Insight, analysis & opinion from Joe Paduda

< Back to Home


MCM investigative reporting – physician dispensing in Florida

If there’s one area of work comp pharmacy management that’s making payers crazy, it’s physician dispensing (followed closely by compounding).
The number of physicians and clinics dispensing drugs is growing; as one state seeks to reel in abusive practices, the purveyors move to the next. I first examined the business four years ago and found 18 companies in the business; a recent search turned up over fifty (I stopped counting there). This despite California’s belated move to rein in the practice that had, at one time, accounted for over half of the work comp drug costs in the ‘Golden State’ (an appelation likely invented by dispensing firms…)
The problem lies not in the actual practice, but in the opportunity for abuse – an opportunity that far too many ‘entrepreneurs’ have grabbed onto with both hands. (Details on this, and specifically the high cost of drugs in Florida, are provided below)
That’s not to say all clinics and practices dispensing drugs are unethical – some bill appropriately, charging perhaps slightly more than usual but nothing outrageous. That’s OK, as handing the patient their meds on the way out fo the office can help increase compliance and reduce patient hassles.
Unfortunately, those good actors are the exception rather than the rule. The Investigative Reporting staff here at Managed Care Matters recently uncovered some rather alarming information about one physician dispensing firm – Automated Healthcare Solutions.
Automated Healthcare Solutions, located in south Florida, has one of the slicker websites, full of platitudes about improving patient care, ensuring access, improving outcomes, reducing payers’ administrative workload…
Sounds great. Before you sign up, you may want to do a quick check on the folks behind AHCS.
Let’s start with Paul Zimmerman, M.D. ‘practicing orthopedic surgeon’ and CEO of AHCS.
Impressive bio – including claims that he was formerly Medical Director at “Liberty Mutual, The Home Depot, Pan American Airlines, Baxter Healthcare and Sears”. Knowledgeable sources have informed me that Zimmerman was never a ‘Medical Director’ at Liberty Mutual. And there’s no evidence he filled that role at the Home Depot either. I’ve asked AHCS to provide substantiation for Zimmerman’s claims…no response yet…
There’s much more to the Zimmerman bio, information that for some reason the good doctor hasn’t included on the AHCS site.
We’ll leave aside his rather modest rating on healthgrades, as the sample size is so small as to be unreliable.
There are two other issues that may provide insight into Dr Z’s policies and practices.
Allegedly, some years ago Zimmerman decided to go into practice in South Florida. He was taken under the wing of the late Dr Richard Dolsey, one of the best occ med physicians I’ve ever come across. Dr Dolsey ran an excellent practice (Physicians’ Health Centers in Miami), dealt ethically and honorably with patients and payers alike, and was widely respected in the physician community. In the course of their association, Zimmerman practiced at Dolsey’s clinic, at least until he allegedly decided to open his own office. According to sources knowledgeable about the events, Zimmerman was accused of attempting to interfere in Dolsey’s practice, specifically by taking patients, clients, and staff from Dolsey to help Dr Z’s new practice hit the ground running.
Instead, Dr Dolsey found out about Dr Z’s plans, and right about the time Zimmerman was about to execute his plan, confronted him. According to sources, the confrontation allegedly involved Zimmerman being escorted out of the office in restraints.
Dolsey subsequently sued Dr. Zimmerman and won his case.
More recently, Zimmerman’s decided to become heavily involved in Florida’s political scene, contributing heavily to GOP candidates and campaigns. Among the candidates Dr Z has supported is Charlie Crist, the ex-GOP and current independent candidate for Senate. In fact, the Zimmermans have maxed out their individual contributions to Crist – who happens to be the current governor.
The dollars didn’t stop there – at a measly $9600. Zimmerman’s company, AHCS, also plopped down a check for $100 grand on the desk of the Florida First Committee, Inc., a Florida PAC controlled by GOP veteran Bill McCollum.
Loyal readers may recall Crist vetoed a bill that would have tightly limited reimbursement for physician-dispensed drugs, a veto that came out of nowhere, surprising many who thought it was a done deal as it would have helped rein in costs in the Sunshine State, where drug costs are 38% higher than other states reviewed by WCRI.
Yep, Crist vetoed a bill that directly, materially, and significantly helped Zimmerman and AHCS. A bill that, had it become law, would have significantly hurt Zimmerman.
What’s the net?
What do you think?

Florida’s drug cost problem
Florida’s drug costs were recently analyzed by WCRI, which reported:
“…the average payment per claim for prescription drugs in Florida’s workers’ compensation system was $565–38 percent higher than the median of the study states.
The main reason for the higher prescription costs in Florida was that some physicians wrote prescriptions and dispensed the prescribed medications directly to their patients. [emphasis added] When physicians dispensed prescription drugs, they often were paid much more than pharmacies for the same prescription.
The WCRI study, Prescription Benchmarks for Florida, found that some Florida physicians wrote prescriptions more often for certain drugs that were especially profitable. [emphasis added] For example, Carisoprodol (Soma®, a muscle relaxant) was prescribed for 11 percent of the Florida injured workers with prescriptions, compared to 2 to 4 percent in most other study states.
Financial incentives may help explain more frequent prescription of the drug, as the study suggested. The price per pill paid to Florida physician dispensers for Carisoprodol was 4 times higher than if the same prescription was filled at pharmacies in the state. [emphasis added]
The study reported that the average number of prescriptions per claim in Florida was 17 percent higher than in the median state. [emphasis added] Similar results can be seen in the average number of pills per claim.”.

2 thoughts on “MCM investigative reporting – physician dispensing in Florida”

  1. Like playing “Whack-a-Mole”; you hit the troublesome creature and it rears it’s ugly head elsewhere. If you think the abuse with Carisoprodol is bad, go back and check the data on Ranitidine (Zantac) in California. Highly profitable and easily justifiable to dispense.
    It appears that the widespread practice of physician dispensing would not be so prolific if physician reimbursements were not shrinking. There are good physicians who began dispensing as a way to stay profitable in the face of greater reporting demands and shrinking reimbursements. California was only able to affect change after it changed it physician reimbursement fee schedule.

  2. Gee that’s funny because all physicians are conscientious and ethical and will solve all our problems if we would all just back off and let them. I know this because the president of the AMA told me so.

Comments are closed.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



© Joe Paduda 2022. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

Note: Some material on this page may be excerpted from other sources. In such cases, copyright is retained by the respective authors of those sources.