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.” Unfortunately, that “reasonable cost” is going to see an 8.9% increase this year. A large part of that increase is being driven by a scheme known as “drug repackaging.” 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. And, 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 between 400 and 700 percent more than pharmacies for the same medication. Paying physicians the inflated rate promoted by drug re-packagers has been an enormous cost driver in workers’ compensation claims in recent years. While the 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.