Doctors, Insurers Clash on Florida Workers’ Comp Physician Dispensing Rules

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Physician dispensing of medications has long been a flash point in workers’ compensation insurance, with at least 22 states regulating or restricting the practice. Florida is no exception to the controversy, and stakeholders on both sides of the issue joined renewed debate last week with testimony from injured workers, doctors, lawyers and insurance industry representatives.

“The workers’ compensation system is a challenging system to negotiate, not only for patients but also for physicians. The last thing they need is to go ahead and put another barrier in between the patient and the physician,” said Dr. David Perloff, a cardiologist in Fort Lauderdale.

Perloff, one of 95 people who attended the virtual regulatory hearing on Friday, urged the Florida Division of Workers’ Compensation to proceed with the rule changes that would allow physician dispensing in most cases. Insurers would be able to deny authorization or reimbursement of office-dispensed drugs only in limited circumstances. The proposed changes can be seen here.

Perloff (Facebook)

Perloff argued that regulators should loosen the reins even further and exempt heart medicines from re-authorization requirements altogether, so that patients can walk out of a doctor’s office with the life-saving drugs and avoid delays. Early medication helps prevent relapses and returns to the hospital, and in the long run will save insurers money, he said. He noted that the American College of Cardiologists recommends the practice.

Patients who spoke at the hearing said that being able to avoid waiting on pharmacies or insurance companies to approve medications is vital to rapid recovery. Leslie Seime testified that after she underwent hand surgery for a work injury, she did not receive drugs from the surgery center and had to go without pain medication for 72 hours, while waiting for an adjuster to approve.

“Delays in care unequivocally impair healing, impair return to function and return to work,” said Dr. Larry Halperin, an orthopedic surgeon in Orlando.

He added that the proposed rule update will let patients begin recovery sooner and is a “strong step toward balancing the needs of carriers, patients and physicians.”

Insurance groups pushed back, noting that physician dispensing has been abused in Florida and other states and has been a major cost-driver in workers’ compensation.

“We strongly support requiring that medications be authorized prior to dispensing,” said Ken Stoller, assistant vice president at the American Property Casualty Insurance Association.

Physician dispensing removes the pharmacist, which can act as a backstop against overprescribing and dangerous drug interactions, Stoller said. While some U.S. physicians have advocated for dispensing private-label, compounded creams, workers’ comp insurers have long argued that the topical meds are unnecessary and ineffective – and are little more than a way for providers to jack up prices.

“All of the arguments supporting physician dispensing have long been debunked, since providers can undeniably treat effectively without it, and pharmacies are abundant and easy to access,” Stoller said at the online hearing.

He argued that dispensing may not even be allowed by Florida’s workers’ compensation statute. The law allows a choice of pharmacy for workers, but physicians and practitioners “are simply not pharmacies or pharmacists.”

The latest rule changes have been in the works for almost three years. In 2020, the Division of Workers’ Compensation, part of the Florida Office of Insurance Regulation, published a bulletin essentially authorizing physician dispensing with few exceptions. At least six insurance carriers objected to that and filed a formal challenge, contending that the bulletin amounted to rulemaking without the proper procedure or input from stakeholders.

Some have argued that physician groups, including a firm that automates billing for doctors, have had an outsized influence on regulators. Supporters of dispensing have countered that insurers are the ones with too much say-so, and that carriers consistently deny routine medical procedures.

A workshop scheduled for September was postponed until November after Hurricane Ian hit Florida. A formal hearing was requested and scheduled for last week.

The proposed rules don’t appear to differ significantly from the 2020 bulletin, and some in the insurance industry have said the wording raises questions.

Proposed rule 69L-7.730, regarding physicians’ responsibilities on dispensing, notes that “medication is treatment and must be authorized prior to dispensing…” Requests for authorization must specify drugs by name, along with dosages.

But the rule also notes dispensing and reimbursement may not be denied “for the sole reason” that a doctor’s office is doing the dispensing.

The companion proposed rule, 69L-7.740, covering insurers’ responsibilities, also notes that carriers and adjusters may disallow payment if the medication was not authorized prior to dispensing and is not medically necessary.


Does that mean that insurers would have to satisfy both requirements in order to refuse reimbursement, asked Brian Allen, vice president of government affairs with Mitchell Pharmacy Solutions.

“The way that reads to me is that if a doctor … failed to preauthorize it but it was medically necessary, it would still be paid for,” Allen said at the hearing. “That seems like a conflict.”

Brittany O’Neil, assistant director of the DWC, explained that the wording is needed because statutes stipulate that if a carrier fails to respond to an authorization request, but the drugs are considered medically necessary, then payment is due.

Others wondered if, since the rules would state that reimbursement cannot be denied solely because the physician is dispensing, what the accepted denial reasons might be. Some studies have shown that the cost of physician-provided meds can be five times higher than pharmacy prices and don’t often meet clinical guidelines, said Ralph Douglas, a Tallahassee attorney who represents comp insurers.


“Is that a sufficient reason” to deny payment, he asked.

Douglas said a better approach would be to allow carriers to authorize dispensing only when they believe it has value, as division rules once allowed, Douglas added.

The DWC’s required analysis of the rules indicate the changes could cost insurers, self-insurers and employers an additional $8.6 million per year. That means the rule changes will likely have to be ratified by the Florida Legislature, which may prove to be difficult, at best. Lawmakers for the past several years have declined to approve other workers’ comp medical reimbursement changes that increase costs.

The window for written comments to be submitted closes Jan. 20. Comments can be sent to Officials did not indicate if or when the division may publish revised rules.

Workers’ Compensation

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