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