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What is the Tennessee Drug Formulary?

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By: Richard Clark, Of Counsel, Nashville

Our Nashville office has provided numerous educational training sessions regarding the Drug Formulary that has gone into effect. The training sessions have been beneficial in an effort to bring insurance professionals up to speed regarding what the Drug Formulary is and how it is being put into practice via the Bureau of Workers’ Compensation. In implementing a Drug Formulary, the Tennessee Bureau of Workers’ Compensation adopted the Work Loss Data Institute ODG Drug Formulary (Appendix A) as the Drug Formulary for use in the workers’ compensation system. The “Appendix A” can be downloaded from the Bureau of Workers’ Compensation website for easy access. 

The Drug Formulary process allows for the review of certain medication prescribed to patients under workers’ compensation. It identifies some medications within certain classes which require approval prior to dispensing. The formulary’s guidelines apply to all new prescriptions written after January 1, 2016. It also applies to all refills of prescriptions written prior to January 1, 2016, but at a later date, depending on the specifics related to the prescribed medications; all drugs dispensed after August 28, 2016 (with a prescription that was written after January 1, 2016) will be subject to the drug formulary guidelines. Until then, there will be no change in the present system of prescribing, dispensing or review.

It is critical to understand that prescriptions that are refills (same medication, same dose, same number, same frequency and same instructions) for older claims were initially subject to separate time frames. For any of these refills of a drug being used or prescribed before January 1, 2016, the Drug Formulary began applying to these prescriptions after February 28, 2017. Therefore, all prescriptions will now be subject to the Drug Formulary Guidelines. The fact that both old and new prescriptions are now subject to these Guidelines should eliminate some of the confusion as to when the Drug Formulary applies in the future.

When beginning to understand the role or function of the Drug Formulary, you must be aware that the “prior approval process” is the process that the insurer uses when a prescription is presented to a pharmacy to be paid under a claim for workers’ compensation, if it is appropriate for the injury being covered. This process is sometimes handled through a pharmacy benefits manager or other intermediary and is usually fairly rapid. In order to determine which drugs apply to the formulary, review “Appendix A” for the relevant classifications. Within “Appendix A,” only those classes of drugs that contain medications that are listed as “N” are applicable with the formulary. Any classes of drugs that are not listed or are not specifically called out in the regulations should be treated similar to “Y” drugs. Only “N” drugs, compounds, topical creams, and investigational/experimental drugs require prior approval.

Another important piece of information is that the seven-day supply of the medication (“N” or “Y” drug) is not reduced based upon the date on which the injured worker presents the prescription to the pharmacy. An injured worker is entitled to a full seven days of a first fill medication as long as the prescription is presented to the pharmacy within seven days from the DOI. The applicable rule states, “Prescriptions presented to a pharmacy from an authorized provider and appropriate for the prescribed injury . . . even if the prescribed medication is status ‘N.’ The employer is responsible for the payment.” Medications dispensed as part of a first fill during the first seven 7 days from the DOI are not subject to the formulary requirements and are required to be reimbursed as long as they are “appropriate” for the injury.

As you can imagine, the implementation of the Drug Formulary will likely raise numerous specific case related questions pertaining to the Guidelines. For this reason, our Nashville office is glad to assist with any case specific questions. Please do not hesitate to email or telephone us with these questions.