California Announces Final Comment Period for Pharmaceutical Fee Schedule

On June 13, 2024, the California Department of Industrial Relations, Division of Workers’ Compensation (DWC) published amended proposed rule changes to the Physician and Non-Physician Practitioner and Pharmaceutical Fee Schedules. These changes will add to costs for both program administration and the delivery pharmacy services. We first reported on these proposed rule changes in April. Since that time, written and verbal comments were collected and reviewed leading to the latest amendments.

The June comment period led to several significant proposed rule changes:

• The physician dispense fee increased from $0 to $10.05;
• The number of days to implement the rule, following its adoption, increased from 90 days to within 180 days;
• the compound dispensing fee increased from $4.05 to $10.05; and
• CA DWC will post a weekly updated Pharmaceutical Fee Data File

The following proposals did not change after the last comment period:

• Drug ingredient cost is defined as the lesser of the following:

  - National Average Drug Acquisition Cost (NADAC)

  - Wholesale Acquisition Cost (WAC) if there is no NADAC

  - Federal Upper Limit

  - Maximum Allowable Ingredient Cost

• Two-Tier Dispensing Fee of $10.05 or $13.20^[1]

MyMatrixx Actions

MyMatrixx by Evernorth successfully argued for an extension to implement the change from 90 to 180 days. We will submit another comment letter to the DWC and continue to encourage the state to adopt policy that makes sense for our clients, contains costs, and prioritizes medication safety for injured workers.

The most recent proposed rule change reinstating dispensing fees to physician dispenser reimbursement encourages the continuation of physician dispensing, increasing concerns over higher employer costs and patient safety. We believe the practice of physician dispensing bypasses the benefits of a pharmacy benefit manager and ignores critical patient safety alerts that are typically identified and communicated to retail pharmacies before medications are dispensed. Physician dispensing also introduces other safety issues including:

• Lack of licensed pharmacist for medication checks and patient counseling
• Lack of regulatory oversight for medication labeling, record keeping, and storage
• Lack of supervision of the dispenser
• Increased fees and costs for employers
• Potential conflict of interest for the dispensing physician by means of financial gain

How You Can Get Involved

The California DWC will accept additional comments on these proposed rule changes until June 28, 2024. All comments will be considered in the state’s rule-making process. Written comments should be addressed to:

A template letter to the regulator addressing some of the concerns is available here to download. Feel free to add your company information to the form and use this as is or add additional comments specific to your organization’s concerns with the rule changes. All written comments on the latest proposed changes to the regulations must be received by 11:59 p.m. on June 28, 2024.

Following the comment period ending June 28, 2024, MyMatrixx anticipates the state will publish the final adopted rule in July 2024. We will communicate details of the required changes at that time.

Please contact your MyMatrixx Account Management team if you have any additional questions.

[1] • For pharmacy-dispensed drugs and compounded medications (*National Provider Identifiers (NPIs) are designated by Medi-Cal based on pharmacy volume.