For more than a decade, insurance companies and physician groups have battled it out over the true meaning of Florida statutes: Are doctors considered pharmacists, allowed to dispense medications to injured workers, often at a higher price?
A Florida appeals court this week may have finally answered that question, giving a multimillion-dollar win to employers and carriers that have spent years trying to undo state workers’ compensation regulations that have allowed physician dispensing.
“This is huge. It’s not often you see a complete vindication like this,” said Jerry Fogel, a consultant with Imagine Clinical who has been at the center of the dispensing debate for years.
The 1st District Court of Appeals on Wednesday overturned a Florida Division of Administrative Hearings decision that had upheld a state Division of Workers’ Compensation regulation issued in 2023. That regulation, initially contemplated in 2020, reversed years of regulatory sentiment that the wording of Florida law does, in fact, allow insurers to deny reimbursement when physicians dispense medications to injured workers.
That 2023 rule has now been struck down. It’s unclear if the appellees in the case, including the Florida Department of Financial Services, the Florida Medical Association, and Prescription Partners LLC, will try to appeal to the state Supreme Court, or if the rule will now be revamped.
Those organizations and their lawyers could not be reached for comment Thursday. Rumors quickly circulated that efforts already were underway to change the law before the Florida legislative session is set to end March 13.
The place where injured workers obtain their prescriptions may not seem like a big deal. After all, workers’ compensation rates for most employers have fallen dramatically in Florida and nationwide over the last two decades. But insurers involved in the case said medical costs could be lower—and outcomes could be improved—if doctors stayed out of the medication-selling business. It’s a potential conflict of interest and physicians are not always trained on a wide range medications like pharmacists are, insurance groups have said.
Ending the dispensing practice will now save workers’ comp insurers as much as $43 million over the next five years, the Florida Insurance Council and the American Property Casualty Insurance Association said in an amicus curiae brief filed with the appeals court.
The groups pointed to studies by the Workers’ Compensation Research Institute that suggest that many drugs are more expensive when doctors dispense and bill for them: The pain reliever Vicodin is, on average, $1.41 per pill if dispensed at a doctor’s office versus 52 cents at a pharmacy. Mobic painkiller is as much $5.86 per pill, compared to $3.19, the brief notes.
“This increase would need to be factored into the cost of workers’ compensation insurance, unraveling years of legislative reform,” attorneys Maria Elena Abate and Michael Billmeier Jr. wrote in the brief.
The Florida Insurance Council hailed the court ruling.
“We believe this decision reinforces an important safeguard against misaligned financial incentives in physician dispensing, protecting injured workers and helping prevent unnecessary cost increases that impact Florida employers,” said George Feijoo, of Floridian Partners, representing the Council
Advocates for physician dispensing have long said it saves injured workers time and avoids multiple trips to pharmacies, speeding recovery. And in an answer brief in the appeal, Prescription Partners’ attorneys said the whole dispute has been unnecessary: They pointed out that under Florida law, the comp insurer chooses the treating physician, in most claims.
“A carrier has the choice to send the injured worker to any provider of the carrier’s choice, including a provider who is not a dispensing practitioner, and thereby avoid any practitioner-dispensing of medications at all,” attorneys Virginia Dailey and Lindsay Ervin wrote.
But Fogel argued that in today’s profit-driven medical system, in which large private equity funds have gained stakes in many provider practices, it’s not so easy for physicians to agree to drop dispensing, even in return for better reimbursement and more patients.
“That worked great 20 years ago,” Fogel said. “But nowadays, no one owns their own operation anymore. The medical people don’t make the decisions so much.”
The appeals court acknowledged that Florida law is somewhat conflicting and confusing on physician dispensing. In some sections, the law is clear that physicians are not the same as pharmacists, the court noted. But another section sets the price of doctor-sold meds to no more than the average wholesale price, plus a $4.18 dispensing fee. For repackaged drugs, it’s 112.5% of the wholesale price, plus an $8 fee.
But Fogel pointed out that even with price ceilings, dispensing doctors have a vested interest in writing more prescriptions and selling more-expensive medications, driving up costs for carriers and employers.
Physician dispensing has become a lucrative part of many medical businesses, insurance groups have said. One of the biggest players is Prescription Partners, based in Hollywood, Florida, which manages the software, packaging and billing when physicians set up office pharmacies and add pharmaceuticals to the bill. The firm has been the driving force behind the Florida regulatory push to allow doctor dispensing, insurance leaders have said.
Paul Zimmerman, a physician, is listed as CEO of Prescription Partners. He could not be reached for comment Thursday. But he once told NBC News that insurance companies have distorted the reported cost of dispensed meds by focusing on a few medications.
On the other side, Publix Super Markets, one of Florida’s largest employers, was the lead appellant in the case. Publix had two reasons for pressing the appeal: Its own workers’ comp costs and its pharmacy business, which will likely see an increase in medication sales now that doctors can be denied reimbursement when dispensing to injured workers.
Other appellants in the case were Florida workers’ comp insurers, including Normandy Insurance Co., based in Deerfield Beach, which Fogel credited with supporting and financing much of the litigation, even after other insurers backed out. Others in the appeal included Zenith Insurance, in Sarasota; Bridgefield Employers Insurance; BusinessFirst Insurance and RetailFirst Insurance.
Topics
Florida
Workers’ Compensation
