ISSUE: Making it easier to recover Bad Checks

DISCUSSION: Florida has historically had one of the best bad check laws in the country. One aspect of the law requires that a letter be sent to the maker of the check. While in many cases this is not a real problem for retailers, it is one more government requirement on businesses. Florida’s law needs to be updated to reflect that it is not always necessary to send a demand letter or file a civil suit to collect the check.

POSITION: The Federation supports any such effort to modernize the worthless check law and eliminating burdensome requirements to collecting worthless checks.

RELATED BILLS:

HB 457 - Magar
SB 550 - Simpson

RECENT DEVELOPMENTS:

(5/3/2013) HB 457 passed, modernizing procedures for retailers to collect on bad checks.

ISSUE: Should physicians continue receiving a higher reimbursement rate than statutorily intended by dispensing repackaged medications to workers’ compensation patients.

DISCUSSION: According to 440.015, Florida Statutes, “It is the intent of the Legislature that the Workers’ Compensation Law be interpreted so as to assure the quick and efficient delivery of disability and medical benefits to an injured worker and to facilitate the worker’s return to gainful reemployment at a reasonable cost to the employer.” A scheme known as “drug repackaging” may be having a negative impact on that reasonable cost. All medications have a standard national drug code (NDC), a number that is assigned by the manufacturer. That NDC is specific to the product and package size, and has an Average Wholesale Price (AWP) attached to it, which is used by claims processors to identify and process the claim for payment. Because drug re-packagers remove drugs from their original containers and place them in new containers of different quantities, the original NDC is removed from the drug and it receives a new one which is set by the re-packager. Further, a loophole in Florida’s law allows re-packagers to set a new AWP for repackaged drugs and requires payers to reimburse providers at that new AWP -- plus a $4.18 dispensing fee. Because of that loophole, repackaging drugs for physician dispensing is now being marketed to medical practices as a tool to increase profit. One re-packager claims on its website that physician dispensing of repackaged drugs is “a profit center producing $20,000 to $100,000 additional net income per physician per year.”

Many recent studies on workers’ compensation data show that physicians who dispense repackaged drugs are being reimbursed at a significantly higher rate than pharmacies for the same medications. Paying physicians the inflated rate promoted by drug re-packagers has been a considerable cost driver in workers’ compensation claims in recent years. While the Florida Retail Federation understands the service that physicians provide by dispensing certain medications from their office, they should be subject to the same reimbursement rates as pharmacies.

POSITION: The Florida Retail Federation supports closing the loophole in the workers’ compensation law to make the reimbursement fee schedule consistent regardless of where medications are dispensed.

RELATED BILLS:

HB 605 - Hudson
SB 662 - Hays

Recent Developments:

(5/3/2013) SB 662 passed, and will lower workers’ comp rates in Florida by reducing the cost of doctor-dispensed medications.

ISSUE: Should the Florida Communications Service Tax (CST) be applied at the point of sale (POS) to certain prepaid calling plans, which are currently exempt from the CST but subject to the 6 percent state sales tax, plus applicable local option sales taxes.

DISCUSSION: The Florida Department of Revenue issued a Taxpayer Information Publication, dated March 27, 2012, which indicates that certain prepaid calling arrangements currently being sold by many retailers were not entitled to the exemption from the Communications Services Tax (CST) if the prepaid arrangement included more than just voice communications which declined in predetermined units. This pronouncement caused concern in the telecommunications industry since they had presumed that all prepaid arrangements sold at retail were only subject to the state and local option sales taxes. This concern led to the Legislature creating a working group of four telecommunications providers and four local government representatives, which was charged with bringing back suggestions for solving the collection problem. Their report is due by February 1, 2013 so that the 2013 Legislature will have time to evaluate the report and take any necessary legislative action. The Florida Retail Federation staff has been monitoring this working group and has provided testimony that the CST cannot be collected at the point of sale due to the complicated nature of the CST.

POSITION: The Florida Retail Federation will oppose any attempt to have retailers collect the CST on prepaid calling arrangements at the point of sale. The Communications Services Tax has too many complicated provisions which cannot be applied at the point of sale level. We encourage the Legislature to clarify that all prepaid calling arrangements are exempt from the CST and are subject to state and local sales taxes only, which are collected at the point of sale.

RELATED BILLS:  

SB 290 - Galvano
HB 435 - Davis

Recent Developments:

(2/15/2013)  We shared with you last week that the Communications Services Tax would be a hot topic this session. Things heated up this week with a committee hearing in the Senate Finance and tax committee and a draft bill that circulated in the House. There are a lot of players at the table: the telecommunication service providers, the local governments who depend on the CST revenue, and the retailers who sell these products. There are a lot of interests to balance, and we’ve got a long way to go until it all gets settled. Randy Miller testified in the Senate committee, sharing with the Senators that collection of this tax at the point of sale is not an option. If you sell prepaid wireless phone service or products, you’ll want to watch this issue closely. You can rest assured; we will be in the mix.