January 27, 2015

Physician Dispensing Reforms

, Cost Containment
, Network Solutions
, Legislation

The Workers Compensation Research Institute (WCRI) released a new study finding that some physicians who dispense medications from their offices in Illinois and California are getting paid two to three times the price of a drug when compared with pharmacies.

Previously, 18 states had enacted reforms to hopefully deter physician dispensing by limiting the prices paid to doctors for prescriptions they wrote and dispensed. However, despite the reform’s efforts to cut costs, the study identifies how some physicians are charging more.

The reform’s loophole is this: Doctors in Illinois and California can assign an average wholesale price (AWP) that is much higher than the AWP assigned by the manufacturer of the original drug. As mentioned in the study, the most common strengths are 5 milligrams and 10 milligrams. A new strength can warrant a new AWP, which is where the opportunity lies for physician dispensers to charge higher prices.

As this can be a concern for all states, CorVel aims to provide a solution for the various challenges in pharmacy management, which includes increased physican dispensing, according to the National Council on Compensation Insurance. CorVel's pharmacy program offers 100% pharmacy exposure management from a single database and proprietary resources. It is integrated with their bill review system to provide complete visibility into all pharmacy  transactions, including in- and out-of-network transactions.