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Tuesday, September 23, 2014

Controlling prescription cost: Focus on Pennsylvania

Today's post is shared from

Nearly half of what Pennsylvania's workers' compensation program pays for prescription drugs goes to physicians who dispense them directly to patients, bypassing pharmacies, a lucrative practice that is limited by many states and not reimbursed at all by private insurance, Medicare or Medicaid, according to a new report.
Although few doctors take advantage of the loophole, the cost differential can be enormous. A single Percocet cost an average 64 cents at a pharmacy last year, the Workers Compensation Research Institute reported Monday, vs. $3.55 when dispensed by a physician. Patients typically don't know the difference; there are no copays in workers' comp, which is funded by businesses.
Limiting the practice could save 1 percent of the program's entire cost, Julia K. Hearthway, the state's secretary of labor and industry, told a House committee last year that was considering a bill to restrict the practice. The legislation unanimously passed the House; a less restrictive version, amended by a Senate committee, has not been scheduled for a full vote.
Much of the argument against physician dispensing is that it's costly: since Pennsylvania's workers' comp law does not allow the kind of negotiation that dramatically lowers costs for most health insurance, doctors can set their own prices.
Some critics of the practice have also noted...