Physician Dispensing in Workers’ Compensation

By Dongchun Wang

July 1, 2012 Related Topics: Fee Schedules, Physician Dispensing, Prescription Drugs and Opioids

This study reports on the rapid growth of physician-dispensed pharmaceuticals for injured workers under state workers’ compensation. The study finds that physician-dispensed drugs became increasingly common in most states that permit physician dispensing. At the same time, the prices paid for physician-dispensed drugs were often substantially higher than if the same drugs were dispensed by a retail pharmacy. Moreover, the prices paid to dispensing physicians rose rapidly for medications that were commonly dispensed by physicians, while the prices paid to pharmacies for the same drugs changed little or fell.   

The study also shows examples of physicians writing prescriptions for and dispensing certain drugs (e.g., omeprazole [Prilosec®] and ranitidine HCL [Zantac®]) that are available without a prescription in a drug or grocery store at a much lower price. Finally, the study examines the results of the California fee schedule reforms, providing evidence of the impact on prices paid, patient access to physician-dispensed prescriptions, and physician prescribing and dispensing patterns for certain drugs.

The study compares 23 states, including Arkansas, Connecticut, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Virginia, and Wisconsin. Five states (Arizona, California, Georgia, South Carolina, and Tennessee) recently adopted reforms aimed at reducing the costs of physician-dispensed drugs. The data include post-reform results for Arizona and California and pre-reform baselines for Georgia, South Carolina, and Tennessee. Also included are three states where physician dispensing is prohibited in general (Massachusetts, New York, and Texas).

Physician Dispensing in Workers' Compensation. Dongchun Wang. July 2012. WC-12-24.

Copyright: WCRI

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