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Physician dispensing in comp – the right way

A commenter (thanks Greg) on my post yesterday re NCCI’s research on physician dispensing noted “Going after the physicians, who are making efforts to recoup their steadily declining reimbursements, does not seem like the best strategy.”
Greg’s got a good point. There are many docs and occ med clinics that are dispensing medications for the right reasons, and not looking to make exorbitant profits. While their intentions are honorable, there are a couple concerns that bear mentioning.
First, as noted yesterday (and other times here on MCM) the proponents of physician dispensing often cite increased patient compliance, reduced hassle for the patient, and increased generic dispensing as justification/rationale for dispensing meds to the patient from the doctor’s office. I’ve not seen any studies that support the claim of increased compliance (I’ve seen claims that refer to studies but not the studies themselves. That said,I’ll stipulate that compliance is likely better when docs dispense drugs.
But, in addition to the higher costs perpetuated by repackagers and physician dispensing technology/services companies, there’s another potential concern with physician dispensing. Work comp claimants are usually treated by docs that haven’t seen the claimant before the occupational injury. While the WC doc certainly asks about prior medical history, current medications and the like, it is not uncommon for patients to forget which meds they take or be unable to accurately identify their drugs.
Not so big an issue if the claimant goes to their usual pharmacy, where the system will identify any potential conflicts and notify the dispensing pharmacist (assuming the claimant doesn’t go to a new pharmacy).
Potentially a bigger issue arises if the treating doc doesn’t get the full story, prescribes and dispenses meds that conflict with the claimants’ other meds. While there are some databases and sources of prescription data that docs may be able to tap into (or so I’m told), I don’t know if many of the physicians dispensing meds are doing so today – or, for that matter, even know of these resources.
That’s not to say the pharmacist’s database is foolproof – it most certainly isn’t. However, it’s a lot better than no database – or not accessing a database – at all.
In my view, physician dispensing can be appropriate if:
a) the price is pegged to the original manufacturer’s AWP, not some fabricated price from a repackager or dispensing services company;
b) the medications are appropriate and consistent with generally approved standards of care; and
c) the physician accesses the appropriate databases to verify the medication prescribed is safe for that particular patient.

3 thoughts on “Physician dispensing in comp – the right way”

  1. Consulting with hospitals developing orthopaedic service lines I have found that in the past three years a dramatic growth in orthopaedic practices developing a dispensary. This is a trend driven by consultants highlighting many of the observations in the NCCI report. The case is not made to improve pt compliance it is for the sole purpose of “making a lot of money”.

  2. Joe, you make great points about physician dispensing breaking the continuity of care from a pharmaceutical standpoint – basically a new pharmacy is being introduced for workers comp medications. This is not all that uncommon, as many injured workers utilize different pharmacies for group health than they do for their work injuries (see IWP, the former Workers Comp Rx/Innovaint Pharmacy, Summit Pharmacy and others). I’ve been a proponent of allowing network physicians to dispense medications as long as they are in network with the PBM’s as well and adjudicating rx’s. At least this way the medications are getting a second clinical screening by going through DUR edits and the rx history stays in tact with the PBM for further clinical edits in case the patient is utilizing other pharmacies as well (docs will not stock all drugs, they limit their formulary to fast movers). There are a handful of companies out there who could pull this off (combining physician dispensing with treating networks and PBM’s) – you will need volume to make it work cost effectively but it can be done.

  3. As a UR nurse I see the abuses on a daily basis. This issue with physician dispensed meds is not an issue of compliance, but one of dispensing medications that do not meet the test of medical necessity based on scientifically proven results.
    Compounded medications {those dispensed with amino acids and other “medical foods”} just do not meet standard. The same goes for compounded topical agents.
    50% of Utilization Review decsions involve Pharmacy issues and many are repeat denials. Yet, the physican keeps dispensing.
    As for adherence – that is a double edge sword – many medications are not recommended for long term use, yet, the physician keeps dispensing, month in and month out. It is the patient that looses in the end.

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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.



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