1. (a) The maximum allowable reimbursement (MAR) for prescription drugs shall be the lesser of:

   1. (1) The provider's usual and customary charge for the same or similar service;

   2. (2) The fees established by the following formulas based on the average wholesale price (AWP) determined by utilizing a nationally recognized pharmaceutical reimbursement system (e.g. Redbook, First Data Bank Services) in effect on the day the prescription drug is dispensed.

      1. (A) Generic drugs: ((AWP per unit) x (number of units) x 1.25) + $4.00 dispensing fee = MAR;
      2. (B) Brand name drugs: ((AWP per unit) x (number of units) x 1.09) + $4.00 dispensing fee = MAR;
      3. (C) A compounding fee of $15 per compound shall be added for compound drugs; or
   3. (3) A negotiated or contract amount.

2. (b) When the doctor has written a prescription for a generic drug or a prescription that does not require the use of a brand name drug in accordance with §134.502(a)(3), reimbursement shall be as follows:

   1. (1) the pharmacist shall dispense the generic drug as prescribed and shall be reimbursed the fee established for the generic drug in accordance with subsection (a) of this section; or

   2. (2) when an injured employee chooses to receive a brand name drug instead of the prescribed generic drug, the pharmacist shall dispense the brand name drug as requested and shall be reimbursed:

      1. (A) by the insurance carrier, the fee established for the prescribed generic drug in accordance with subsection (a) of this section; and
      2. (B) by the employee, the cost difference between the fee established for the generic drug and the fee established for the brand name drug in accordance with §134.503(a)(2) of this title.
3. (c) When the doctor has written a prescription for a brand name drug in accordance with §134.502(a)(3), reimbursement shall be in accordance with subsection (a) of this section.
4. (d) Reimbursement for over-the-counter medications shall be the retail price of the lowest package quantity reasonably available that will fill the prescription.
5. (e) This section applies to the dispensing of all drugs except inpatient drugs and parenteral drugs.
6. (f) Upon request by the provider, the insurance carrier shall disclose the source of the AWP used.

Source Note:The provisions of this §134.503 adopted to be effective January 3, 2002, 26 TexReg 10970; amended to be effective March 14, 2004, 29 TexReg 2346.