In-office physician dispensing of workers’ compensation medications continues to be a concern for payers and regulators across multiple states despite some successful efforts to reduce this practice over the past several years. Two recent examples include New Mexico and Idaho, where regulators have proposed new ways to tackle the concern.
New Mexico
Earlier this year, the New Mexico Workers’ Compensation Administration (WCA) released proposed rule changes to several areas of their regulations, including Part 7, which deals with payments for health care services.
To curb the dispensing of medications by physicians, the proposed changes include language that would:
- Extend the existing days’ supply allowance for “new” prescriptions dispensed by a health care provider from 10 to 14 days
- Require any “renewal or refill” prescription dispensed by such health care provider to be disallowed without preauthorization by the payer
Idaho
In response to feedback received as part of its negotiated rulemaking process earlier this year, Idaho’s Industrial Commission (IC) proposed additional changes to its rule provisions to further limit reimbursement for physician dispensing. Physician dispensed medications, including topical, over-the-counter, and repackaged medications, would be additionally capped at 130% of the average wholesale price (AWP) for the “lowest-cost therapeutic equivalent drug.” That additional cap would be on top of the existing fee schedule rates for those medications. This would mean the physician would be reimbursed the lower of the two applicable rates.
Moving forward
MyMatrixx continues to believe the practice of physician dispensing bypasses the benefits of a pharmacy benefit manager and risks ignoring critical patient safety alerts that are typically identified and communicated to retail pharmacies before medications are dispensed. MyMatrixx believes this practice inflates medication costs for employers.
The New Mexico WCA conducted an in-person public hearing on its proposed rule changes on October 18 and is accepting written comments until November 12. The Idaho IC scheduled its second of two public hearings for October 24 (the first was on October 7), to receive final public testimony, with written comments being accepted likely through October 28.
MyMatrixx supports further limitations on physician dispensing and has been reviewing both proposed rule changes internally for potential recommendations for these states. Our recommendations will likely be more technical in nature, to ensure that the language used in regulations is clear to all stakeholders and can be implemented accurately to ensure full compliance and achieve the goals of both state agencies in proposing the language. We will be coordinating with our trade association, the American Association of Payers, Administrators and Networks (AAPAN), on these two proposals as well.
We also encourage our clients and other interested stakeholders to review both states’ proposals for themselves:
- Proposed New Mexico language (refer to page 7)
- Proposed Idaho language (refer to page 28)
For more policy developments like this in workers’ compensation impacting pharmacy in states across the country, please visit and bookmark Statehouse Watch at MyMatrixx.com.