Insight, analysis & opinion from Joe Paduda

< Back to Home


Report from the Physician Dispensing Summit

Yesterday’s meeting in Boston was very, very productive.  The audience included trade groups, insurers, TPAs, large employers, physicians, researchers, regulators, analysts, PBMs, and media, all focused on the single issue of physician dispensing.

Among the sessions was a report on a just-completed study of the impact of dispensing on claim outcomes – very compelling and highly revealing.

Here were some of the other highlights:

AIA CEO Leigh Ann Pusey led off with the keynote; the fact that Ms Pusey took the time to prepare for and attend the Summit is revealing indeed; her members write over a hundred billion dollars of insurance premiums and are dealing with critical, industry-altering issues including Dodd-Frank, TRIA, and the sequester.  She was very knowledgeable and detailed the work AIA is doing both internally and with other groups and associations.  Suffice it to say that this is a very high priority for AIA and their members.

Dan Reynolds, managing editor of Risk and Insurance moderated an excellent panel on the issue of patient safety.  Pharmacists, a physician, and the nation’s leading authority on prescription drug monitoring programs provided insights into the risks inherent in physician dispensing.  Notably, John Eadie of Brandeis’ PDMP Center for Excellence revealed that most states require/request dispensing physicians access the PDMP prior to dispensing scheduled drugs.   He provided a guide for finding out how different states address the issue; I’ll provide a link in a later post.

Sedgwick’s Kimberly George noted that, where appropriate, the giant TPA uses physician dispensing as a data point in assessing and rating physicians. This can affect the volume of patients directed to specific practitioners.

For me, the major takeaway was CWCI’s analysis of the impact of physician dispensing on claim costs and outcomes.  Alex Swedlow’s concise presentation noted that after reform eliminated the upcharge for repackaged drugs;

  • each physician-dispensed repackaged drug prescription added $545 to the average medical benefit costs. 
  • paid medical benefits on claims with physician-dispensed repackaged drugs averaged $7,297, or 37.3 percent more than the $5,316 average for claims without these types of prescriptions.
  • indemnity payments on claims with physician-dispensed repackaged drugs averaged $5,039, or 28.2 percent more than the $3,930 average for claims without physician-dispensed repackaged drugs.
  • claims with physician-dispensed repacked drugs averaged 50.3 paid TD days – 8.9 percent more than the average of 46.2 days for claims without repackaged drugs.

The research, conducted by Swedlow, John Ireland, and Laura Gardner, destroys physician dispensers’ claim that better outcomes and lower costs result from physician dispensing.  

Undoubtedly, dispensing advocates will now roll out their PR flacks and physician shills in an attempt to refute CWCI’s study results, methodology, impact, and applicability to other states.

Good luck with that.

Swedlow, Ireland, and Gardner are three of the most respected researchers in this industry.  Their expertise, insight, intellectual rigor, and objectivity are beyond question.

With the release of CWCI’s excellent work, we can now refute every claimed benefit offered up by physician dispensers – leaving no doubt as to the only real benefit of the practice:

taking hundreds of million of dollars from taxpayers and employers to do nothing other than line the pockets of dispensing docs, dispensing companies, their investors, and their partners.

What does this mean for you?

Read the study here.

Send it to regulators, employers, policyholders, legislators, lobbyists, attorneys – anyone and everyone.  Get the word out.  

8 thoughts on “Report from the Physician Dispensing Summit”

  1. Everyone knows repackaging (up pricing NDC) arose as result of unreasonably low fee schedules implemented by these same people that spoke at the conference.

    1. Mr Gaines – how are things in the compounding business these days?

      re your comment:
      a) do you know who spoke at the conference?

      b) if you do, how exactly did they affect fee schedules?

      c) define “unreasonably low”

      d) explain to us how repackaging arose from fee schedules? where is the link and how can you demonstrate cause and effect?

      e) now that your claims about outcome improvement and choice and access have been refuted, now you blame low fee schedules? what’s next, those monsters under your bed?

      1. I do no compounding. I am against coumpounding and repackaged drugs. Nevertheless, the repackage drug crisis elvolved out of california adopting the CMS fee schedule for pharmacueticals. This was done with data from CWCI. The repackaged drugs were not on the CMS data base so the law alowed higher reimbursement. The insurance industry was in such hurry to institute the CMS fee schedule, that they open a huge market for repackage drugs. What is a bigger healthcare expense, repackage drugs or prices (expense,markup,profit) for namebrand drugs? I rarely hear this discussion on your blog.

        1. Mr Gaines

          I appreciate your kind words re MCM.

          You made unfounded statements in your initial comment. I asked for clarification. Your response doesn’t provide any solid verifiable link between cause and effect but rather makes additional unfounded assertions.

          You fail to address the key point. Physician dispensing of repackaged drugs increases costs and extends disability. Blaming this practice on CWCI is shooting the messenger.

          Ripping off employers and taxpayers because you don’t like your fees is fraudulent, unethical and unprofessional.

          1. As I said before I do not support repackaged drugs or compounding. Your previous articles show the dramatic increase in physician dispensing in California Worker comp started right after the CMS schedule was implemented in California. Nobody who knows anything about California WC ever thought physician dispensing improved outcomes, it was always marketed to Dr.s as a revenue generator. My point is the CWCI, and the insurance carriers who draft and pass every California WC law, have to do a better job. They cannot continue to draft sloppy legislation and then blame the providers. Is it ethical for a large pharmaceutical companies to pay a generic manufacture millions of dollar to delay production of a generic equivalent so the pharmaceutical came dramatically increase profits?

  2. Jeffrey: Price gouging (with no proven benefit to the patient) is irresponsible, even if you may see it as a result of unreasonable fee schedules. Address those, if you feel you must, but do not condone abusive practices.

    1. I am not tiring to make a personal attack, I find the blog informative and well written. Nevertheless, if the claims industry keeps making the same mistakes over and over, and only blames the providers, the system will continue the way it is.

  3. Physicians dispensing get a bad rap over the work
    comp dispensing. Physicians dispensing for only work comp did inflate
    the AWP’s and I am so against that. The physicians dispensing for
    insurance do not inflate as they have to use the original NDC number.
    The work comp arena used a different NDC not the manufacturers. Many
    of the PBM’s/Insurance Companies require the original manufacturers NDC

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 2023. 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.