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March 19, 2002


March 19, 2002



Petitioner Ez Rx Pharmacies (Provider) appealed the Findings and Decision of the Medical Review Division (MRD) of the Texas Worker’s Compensation Commission (TWCC) denying reimbursement from Respondent National Fire Insurance Company of Hartford (Carrier) for prescription medication provided to M. G., Claimant. This decision orders the Carrier to reimburse the Provider $431.40 for the medication.

The Administrative Law Judge convened a hearing on January 23, 2002. The hearing was concluded and the record closed that date. The Petitioner appeared by telephone through its president, Nicky Otts. The Carrier was represented James Loughlin.


The issue presented in this preceding is whether the Carrier should reimburse the Provider $431.40 plus interest for prescription medications consisting of Celebrex, an anti-inflammatory drug, and Ultram, a non-narcotic analgesic for pain control. The Carrier argued that the Provider failed to establish medical necessity for the prescribed medications.

The documentary record in this case consisted of the 67-page certified record of the MRD proceeding (Exh. 1). Additionally, Mr. Nicky Otts testified on behalf of the Petitioner.

The certified record contained a letter from the Claimant’s treating physician which stated that she was being treated for a July 26, 1993, work injury. The Claimant was suffering from lower back pain which radiated to the right lower extremity, and diffuse pain in the right upper extremity. The treating physician stated that the Claimant reported good pain control with the prescribed medications. The letter was on the physician’s stationary, but was unsigned. (Exh. 1, p. 12).

The certified record also contained a peer review performed by Stephen Tomko, B.S., D.C., Physician Adviser. Dr. Tomko concluded that the documentation he reviewed did not support continued chiropractic treatment and physical therapy and did not support a chronic pain program. (Exh. 1, pp. 13-16).

Mr. Otts, Petitioner’s president and a registered pharmacist, testified that a pharmacist does not determine medical necessity before filling prescriptions. When an injured worker presents a prescription to the pharmacy, the pharmacy verifies billing information and then determines whether the prescription seems reasonable for a work related injury. Mr. Otts testified that a prescription for birth control pills would not be filled for an injured worker because it would not be reasonable to do so for a workers’ compensation injury. In this case, he stated that it was reasonable to fill prescriptions consisting of a non-narcotic pain reliever and an anti-inflammatory drug because both could be used to treat a work related injury.

Mr. Otts concluded his testimony by stating that a pharmacy does not determine medical necessity for a prescription because only doctors can make medical decisions and judgments. Additionally, he testified that a pharmacy cannot telephone the carrier for payment authorization prior to filling a prescription because authorization would be subject to a later review for medical necessity. Finally, he stated that the law prohibits him from billing an injured worker for medication if the Carrier fails to pay.


The Pharmaceutical Fee Guideline of the Texas Workers’ Compensation Commission (TWCC) in effect at the time the prescriptions were filled did not adequately address the issue presented in this case. The new TWCC rules pertaining to pharmaceutical services require a carrier to “request a statement of medical necessity from the prescribing doctor before denying reimbursement for prescription or over the counter medications.” Additionally, “[a]t the time the insurance carrier sends the request for a statement of medical necessity, the carrier shall send the provider of the pharmaceutical services and the employee a copy of the request.”[1]The ALJ will attempt to reconcile the absence of direction in the old Pharmaceutical Fee Guideline with the new TWCC rules pertaining to pharmaceutical services.

The Petitioner accepted and filled prescriptions issued by the Claimant’s treating physician. Before filling them, the Petitioner determined the prescriptions for a non-narcotic pain reliever and an anti-inflammatory drug seemed reasonable for an injured worker. The Petitioner could not either make a medical necessity determination or contact the Carrier for payment authorization before filling the prescriptions. The ALJ believes that the Petitioner used due diligence rather than careless indifference in determining that the treating physician had issued prescriptions based on medical necessity. Additionally, the Petitioner was without knowledge or the means of acquiring knowledge that the Carrier would contest medical necessity and not pay for medication prescribed by the treating physician.[2]

Further, the Petitioner accepted and filled the prescriptions in good faith after concluding the treating physician had made the necessary finding of medical necessity. The ALJ believes that a prescription issued by a treating physician establishes a presumption of medical necessity which may be relied on by a pharmacy. A presumption is a conclusion of fact drawn from the exercise of natural reason and common experience[3] and does not shift the burden of proof, but only shifts the burden of producing or going forward with the evidence. To rebut the presumption, the Carrier should show that the pharmacy did not act in good faith in accepting and filling prescriptions.[4] The pharmacy filled the prescription only after making a determination that it was reasonable to do so based on its experience. In reviewing the evidence presented in this case, it is the duty of the trier of fact to determine reasonable presumptions of fact to be drawn from the established facts.[5] It was certainly reasonable for the Provider to presume that the prescribed medications were medically necessary. It is also noteworthy that the Petitioner did provide some evidence of medical necessity from the treating physician. As stated above, the Claimant’s physician stated that she reported good pain control with the medications.

Based on the evidence, the ALJ concludes that the Petitioner’s appeal should be granted.


  1. On July 26, 1993, M.G. (Claimant) suffered a compensable injury to her back and upper right extremity when she lifted a patient in bed.
  2. Claimant’s injury is covered by worker’s compensation insurance written for Claimant’s employer by National Fire Insurance of Hartford (Carrier).
  3. Claimant’s treating physician prescribed Celebrex, an anti-inflammatory medication, and Ultram, a non-narcotic analgesic for pain control, to treat the injury.
  4. Ez Rx Pharmacies (Petitioner) filled the prescriptions referred to in Finding of Fact No. 3.
  5. It was reasonable for the Petitioner to fill anti-inflammatory and pain control prescriptions for treatment of an injured worker.
  6. Prescriptions issued by a treating physician create a presumption of medical necessity.
  7. There is no evidence that the Petitioner did not act in good faith in filling the prescriptions referred to in Finding of Fact No. 3.
  8. The medications referred to in Finding of Fact No. 3 provided relief to the Claimant.
  9. The Petitioner timely requested dispute resolution by the Texas Workers’ Compensation Commission Medical Review Division (MRD).
  10. The MRD issued its findings and decision on October 2, 2001, concluding that the disputed expenses should not be paid, and the Petitioner timely appealed this decision.


  1. The Texas Workers’ Compensation Commission (TWCC) has jurisdiction to decide the issues presented pursuant to Tex. Labor Code §413.031.
  2. The State Office of Administrative Hearings has jurisdiction over matters related to the hearing in this proceeding, including the authority to issue a Decision and Order, pursuant to Tex. Labor Code §413.031 and Tex. Gov’t Code ch. 2003.
  3. The Notice of Hearing issued by TWCC conformed to the requirements of Tex. Gov’t Code §2001.052 in that it contained a statement of the time, place and nature of the hearing; a statement of the legal authority and jurisdiction under which the hearing was to be held; a reference to the particular section of the statutes and rules involved; and a short plain statement of the matters asserted.
  4. An employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed. Tex. Labor Code §408.021 (a).
  5. The Petitioner has the burden of proving by a preponderance of the evidence that it should prevail in this matter. Tex. Labor Code §413.031.
  6. Based on Findings of Fact Nos. 3 - 8, the Petitioner proved by a preponderance of the evidence that Celebrex and Ultram were reasonably required and medically necessary to treat the Claimant.
  7. The Carrier should reimburse the Petitioner for prescriptions filled to treat the Claimant in the amount of $431.40 plus interest.


IT IS, THEREFORE, ORDERED that National Fire Insurance of Hartford reimburse EZ Rx Pharmacies for prescriptions filled in treating the Claimant in the amount of $431.40.

Issued this 19th day of March, 2002.

Administrative Law Judge

  1. 28 Tex. Admin. Code § 134.502(e), effective January 3, 2002.
  2. See Barfield v. Howard M. Smith Company of Amarillo, 426 S.W.2d 834 (Tex. 1968). The Texas Supreme Court stated that a party claiming an estoppel must have used due diligence, rather than careless indifference.
  3. 35 Tex. Jur. 3d Evidence § 107; see Ice Service Co. v. Scruggs, 284 S.W.2d 185 (Tex. Civ. App.-Fort Worth 1955, writ ref’d).
  4. 35 Tex. Jur. 3d Evidence § 108.
  5. Matthews v. Warren, 522 S.W.2d 569 (Tex. Civ. App.-Austin 1975, writ ref’d).
End of Document