The Texas Division of Workers’ Compensation (DWC) finalized its Calendar Year 2026 Medical Quality Review Annual Audit Plan, selecting topical analgesics as the focus of a plan-based audit.
DWC audits ensure that doctors in the workers’ comp system treat, recommend, and prescribe medically necessary and appropriate health care that is timely and cost-effective, as well as facilitate functional recovery and appropriate return-to-work outcomes. The DWC’s decision to focus on topical analgesics followed stakeholder feedback received in December 2025, including comments from Healthesystems.
The DWC will work with system participants to develop the topical analgesic audit, including defining the timeframe, sample size, and case selection. As topical analgesic use continues to increase, audit findings may lead to future DWC reimbursement rule changes, particularly where system wide trends and compliance gaps signal a need for enhanced prescribing oversight and utilization management.
The data yielded from this audit will be of great interest to the workers’ comp industry, even beyond Texas, as high-cost topical analgesics/dermatologicals continue to be an ongoing area of focus for workers’ comp.
The NCCI reported earlier this year that topical medications are an emerging cost driver, often due to high prices, with topical costs ranging widely by states, from roughly $10 to $630. Additionally, the WCRI reported in 2024 that dermatological agents accounted for 22% of total prescription payments in Q1 of 2023 – the largest share among any drug category.
Pennsylvania recently proposed reimbursement caps for certain topical medications in response to rising costs. In October of 2024, Healthesystems attended a WCRI webinar, which noted that dermatological agents were the top prescription cost driver in Pennsylvania for Q1 of 2023, accounting for 55% of all prescription payments, with most dispensed directly by physicians.
In 2025, regulators in Arizona met multiple times to discuss medical regulations for topical analgesics, while a report from Delaware noted that dermatological agents made up approximately 35% of all prescription payments in Q1 of 2023 in Delaware – the largest share of all other therapeutic groups of drugs.
Additionally, the California Pharmacy & Therapeutics Committee met to discuss topicals, sometime after the CWCI reported that dermatologicals accounted for the biggest share of the total drug spend in the California workers’ comp system, making up 4.9% of prescriptions in 2016 and shooting up to 12.6% in 2024. As of 2024, topicals made up 18.9% of drug spend in the California workers’ comp system.
For ongoing coverage of the latest legislation and policy updates impacting workers' comp, visit the Healthesystems Advocacy & Compliance page for our weekly Regulatory Recap.
