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A tale of two states – Idaho and Florida

Yesterday came the welcome news that the good – and smart – folk in positions of authority in Idaho have drafted work comp regulations designed to prevent outrageous up-charging for physician-dispensed repackaged drugs.  Approved by both Legislative houses, the rules will shortly go into effect.  Idahoans are fortunate indeed to be in a state where they can proactively prevent a problem by implementing regulations, and don’t have to pass legislation to save taxpayers and employers dollars.

Oh, if that were only the case in Florida.  

Two bills have been introduced by allies of physician dispensers that purport to address the issue.  Both require physician dispensers to pay a $15 “rebate” to employers for each physician dispensed script they bill.  Why, you ask?

They say that physician dispensed drugs’ average bill is only $15 higher than the average retail pharmacy bill, so the $15 covers their higher costs.

They are, of course, lying.

First, physician dispensing companies get docs to dispense by telling them they can make another $50 grand (or more!!) a year giving drugs to work comp claimants.  You can’t make fifty grand if you only make $15 more per script – unless you dispense 3,333 scripts a year…

Second,  physician dispensers almost exclusively dispense generics, which are much cheaper – on a per script basis – than brand drugs. Retail chains sell brands and generics – brands cost over $200 per script. Thus, the claim that physician dispensed drugs only cost $15 more on average than retail is 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.”

Of course, it is highly likely that the sponsors received thousands of dollars in contributions from those dispensers, who spent over $3 million in the last election cycle to ensure they could keep sucking money out of taxpayers’ and employers’ wallets to buy jets and fancy Italian sports cars – and generate fat profits to their investors – ABRY Partners being the most visible.

To our friends in Idaho; Yippee-Kai-Yay!

To those in Florida; Illegitimi non carborundum.


3 thoughts on “A tale of two states – Idaho and Florida”

  1. Now if only Idaho could come into the 21st century in terms of in state adjusting and check issuance procedures in workers comp requiring that checks can only be issued AND mailed from within Idaho unless a detailed formal waiver is approved by the state. Please Idaho legislature – everything is electronic now – people outside of Idaho can follow the Idaho laws and issue checks just as easily whether sitting in an Idaho office or any other state.

    Excerpt from the Industrial Commission’s Advisory Committee On Workers’ Compensation Minutes
    February 8, 2012
    “Commissioner Baskin inquired of Mr. Haxby and Mr. Haase the reality of insisting that adjusting in all cases be handled in state as the use of out of state medical bill review companies continues to expand. Mr. Haxby replied that he has seen advancements in electronic data exchange that includes an electronic notification system to inform the local adjuster when a payment recommendation or an adjusting recommendation has been made creating better communication.
    Mr. Haase agreed and noted that provider billing handled by electronic medical review companies has become a cottage industry which in most cases is done much faster than in-house, and they do a lot of networking to try and reduce costs. Mr. Haase said that about 99% of the sureties he deals with keep the actual adjusting in-state. Mr. Haxby and Mr. Haase agreed that adjusters need to inform the sureties they work for of the criteria needed to keep the insurer compliant in Idaho.”

    99% in state?

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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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