Latest debate in workers comp is over drug dispensing

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A debate about doctors dispensing drugs to workers compensation patients is growing increasingly noisy, as business groups contend the practice drives up insurance costs, reports Jim Saunders of News Service of Florida.

The debate played out Wednesday during the meeting of a relatively obscure workers-compensation insurance panel. Tom Panza, an attorney for Automated HealthCare Solutions, which provides software used in physician dispensing, blasted the estimates of higher costs, likening the math to “an urban myth.”

But Insurance Commissioner Kevin McCarty and business and insurance-industry officials said the Legislature needs to limit the amounts that doctors can charge when they dispense medications instead of writing prescriptions that would be filled at pharmacies.

Sandy Shtab, an official with the pharmacy-benefits management firm Healthesystems, said it has found “astonishing” price markups for physician-dispensed drugs. She described doctor dispensing as a convenience to patients.

“I’m not really sure why we’re bending over backwards to pay for that convenience,” Shtab said.

The debate centers on what are known as “repackaged” drugs, which doctors buy in small quantities and dispense in their offices. Repackaging affects the pricing of drugs, which allows doctors to charge more than pharmacies when dispensing to workers-compensation patients.

Insurance regulators last month approved an average 8.9 percent increase in workers-compensation rates for 2012 and attributed 2.5 percent to doctor dispensing.

Business groups are backing proposed House and Senate bills for the 2012 legislative session that would limit the amounts doctors can charge. A similar bill died during the 2011 session, and former Gov. Charlie Crist vetoed doctor-dispensing limits in 2010.

The 2012 bills likely will face opposition from doctors groups, along with Automated HealthCare Solutions, a Miramar-based firm that is a major Republican political contributor.

The debate Wednesday focused heavily on whether doctor dispensing has driven up workers-compensation costs and whether the practice has any effect on patient care.

Lori Lovgren, state relations executive for the National Council on Compensation Insurance, which makes annual rate proposals for the insurance industry, said her organization has found markups on repackaged drugs of as much as 679 percent.

Tamela Perdue, general counsel of Associated Industries of Florida, said NCCI would have to file a proposal to reduce workers-compensation rates 2.5 percent if legislation passes that would limit doctor dispensing costs.

“That 2.5 percent is going directly to the employer,” Perdue said.

But Panza said a NCCI rate proposal that led to the 8.9 percent increase did not provide evidence that doctor dispensing was responsible for part of the hike. He also said insurance companies can contract with thousands of doctors who don’t dispense drugs if they think the practice is increasing costs.

“If they don’t like paying these prices, don’t do it,” Panza said.

Supporters of doctor dispensing argue, in part, that it leads to patients being more likely to take medications than if they had to go to a pharmacy to pick up prescriptions. As a result, those supporters contend that patients recover more quickly from injuries and get back to work.

“When you go to a doctor, 100 percent of them (the prescriptions) get filled,” Panza said.

But physician David Deitz, a national medical director for insurer Liberty Mutual Group, disputed that doctor dispensing provides medical benefits to patients or gets them back to work faster.

“A filled prescription does not indicate compliance,” Deitz said.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including,,, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.