Additional changes to the Worker’s Compensation Act of Indiana (the “Act”) are coming on January 1, 2019. Two new sections have been added to the Act which affect the approval of “non-preferred” drugs.

Ind. Code §22-3-3-4.7/22-3-7-17.6 state that, beginning January 1, 2019, reimbursement is not permitted for a claim of payment for a drug that is an “N” (non-preferred) drug by the Official Disability Guidelines (ODG) Worker’s Compensation Drug Formulary Appendix A published by MCG Health (the “Formulary”)[1], which is prescribed for an employee who has filed a notice of injury. [2]

After January 1, 2019, when 1) a doctor prescribes an “N” drug; and 2) the doctor provides medical reasoning for the drug;

• The employer may approve the drug, allowing the “N” drug to be prescribed; or
• If the employer does not approve the drug, the employer shall:
  1. Send the prescription request to a third party that is  certified by the Utilization Review Accreditation Commission[3] to make a determination on the requested prescription; and
  2. Notify the prescribing doctor and the employee of the third party’s determination within five (5) days of the prescription request.
     1. If the third party determines the “N” drug should be denied:
        1. The employer shall notify the prescribing doctor and the employee of the determination.
        2. The employee may appeal the denial to the Worker’s Compensation Board of Indiana (the “Board”).

If the employer fails to provide notice to the prescribing doctor and the employee within five (5) days of the prescription request, the prescription is deemed approved and reimbursement for the “N” drug is authorized by the Act.

Any approval of an “N” drug prescription is good only for a single prescription order.  If the prescribing doctor prescribes the “N” drug again, the same review process is required.

If a drug is prescribed to an employee during a “medical emergency,” the employee shall receive the prescribed drug even if it is an “N” drug according to the Formulary.  A medical emergency is a “sudden onset of a medical condition manifested by acute symptoms of sufficient severity, including severe pain that in the absence of immediate medical attention could reasonably be expected to result in:

1. Serious jeopardy to the employee’s health or bodily functions; or
2. Serious dysfunction of a body part or organ.

What does it mean?

Beginning in 2019, if a doctor in a worker’s compensation case prescribes a non-preferred “N” drug, the employer/insurer must approve the prescription for the prescription to be authorized and payable as a covered medical benefit under the Act.  If the employer/insurer denies the prescription, it must follow the steps above to provide notice and a third party determination within five (5) days of the prescription request, or the prescription is deemed authorized. 

The employee may appeal any denial to the Board.  Prescriptions for “N” drugs are deemed authorized if issued during a medical emergency.

Please contact a member of the RBE worker’s compensation team with any questions about the new provisions that take effect January 1, 2019.

[1] https://www.mcg.com/odg/odg-solutions/drug-formulary/.  An organization must maintain a paid annual subscription to access to the Formulary.

[2] If the employee begins use of the “N” drug before July 1, 2018, and the use continues after January 1, 2019, reimbursement is permitted for the “N” drug until January 1, 2020.

[3] https://www.urac.org/

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Posted on Dec 05, 2018.