A friend who happens to be a practicing physician here in Connecticut was approached recently by physician dispensing firm Rx Development with a great offer. The physician could dispense medications right from his/her own office, at no cost and no obligation, and make buckets of money!
How much money?
Well, how about a 4443% markup on Soma’s generic?
Or 4330% on Mobic’s?
2060% on Ultram’s?
But wait. There’s more. The doc can pick her/his own drugs, negotiate for a bigger share of the margin, and Rx Development does all the work, provides all the drugs, handles all the billing, and trains the doc’s staff – all at NO CHARGE!
Of course, this only applies to work comp and auto accident patients.I guess increasing compliance, the avowed intent of physician dispensing, isn’t that important unless you can get paid huge dollars.

Oh well, one should do well if one is doing good! And if one can’t do well, what’s the point of doing good?
I’m hoping the State of Connecticut is aware of this, and takes prompt action to address this practice – which is nothing more than abusing the system to make outrageous profits at the expense of Connecticut’s employers. If you agree, please pass this on to the Connecticut Workers Compensation Commission Chair at
wcc.chairmansoffice@po.state.ct.us
We have GOT to stop this.
Here’s the letter received by the physician.
“Dr. Jenson,
Thanks for taking the time to speak with me this morning. We work with Offices in your area that see workmans comp [sic] patients and assist them with almost every aspect of the visit. Here is some information regarding what we were discussing and what we offer. Also here is a link to the Website. www.rxdevelopment.com
Our largest asset is In-Office Medication. What we do at Rx Development is store only the medications you would like in prepackaged (30,60,90,120 Count bottles) in a cabinet for your workman comp [sic] and auto accident patients. The medication is bar coded and electronically scanned through our web based dispensing system. There is absolutely no out of pocket cost to the Doctors or Patients. We handle everything for you: supplies, collections, set up and training, and tracking of inventory. Not only do your patients have the convenience of having their medical needs addressed in one location, you also capture the profit your [sic] passing onto local drugstores. [emphasis added]
We would love the opportunity to give you a free no obligation consultation to show you what makes us different and show you how easy and effective this really is!!
Here is more information from our Website:
Point-of-Care physician dispensing makes sense for both doctors and patients alike. From the convenience of having prescriptions on-site to the extra revenue doctors can easily generate, Rx Development offers unparalleled medication dispensing services that are above the rest.
In-office medication dispensing or point-of-care dispensing, gives physicians a greater success rate when it comes to managing the treatment process. While patients enjoy the convenience of having their medical needs addressed in one location, doctors achieve maximum medical improvement (MMI) for the injured, getting them back to work as soon as possible. Medication dispensing programs not only expedite Workers’ Compensation, personal injury, and automobile accident claims, but effortlessly yield supplemental revenue sources for the physicians.
· Obtaining Medications–It all begins with the convenience and availability of patient pharmaceuticals at your office. Rx Development will advance the amounts necessary to implement the program including medications that have been properly labeled and packaged in compliance with DEA and FDA regulations.
· Equipment and Supplies–Everything you need to properly dispense medication is at your fingertips. No out-of-pocket costs are necessary; all supplies are included as part of our management. This includes:
· Billing and Collections–Enjoy financial peace of mind while utilizing the Rx Development in-office medication dispensing program. A full suite of pharmaceutical A/R services is available so you don’t have to concern yourself with billing and collections. Rx Development advances the funds to purchase the medications and handles all insurance company reimbursements.
· Inventory Consulting–The Rx Development point-of-care dispensing program helps you maintain adequate inventory without incurring out-of-pocket costs.
· Comprehensive Training–Staff members will be completely trained in administering pharmaceuticals, accessing reports, processing patient requests, and more.
· Supplemental Income–Earn residuals as you provide a convenient service of dispensing pharmaceuticals to your patients without ever leaving your office.
· Industry Updates–Rx Development helps you stay abreast of current industry standards, as well as local, state, and federal regulations. Our knowledgeable advisors will keep your staff informed of the latest updates.”
I’m encouraging my friend to resist the temptation….

There’s an excellent thread in Mark Walls’ LinkedIn group on the impact of opioid abuse on workers comp. Mark’s asked members to publicize the issue and among the fifty-plus comments are many thoughtful and well-considered responses, including several by physicians very knowledgeable about and engaged in the issue.
The dialogue is remarkable for its depth and detail; providers, attorneys, claims professionals, clinical managers, employers and
There’s also at least one provider opining that opioid abuse isn’t a problem and we should just let physicians do what they want because they went to medical school and we didn’t. His ignorance is stunning, but fortunately, his views are held by a minority of one.
The rest of the commenters are well aware of the dimension and impact of the problem, and several advance excellent, and pragmatic, approaches to addressing opioid overprescribing.
I think this social media thing just may take off…
Kudos to Safety National for encouraging Mark to engage in these issues. The impact he’s having is pretty impressive for someone who describes himself as “just a claims guy”.

This morning’s WorkCompCentral arrived with the welcome news [sub req] that Florida legislators are (once again) going to take up the issue of repackaged drugs and their effect on workers comp.
It’s unbelievable incredible not surprising that the legislature still hasn’t fixed this problem. Perhaps now that NCCI has shown system costs were $62 million higher – a full 2.5% – due to repackaged drugs dispensed by physicians, politicians will do the right thing for Florida’s businesses.

Perhaps.
The latest report from NCCI indicated physician dispensers “charged more than pharmacies for all 15 of the top drugs in Florida…” The differential went from 45% on the low end to 680% for carisoprodol [aka Soma(r)], a drug that a good friend/Medical Director of a very large work comp insurer calls the “worst drug in workers comp”.
For those unfamiliar with the issue, here’s the briefest of summaries.
– Florida’s pharmacy fee schedule is set at 100% of AWP plus a $4.18 dispensing fee for both generics and brand drugs. But AWP is based on the drug’s NDC number, a code that can be created by the wholesaler/repackager. Thus, if a company wants to buy a million 800 mg ibuprofen tablets and repackage them into lots of 27, it can create it’s own NDC, and thus set its own AWP.
That’s how repackagers/physician dispensers make their millions.
– Florida tried to fix this a while ago, but then-Governor Charlie Crist vetoed a bill passed unanimously by both Houses that would have tied the repackaged drug’s price to that of the original drug’s ‘underlying’ NDC, thereby eliminating the huge markups.
Turns out Crist got a very large campaign donation from a very large physician dispensing/technology company – Automated Healthcare Solutions of Miramar Florida.
– then, under new Governor Rick Scott (!!) the legislature scheduled a vote on overturning Crist’s veto, a vote that – given the previous unanimous passage of the physician dispensing fix – seemed like a mere formality.
Alas, physician dispensing companies pulled out their wallets and donated $1 million to political spending committees controlled by incoming legislative leaders Sen. Mike Haridopolos, R-Merritt Island, and Rep. Dean Cannon, R-Winter Park. And, the scheduled vote…never happened.
– now, NCCI and WCRI have both published reports conclusively showing physician dispensed medications increase the cost of doing business in Florida.
Now you’re up to date. Disgusted; faith in politicians shattered; amazed by the hypocrisy of ostensibly pro-business elected officials, but hey, at least you’re current.
Here’s hoping Florida does the right thing – but don’t bet on it.

NCCI released its 2011 pharmacy study yesterday, and there’s not much in the way of good news. Here are a few of the major take-aways from the research, which used 2009 data.
– per-claim drug costs grew by 12% in 2009.
– Pharmacy accounts for 19% of work comp medical expense, the highest percentage since NCCI started studying the issue.
– OxyContin is now the number one drug. Yippee.
– Utilization is the main cost driver, and physician dispensing closely follows. Physician dispensed drugs accounted for 28% of spend in 2009, up a full five points from the previous year.
Let’s take a quick look into a few of the other findings.
The older the claim, the more the drug spend. For claims more than 11 years old, drugs account for more than 40% of costs; for drugs 1 to 2 years old, drugs are a mere 3% of spend.
Drug costs for claims 4 to 9 years old are ” distinctly higher than in previous service years. Subsequent exhibits suggest that increases in physician dispensing might be contributing to this growth.” [emphasis added]
Physician dispensing accounts for fully half of all drug costs in Florida; about 44% in Georgia, 35% in Maryland, and about 32% in PA. Bad as that is, the big problem is that physician dispensing rose dramatically in almost every state. (Note that Hawaii’s decrease from 2008 – 2009 was a temporary situation, as all reports indicate physician dispensing has increased rapidly over the last two years.)
There’s a lot more to the study, and we’ll be digging deep into the research over the next couple days. For now, here’s what this means to you.
It is NOT ABOUT PRICE. Utilization is the main driver of work comp pharmacy costs.
Physician dispensing is the single biggest problem in work comp pharmacy. It’s beyond crisis stage.
With OxyContin the number one drug, we can expect claim durations to increase – people on high-power opioids are NOT going back to work.
And a big “well done” to NCCI’s Barry Lipton, Chris Laws, Linda Li, and their unnamed research associates for what is their best work on drugs to date.

There’s a lot of myth and fiction surrounding opioid abuse, addiction, and dependence, a situation that leads to misunderstanding the drivers, and solutions to the problem. With NCCI reporting narcotics account for a quarter (about $1.4 billion) in work comp drug spend, it’s critical for adjusters, clinical staff, and execs alike to understand the issue.
There’s a CEU course entitled “Understanding Opioid Addiction and Dependence: Therapeutic Options to Improve Patient Care” that’s free for the taking. Originally developed for pharmacists, anyone can access the materials and take the tests. If you can’t take the course now, make sure you click on the link and print out the flow chart illustrating the appropriate path for screening, diagnosis and treatment of opioid dependence, print it out, and stick it up on your wall. Especially if you’re an adjuster.
A reader asked why this has become so important an issue. Several reasons.
1. Most claimants on opioids aren’t going back to work driving the school bus, operating the printing press, or moving patients in the nursing home. Getting claimants off opioids is the first step to getting the claim closed.
2. Drug costs are going thru the roof, driven in large part by overuse of narcotics.
3. There’s very little medical evidence to support the long-term use of opioids for individuals with musculoskeletal injuries. Yet many claimants are on opioids for more than three months.
Here’s a couple takeaways to get you thinking…
– Among individuals 12 years or older in 2008-2009 who used pain relievers nonmedically in the past 12 months, 55.3% acquired the drug from a friend or relative; 17.6% reported that it was prescribed by a single physician
– Evaluating opioid dependence requires an understanding of the difference between addiction, tolerance, and physical dependence.
– the Diagnostic and Statistical Manual of Mental Disorders, 4th edition, defines substance dependence, which equates with addiction, as a maladaptive pattern of substance use over a 12-month period with evidence of 3 or more of the following
(anything here sound familiar?):

• Drug tolerance
• Withdrawal symptoms
• The amount or duration of use is greater than intended
• The patient repeatedly tries unsuccessfully to control or reduce substance use
• The patient spends much time using the substance, recovering from its effects, or trying to obtain it
• The patient reduces or abandons important work, social, or leisure activities because of substance use
• The patient continues to use the substance despite knowledge that it has caused ongoing physical or psychological problems

What does this mean for you?
Dealing with opioid abuse requires understanding the causes and solutions. If you handle claims or deal with injured workers, this is well worth your time.

WCRI’s just published another in their excellent series of reports benchmarking workers comp costs and outcomes in key states. This latest, entitled “PRESCRIPTION BENCHMARKS, 2ND EDITION: TRENDS AND INTERSTATE COMPARISONS”, provides additional insight into the difference in cost between drugs dispensed by physicians and retail pharmacies. It is based on 2006 – 2008 claims with more than seven days of lost time that had at least one script paid by work comp. Before we dig into the cost differential, there’s one item in particular deserves your attention
Here’s a direct quote:
“At $1,182, Louisiana had the highest average prescription cost per claim, [emphasis added] more than three times as high as that in Michigan, Minnesota, and Wisconsin, and 50-70 percent higher than the states with higher prescription costs.”
Why?
Two reasons – utilization, and physician dispensing.
Well, claimants in LA received higher cost drugs, more of them, and a higher percentage of their scripts were brand drugs. Louisiana also had a ‘medium’ level of physician dispensing that had grown moderately over the study period. LA claimants were also much more likely to have carisoprodol prescribed than claimants in most other states.
In sum, claimants “filled more prescriptions for more pills per claim in Louisiana than in any other study state.”
Ok, back to the premium paid for physician dispensed scripts. Here are a couple examples.
In Florida, ibuprofen dispensed by physicians cost 48% more than when dispensed in a retail pharmacy. In Illinois, it’s 42%; Louisiana, 81%; Maryland, 63%; New Jersey 69%; Pennsylvania 57%.
Ibuprofen is a bargain compared to Soma(r) (carisoprodol); Florida’s docs were paid 464% more; Louisiana 268%; Illinois 384%; Maryland 318%, Tennessee 300%.
In total, physician dispensed drugs likely add about a half-billion dollars to employers’ workers comp costs – cost that brings no added value.
What does this mean to you?
Do you write comp in Louisiana?

The number of of people dead from opioid analgesic use quadrupled over the last nine years. Opioids are synthetic opiates, and include methadone, OxyContin, Percocet, Oxycodone, fentanyl, and Actiq.
11,499 people died as a result of opioid usage in 2007, up from less than 3000 in 1999.
That’s twice as many as died from cocaine, and five times more than died from heroin.
The data come from the CDC’s National Vital Statistics System, and was published in the CESAR bulletin of May 31.
Another study published in JAMA indicates significantly higher risk of death for those taking more than 100mg/day.
This dosage level is not uncommon in workers comp, and the high dosage, coupled with long-term usage of opioids, significantly raises the chance of death from overdose. In fact, in comp, – over a third of claimants who start using opioids are on them for more than a year; a fifth are on for more than two years; and a seventh are on for more than three years.
And the usage of opioids in comp is exploding – the number of scripts is up 500% in California – in only four years.
The unknown is how many workers comp claimants are dying from opioid overdoses. I’m thinking that ‘unknown’ will not remain unknown for much longer, and when the data does come out, there’s going to be a lot of ‘energetic’ conversation about who’s at fault and what to do.
Here’s hoping we get to solutions pretty quickly.

Our colleagues at Workers Comp Insider sent us news of Florida Governor Rick Scott’s latest idiocy – he issued an executive order requiring drug testing for all state employees every quarter.
The master of simple solutions to complex problems has done it again. Here’s a bit from Jon Coppelman’s piece.
“All current employees – regardless of what they do – must be randomly tested every quarter. Because drugs stay in the body for hours and even days after they are used, the governor is attempting to control every waking minute of the state workforce. Not even commercial drivers are subject to such stringent monitoring.
This policy does not stem from “business necessity” nor does it take into account individual freedom and the right to privacy. Using the governor’s logic, you could argue that everyone in America should, for one reason or another, be tested for illegal drugs. This is bad policy and, to put it bluntly, unAmerican.”
A few questions spring to mind.
– does this include Scott and his staff, and all political appointees? the language seems to say it does.
– is this Constitutional ? seems like a potential case could be made that this is a violation of due process, privacy…
– what are the legal implications? Scott’s Order will result in hundreds of thousands of drug tests each year – many will be false positives, leading to…what? what is the next step? retest? what recourse will workers have if their tests are positive? do they get fired immediately? what if they metabolize meds differently?
– the drug tests are for ‘illegal drugs’ only, yet the abuse of prescription drugs has surpassed illegal drugs on the popularity scale. So, what does Scott’s Order do about rampant abuse of opioids in Florida? anything?
– how much is this going to cost? let’s see…
168,000 state employees.
tested 4 times each year
figuring a drug test (all in, staffing, reporting, actual test, etc) costs about $100 (they’re much more expensive on a retail basis, but Scott will likely go for a low bid.
and the total is – $67,000,000.
Yep, $67 million dollars.
and this from the idiot who didn’t want to implement a Prescription Drug Monitoring Program because it would cost less than a million dollars a year.
Now, let’s add in the legal costs – because employees will sue if they get fired. And the cost of hiring replacement workers (who all have to get drug screens).
and remember this doesn’t address abuse of OxyContin etc.
What does this mean for you?
next time you vote, consider the consequences.