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Posts tagged: workers’ compensation

Updated WCMSA Regional Office Contact List

By , August 13, 2013 9:47 am

CMS has posted an updated contact list for its regional offices that review WCMSAs. The updated contact list can be located here.


Physician Dispensing and Workers’ Compensation

By , August 8, 2013 9:15 am

Physician dispensing of repackaged drugs continues to be a major contributor to the growing cost of prescription drug treatment within the workers’ compensation industry. In the 2012 Survey of Prescription Drug Management released by CompPharma and authored by Joseph Paduda in January of 2013, it was noted that physician dispensed medications were second only to the use of opioids as the largest driver of workers’ compensation prescription drug costs.

Physician dispensing is not a new practice among physicians. It became popular in the late 19th and early 20th centuries and was first seen in workers’ compensation in California in the middle of the last decade. At that time, physicians began to partner with companies who marketed repackaged drugs for resale as an opportunity for offsetting practice revenue losses due to reimbursement cuts made by government, commercial and workers’ compensation payers.

Repackaged drugs are usually purchased in large quantities from the original manufacturer by companies who then repackage them into smaller quantities for resale. The repackaged drugs are usually sold at a profit by physicians who dispense them to the patient at time of treatment. The FDA requires the company that is repackaging and relabeling the drugs to assign a new NDC number (different from the original manufacturer’s NDC) and at that time it is common for the company to set a new AWP (average wholesale price) that is generally higher than the original. This new AWP is also typically higher than the AWP utilized by retail and mail order pharmacies and is often not controlled by state fee schedules.

From a workers’ compensation payer’s perspective, arguably there are numerous “Pros” and “Cons” concerning physician dispensing.


*Allows the physician the opportunity to ensure the patient has the medication to begin treatment immediately as it is dispensed at the time of service. Additionally, physician dispensing makes it more convenient for those patients who may have difficulty finding transportation to a retail pharmacy. Those patients that may not otherwise have reliable transportation may postpone filling the medication or never obtain the medication for treatment at all.

* Beneficial for specific medications that require physician monitoring such as those dispensed within a drug rehabilitation program.


*Patient Safety:  Since the medication is being dispensed by the physician without the oversight of the pharmacy benefit manager or pharmacist, an important safety check is bypassed.  Since the physician must depend on the injured worker to provide the medication history in order to perform drug utilization review, drug therapy problems may go undetected.  This leads to possible missed drug interactions, duplicate or excessive drug therapy, as well as other high risk medication concerns.

* Inflated costs:  The majority of medications dispensed by physicians are associated with an increased cost per unit because of the creation of a new NDC and AWP.  In many cases this AWP is much higher (in some cases as much as 400% higher) than the same drug dispensed through the retail or mail order pharmacy setting.

*Administrative inefficiency:  It is difficult for bill review systems to identify physician dispensed drugs as they are often simply included in the physician’s treatment bill and the reviewer is unable to separate the cost of treatment from that for drugs.  As these transactions are often billed on paper, this drives additional cost for payers compared to PBM-billed transactions that tend to be billed electronically.  This also makes it very difficult for the payer to build a complete data picture of the magnitude and amount of physician dispensed drugs.

As the practice of physician dispensing continues to gain in popularity, it will remain a concern for payers of worker’s compensation claims.  Due to the financial benefits as well as aggressive marketing by the repackaging companies, it is estimated that the percentage of physicians dispensing drugs is growing well over 10% per year.  In response to this, many, but not all of the states, have begun to  change regulations monitoring physician dispensing in an attempt to help control the inflated cost due to this type of dispensing.

In order to control rising costs, it is important that the workers’ compensation industry work with state legislators to provide insight into this issue. It is equally important for the industry to remain informed on how physician dispensing is being handled by each individual state.  Payers should also discuss with their PBMs their approach to controlling physician dispensing and to ensure sure that it is being actively managed and monitored.


New Statute of Limitations for Conditional Payment Recovery to Begin on July 10th

By , July 2, 2013 2:56 pm

At last, one of the components of the SMART Act is set to take effect on July 10, 2013. The SMART Act, also known as H.R. 1845, provides that: six months after enactment (signed by President Obama on January 10, 2013), an action for recovery of conditional payments cannot be brought unless it is less than 3 years after the date of the receipt of notice of a settlement, judgment, award or other payment by CMS/DHHS.

So what does this mean? This means that recovery of conditional payments is limited to three (3) years from the date of notice to CMS on any cases that settle after July 10th of this year, as long as CMS is notified of the settlement, judgment, or award. Three years after a case settles and notice is provided to CMS, you can finally rest assured that CMS won’t be looking for additional monies from that workers’ compensation, liability or no-fault case you settled.

Until the SMART Act, there was no clear statute of limitations for conditional payment recovery; although cases such as U.S. v. Stricker attempted to interpret it via case law. A clear statute of limitations through legislative reform to the MSP Act was needed as any case law which attempted to interpret what the Statute of Limitations would seemingly only apply to that jurisdiction where the case was decided. This could potentially create a lack of consensus among jurisdictions on a Federal issue which really should be determined through the legislative or executive branch rather than the judicial. The SMART Act accomplished this.

One great aspect of this new statute of limitations is that it is a self-enacting provision of the SMART Act. Unlike some of the other components of the SMART Act, CMS does not need to promulgate rules or post a proposed rulemaking in the Federal Register for this to begin. Therefore, PMSI highly encourages payers to take note of this new statute of limitations and ensure that CMS is noticed on the appropriate settlements so that payers can take advantage of the statute of limitations which will be effective on July 10, 2013 as a result of the SMART Act.


Redesign of CMS COB and Recovery Websites

By , June 19, 2013 8:24 am

CMS has issued an alert notifying the industry of a reorganization of the MSP sections of its website. There appears to be no substantive changes to the MSP program, but rather what appears to be an ongoing reorganization and consolidation of information.

Below is the text of the alert:  

The Coordination of Benefits and Medicare Secondary Payer Recovery sections on the Medicare tab of the CMS.Gov Web Site have been redesigned and restructured.  As part of this restructuring, all pertinent information from the web site has been incorporated into this new design and web page links have changed. Please visit the Coordination of Benefits & Recovery section of to see our new web pages. 

CMS provides the ability for you to be automatically notified when changes are made to the Coordination of Benefits & Recovery Overview web pages.  If you have not already signed up for these notifications, please click the Subscription Sign-up Notification link found in the Related Links section of the web pages.   When new information regarding Coordination of Benefits & Recovery are available, you will be notified. These announcements will also be posted to the What’s New page of the corresponding web pages.

The following short-cuts have also been created for each of the new web pages:

Coordination of Benefits & Recovery Overview:  

Attorney Services:

Beneficiary Services:

COBA Trading Partners:

Employer Services:

Insurer Services:

Prescription Drug Assistance Programs:

Provider Services:

Mandatory Insurer Reporting For Group Health Plans: 

Mandatory Insurer Reporting For Non Group Health Plan:

Workers’ Compensation Medicare Set-Aside Arrangements:


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