NEWSLINE
The Division of Workers' Compensation (DWC) has revised the provisions of the Official Medical Fee Schedule that govern the maximum reasonable fee for medications dispensed to injured workers beginning July 1, 2025. The updated regulations revise the fee schedule to reflect changes in Medi-Cal methodology and Labor Code provisions that establish additional rules for physician-dispensed medications.
Under California Labor Law, the drug fee schedule is based primarily on the Medi-Cal pharmacy payment system. The revised regulations amended the drug fee schedule to incorporate relevant medical revisions and related provisions of the Labor Code. Highlights of the revision include the following.
- Retention of the previous methodology for medicines dispensed before July 1, 2025
- Adopting the new maximum charges based on the Medi-Cal methodology for drugs dispensed on or after July 1, 2025
- Adopts the updated drug charge data file format that establishes “lowest cost” and “no substitution cost” based on the Medi-Cal methodology and will be published weekly, as well as associated usage rules
- “Lowest cost” of the drug ingredient based on the lowest of the following: national average drug acquisition cost (or wholesale acquisition cost if no NADAC is present), state cap, and maximum allowable ingredient cost
- Drug ingredient “no substitution costs” for medically necessary branded medications based on national average drug acquisition cost (or wholesale acquisition cost if no NADAC exists)
- Elimination of the average wholesale price (AWP) as a price benchmark
- Introduction of an increased dispensing fee for doctors; The fee has been increased from the current $7.25 (or $8.00 for nursing home patients) to $10.05.
- Implementation of Medi-Cal's two-tier pharmacy dispensing fee
- $13.20 for pharmacies listed on the Medi-Cal National Provider Identifier (NPI) file and eligible for the higher dispensing fee on the day of dispensing
- $10.05 for all pharmacies/pharmacies not listed in the NPI file as eligible for the higher dispensing fee on the day of dispensing
- Weekly acceptance of Medi-Cal NPI files and associated usage rules
- Adopts compounded drug rules to implement the provisions of the Labor Code and clarify the applicability of the Medi-Cal method of compounded charges.
The regulations come into force on July 1, 2025, giving the public more than six months to adapt systems to the new rules. Sample drug charge data and NPI files are included in the rulemaking materials for stakeholders to use when programming internal systems. DWC expects to publish an updated drug fee calculator that will be available to the public by the effective date.
The text of the regulations and the final justification with comment tables can be found on the DWC Approved Regulations page. Further information and sample data files can be found on the new drug fee schedule webpage, which applies to products dispensed from July 1, 2025.