Compounding Pharmacies in Texas Work the Worker's Compensation System--when N no longer worked they changed to Y- States Have Caught on to compounding pharmacy fraud in Worker's Compensation Claims-Oklahoma has a new rules requiing prior authorization

When Texas adopted their closed formulary requiring prior authorization for drugs with an “N” status in the Official Disability Guidelines (ODG) drug list, the use of compounded medications fell off dramatically since many contained an “N” drug. The reduction, however, was short-lived as “Y” status ingredients were used instead, conceivably so the compounded medications wouldn’t trigger the prior authorization requirement. As part of its new closed formulary, Oklahoma instituted a rule that requires prior authorization for all compounded medications, allowing prescribing physicians and payer medical directors to talk about medical necessity and efficacy prior to approving the use of a compounded medication. Mississippi adopted a rule that requires pre-authorization for compounded creams, imposed a $300 per month price cap and a 120 gram quantity cap per authorization. Hawaii and other states have limited reimbursement for ingredients based on the average wholesale price, using the NDC from the original manufacturer of the ingredient; and Georgia recently adopted changes to their fee schedule that limit reimbursement for compounds for no more than three FDA-approved active pharmaceutical ingredients.

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