Session 2013
9:00 am
Thu January 10, 2013

Florida Docs Want To Keep Lucrative Drugs Scheme While Cutting Workers' Comp Costs

With another legislative fight brewing, the Florida Medical Association is signaling that it could play a large role this year in a debate about limiting the amount of money doctors can charge for dispensing drugs to workers' compensation insurance patients.

COST DRIVER? Florida doctors insist their profitable way of dispensing medications does not increase the cost of workers' compensation.
COST DRIVER? Florida doctors insist their profitable way of dispensing medications does not increase the cost of workers' compensation.

The FMA was not outspoken during the 2012 legislative session when insurers and business groups unsuccessfully lobbied to cap such payments to doctors as a way to reduce workers' compensation costs. But FMA General Counsel Jeff Scott said Wednesday the powerful physicians' association has received an "avalanche" of calls from members who were concerned about the issue.

Scott said doctors dispensing what are known as "repackaged drugs" --- as opposed to writing prescriptions that would be filled at pharmacies --- is not a major cost driver in the insurance system and has drawn a disproportionate amount of attention. Many doctors argue that such in-office dispensing helps patient care, though it also provides another source of revenue for physician practices.

"We learned a lot the last year,'' Scott said. "We decided we were going to get involved and, in good faith, try to resolve this issue."

But it appears clear that the issue will spur another lobbying fight during the legislative session that starts in March. A workers' compensation panel chaired by state Insurance Commissioner Kevin McCarty recommended Wednesday that lawmakers consider limiting reimbursement for doctor-dispensed drugs, along with looking to curb costs through changing the way hospitals are reimbursed for treating workers' compensation patients.

Sam Miller, executive vice president of the Florida Insurance Council, said his industry group will continue to pursue the limits on drug costs as it tries to find more savings in the workers' compensation system.

Lawmakers passed a massive overhaul of the system in 2003 that has led to a 56 percent overall drop in insurance rates. But rates have begun to inch back up since 2010 and Miller said addressing the drug-dispensing issue and hospital reimbursements would offer additional ways to hold down costs.

"Clearly, the Legislature needs to look at cost drivers that weren't effectively handled in 2003,'' Miller said.

The debate, which has flared repeatedly during the past few years, stems from repackaged drugs not being subject to the price limits that apply to other drugs in the workers' compensation system. Physicians buy the repackaged drugs in smaller amounts than the volumes purchased by pharmacies, which backers of doctor dispensing say is a factor in the costs.

Major business groups, such as the Florida Chamber of Commerce, Associated Industries of Florida and the National Federation of Independent Business, have lobbied for the price limits to also apply to repackaged drugs but they have not been able to get legislative approval.

Those groups have run into fierce opposition led by Automated HealthCare Solutions, a politically influential firm that provides dispensing technology to doctors. Supporters of physician dispensing say, at least in part, it can help increase compliance of patients getting and taking needed medications --- an issue that Scott said ties into ongoing changes in the health-care industry that make doctors more responsible for directing the care of patients.

A recent state report about the workers' compensation system shows that payments to physicians for repackaged drugs jumped from about $21.6 million in 2007 to $46.8 million in 2008. The amounts continued growing --- though more slowly --- to nearly $54.4 million in 2010, but fell back to $52.4 million in 2011.

That report and another by the National Council on Compensation Insurance, which proposes rates and does analysis for the state, also show that drugs dispensed by physicians are more expensive than those purchased at pharmacies. NCCI estimated that the proposed limits would save about $27.3 million in the workers' compensation system.

Tom Panza, an attorney for Automated HealthCare Solutions, acknowledged Wednesday that costs are higher for doctor-dispensed drugs, but he has repeatedly questioned the estimated amounts. He said, for example, that a 2011 estimate put the potential savings at $62 million, far higher than the current $27.3 million estimate.

"We believe that this math is bogus,'' Panza told McCarty and other members of the workers' compensation panel that makes recommendations to the Legislature.

McCarty, Miller and NCCI official Natasha Moore said insurance companies appear to have taken steps to limit costs through such things as contracts with physicians. But they said the costs clearly remain higher than when patients get prescriptions at pharmacies.

The insurance commissioner said he and others are not trying to prevent physicians from dispensing drugs but are trying to make the costs level.

"I think everybody wants to resolve this issue in a way that is not harmful to our injured workers,'' McCarty said.

Jim Saunders reports for the News Service of Florida.