Increases in the cost and frequency of physician-dispensed medications continue to negatively impact the Florida workers’ compensation system, according to a new 17-state study by the Workers Compensation Research Institute (WCRI). The study, Prescription Benchmarks for Florida, 2nd Edition, compares the cost, price, and utilization of prescription drugs in Florida with 16 other states: California, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, Texas, and Wisconsin.
WCRI based the study on claims with more than seven days of lost time that had injuries occurring between October 2006 and September 2007 and prescriptions filled through March 2008 for interstate comparisons. The report found that the average payment per claim for prescription drugs in Florida’s workers’ compensation system was $536. That was 45 percent higher than the median of the other states in the study. Over a 2-year period (2005/2006 and 2007/2008), the average cost per claim for prescription drugs in Florida increased 14 percent. By contrast, prescription costs per claim were fairly stable in most of the other states studied over the same period.
The study also found that the percentage of prescription payments for physician-dispensed prescriptions in Florida increased from 17 to 46 percent over a 4-year period (2004/2005 and 2007/2008).
The problems associated with physician-dispensed prescriptions have been widely debated by legislators and the workers’ compensation community nationwide in recent years. In 2010, the Florida Legislature passed HB 5603, which was designed to limit reimbursement rates for physician-dispensed prescriptions to the same level as pharmacies for the same medications. The bill included language that supporters said would close loopholes allowing dispensing doctors to “up charge” medication ingredient costs simply because the drugs were dispensed in an office setting. According to the Florida Department of Financial Services Division of Risk Management, HB 5603 would have saved taxpayers at least $18 million over the following five years.
Although the bill had the support of then-CFO Alex Sink and was a priority for Florida workers' compensation carriers and employers, then-Gov. Charlie Crist vetoed the legislation. In his veto announcement, Crist said that the bill had not been “fully vetted during the legislative process” and implementing it “could result in numerous unintended consequences” that could have a negative impact on injured workers. Labor interests and the Florida Medical Association lobbied hard for Crist to kill the bill.
WCRI is a nonpartisan, not-for-profit membership organization supported in its public policy research by employers, insurers, insurance regulators and state regulatory agencies, as well as several state labor organizations.
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