CMS Comments on Hydrocodone Combination Product Coverage Changes in Relation to WCMSAs

Brenda SmithAs of October 6th, 2014, the rescheduling of all hydrocodone combination products to the Schedule II classification went into effect. As previously discussed in our September 15, 2014, “DEA Classification Change for Hydrocodone Combination Products (HCPs)” blog, there were restrictions and changes related to the reclassification that could possibly lead to increase costs and ultimately have an impact on both the medical and the prescription allocations within the MSA.

It was noted that due to more stringent requirements in the areas of distribution, dispensing, record keeping and storage and the changes needed to meet these requirements that there would more than likely be an increase in the costs of the HCPs. We have already seen a rise in costs according to Redbook pricing noted via the CMS portal. For example, in August 2014 when the DEA ruled on the reclassification of the HCPs, generic Norco (Hydrocodone/Acetaminophen 5/325), was $0.342 per tablet. As of October it is now $0.459 per tablet. This is an increase of almost .12 per tablet in 2 months and is already leading to higher prescription costs within the workers’ compensation claim and MSA allocations.

It was also noted the new requirements for HCPs as Schedule II medications would set limitations on prescribing. Schedule II medications must be hand written and may not be faxed (the exception being for Hospice) or called into pharmacies thus making it more difficult for a claimant to obtain their medication. Many states will allow only a one month prescription to be written per visit while others will allow up to a 90 day supply. Previously when under the schedule III classification, the HCPs were valid for up to 6 months. Due to these prescribing limitations it was noted there would be more visits required. As a result, on November 17, 2014, CMS issued a “Notice of Hydrocodone Combination Product coverage changes in Medicare Part D Effective for WCMSA Proposals Submitted on or after January 1, 2015”. It stated that “at a minimum, allocate four healthcare provider visits per year when Schedule II controlled substances (including hydrocodone combination products) are used continuously unless healthcare provider visits are more frequent per medical documentation”. This confirms our previous assumption that there would be an increase in claims costs due to prescribing limitations.

CMS has also indicated that WCMSA cases submitted to CMS before January 1, 2015 that are closed due to missing, incomplete and/or inadequate supporting documentation (or any other reason), and subsequently re-opened after January 1, 2015, will also be subject to a review that includes the C-III controlled substances changes due to rescheduling by the DEA.

CMS methodology continues to highlight that payers that work with Helios Settlement Solutions are well positioned to mitigate pharmacy and their associated costs prior to settlement negotiations and creation of their MSA.

Helios Settlement Solutions will continue to keep you informed of any further changes concerning the HCPs and other medications that will affect drug costs as well as medical costs within the claim and ultimately the allocations within the MSA.

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