In the wake of the Florida Legislature’s failure to cut physician reimbursements for prescribing repackaged drugs to workers’ compensation patients, a national group of state legislators is looking to create a model act that states could use to address the issue.
The National Council of Insurance Legislature announced it is looking at creating a model act that will provide states with a blueprint to regulate the sale and reimbursement of physician dispensed drugs.
“The Workers’ Compensation Committee Insurance Committee is responding to concerns that allegedly overpriced repackage drugs is leading to higher medical costs and insurance premiums,” stated the conference. “This is especially true in regions such as the South and Midwest.”
The committee cited Florida’s stalemate over the issue earlier this year as a primary reason for developing the model act.
Florida Insurance Commissioner Kevin McCarty told the committee that as part of a 8.9 percent workers’ compensation rate increase this year, 2.5 percent was attributable to rising drug costs. According to the insurers’ National Council on Compensation Insurance, that 2.5 percent figure translated into $62 million in additional costs to employers.
In Florida, by law prescription drugs filled in pharmacies are reimbursed at three times the drug manufacturer’s wholesale price, plus a $4.18 dispensing fee. The law is silent, however, when it comes to reimbursed physician-dispensed drugs.
As a result there has been an explosion in the state in the amount of drugs repackaged and dispensed by physicians. NCCI said that in 2003 only nine percent of all workers’ compensation drugs were dispensed by doctors. That number has now risen to over 50 percent and some drugs are being marked up by as much as 600 percent.
Florida lawmakers attempted to rein-in the drug costs by setting the reimbursement rate for doctor-dispensed drugs at the same level as pharmacies. The bill had widespread support from business groups and insurers.
Despite that support, the bill died after being opposed by drug companies and firms that provided doctors with the software that monitors and tracks doctor-dispensed drugs.
Florida is not alone when it comes to facing higher costs associated with doctor-dispensed drugs. The NCCI projected that physician-dispensed drugs have increased the medical cost per claim as much as $100 in states including North Carolina and South Carolina.
NCOIL said it will study Florida’s proposed law in creating a possible model act, which could be drafted in time for its November meeting.
“Legislators have laid a foundation for regulating controversial physician sales of repackaged drugs in an effort to prevent spiraling workers’ comp costs,” the conference stated.