropriate medical care to foster prompt recovery and a timely return to work,” Steve Bennett, Washington, D.C.-based associate general counsel and director, workers compensation programs said Monday in a statement to Business Insurance. “All treatment should be evidence-based and outcome-focused, and there is little to no medical evidence to support the prescription of compound medications instead of FDA-approved medications. In the extremely rare circumstance where a particular injured worker requires a compound medication, the proposed rules allow such prescriptions via preauthorization.” 

The proposal is still in the early stages. The division is reviewing comments and plans to eventually release a formal rule proposal, according to a spokeswoman. 

If the rule is approved, Texas would join Oklahoma, Florida, Nevada and Tennessee in requiring preauthorization for compounded medications.