Earlier this year, I predicted Florida would pass a bill limiting reimbursement for physician dispensed drugs. This morning, we made some significant progress.
Spent a good chunk of the morning watching the Florida Senate hearing on Sen Hays’ bill that would peg reimbursement for physician dispensed drugs at what a retail pharmacy would charge for the same drug.
Automated Healthcare Services’ lobbyist Tom Panza was up to speak in opposition. A passionate advocate for his client, Panza’s speech was notable for its energy if not for its accuracy.
He conflated drug costs, saying that repackaged/physician dispensed drugs average price of $137 is the same as the average pharmacy price of $120. What Panza didn’t say, and none of the Senators asked about, is drug mix. Physician dispensers almost exclusively dispense generics, which are much cheaper – on a per script basis – than brand drugs. And retail chains sell brands and generics – brands cost over $200 per script. Thus, Panza’s claim that physician dispensed drugs only cost $17 more on average than retail was misleading and false on its face; in fact WCRI’s recent report on pharmacy in Florida notes: “physicians were paid 35-60 percent more than pharmacies for the same prescription.”
Panza also trotted out the hoary old chestnut that physician dispensing increases compliance, citing the statistic that 30% of scripts aren’t filled – ignoring that this figure is a) dated; b) addresses group health and not work comp; and c) the main reason people don’t fill their group health scripts is cost. And as we all know, comp claimants don’t pay anything for drugs.
Panza also stated that physician dispensed drugs reduced litigation and increased patient satisfaction, without citing any data or research to support that assertion. Gotta respect his passion, even if his logic and supporting data (of which there was almost none) was suspect at best.
Lori Lovgren came up after Panza, and debunked his claim that prices were the same for physician and pharmacy prices. Sen Bennett was somehow confused about her response, or perhaps more accurately Bennett didn’t like what he heard. Bennett’s been vocal about his support for the egregious over-billing for drugs by physician dispensers. Sen Negron, another physician dispensing supporter, asked some unsubtle questions asking if insurers had any ownership of pharmacies or PBMs, which Lovgren did not answer – the answer, of course, is no.
While Lovgren was, or course, accurate, she wasn’t a particularly effective speaker, and failed twice to make key points refuting Panza’s claims. It’s one thing to have the right information, but it’s a whole different thing to present that information cogently and effectively.
Several other Senators seemed to focus on narcotics, and wanted to know if the pill mill bill had changed the financial picture, making NCCI’s cost figures irrelevant. Lovgren responded that no, there was no significant impact on cost, but that didn’t seem to bear much weight
A number of potential speakers from all manner of employer, taxpayer, and payer advocacy organizations waived their chance to speak but voiced support for Sen. Hays’ bill (restricting overcharging for physician dispensed medications).
A physician advocated for physician dispensing said he couldn’t dispense at the costs set by the Hays bill as he has to hire additional staff and buy software etc and therefore the bill killed physician dispensing
David Deitz, MD spoke directly to the physicians’ claims that physician dispensing increases compliance, noting there are no studies supporting that claim. He also noted that Liberty Mutual does not oppose physician dispensing but rather repackaging. Another Senator cut off Dr Deitz, and the Committee did not allow any of the other dozens of supporters to speak. That’s too bad, as Dr Deitz knows this subject very well.
There was some very brief discussion, but the bill passed out of Committee by a substantial margin
This is a big step, a critically important one, but only a step. There’s much to be done to get this bill passed by the Senate and signed into law.
We’ll keep you posted.
Thanks to Carol Gentry of HealthNews Florida for the head’s up.

Today’s WorkCompWire has a great piece authored by PMSI CEO EIleen Auen on the differences between work comp and group pharmacy management.
Among Eileen’s points are:
– “Group health benefits generally focus on sickness and illness while workers’ compensation focuses on workplace injuries and returning individuals to work. Although a fairly obvious difference, it underlies many of the other differences that make workers’ compensation unique, including drug mix.” (I’d add that work comp ONLY covers drugs specifically for treatment of the occupational injury or illness).
– “The types of drugs used. Because of the focus of care, the medication mix in workers’ compensation is much more focused towards pain management rather than illness management.”
There’s quite a bit more on differences in clinical management, formulary, and financial incentives, and how these effect prescriber and patient behavior.
Well worth the read, especially if you’re an investor type trying to understand the WC PBM industry.
(Note PMSI is a member of CompPharma, and Eileen is a good friend)

I’m finishing up compiling results from the most recent survey of pharmacy management in workers comp, and had to take a break and get this out.
I just totaled up the responses to the question “How much of an issue are opioids in workers comp?”
The average response was 4.8 on a 1 to 5 scale, with 5 “extremely significant”.
This is the highest score for any question in the eight year history of the survey.
Moreover, respondents are deeply concerned about the increased risk of addiction and dependency inherent in widespread and prolonged use of these highly addictive drugs. They rated their level of concern at 4.4.
Respondents were from a variety of payers: state funds, large private insurers, TPAs and smaller regional carriers.
Kudos to WCRI, NCCI, and CWCI for raising awareness of the issue.
Next step is to put solutions in place.

Today’s WorkCompCentral arrived with the welcome news [subscription required] that South Carolina’s Workers Comp Commission has capped the price on repackaged drugs at the price set by the underlying manufacturer.
This is good news indeed, and a well-deserved helping of coal for drug repackagers and physician dispensing companies who add no value while sucking money out of the system.
This follows similar action earlier this year in Georgia, and should have a significant impact on employers’ costs in the Palmetto State. According to NCCI, physician dispensed drugs accounted for about 27% of all drug costs in SC – but that was back in 2009. It’s highly likely they’re up well over 30% by now.
Other states that have put caps on physician dispensed drugs or otherwise limited the practice include California, New York, Georgia, Texas, and Massachusetts. Connecticut is looking at the issue, as is Maryland.
The big problem continues to be Florida, where physician dispensed drugs now account for over half of all drug costs – and price levels continue to head for the stratosphere. Sources indicate legislation designed to limit price gouging will pass the House, but it’s up in the air in the Senate.
For more info on exactly how much cost these companies add to the system, click here.
What does this mean for you?
Lower costs and improved patient safety in South Carolina is great news indeed!

A doctor prescribes massive doses of opioids for a claimant; that prescription is denied; another physician writes the exact same prescription, the claimant gets the drugs, dies, and the insurance company that paid for the drugs is liable.
Only in workers comp.
I’ve received no fewer than eight emails and references to this in the last few days; all express outrage – outrage that any physician would prescribe these drugs, outrage that the second prescription wasn’t rejected, outrage that the doc that wrote the second prescription was the sister of the first prescriber, outrage that the insurance company is somehow deemed liable for the death.
I won’t get into the court’s decision re liability; Roberto Ceniceros has that discussion covered here. That’s dealing with the result. What makes me insane is the simple reality that the claimant got drugs they never should have received.

Because the system – denying inappropriate care through the state-regulated utilization review process – worked. The pharmacy that received the initial script refused to fill it.
Here’s a few more details that add even more concern.
The claimant was prescribed fentanyl patches which were supposed to last two days per patch. Two days after the script was written, there were only four patches left in the box. According to court records, “Subsequent toxicology reports revealed that Fentanyl alone was sufficient to account for death, in even a tolerant user, as Decedent was [sic] certainly was. Decedent died from drug intoxication due to an overdose of Fentanyl prescribed for his work injury.”
This was in addition to “Propoxyphene, which is [sic] synthetic narcotic analgesic, frequently compounded with non-narcotic analgesics; Oxycodone, a narcotic analgesic, often compounded with other ingredients such as non-narcotic analgesics…”
Oh, and the doc who prescribed the drugs that killed the claimant worked in her brother’s practice; was referred the claimant by her brother, who told her to “handle” the situation; knew the UR determination had rejected her brother’s initial prescription; yet wrote the exact same script – for Sonata, Fentanyl, Oxycodone, Fentora, Docusate, and Lyrica.
What does this mean for you?
It is abundantly clear that opioid usage in workers comp is a national disaster. PBMs and payers have to start – or step up – screening for overuse and denying scripts that are not medically necessary. Physicians exhibiting these prescribing patterns have to be very carefully scrutinized. PBMs and payers have to work together to identify claimants at high risk for addiction, assess those claimants, and get them into treatment.
And we need to do this NOW.
Court decision is here.

The giant pharmacy/PBM company has told some Florida physicians they will no longer fill their scripts.

The article by the St Pete Times’ Letitia Stein, reported “CVS pharmacies appear to be flagging prescriptions for a specific combination of medications with high potential for abuse — oxycodone, Xanax and Soma…”. CVS is focusing on a relatively small group of doctors; this isn’t a blanket policy. These docs received a notice from CVS stating:
“CVS Pharmacy Inc. has become increasingly concerned with escalating reports of prescription drug abuse in Florida, especially oxycodone abuse…We regret any inconvenience that this action may cause. However, we take our compliance obligations seriously and find it necessary to take this action at this time.”
Pharmacies are obligated to refuse to fill scripts they believe are questionable; some, including Titan Pharmacy in New York, believe strongly in this obligation. Unfortunately the vast majority don’t. If they did, the current disaster in opioid overdosing would be much less of a problem.
Which is a nice segue to our next news item – WorkCompCentral’s John Kamin reported [sub req] this morning that the widow of work comp claimant who reportedly died as a result of an oxycodone overdose can pursue death benefits.
That’s right – a comp claimant, who was receiving drugs as a result of a work comp injury, died and the carrier may be liable for death benefits.
In this case it appears that the prescribing physician was careful and judicious, as the patient was prescribed a total of 60 mg of oxycodone (equivalent to 120 MED, the generally accepted dosing limit)
. And, the patient’s toxicology report appeared to indicate much higher usage than expected.
With all that said, the warning here is clear.
Some number of work comp claimants die as a result of opioid usage, and the employers/insurers who own that claim may well face liability for a death claim.

This morning’s opening session at the WCRI packed more insight into an hour than anyone could reasonably expect to digest. That’s not a criticism but rather a compliment directed at the four speakers.
First, the macro view as provided by WCRI’s Dongchun Wang. Massachusetts, Pennsylvania, Louisiana and New York had narcotic utilization significantly higher than the other study states, with NY occupying the top spot.
Massachusetts had by far the largest percentage of Schedule II drugs used as pain medications.
Long term usage of narcotics is a critical issue in comp: claimants on these drugs are not likely returning to work and incur higher medical costs. Again NY and LA had high percentages of claimants on narcotics who continued using them for an extended time. WCRI also examined public policy implications of their research findings on long term narcotic usage. Researcher Dongchun Wang reported data indicating compliance with chronic pain guidelines was all but non-existent (my words not her’s). The data showed only 7% of users were drug tested while 4% had psych evaluations/treatment.
This is a disaster. 19 out of 20 claimants prescribed narcotics over the long term are pretty much on their own. These prescribing physicians are NOT complying with the basic treatment guidelines.
Addiction, which Pain Management physician Janet Pearl MD defined as a psychological dependence on a drug, is a very significant and all-too prevalent among work comp claimants using opioids over an extended period. Pearl also noted that there is no evidence to support high dose opioid therapy while moderate dosing helps with pain but NOT with function.
Finally Colorado work comp medical director Kathryn Mueller MD described how her state addresses the issue. My main takeaway involves Colorado’s decision to pay physicians for managing chronic pain based on a code-based reimbursement for review of drug screens, and the implementation and monitoring of opioid agreements.
This is one of those blindingly obvious solutions that every payer and state should implement now. Paying a physician to do the extra work required in managing claimants with chronic pain is just common sense.