Sunday, October 13, 2013

Third Question of the Day October 13, 2013 What States Besides California Have Attempted to Remove the Financial Incentive of Compounded Medication from Worker's Compensation?


1 comment:

Kenneth Woliner, MD said...

Florida has tried. The Florida Medical Association has opposed those bills vigorously, as physicians get "a cut" from dispensing drugs. Ironically, it is against the law for Florida physicians to dispense compounded drugs to patients. The way to "get around that law", albeit an illegal way (but crafty enough to confuse the inspectors/regulators) is to say you are doing "centralized prescription filling" (even though you are not complying with those requirements either). Either way, these arrangements are "patient-brokering" and "split-fee/kickback relationships".

It is a natural outgrowth, however, of the battles between pharmacists and physicians and insurance companies. Pharmacies start doing flu shots and other immunizations and having "minute clinics" to handle cough/colds. That deprives a family doctor the opportunity to make income on those services. Physicians have overhead, and if you pay them half as much to take out your kidney, they'll take out both o them. So, we look for ways to increase income/profit from ancillary services that may or may not actually help the patient.

"Physician dispensing companies" that sell re-packaged drugs for physicians to dispense (and computer systems to help the physicians dispense, and more importantly, BILL worker's comp and other insurance companies) advertise to physicians that this is a way to increase their revenue stream. Same thing goes for marketing firms for compounding pharmacies. "Prescribe this compounded drug that we bill insurance $2,000 a month for (even though raw materials only cost $150), and we'll send you a cut of the profits (in a not so obvious way such as a "consulting fee", etc).

The compounded pain creams are especially prone to abuse because they have listed a "pie-in-the-sky" Average Wholesale Price (AWP) that is 1,000% to 10,000% more than the actual AWP charged to compounded pharmacies. Compound pharmacies buy the raw materials (each component drug of the compounded pain cream) cheaply, then mark it up to the artificial AWP that is listed in the computers with tier fee schedules, the insurance company (worker's comp, etc) pays 90% of AWP (thinking they are getting a deal, but in reality, they're being exploited financially), the manufacturer/wholesaler o the drugs, the compounding pharmacy, and the physician - each make profit, and when the insurance company (such as worker's comp) goes broke, they charge higher and higher premiums. A never-ending cycle.

With money at stake, there is lots of lobbying. I don't have a solution for this problem.

Kenneth Woliner, MD
www.holisticfamilymed.com