Chapter 23: Pharmacy Services

Billing & Payment Policies for Healthcare Services provided to Injured Workers and Crime Victims

 

 

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Effective July 1, 2011

Complete Chapter for printing

(Republished February 1, 2012)

Look for possible updates and corrections to these payment policies

 

Table of contents

Definitions

Payment policies:
All pharmacy services
Buprenorphine or buprenorphine/naloxone
Emergency contraceptives and pharmacist counseling
Endorsing practitioner and Therapeutic Interchange Program
Infusion therapy
Initial prescription drugs or “first fills” for State Fund claims
Third party billing for pharmacy services

More info:
Related topics



Definitions

Endorsing practitioner:

A practitioner who has reviewed the preferred drug list and has notified the health care authority that he or she has agreed to allow therapeutic interchange of a preferred drug for any nonpreferred drug in a given therapeutic class.

Preferred drug list (PDL):

The list of drugs selected by the appointing authority to be used by applicable state agencies as the basis for the purchase of drugs in state purchased healthcare programs.

Refill:

The continuation of therapy with the same drug (including the renewal of a previous prescription or adjustments in dosage) when a prescription is for an antipsychotic, antidepressant, chemotherapy, antiretroviral or immunosuppressive drug, or for the refill of an immunomodulator/antiviral treatment for hepatitis C for which an established, fixed duration of therapy is prescribed for at least 24 weeks but no more than 48 weeks.

Therapeutic alternative:

Drug products of different chemical structure within the same pharmacologic or therapeutic class and that are expected to have similar therapeutic effects and safety profiles when administered in therapeutically equivalent doses.

Therapeutic interchange:

To dispense with the endorsing practitioner's authorization, a therapeutic alternative to the prescribed drug.

Note: Also see WAC 296-20-01002 for the above definitions.


 

Payment policy: All pharmacy services

(See definition of preferred drug list (PDL) in “Definitions ” at the beginning of this chapter.)

Prior authorization

Nonpreferred drugs
To obtain authorization for nonpreferred drugs:

If the outpatient drug formulary is part of the… And you are a PDL endorsing provider, then: Or you are a non-endorsing provider, then:
Preferred drug list (see “Note” below this table) Write DAW for nonpreferred drugs. For State Fund claims, contact the PDL Hotline.
For self-insured claims, contact the self-insured employer.
Remainder of drug classes For State Fund claims, contact the PDL Hotline.
For self-insured claims, contact the self-insured employer.
For State Fund claims, contact the PDL Hotline.
For self-insured claims, contact the self-insured employer.

Note: L&I uses a subset of the Washington State Preferred Drug List (PDL).  See how to endorse the PDL in “Additional information: Endorsing the PDL” at the end of this “Payment policy” section.

Links: A current list of the drug classes that are part of the workers’ compensation benefit and on the PDL is available at www.lni.wa.gov/ClaimsIns/Providers/TreatingPatients/Presc/PDL.asp.

The outpatient formulary can be found in the Payment Policies Appendix G: Outpatient Drug Formulary, or online at www.lni.wa.gov/ClaimsIns/Providers/TreatingPatients/Presc/OutpatientDrug.asp.

The PDL Hotline is open Monday through Friday 8:00 am to 5:00 pm (Pacific Time), and the toll free contact number is 1-888-443-6798.

For a list of self-insured employers’ contact information, see www.Lni.wa.gov/ClaimsIns/Insurance/SelfInsure/EmpList/Default.asp .

Filling prescriptions after hours

If a pharmacy receives a prescription for a nonpreferred drug when authorization can’t be obtained, the pharmacist may dispense an emergency supply of the drug by entering a value of 6 in the DAW field.

The insurer must authorize additional coverage for the nonpreferred drug.

Note: An emergency supply is typically 72 hours for most drugs or up to 10 days for most antibiotics, depending on the pharmacist’s judgment.

Who must perform pharmacy services to qualify for payment

The pharmacy service fee schedule applies to pharmacy providers only.  It doesn't apply to medical providers administering or dispensing drugs in the office.

Requirements for writing prescriptions

Prescription forms

Orders for over the counter non-oral drugs or nondrug items must be written on standard prescription forms.

Recordkeeping for prescriptions

Records must be maintained for audit purposes for a minimum of 5 years.

Link:  For more information on recordkeeping requirements, see WAC 296-20-02005.

Requirements for billing

NCPDP payer sheet, version 5.1

For State Fund claims, L&I uses version 5.1 of the NCPDP payer sheet to process prescriptions for payment in the point of service (POS) system.

Link: The current version of the NCPDP payer sheet is available online at www.Lni.wa.gov/ClaimsIns/Files/Providers/PayerSheet.pdf.

Payment methods

Link: For a definition of “Average Wholesale Price” (AWP), see WAC 296-20-01002.

Payment for drugs and medications, including all oral nonlegend drugs, will be based on these pricing methods:

If the drug type is… Then the payment method is:
Generic AWP less 50%
(+)
$ 4.50 professional fee
Single or multisource brand AWP less 10%
(+)
$ 4.50 professional fee
Brand with generic equivalent
(dispense as written only)
AWP less 10%
(+)
$ 4.50 professional fee
Compounded prescriptions Allowed cost of ingredients
(+)
$4.50 professional fee
(+)
$4.00 compounding time fee (per 15 minutes)

Note: Orders for over the counter non-oral drugs or nondrug items are priced on a 40% margin.

Prescription drugs and oral or topical over the counter medications are nontaxable.

Link: For more information on tax exemptions for sales of prescription drugs, see RCW 82.08.0281 .

Additional information: Endorsing the PDL

Providers may endorse the PDL by:


Payment policy: Buprenorphine or buprenorphine/naloxone

Coverage policy

The insurer may cover buprenophine (Subutex®) or buprenorphine/naloxone (Suboxone®) for a limited time to aid in opioid weaning, but doesn’t provide coverage for maintenance of opioid dependency or for off label uses.

Prior authorization

Prior authorization is required for buprenorphine and buprenorphine/naloxone products.

Authorization is limited to 30 days.  An additional 30 days is available if requested and progress on the opioid taper has been documented.

To get authorization, the requesting provider must:

  • Provide documentation of a time limited opioid taper plan, and
  • Have a current DATA 2000 waiver to prescribe buprenorphine and buprenorphine/naloxone.

Note: To verify whether a provider has a valid DATA 2000 waiver, use the “Buprenorphine Physician & Treatment Program Locator” at http://buprenorphine.samhsa.gov/bwns_locator/dr_facilitylocatordoc.htm .


Payment policy: Emergency contraceptives and pharmacist counseling

Coverage policy

The insurer covers emergency contraceptive pills (ECPs) and associated pharmacist counseling services when all of the following conditions are met:

  • A valid claim for rape in the workplace is established with the insurer, and
  • The ECP and/or counseling service is sought by the worker, and
  • The claim manager authorizes payment for the ECP and/or the counseling, and
  • The pharmacist is approved by the Department of Health Board of Pharmacy to follow this particular protocol.

Requirements for billing

Once the “Coverage policy” conditions listed above have been met, the dispensed medication must be billed with the appropriate NDC and the counseling service with HCPCS code S9445.


Payment policy: Endorsing practitioner and Therapeutic Interchange Program

(See definitions of endorsing practitioner, refill, therapeutic alternative, and therapeutic interchange in “Definitions” at the beginning of this chapter.)

Requirements for writing prescriptions

Endorsing practitioners may indicate Dispense as Written (DAW) on a prescription for a nonpreferred drug on the PDL, and the prescription will be filled as written.

Alternatively, if an endorsing practitioner indicates “substitution permitted” on a prescription for a nonpreferred drug on the PDL:

  • The pharmacist will interchange a preferred drug for the nonpreferred drug, and
  • A notification will be sent to the prescriber.

Additional information: When therapeutic interchange won’t occur

Therapeutic interchange won’t occur when the prescription is a refill of a drug, as exempted by law, that is:

  • An antipsychotic, or
  • An antidepressant, or
  • Chemotherapy, or
  • Antiretroviral, or
  • Immunosuppressive drug.

Due to federal regulations, therapeutic interchange won't take place when the prescription is for a schedule II nonpreferred drug.  However, L&I will honor the prescription if an endorsing practitioner indicates DAW for a schedule II nonpreferred drug.

Note: Exception: Fentanyl patch (Duragesic) won’t be routinely covered.

Link: For exception criteria, see www.Lni.wa.gov/ClaimsIns/Providers/TreatingPatients/ByCondition/Duragesic.asp .

Payment policy: Infusion therapy

Prior authorization

Services
Infusion therapy services require prior authorization by the insurer.

Supplies
Prior authorization is required for supplies (including infusion pumps).  (Also see “Services that aren’t covered,” below.)

Link: See WAC 296-20-1102 for information on the rental or purchase of infusion pumps.

Drugs
Drugs must be authorized.  (Also see “Requirements for billing,” below).

Who must perform infusion therapy to qualify for payment

Services
The insurer will only pay home health agencies and/or independent registered nurses for infusion therapy services and/or therapeutic, diagnostic, vascular injections.

Supplies
Only pharmacies and DME suppliers, including IV infusion companies, may be paid for infusion therapy supplies.

Drugs
Infusion therapy drugs, including injectable drugs, are payable only to pharmacies.

Services that aren’t covered

Supplies
Implantable infusion pumps aren't routinely covered.

Note: Exception: When a spinal cord injury is the accepted condition, the insurer may pay for an implantable pump for Baclofen.

Link: See more information about implantable infusion pump coverage in WAC 296-20-03014(6) .

Requirements for billing

Supplies
Supplies, including infusion pumps, must be billed with HCPCS codes.

Link: For information on the rental or purchase of infusion pumps, see WAC 296-20-1102 .

Drugs
Authorized drugs must be billed with:

  • NDC codes, or
  • UPC codes if NDC codes aren't available.

Payment policy: Initial prescription drugs or “first fills” for State Fund claims

Payment methods

Payment for “first fills” will be based on L&I’s fee schedule including but not limited to:

Screening for drug utilization review (DUR) criteria,

Preferred drug list (PDL) provisions, and

30 day supply limit and formulary status.

Note: L&I will pay pharmacies or reimburse workers for prescription drugs prescribed during the initial visit for State Fund claims regardless of claim acceptance.

Links: For definitions of “initial prescription drug” and “initial visit,” see WAC 296-20-01002 .

For billing and payment for initial prescription drugs information, see WAC 296-20-17004 .

Requirements for billing

Your bill must be received by L&I within one year of the date of service.

Pharmacies should bill the appropriate federal or self-insured employer.

Note: If a payment is made by L&I on a claim that has been mistakenly filed as a State Fund claim, payment will be recovered.

Link: For additional information and billing instructions, go to www.lni.wa.gov/ClaimsIns/Providers/TreatingPatients/Presc/Billing/default.asp#3, or see the Pharmacy Prescription Billing Instructions manual. 

Payment limits

L&I won’t pay:

  • For refills of the initial prescription before the claim is accepted, or
  • For new prescription written after the initial visit but before the claim is accepted, or
  • If it is a federal or self-insured claim.

Payment policy: Third party billing for pharmacy services

Requirements for billing

Pharmacy services billed through a third party pharmacy biller will be paid using the pharmacy fee schedule only when:

  • A valid L&I claim exists, and
  • The dispensing pharmacy has a signed Third Party Pharmacy Supplemental Provider Agreement on file at L&I, and
  • All POS edits have been resolved during the dispensing episode by the dispensing pharmacy.

Pharmacy providers that bill through a third party pharmacy billing service must:

  • Sign a Third Party Pharmacy Supplemental Provider Agreement, and
  • Allow third party pharmacy billers to route bills on their behalf, and
  • Agree to follow L&I rules, regulations and policies, and
  • Ensure that third party pharmacy billers use L&I’s online POS system, and
  • Review and resolve all online POS system edits using a licensed pharmacist during the dispensing episode.

Payment limits

Third party pharmacy billers can’t resolve POS edits.

Additional information: Third Party Pharmacy Supplemental Agreements

Third Party Pharmacy Supplemental Agreements can be obtained either:

  • Through the third party pharmacy biller, or
  • By contacting L&I’s Provider Accounts (see contact info, below).

The third party pharmacy biller and the pharmacy complete the agreement together and return it to L&I.

Links: To contact L&I’s Provider Accounts, call 360-902-5140.

For more information about these agreements, refer to the Pharmacy Services website at www.Lni.wa.gov/ClaimsIns/Providers/Treatment/Presc/default.asp.


If you’re looking for more information about… Then go here:
Administrative rules
for pharmacy services
Washington Administrative Code (WAC) 296-20-01002:
http://apps.leg.wa.gov/wac/default.aspx?cite=296-20-01002
WAC 296-20-17004:
http://apps.leg.wa.gov/wac/default.aspx?cite=296-20-17004
WAC 296-20-03014(6):
http://apps.leg.wa.gov/wac/default.aspx?cite=296-20-03014
WAC 296-20-1102:
http://apps.leg.wa.gov/wac/default.aspx?cite=296-20-1102
WAC 296-20-02005:
http://apps.leg.wa.gov/wac/default.aspx?cite=296-20-02005
Becoming an L&I provider L&I’s website:
www.Lni.wa.gov/ClaimsIns/Providers/Becoming/default.asp
Billing instructions and forms Chapter 1:
Introduction
DATA 2000 waiver information SAMHSA website (use the “Buprenorphine Physician & Treatment Program Locator”):
http://buprenorphine.samhsa.gov/bwns_locator/dr_facilitylocatordoc.htm
Drug classes that are part of
the workers’ compensation
benefit and on the PDL
L&I’s website:
www.Lni.wa.gov/ClaimsIns/Files/Providers/SelectedPDLforworkers.pdf
Endorsing the PDL Online registration at:
www.rx.wa.gov/tip.html
Call Benefit Control Methods:
1-866-381-7879
Fee schedules for all healthcare
facility services (including ASCs)
L&I’s website:
http://feeschedules.Lni.wa.gov
NCPDP payer sheet current version L&I’s website:          
www.Lni.wa.gov/ClaimsIns/Files/Providers/PayerSheet.pdf
Outpatient formulary L&I’s website:
www.Lni.wa.gov/ClaimsIns/Files/Providers/DrugFormulary100111.pdf
PDL Hotline Open Monday through Friday, 8:00 am to 5:00 pm (Pacific Time):
1-888-443-6798
Tax exemptions for sales of
prescription drugs, as specified
in Washington state law
Revised Code of Washington (RCW) 82.08.0281:
http://apps.leg.wa.gov/RCW/default.aspx?cite=82.08.0281
Therapeutic Interchange
Program
exception criteria
L&I’s website:
www.Lni.wa.gov/ClaimsIns/Providers/TreatingPatients/ByCondition/Duragesic.asp
Third Party Pharmacy
Supplemental Agreements
L&I’s website:
www.Lni.wa.gov/ClaimsIns/Providers/Treatment/Presc/default.asp

Need more help?  Call L&I’s Provider Hotline at 1-800-848-0811.


 

CPT® codes and descriptions only are © 2010 American Medical Association

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