Oh this is getting fun!

Earlier this week WorkCompCentral published a column ostensibly written by a physician attacking me for exposing the dangers, both physical and financial, inherent in physician dispensing of repackaged drugs.  I say ostensibly because the column reads like it was ghost-written by one of the industry’s shills, perhaps one of Ron Sachs’ interns. (Ron’s the guy physician dispensing company AHCS hired to call reporters to tell them they were suing me).

By the way, I LOVED the column.

It was an amazing combination of pronouncements from an arrogant-beyond-belief doctor, with a really nasty and personal attack on me, my motives, and my ethics.

Alas, it was so poorly done, with so many logical fallacies and nonsensical arguments based on nothing more than fact-free opinion that I can’t believe a real doctor actually wrote it.  After all, doctors are supposed to believe in science; you know, research, medical evidence, facts, logic supported by data – those kind of things.  Yet the column didn’t have any of those, instead it was a mishmash of unsupported claims based on “our experience”, and never directly addressed the key issues I raised in my piece, e.g. retail pharmacies have much more complete access to patient data, and docs who dispense don’t.

(btw, a Summit on Physician Dispensing will be held in Boston on February 25/26.  Sponsored by PMSI and Progressive Solutions, the Summit is free of charge and is held the day before WCRI’s annual conference – in the same hotel.  This is an invite-only event; there are a few slots open.  Email me at jpadudaAThealthstrategyassocDOTcom for details.

The ostensible author, one Dr Rafael Miguel, offered not a single shred of evidence to support his claims of better outcomes and enhanced quality of care. When not denigrating pharmacists, mischaracterizing my statements, and accusing me of profiting from defeating physician dispensers (more on that below), Dr Miguel/the intern hid the total lack of data supporting his claims behind the omnipotence of the god in the white coat, as if his title is proof enough and we non-physicians should meekly listen and obey.

You can tell the physician dispensing industry is in desperate straits when they use surrogates to question the motives of their opponents, fabricating reasons why anyone would dare interfere with their ability to suck money out of taxpayers and employers by charging outrageous amounts for the drugs they prescribe – and dispense – to workers’ comp claimants.

That’s known as “diversion”; when you can’t refute a critic, yell really loud about what a bad person they are.

Well, let’s look at Dr Miguel.

Dr Miguel is a dispensing physician using Rx Development Associates.  A quick check of their website reveals frequent mention of one of the key benefits of physician dispensing; additional revenue for the physician.  RxDA also touts how easy it is to sign up and use their system to generate big profits, “without interrupting or burdening staff members.”  That’s in direct conflict with Dr Miguel’s assertion that physicians “must recover the costs and time to provide this service to workers compensation patients.”

Let’s look at Dr Miguel’s scripts.  He’s dispensed fluoxetine, etodolac, omeprazole, and gabapentin, among other meds. One of those scripts, omeprazole, is commonly used for heartburn.  Omeprazole, also known as Prilosec, can be bought over the counter for about a buck a pill; Dr Miguel charged about $10  pill.  That’s not opinion or hyperbole, it’s fact.  Miguel charged about ten times more for the drug than it would have cost over the counter.

Dr Miguel/the intern contends docs can’t buy drugs for the same price retail pharmacies do, and that’s why they have to charge so much more.  Again, he offers no evidence of this.  In fact, if Dr Miguel had tried, he could have found repackaging companies clamoring to sell him drugs at very low prices.

Finally, allow me to address Dr Miguel/the intern’s questioning of my motives, and contention that my efforts to combat physician dispensing are “what can only be described as an attempt to fatten Mr. Padudas personal bottom line.”

1. As I have noted many times, I am co-owner of CompPharma, an association of workers’ comp PBMs.  It makes no difference (financially) to me if  physician dispensing dies off, explodes, or just stumbles along. I don’t get a nickel more or less.
2. My public battle with the industry and its advocates has cost me tens of thousands of dollars in legal fees not to mention hundreds of uncompensated hours.
3. Yes, PBMs will benefit if physician dispensing ends, but I am not a PBM, nor do I own a PBM, nor do I get paid based in any way on their volume of business.

Workers comp payers around the country are seeing their bills – and payments – for inpatient and outpatient services increase significantly faster than other costs.

And all indications are those increases are going to…increase.

The latest WCRI reports (kudos to Rick Victor et al for getting ever-more current data into their studies) show facility costs are up substantially in several states.  Indiana’s facility costs were substantially higher than WCRI’s median states, driven by prices.  As Indiana doesn’t have a fee schedule for facilities, hospitals can jack up prices whenever they want – and they are.

WCRI reported overall hospital inpatient payments per stay increased 12% per year from 04/05 to 09/10; anecdotal information from HSA consulting clients indicate Indiana hospital prices are up significantly this year.

At that rate, your costs will double every six years.

And that’s the best case scenario.

What’s behind my pessimistic forecast is the news that hospitals will likely take a big hit in the fiscal cliff deal.  Medicare is going to get cut, and policymakers are focusing on facilities rather than physicians as the primary target for reductions in reimbursement.

What does this mean for you?

When – not if – those cuts are announced, we can expect facility costs to increase. In states like Indiana where there is no fee schedule, those increases will be driven by a combinaton of higher prices and more services per episode.

In fee schedule states, watch for significant increases in utilization – more and higher-intensity services per stay.

For a detailed view into workers’ comp outpatient costs and cost drivers, watch WCRI’s webinar on the subject.

This morning’s workcompcentral arrived with the news that hospitals and device manufacturers somehow are arguing the huge overpayment for surgical devices in California is justified because of the “additional costs” of putting these devices in comp claimants.

Seems the California Hospital Association hired a consulting outfit to see just how much more costly it is to do surgery involving screws and cages and other hardware for people with occupational injuries than non-occupational ones.  And, stunningly, it’s waaaaaaay more expensive!

Yep, wrenching that back lifting a stack of drywall at work requires surgery that is, well, different/more complex/more involved/more time-consuming/more lucrative than lifting drywall at home when you’re re-doing the family room. The doctors, facilities, devices, tools, patients, support staff, all are identical – the only difference is who’s paying for the device – workers comp or Medicare.

The “disagreement” arises over a regulation proposed by DWC California that would set device reimbursement at 120% of Medicare.  That’s ALREADY higher than Medicare, but not enough for the profiteers.

Writing in this morning’s WCC, Greg Jones reported that hospitals and their allies said “additional allowances for devices used in certain spinal surgeries are not enough to make up for lost revenue from eliminating the spinal pass-through”.

No $%&*(.  It’s not supposed to.  

The “pass through” provision allowed these providers to “pass through” grossly inflated charges to workers comp payers.  There’s more to it than this – of course – but the net is this.

Once again workers comp is the trough.  As friend and colleague John Swan often reminds me, pigs get fat, and hogs get slaughtered.

An article in Physicians News yesterday suggested providers look to workers comp to make up revenue losses from Medicare and commercial payers’ declining reimbursement. That wasn’t stated explicitly, but you don’t have to be a code-breaker to get author Franklin Rooks’ message.
Rooks’ main point appeared to be for physicians to think carefully before agreeing to work comp PPO contracts. Can’t disagree with that, but I do take exception to the several statements which are the basis for his arguments.
As Rooks cited me in his piece, I posted a comment, which is excerpted below.
1. The article stated “Employer direction of medical care tends to erode workers compensation reimbursement to levels below the state fee schedule.” without providing any data or backup whatsoever to support this assertion. Physician News’ editors should have caught this.
In fact there is ample evidence from multiple sources that there are many factors impacting reimbursement, with market concentration of providers and the relative level of workers comp fee schedules [compared to other payers’ reimbursement amounts] chief among them.
2. The article cited the recent effort by Florida’s legislature to ban egregious over-charging for physician dispensed medications. As readers know all too well, in Florida, physician dispensing of medications to workers comp patients has increased employers’ costs by over $60 million with no benefit to injured workers. Data from several sources indicate physician dispensing adds over a billion dollars to the national workers comp tab, again with no discernible, demonstrated benefit to patients. There is, in fact, a critical issue of patient safety in the practice of physician dispensing, as work comp physicians often do not know precisely what medications the patient is taking, and therefore cannot be sure there are not potentially hazardous drug-drug interactions.
I’d also note that workers comp is NOT intended to be the payer used by physicians and other providers seeking to make up for lost revenue from other sources. Mr Rooks’ unstated but clearly intended message is for providers to seek the most reimbursement possible from comp to compensate for declines in other sources.
That is inappropriate and unethical.
Thanks to Sandy S for the head’s up.