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Physician dispensing – the latest from Florida

Physician dispensing in Florida is back in the news, as we await with bated breath the outcome of this session’s legislative battle.
On one side is the Florida Medical Association and Automated Healthcare Solutions, the Miramar company that provides software, billing services, and otherwise enables the physician dispensing industry.
On the other is the Chamber of Commerce, most of the state’s work comp insurers, and several large employers seeking to correct a loophole in the law, a loophole that has enabled dispensers and their facilitators to suck over $50 million out of employers’ and taxpayers’ wallets to pay for drugs at inflated prices.
Here, excerpted for brevity’s sake, three recent articles:
An editorial in the Palm Beach Post says this:
[In late 2010, the GOP majority in the Senate was poised to end the loophole by overriding a veto of a bill by past Gov Charlie Crist]:
By late 2010, however, Automated Healthcare Solution had given nearly $1 million to the Republican Party of Florida. The company also gave big to the political action committees of new Senate President Mike Haridopolos and new House Speaker, Dean Cannon. Physician groups had given. The override never happened.
Meanwhile, Alan Hays [author of a bill to close the loophole] had moved from the House to the Senate. Last year, he introduced the loophole-closing bill again. It had no House companion, and went nowhere. This year, Sen. Hays is back with a similar bill, SB 668. There is a House bill, HB 503. It has passed one committee, by a vote of 14-1.
For those who oppose his bill, Sen. Hays said, “It’s all about how many millions they can make from gaming the system.” Indeed, the estimated savings from closing the loophole are now $62 million. In August, the Workers Compensation Research Institute reported that “the average payment per claim for prescription drugs in Florida’s worker compensation system was 45 percent higher than the median” of other states the group had studied between 2006 and 2008, all because of repackaging. Recall that unexpected rate increase in 2009.
Those who profit from it claim that the current system helps workers take medicine more faithfully and get back to work quicker. In fact, SB 668 would not prevent physicians from dispensing drugs. They just would have to charge based on the normal fee schedule. They couldn’t rip off the system.
Automated Healthcare Solutions’ main argument against this bill is the $160,000 it has donated to the Republican Party and the $10,000 it has donated to Rep. Cannon’s PAC, the Florida Freedom Council. The Florida Medical Association has donated, and its ex-lobbyist is Sen. John Thrasher. He chairs the Rules Committee, and can stop any bill from reaching the floor.
This isn’t Special Interests vs. The Little Guy. Florida’s major business groups support the bill. Still, the biggest thing wrong with Tallahassee is that certain groups use lobbyists to get certain favors that help a few people but hurt the state overall. You’ve heard Gov. Scott and most legislators claim that they want Florida to be more business-friendly. So cozy up to this bill. Confound the skeptics.
Friend and colleague David Depaolo has a post in Work Comp World:
“Our WorkCompCentral news story calls AHCS a software firm, but that is not an accurate representation – the company manages physician dispensing of drugs with automated systems to control inventory, repackaging, and claims management to help ensure top dollar reimbursement to the physician…
According to news reports, companies controlled by AHCS executives Dr. Paul Zimmerman and Gerald Glass gave $100,000 to a committee that supported Scott during the 2010 elections. Five companies affiliated with AHCS sent $500 checks each to Scott’s campaign, according to the publication Health Care News Florida.
The FMA seems to be tightly integrated with AHCS. FMA spokeswoman Erin VanSickle referred questions by WorkCompCentral on FMA’s stance on the bills to Alia Faraj-Johnson, an outside media consultant for AHCS.”
And WorkCompInsider adds this
“A Tampa Bay news report talks about how the state’s pill mill crackdown was held up by proponents of doc dispensing, including AHCS principals: “The two Miramar workers’ compensation doctors have helped pump about $3 million into the political system through a dozen companies in the past year.”
On the other side of the issue comes this from Stanley T Padgett, an attorney who is also “CEO of FPP Health Solutions, LLC (“FPP”). FPP is the exclusive Pharmacy Services Provider to the FMA [Florida Medical Association];
“Dispensing provides patient convenience, better patient compliance and better medical outcomes. It also provides an additional revenue stream [emphasis added] to offset the constant onslaught of government and provider reimbursement cuts for physician services.”
Stanley T Padgett’s argument is that compliance increases with physician dispensing, but nowhere in his article does he reference the fact that the vast majority of physician dispensing in the Sunshine State is for work comp patients. In fact, Stanley T Padgett only discusses patients with chronic conditions, specifically hypertension – a diagnosis that is extremely rare in comp. We’ll also ignore his unfounded assertion that somehow compliance will increase if docs dispense medication (there are many reasons for non-compliance, and asserting that it’s more convenient to get your pills from a doctor than from one of the three pharmacies on the next street corner and therefore physician dispensing will reduce medical costs in Florida by over $10 billion is just laughable.
If, as Stanley T Padgett claims, the purpose is to “provide patient convenience, better patient compliance and better medical outcomes”, then why, pray tell, don’t those docs dispense drugs for Medicare, Medicaid, and group health patients?
What does this mean for you?
It’s crunch time, folks. If you want to end this outrageous assault on employers and taxpayers, tell Florida’s Governor and legislators to back Sen. Hays’ bill.

One thought on “Physician dispensing – the latest from Florida”

  1. The solutions fall into the old “Good/Better/Best” options.
    The “BEST” (quickest/ clearest) is a legistative solution.
    “BETTER” (assuming the legislature won’t act) is for the comp industry (carriers and networks) to educate physicians on the cost of inhouse dispensing. The practice I’m associated with dispensed inhouse in the past, via a program that offered modest profit to the doctor. We were marketed that the cost was the same to the carrier as when the injured worker filled the script at the local pharmacy. When we discovered that was not true, we discontinued. Most physicians in the work comp system support providing the appropriate care at the appropriate time at the APPROPRIATE COST. But we had to figure out ourselves that the carrier was paying a lot more to us than to the pharmacy. I never had a carrier tell us it was costing them more.
    “GOOD”: All adjusters and case manager need to just saying ‘no’. At the time of authorization, ask if the doctor dispenses. Condition the authorization on the practice agreeing not to dispense inhouse. (And make sure the case managers know why). Savvy adjusters have been doing it successfully.

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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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