Physician dispensing has been an ongoing issue in workers’ comp, and is most frequently associated with pain management. At Brentwood Services Administrators, Inc., our claims team has been successful in getting those scripts either redirected to a pharmacy benefits manager (PBM) or at least getting the MD office to agree to match PBM prices, so I thought I’d share some of our strategies for success.
Physician dispensing is the practice of doctors dispensing prescription medications from their office directly to the patient.
Physicians’ offices who add RX to their service offerings generally provide drugs in one of two ways:
- In-house pharmacy: primarily for large practices and medical groups, this model allows the practice to manage their own inventory and generate higher profit margins.
- Third Party Vendors: Practices contract with companies like RX Development, Injured Workers’ Pharmacy, Primary RX, Physician Partner, etc. who specialize in processing the paperwork and stocking their offices with prepackaged quantities of the drugs they prescribe the most. These third parties can also supply software to control inventory and integrate scripts with the physician’s clinical tracking software.
Why doesn’t the workers comp industry like physician dispensing?
It bypasses the pharmacy and any other PBM clinical oversight – the dispensing doctor may not be aware of other meds the patient is taking, what his or her medical history is outside WC, etc. The retail pharmacy and PBM offer checks and balances to the process, as they are able to see much more information and understand the “big picture”
It costs more. Because the dispenser sets the price, they can choose whatever they want. In some states, price per pill has been as much as 300% more for a physician dispensed medication vs. the same script filled at a retail pharmacy – is that crazy or what?
The reasons physicians give for adding RX dispensing to their practices include:
- Increased control – they believe filling scripts in-house increases compliance and protects against prescription fraud and narcotic diversion.
- Convenience for the patient – physician dispensing eliminates the need for the patient to drive to a drug store following the appointment.
- To make more money – some articles suggest that the average family practice can add an additional $25,000 in supplemental income annually. With pain management docs, it is likely even more.
So we have a treating doc who wants to fill the injured worker’s scripts in-house. We know that by authorizing, we’ll lose the clinical oversight provided by an independent pharmacy and/or PBM, and we’re undoubtedly going to pay more. What can we do to manage the problem?
- Understand your state’s legislative and regulatory controls over prescription meds so you know what’s allowed and what’s not, and act accordingly.
- Tap into your PBM’s– PBM’s often have contractual arrangements with physician-dispensing billing companies and can get the first fill discounted, redirected or both. They can also make sure subsequent fills go through the proper channels.
- Deny and redirect: One member of our claims team reports that she denies all prescriptions by any provider other than our PBM due to “no authorization”. She contacts the claimant in writing that she’s denied the bill, and lets them know they need to use the PBM to get their meds. When she later gets the call from the dispensing company, she tells them the RX was not authorized, and they usually become willing to negotiate the price, usually accepting our designated PBM’s pricing.
- If all else fails and the only decent pain management doc in town refuses to see the patient unless you agree to let him fill the scripts in-house, ask if he will match the PBM’s pricing.
A side note on compound drugs….In general, compounding is the practice in which a licensed pharmacist or physician combines, mixes or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.….Relative to WC, compound drugs have not been proven to be more effective than commercially manufactured drugs, are NOT approved by the US Food and Drug Administration. Compounds also pose risks to patients and are often not medically necessary. They also cost a heck of a lot of money. If an adjuster gets a call wanting authorization for a compound drug, they can call the UR company and ask them to pre-certify it. In many cases, they’ll deny it and a request that the doctor prescribe an approved alternative can be submitted. Alternatively, the designated PBM may be able to provide the compound at a much lower price.