What’s the Story With Physician-Dispensed Drugs?

According to an NCCI Research Brief, one of the fastest areas of cost increases involves physician-dispensed drugs. When a doctor prescribes a drug for a patient, the patient typically obtains the drug from a pharmacy. But sometimes the doctor fills the prescription in his/her own office. Some reasons for this include:

• The physician wants the patient to start taking the drug immediately and dispenses enough medication to last until the patient can get to a pharmacy;

• The physician cannot be sure what the right medication or dosage should be and dispenses a few days’ supply of medication to determine whether that course is effective;

• It might be inconvenient for the patient to get to a pharmacy;

• The physician is looking to increase revenue by retaining some of the business they would otherwise send to pharmacies. The cost per unit of physician-dispensed drugs is often higher than the cost per unit of the same drug dispensed by a pharmacy. (emphasis added).

You may rightly note that Kentucky, and many other states, have Drug Fee Schedules for workers’ compensation which put limits on how much a provider may charge. But those regulations don’t limit thenumber of times the provider may charge. And NCCI again tells us their data shows  “Utilization Is a Major Driver of Total Rx Cost per Claim.” Utilization is more important than unit cost. So how do you control utilization of pharmaceuticals?

Often utilization spins out of control because nobody looks. This is because carriers and TPAs frequently pay drug bills off invoices sent to them by their Pharmacy Benefits Manager (PBM). Those invoices often cover many employees of various employers and make payingthe bill easier than managing the bill.

Thus employees get more and more scripts they may not need for ailments and injuries they no longer have. But there are techniques to combat this. In Kentucky a major solution is found in certified managed care. Employers who participate in a workers’ compensation certified managed care organization (MCO) can restrict employees’ pharmaceutical utilization to only those pharmacies who participate in the MCO and who utilize management techniques that help control utilization.

OMCA has certified MCOs that include pharmacies and systems which address over-utilization. We can fix the problem of physician-dispensed drugs and reduce your pharmaceutical expense. In workers’ comp or group health, OMCA’s utilization review staff knows the ropes and can reduce utilization.

Call us. We can do better.

William Faris, JD
Chief Executive Officer
502-495-5040
william.faris@omca.biz
omca.biz