Physician-Dispensed Packaged Drugs: The CWCI's New Study
Thursday, March 7, 2013 | 0
The California Workers' Compensation Institute has announced a new study on physician-dispensed repackaged drugs.
Authored by Alex Swedlow, Laura Gardner and John Ireland, the February 2013 CWCI study is titled "Differences in Outcomes for Injured Workers Receiving Physician-Dispensed Repackaged Drugs in the California Workers' Compensation System."
As the authors state in a preface to their report, physician dispensing has become commonplace in workers' comp. They note that "Claims of improved access to prescription services and improved compliance with pharmacy prescriptions leading to improved medical and disability outcomes are often challenged by suspicions that an alternative motivating factor driving physician dispensing is financial benefit."
Several studies have documented that over half of all California workers' comp prescriptions are physician-dispensed.
The CWCI study focuses on the relationship between physician-dispensed repackaged drugs and overall outcomes for workers, defined as average medical and indemnity benefit payments and total paid days of temporary disability.
Skeptics may question the methodology of the study and some may discount the study as one financed by the California workers' comp industry.
But Swedlow and his fellow researchers have credibility among DWC policymakers and prominent workers' comp stakeholders, so the study will be given attention.
Comparing cases with physician-dispensed repackaged drugs with cases without such dispensing, the study breaks down results for the following categories:
- Average paid medical benefits per claim.
- Average paid indemnity benefits per claim.
- Average paid temporary disability days per claim.
- Incremental medical benefit cost per physician-dispensed drugs.
For example, they find that after 2007, indemnity payments on claims with physician-dispensed repackaged drugs averaged 28.2% more than for cases with no physician-dispensed repackaged drugs. Claims with repackaged drugs were said to involve 8.9% more days of TD than claims without repackaged drugs.
Physician economic incentives to dispense repackaged drugs were lowered by 2007 revisions to the pharmacy fee schedule which the authors note "largely eliminated differential pricing."
The significance of the CWCI study is in its assertion of findings "that associate physician dispensing of repackaged drugs with higher medical and indemnity costs and delayed return-to-work."
According to the study, "California's experience with compounded drugs in workers' compensation further illustrates the difficulty of managing pharmacy benefits without adequate controls over utilization as well as unit prices."
The authors note that another recent CWCI study shows that despite a downward trend in volume, a change in the mix of ingredients, the number of ingredients, the average quantity of ingredients and the average payment per ingredient have "effectively raised the average price of compounded drugs by 68%."
Unless rebutted by other studies, the CWCI study is likely to become a prominent factor in future efforts by policymakers to regulate physician dispensing and repackaged drugs.
The CWCI study can be downloaded here.
Julius Young is an applicants' attorney with the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his Workers' Comp Zone blog.
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