The California Division of Workers’ Compensation (DWC) adopted long-awaited Pharmaceutical Fee Schedule rules, introducing major changes to pharmaceutical billing and reimbursement.
While there are many updates to the new rules, the biggest change is that AWP will be replaced with a new pricing benchmark. The maximum allowable fee for medications will be the lower of:
- Drug Ingredient cost, as determined by National Drug Acquisition Cost (NADAC), Wholesale Acquisition Cost (WAC), Federal Upper Limit (FUL), or Maximum Allowable Ingredient Cost (MAIC)
- Usual and Customary (U&C) Charge
Additional changes include:
- A two-tiered dispensing fee structure based on pharmacy transaction volume, where the pharmacy dispensing few is $10.05 for pharmacies with 90,000 or more transactions per year, or $13.20 for pharmacies with fewer than 90,000 transactions per year
- Introducing weekly data files to determine pricing fees and identify pharmacies eligible for higher dispensing fees
- Establishing reimbursement guidelines for physician-dispensed medications, compounded drugs, and repacks
To assist stakeholders, the DWC launched a new website with information about the new Pharmaceutical Fee Schedule. It includes sample data files to help with programming business systems used for billing, bill review, and payment. Additional sample files and a new Pharmaceutical Fee Calculator will also be available for stakeholder testing in the first quarter of 2025.
These rules go into effect July 1, 2025.
