Policy Change: OWCP Pharmacy Fee

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The Department of Labor’s, Office of Workers’ Compensation Programs (OWCP) has occasionally altered their prescription drug fee schedule throughout the years. The prescription drug fee schedule is essentially a formula which determines the maximum amount the OWCP will pay for claimants’ prescriptions. The schedule applies to all four federal programs; the Federal Employees’ Compensation Act (FECA), the Longshore and Harbor Workers’ Compensation Act (LHWCA), the Federal Black Lung Benefits Act (FBLBA), and the Energy Employees Occupational Illness Compensation Program Act (EEOICPA).

The big change this time around is the separation of brand name and generic drugs. In the past the OWCP has applied their general payment formula to both categories of drugs. Starting May 1, 2014 generic and brand name reimbursement rates will be calculated separately.

The Old Formula: Effective September 29, 2011

95% of the Average Wholesale Price (AWP) of listed prescriptions plus a fixed dispensing fee of $4.00

The New Formula: Effective May 1, 2014

  • Brand Name Drugs: 90% of AWP plus a $4.00 dispensing fee
  • Generic Drugs: 75% of AWP plus a $4.00 dispensing fee

Brand name drugs will be going from 95% of AWP to 90%. Generic drugs will be going from 95% of AWP to 75%.

If you’d like to read the official release from the OWCP we’ve provided it below.

Effective May 1, 2014, the Office of Workers’ Compensation Programs (OWCP) will begin calculating the maximum allowable fee for pharmacy billings of prescription drugs using a formula which differentiates between brand name drugs and generic drugs. The maximum allowable fee for brand name drugs will be 90% of the average wholesale price (AWP) plus a $4.00 dispensing fee, and the maximum allowable fee for generic drugs will be 75% of the AWP plus a $4.00 dispensing fee. This change will affect prescriptions paid under all of the OWCP Programs; Division of Federal Employees’ Compensation (DFEC), Division of Energy Employees’ Occupational Illness Compensation (DEEOIC), and Division of Coal Mine Workers Compensation (DCMWC).

By Brian Carrigan

Summary
Policy Change: OWCP Pharmacy Fee
Article Name
Policy Change: OWCP Pharmacy Fee
Description
Brian Carrigan is founder and CEO of Remain At Home Health Care. He frequently writes and speaks on senior related issues.
Brian Carrigan
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