WCRI’s latest report on physician dispensing confirms what we weary soldiers have known for years; the physician dispensing industry is way better at figuring out how to screw employers and taxpayers than workers’ comp payers and regulators are at stopping them.
We’ve tried eliminating the upcharge for repackaged drugs; they came up with custom-manufactured medications.
Here’s the summary from WCRI:
the mechanism involves the creation of an opportunity to assign a much higher AWP to these new-strength and new-formulation products. Consider cyclobenzaprine HCL (a muscle relaxant), for which the most common strengths are 5 milligrams and 10 milligrams. If a new strength of 7.5 milligrams comes to market and the original manufacturer of that new strength sets a new AWP, this AWP could be much higher than the AWPs set by the original manufacturers for the existing 5- and 10-milligram strengths. These new strengths and formulation, almost all dispensed by physicians, are labeled as drugs made by generic manufacturers, not repackagers, and therefore, are not subject to the new reimbursement rules targeting physician-dispensed repackaged drugs.
Shockingly, Florida and California, two states that have attempted to control doc-dispensed drug costs with a repackaged drug cost cap have seen these “new” drugs become the most popular versions of the drug – and the most costly, with an average price of $3.01 per pill compared to $0.38 for the “regular” formulations.
Why has this 7.5mg version become so popular?
Is it better than 5mg or 10mg versions?
Of course not.
Make no mistake, these dispensing docs – and the industry that supports them, are quite clear about the money.
WCRI used data from 2 years ago; if anything it’s way worse now.
The solution is both simple in concept and difficult in execution. Enable employer direction to pharmacies, a situation that currently exists in NY and MN (and in some cases in CA as well).
Yes, limiting doc dispensing to the first few days helps – legislation in IN and PA has been quite helpful in limiting the shameless profiteering of corrupt docs. However, the dispensing industry is quite creative in coming up with ways to circumvent regulations; don’t be surprised if:
- docs rent a corner of their office to a “pharmacy”, and/or
- docs get ownership in a pharmacy down the hall, and/or
- companies are setting up vending machine-like dispensaries in medical office buildings
In fact, these all – and likely other maneuvers – are already operating in many states. As I noted a year ago, these bad actors “will find any loophole, whether in a states’ pharmacy licensing process, medical board regulation, work comp statute or scope of practice to find a way to continue screwing employers and taxpayers.”
Because that is precisely what they are doing.
What does this mean for you?
It is long past time to stop playing nice.