Pharmaceutical Schedule Guidelines

(1) The Pharmacy Fee Guideline maximum allowable amount for prescribed drugs (medicines by pharmacists and dispensing practitioners) under the Tennessee workers’ compensation laws is the lesser of: (a) The provider’s usual charge; (b) A negotiated contract or lower amount; or (c) The fees established by the formula for brand-name and generic pharmaceuticals as described in the following subsections. MEDICAL FEE SCHEDULE CHAPTER 0800-02-18 (d) Prescribed Medication Services 1. “Drug” has the meaning set out in Tenn. Code Ann. § 63-10-204. 2. Medicine or drugs may only be dispensed by a currently licensed pharmacist or a dispensing practitioner. 3. Carriers may contract with pharmacy benefit managers to process and administer claims for reimbursement of pharmacy services and review the relatedness and appropriateness of prescribed services. Carriers and pharmacists may also negotiate alternative reimbursement schedules and amounts, so long as the reimbursement amount does not exceed the fee schedule amount set out in these Rules. 4. For the purposes of these Medical Fee Schedule Rules, medicines are defined as drugs prescribed by an authorized health care provider and include only generic drugs or single-source patented drugs for which there is no generic equivalent, unless the authorized health care provider writes that the brand name is medically necessary and includes on the prescription “dispense as written.” (e) Reimbursement 1. The pharmaceutical reimbursement formula for prescribed drugs (medicines by pharmacists) is the lesser of: (i) Average Wholesale Price* (“AWP”) + $5.10 filing fee; (only the original manufacturer’s NDC number should be used in determining AWP). The AWP shall be determined from the current pricing information for that date of service. The publications to be used are: (1) Primary reference: Price Alert from Medi-Span, available online at the following website: https://www.wolterskluwer.com/en/solutions/medi-span/price-rx (2) Secondary reference: (for drugs NOT found in Price Alert) the Red Book, available online at: https://www.ibm.com/products/micromedex-red-book, or (ii) A negotiated contractual amount, that is less than or equal to the above reimbursements, or (iii) The provider’s usual charge. 2. If the original manufacturer’s NDC number is not provided on the bill, then the reimbursement shall be based on the AWP of the lowest priced therapeutically equivalent drug, calculated on a per unit basis. 3. Reimbursement to pharmacists or any third-party billing agency or other contracted agent of a pharmacy shall never exceed the maximum amount calculated by the pharmaceutical reimbursement formula for prescribed drugs. The usual and customary charge of the pharmacy for the medication shall be included on each bill. A generic drug shall be substituted for any brand name drug unless there is no pharmaceutical and bioequivalent drug available, or the prescribing physician indicates that substitutions are prohibited by including the words “Dispense as Written,” or “No Substitution Allowed,” along with a statement that the brand name drug is medically necessary. A prescribing physician may also prohibit substitution of generic drugs by oral or electronic MEDICAL FEE SCHEDULE CHAPTER 0800-02-18 communication to the pharmacist so long as the same content is conveyed that is required in a written prescription. (i) A bill or receipt for a prescription drug shall include all of the following: (I) When a brand name drug with a generic equivalent is dispensed, the brand name and the generic name shall be included unless the prescriber indicates “do not label.” (II) If the drug has no brand name, the generic name, and the manufacturer’s name or the supplier’s name, shall be included, unless the prescriber indicates “do not label.” (III) The strength, unless the prescriber indicates “do not label.” (IV) The quantity dispensed. (V) The dosage. (VI) The name, address, and federal tax ID# of the pharmacy. (VII) The prescription number, if available. (VIII) The date dispensed. (IX) The name of the prescriber. (X) The name of the patient. (XI) The price for which the drug was sold to the purchaser. (XII) The original manufacturer’s National Drug Code Number (“NDC Number”), if one (1) is available. (ii) Dietary supplements such as minerals and vitamins shall not be reimbursable unless a specific compensable dietary deficiency has been clinically established in the injured employee as a result of the work-related injury. (iii) A compounding fee not to exceed twenty-five dollars ($25) per compound prescription may be charged if two (2) or more prescriptive drugs require compound preparation when sold by a hospital or pharmacy. (iv) If a workers’ compensation claimant chooses a brand-name medicine when a generic medicine is available and allowed by the prescriber, the claimant shall pay the difference in price between the brand-name and generic medicine and shall not be eligible to subsequently recover this difference in cost from the employer or carrier. (f) “Patent” or “Proprietary Preparations” 1. “Patent” or “Proprietary preparations,” frequently called “over-the-counter drugs,” are sometimes prescribed for a work-related injury or illness instead of a legend drug. MEDICAL FEE SCHEDULE CHAPTER 0800-02-18 2. Generic substitution as discussed in (e)2. above applies also to “over-the- counter” preparations. 3. Pharmacists shall bill and be reimbursed their usual retail price for the “over-the- counter” drug(s). 4. The reimbursement formula does not apply to the “over-the-counter” drugs and no filling fee may be reimbursed. (g) Dispensing Practitioner 1. Dispensing practitioners shall be reimbursed the same as pharmacists for prescribed drugs (medicines), except such practitioners shall not receive a filling fee. 2. “Patent” or “proprietary preparations” frequently called “over-the-counter drugs,” dispensed by a physician(s) from their office(s) to a patient during an office visit should be billed as follows: (i) CPT® Code 99070 shall be used to bill for the “proprietary preparation,” and the name of the preparation, dosage and package size shall be listed as the descriptor. (ii) An invoice indicating the cost to the dispensing physician of the “proprietary preparation” shall be submitted to the carrier with the CMS- 1500 Form or its successor form. (iii) Reimbursement is limited to the lesser of the provider’s billed charge or 20% above the actual cost to the dispensing physician of the item. (h) Repackaged or Compounded Products All pharmaceutical bills submitted for repackaged or compounded products shall include the NDC Number of the original manufacturer registered with the U.S. Food & Drug Administration or its authorized distributor’s stock package used in the repackaging or compounding process. The reimbursement allowed shall be based on the current published manufacturer’s AWP of the product or ingredient, calculated on a per unit basis, as of the date of dispensing. A repackaged or compounded NDC Number shall not be used and shall not be considered the original manufacturer’s NDC Number. If the original manufacturer’s NDC Number is not provided on the bill, then the reimbursement shall be based on the AWP of the lowest priced therapeutically equivalent drug, calculated on a per unit basis. The filling fees otherwise provided in these Rules shall be payable when applicable.