Section 134.540 - Closed Formulary for Claims Subject to Certified Networks(a) Applicability. The closed formulary applies to all drugs that are prescribed and dispensed for outpatient use for claims subject to a certified network.(b) Preauthorization for claims subject to the division's closed formulary. Preauthorization is only required for: (1) drugs identified with a status of "N" in the current edition of the ODG Treatment in Workers' Comp (ODG) / Appendix A, ODG Workers' Compensation Drug Formulary, and any updates;(2) any prescription drug created through compounding; and(3) any investigational or experimental drug for which there is early, developing scientific or clinical evidence demonstrating the potential efficacy of the treatment, but that is not yet broadly accepted as the prevailing standard of care as defined in Labor Code §413.014(a).(c) Preauthorization of intrathecal drug delivery systems. (1) An intrathecal drug delivery system requires preauthorization under the certified network's treatment guidelines and preauthorization requirements in Insurance Code Chapter 1305 and Chapter 10 of this title (Workers' Compensation Health Care Networks).(2) Refills of an intrathecal drug delivery system with drugs excluded from the closed formulary, which are billed using Healthcare Common Procedure Coding System (HCPCS) Level II J codes, and submitted on a CMS-1500 or UB-04 billing form, require preauthorization on an annual basis. Preauthorization for these refills is also required whenever:(A) the medications, dosage or range of dosages, or the drug regimen proposed by the prescribing doctor differs from the medications, dosage or range of dosages, or drug regimen previously preauthorized by that prescribing doctor; or(B) there is a change in prescribing doctor.(d) Treatment guidelines. The prescribing of drugs must be under the certified network's treatment guidelines and preauthorization requirements in Insurance Code Chapter 1305 and Chapter 10 of this title. Drugs included in the closed formulary that are prescribed and dispensed without preauthorization are subject to retrospective review of medical necessity and reasonableness of health care by the insurance carrier under subsection (g) of this section.(e) Appeals process for drugs excluded from the closed formulary.(1) When the prescribing doctor determines and documents that a drug excluded from the closed formulary is necessary to treat an injured employee's compensable injury and has prescribed the drug, the prescribing doctor, other requester, or injured employee must request approval of the drug in a specific instance by requesting preauthorization under the certified network's preauthorization process established in Chapter 10, Subchapter F of this title (Utilization Review and Retrospective Review) and applicable provisions of Chapter 19 of this title (Licensing and Regulation of Insurance Professionals).(2) If an injured employee or a requester other than the prescribing doctor requests preauthorization and a statement of medical necessity, the prescribing doctor must provide a statement of medical necessity to facilitate the preauthorization submission under § 134.502 of this title (Pharmaceutical Services).(3) If preauthorization for a drug excluded from the closed formulary is denied, the requester may submit a request for medical dispute resolution under § 133.308 of this title (MDR of Medical Necessity Disputes).(4) In the event of an unreasonable risk of a medical emergency, an interlocutory order may be obtained in accordance with § 133.306 of this title (Interlocutory Orders for Medical Benefits) or § 134.550 of this title (Medical Interlocutory Order).(f) Initial pharmaceutical coverage. (1) Drugs included in the closed formulary that are prescribed for initial pharmaceutical coverage under Labor Code §413.0141 may be dispensed without preauthorization and are not subject to retrospective review of medical necessity.(2) Drugs excluded from the closed formulary that are prescribed for initial pharmaceutical coverage under Labor Code §413.0141 may be dispensed without preauthorization and are subject to retrospective review of medical necessity.(g) Retrospective review. Except as provided in subsection (f)(1) of this section, drugs that do not require preauthorization are subject to retrospective review for medical necessity under § 133.230 of this title (Insurance Carrier Audit of a Medical Bill), § 133.240 of this title (Medical Payments and Denials), Insurance Code Chapter 1305, and applicable provisions of Chapters 10 and 19 of this title.(1) For an insurance carrier to deny payment subject to a retrospective review for pharmaceutical services that fall within the treatment parameters of the certified network's treatment guidelines, the denial must be supported by documentation of evidence-based medicine that outweighs the evidence-basis of the certified network's treatment guidelines.(2) A prescribing doctor who prescribes pharmaceutical services that exceed, are not recommended, or are not addressed by the certified network's treatment guidelines is required to provide documentation on request under § 134.500(13) of this title (Definitions) and § 134.502(e) and (f) of this title.28 Tex. Admin. Code § 134.540
The provisions of this §134.540 adopted to be effective January 17, 2011, 35 TexReg 11344; Amended by Texas Register, Volume 43, Number 15, April 13, 2018, TexReg 2276, eff. 4/22/2018; Amended by Texas Register, Volume 49, Number 48, November 29, 2024, TexReg 9760, eff. 11/28/2024