2018 FECA Circulars Archive

Attention: This circular has been superseded and is inactive.

SUBJECT: Dual Benefits - FERS Cost of Living Adjustments

Background: Effective December 1, 2017, benefits issued by the Social Security Administration (SSA) will be increased by 2.0%. This requires the amount of the Federal Employees’ Retirement System (FERS) Dual Benefits deduction to be increased by the same amount, to ensure the dollar-for-dollar offset remains current.

This adjustment will be made from the National Office for all cases that were correctly entered into the iFECS Compensation program. The adjustment will be effective with the periodic roll cycle beginning December 10, 2017. There will be no adjustment or overpayment declared for the period of December 1, 2017 through December 9, 2017.

ANTONIO RIOS
Director for
Federal Employees' Compensation

Distribution: All DFEC Staff

Back to Top of FECA Circular No. 18-02

Back to Table of Contents

Attention: This circular has been superseded and is inactive.

SUBJECT: Current Interest Rates for Prompt Payment Bills and Debt Collection

The interest rate to be assessed for the prompt payment bills is 2.63 percent for the period of January 1, 2018 through June 30, 2018. This new rate has been updated in the Central Bill Payment system tables.

The rate for assessing interest charges on debts due the government remains unchanged again this year. The interest rate for assessing interest charges on debts due the government is 1.0 percent for the period of January 1, 2018 through December 31, 2018. This rate remains unchanged in the iFECS system tables.

Ordinarily, the rate of interest charged on debts due the U.S. Government is only changed in January, and is effective for the entire year. However, the rate may be changed in July if there is a difference in the Current Value of Funds (CVF) interest rate of more than two percent. The rate will be reviewed on July 1, 2018 to determine if the Treasury has changed the rate.

Attached to this Circular is an updated listing of both the Prompt Payment and Debt Management interest rates from January 1, 1985 through the current date.

ANTONIO RIOS
Director for
Federal Employees' Compensation

Attachment: Prompt Pay Interest Rates Debt Management Interest Rates

Distribution: All DFEC Staff

ATTACHMENT TO FECA CIRCULAR NO. 18-03

ATTACHMENT TO FECA CIRCULAR NO. 18-03

Back to Top of FECA Circular No. 18-03

Back to Table of Contents

Attention: This circular has been superseded and is inactive.

SUBJECT: Bill Pay - Revision in the Reimbursement Rates Payable for the Use of Privately Owned Automobiles Necessary to Secure Medical Examination and Treatment.

BACKGROUND: Effective January 1, 2018, the mileage rate for reimbursement to Federal employees traveling by privately-owned automobile INCREASED to 54.5 cents per mile by GSA. No restriction is made as to the number of miles that can be traveled. As in the past, determination has been made to apply the applicable rate to disabled FECA beneficiaries traveling to secure necessary medical examination and treatment.

APPLICABILITY: Appropriate National Office and District Office personnel.

REFERENCE: Chapter 5-0204, Principles of Bill Adjudication, Part 5, Benefit Payments, Federal (FECA) Procedure Manual and 5 USC 8103.

ACTION: The Central Bill Pay (CBP) facility has updated their system to reflect the new rates. Since there is no action required at the District Office level, the rates are being provided for informational purposes only.

DISPOSITION: This Bulletin should be retained in Chapter 5-0204, Principles of Bill Adjudication, Federal (FECA) Procedure Manual.

ANTONIO RIOS
Director for
Federal Employees' Compensation

Distribution: All DFEC Staff

Back to Top of FECA Circular No. 18-04

Back to Table of Contents

Attention: This circular has been superseded and is inactive.

SUBJECT: Medication "Convenience" Kits and Combination Medications

PURPOSE: To provide notification of new DFEC policy with respect to payment for certain medications and kits

References: 5 U.S.C. § 8103; 5 U.S.C. § 8124 (a)(2); 5 U.S.C. § 8128; 5 U.S.C. § 8145; 5 U.S.C § 8149. See 20 C.F.R. 10.800-826, FECA Bulletins 17-01 and 17-03.

Medical compounding is the process of combining or altering two or more drugs or their ingredients to create a hybrid that is tailored to the specific need of a patient. Compounding is normally done by licensed pharmacists with the oversight of the states' boards of pharmacy or by licensed physicians. With FECA Bulletin 17-01, a new DFEC policy was instituted for the authorization of compounded products, and how to manage cases where a claimant is receiving such compound medications. With FECA Bulletin, 17-03, a new policy was issued that herbal supplements would only be authorized on an exception basis.

Since Bulletin 17-01 was published, the Division of Federal Employees' Compensation (DFEC) has identified a new trend in the dispensing of medication kits, which may have emerged as a possible substitute for traditional compounding. While most compounded medications are mixed together by a pharmacist, some medication kits appear to be packaged solely for convenience. These "convenience kits" include multiple medications or items that are used together or mixed by the patient at home. There are several varieties of kits available. A typical compounding convenience kit might contain a base chemical and one or more pre-measured active ingredients that are to be mixed by the patient by following packaged instructions.

While compounded drugs use multiple billing codes for multiple ingredients, these kits typically have just one National Drug Code (NDC) number registered to them. This has allowed such convenience kits to be approved and paid for regardless of the cost of the kit's individual components and not in accordance with DFEC's Letter of Medical Necessity (LMN) process. Similarly, there are combination medications that in effect may meet the technical definition of a compound drug. Although they combine two drugs, they are assigned a single NDC number and thus also cannot be processed through the LMN process.

The cost of certain convenience kits and combination medications is extremely high and in many instances, there are safe and commercially available alternative NDCs available at a lower cost.

Under the Federal Employees' Compensation Act (FECA), the Department of Labor's (DOL) Office of Workers' Compensation Programs (OWCP) may provide to an employee injured while in the performance of duty, the services, appliances, and supplies prescribed or recommended by a qualified physician, which OWCP considers "likely to cure, give relief, reduce the degree or the period of disability, or aid in lessening the amount of the monthly compensation." See 5 U.S.C. 8103. The Act and its implementing regulations at 20 C.F.R. Part 10, Subpart I (20 C.F.R. 10.800) authorizes OWCP's FECA program to set limitations and require pre-authorization for medical services and supplies where deemed necessary.

In accordance with the discretion granted to DOL and delegated to OWCP, DFEC is instituting a new exception-based policy pertaining to payment of convenience kits and certain other combination medications. Authorization and payment will automatically deny when:

1. DFEC has determined that the items in the kit/medication can typically be obtained separately and/or at a lower cost and there is a reasonable commercially available alternative or substitute; or
2. The primary use is for a condition not normally caused by a workers' compensation injury.

For example, the combination medication kit Dermacinrx Zrm Pak (NDC 59088080500) contains a patch and a cream. These items (Lidocaine 5% patch and Dimethicone 5% cream) can be obtained separately and at lower cost, so this is one of the NDCs on DFEC's denial list.

This trend has also been observed for other combination medications, such as Duexis (NDC 75987001003), which is a combination of Ibuprofen and Famotidine, both of which can be obtained separately and at a lower cost. Therefore, this medication is also being placed on DFEC's denial list.

DFEC's initial list of denied NDCs contains 49 different NDCs. An informational copy of this initial list is attached to this Circular. Please note that DFEC will continuously and regularly review and evaluate NDCs in accordance with the above policy and set the corresponding NDC to deny. As this evaluation process progresses, additional listings of non-payable medications (such as convenience kits and combination medications) will be made available on DFEC's website at https://www.dol.gov/owcp/dfec/. Providers are expected to review this list prior to dispensing to determine if the NDC will be covered for payment. DFEC will also place notice regarding this new policy on the DFEC Web Bill Processing website at https://owcpmed.dol.gov.

Exception Basis Note: DFEC policy on considering exceptions for DFEC specified NDCs for convenience kits and combination medications will follow that set forth in FECA Bulletin 17-03. The convenience kits and combination medications for DFEC specified NDCs can only be approved on a District Director exception basis when a claimant's treating physician acquires pre-authorization by submitting rationalized medical evidence that explains why the authorization of the convenience kit/combination medication is medically necessary and cost effective, fully explaining why the commercially available alternative is not suitable for this condition for this particular claimant.

ANTONIO RIOS
Director for
Federal Employees' Compensation

Distribution: All DFEC Staff

Back to Top of FECA Circular No. 18-05

Back to Table of Contents

Attention: This circular has been superseded and is inactive.

SUBJECT: Physician Dispensed Medication (Billing for Unspecified "J Codes")

PURPOSE: To provide notification of new DFEC policy with respect to payment for Unspecified Healthcare Common Procedure Coding System (HCPCS) "J Codes"

REFERENCES: 5 U.S.C. § 8103; 5 U.S.C. § 8124 (a)(2); 5 U.S.C. § 8128; 5 U.S.C. § 8145; 5 U.S.C § 8149. See 20 C.F.R. 10.800-826, FECA Bulletins 17-01 and 17-03, 17-07 and FECA Circulars 12-06 and 18-05.

BACKGROUND:

FECA Circular 12-06 outlined that providers submitting bills for payment of medications dispensed in the office using Healthcare Common Procedure Coding System (HCPCS) "J" codes J3490, J8499, J8999, and/or J9999 were required to also submit a National Drug Code (NDC) and the day's supply.

FECA Bulletin 17-01 implemented new controls for the authorization of compounded medications.

FECA Bulletin, 17-03 implemented a new policy that herbal supplements would only be authorized on an exception basis.

FECA Bulletin 17-07 implemented new controls for the authorization of opioid medications.

FECA Circular 18-05 implemented a new exception-based policy pertaining to payment of convenience kits and certain other combination medications.

This circular implements additional controls on physician dispensed medications as explained below. Since the controls for pharmacy dispensed medications were implemented, the Division of Federal Employees’ Compensation (DFEC) has identified a new trend in the dispensing of medication in physician offices. Medication dispensed in this manner is typically billed using HCPCS codes, specifically "J codes". In the HCPCS manual, a "J code" is described as follows:

"J codes include drugs that ordinarily cannot be self-administered, chemotherapy drugs, immunosuppressive drugs, inhalation solutions, and other miscellaneous drugs and solutions."

Physician dispensing can present a safety concern as it presents obstacles for both a physician and pharmacist to identify harmful drug interactions when multiple physicians are treating a patient.

The cost of the physician dispensed medications can be significantly higher than those dispensed at a pharmacy, and billing medication in this manner allows such submissions to bypass controls that DFEC has implemented. There may also be situations where the prescription of certain medications can be incentivized, potentially impacting physician judgment on medical necessity and medication quantity prescribed.

Specifically, the practice of dispensing medications in this manner inhibits DFEC from effectively administering program controls relating to safety, cost and medical necessity. It circumvents opioid controls as outlined in FECA Bulletin 17-07 and adversely impacts program controls on compound medications as outlined in FECA Bulletin 17-01.

AUTHORITY: Under the Federal Employees’ Compensation Act (FECA), the Department of Labor's (DOL) Office of Workers' Compensation Programs (OWCP) may provide to an employee injured while in the performance of duty, the services, appliances, and supplies prescribed or recommended by a qualified physician, which OWCP considers "likely to cure, give relief, reduce the degree or the period of disability, or aid in lessening the amount of the monthly compensation." See 5 U.S.C. 8103. The Act and its implementing regulations at 20 C.F.R. Part 10, Subpart I (20 C.F.R. 10.800) authorizes OWCP's FECA program to set limitations and require pre-authorization for medical services and supplies where deemed necessary.

ACTION: In accordance with the discretion granted to DOL and delegated to OWCP, DFEC is updating its policy regarding Physician Dispensed Medication, specifically as it relates to unspecified "J codes."

1. DFEC will continue to authorize and pay for specific "J codes" (not subject to the limitations listed in #2 below) if properly administered and billed in accordance with 20 C.F.R. 10.800-826. Examples of such J Codes include J0878 - Injection, daptomycin, 1 mg, or J2278 - Injection, ziconotide, 1 mcg.
   
2. Expanding on the guidance in FECA Circular 12-06, all bills for the following unspecified "J codes" must be submitted with an NDC and the day's supply and are subject to prior authorization by claims staff:
   
   • J3490 - Drugs unclassified
   • J3590 - Unclassified biologics
   • J7999 - Compounded drug, not otherwise classified
   • J8999 - Prescription drug, oral, chemotherapeutic, NOS
   • J9999 - Not otherwise classified, antineoplastic drugs
   • J8499 - Prescription drug, oral, nonchemotherapeutic, NOS¹
     
3. DFEC will rely on the specific definition of a HCPCS "J code" to determine whether medication dispensed and billed with one of the six unspecified codes in #2 will be authorized and paid. If the medication dispensed is indeed a drug, "that ordinarily cannot be self-administered," (see 3a) DFEC will authorize and pay for the medication without further claims development in accordance with 20 C.F.R. 10.800-826.
   
   1. Examples of medications that ordinarily cannot be self-administered and would instead be administered by a physician in the physician’s office, that cannot be billed with a specific "J code", and in turn would be considered payable by DFEC if billed with one of the six unspecified codes in #2 above, include the following:
      
      • Enalaprilat 1.25MG/ 1ML (NDC 10019009504), Famotidine 10MG/ 1ML (NDC 10019004602), Glycopyrrolate 0.2MG/ 1ML (NDC 10019001663) and Flumazenil 0.1MG/ 1ML (NDC 36000014810)
        
   2. Examples of medications that ordinarily can be self-administered, would not need to be administered by a physician and could be obtained in a pharmacy setting, and in turn would NOT generally be considered payable by DFEC if billed with one of the six unspecified codes in #2 above, include the following:
      
      • Ointments and Lotions, such as LidoPro Ointment (NDC 53225102201), Relador Pak w/Occlusive Dressing (NDC 69166010590), Baclofen Topical Cream (NDC 76420093101) and New Terocin lotion (NDC 50488112901)
        
      • Patches, such as Terocin Patch -Menthol (NDC 50488100101), LidoPro Patch (NDC 53225102301), Lidocaine Patch (NDC 59088039654, 59088039682) and Lidozen patches (NDC 63187091730)
        
      • Combination Medication Kits, such as Livixil Pak (NDC 15455950401), NuTriaRX CreamPak (NDC 70859000201), NuDiclo SoluPak (NDC 70859000301) and NuDiclo TabPak (70859000401)
        
      • Oral Medications, such as Tramadol Hydrochloride capsule (NDC 69467100101), Cyclobenzaprine Hydrochloride tablet (NDC 69420100101), Omeprazole capsule (NDC 68462023110), and Morphine Sulfate tablet (NDC 00406833001).
        
4. Prior authorizations for the medications described in 3a may be requested by utilizing the Unspecified J Code Authorization Request, which is available on the DFEC Web Bill Processing website at https://owcpmed.dol.gov. Prior Authorization requests should be faxed with supporting medical documentation to the number provided on the website. All fields are required and must be completed. Incomplete requests cannot be processed and will be returned.
   
   DFEC will review the request and case file documentation to determine whether to authorize the requested medication. Specifically, DFEC will review whether the prescribing physician has provided medical rationale regarding why the medication is necessary for the claimant's accepted work related condition. In some instances, DFEC may request additional medical justification from the physician and may undertake additional medical development concerning the medical necessity of requested medication. In the event a medication authorization is denied, a claimant may upon request receive a formal decision with appeal rights.
   
5. This policy is effective June 1, 2018. All bills received on and after this date will be subject to this policy.

ANTONIO RIOS
Director for
Federal Employees' Compensation

Distribution: All DFEC Staff

Back to Top of FECA Circular No. 18-06

Back to Table of Contents