“Prescription” of Non-Prescription Drugs in Workers’ Compensation

“Prescription” of Non-Prescription Drugs in Workers’ Compensation

                  Kathy was on pain medications for a work-related injury.  The meds caused her some stomach upset, so her doctor wrote a prescription for 20 mg omeprazole capsules.

                  Her doctor could have told her that this drug is available over-the-counter under labels such as Prilosec and Nexium, or available in dozens of store brands, and could have told her to just pick some up at the local supermarket or drugstore.  Most versions, from most stores, sell for about $15 per bottle.  Instead, the doctor wrote a “prescription” for exactly the same generic drug, same dosage, and directed the “prescription” to an out-of-state, “workers’ compensation” pharmacy.   The employer was charged $244.05 for the same drug.

                  George needed a pain patch for his work injury. His doctor thought a patch containing 4% lidocaine and 1% menthol would do the trick.  The doctor could have told George that this formulation is available over-the-counter and  to pick up a box and any drugstore or supermarket, where a box of such patches costs about $12.  Instead, the doctor wrote a “prescription” the same formulation and an out-of-state “workers’ compensation” pharmacy billed the employer $1,756.32.

                  This scenario plays out every day for dozens of drugs.  Employers and insurers don’t catch the issue because they contract with PBMs (Pharmacy Benefit Managers) and assume that such issues will be dealt with by their PBM.   However, most PBMs will not get involved in review or repricing of drugs from “workers’ compensation” pharmacies because they are typically  “out-of-network”, and PBMs claim that they have no mechanism or authority to negotiate with pharmacies that are not in their network.  The issue can therefore go undetected and the employer or insurer winds up paying ridiculous amounts.  Insurers and employers are misled into thinking that the drugs are  specialty prescription medications due to the high billed prices and because the doctor, pharmacy and pharmacy billing company use language and forms reserved for prescription drugs.

                   PBMs can provide some valuable services, but when it comes to out-of-network bills, employers and insurers are often left to fend for themselves and usually do not have the personnel, software or infrastructure to challenge, reduce or negotiate bills from out-of-network pharmacies.  Instead of just paying such bills, employers and insurers should have someone screen such bills to spot prescription of OTC medications, potential violations of physician self-referral laws, potential violations of pharmacy generic drug dispensing laws, and to review the prices charged and apply existing law to reduce or negotiate the charges down to normal rates.

Cliff Goldstein, Esq., formerly the CEO and a Senior Litigator at Chartwell Law, has 35 years of experience in litigating complex workers' compensation cases.  He now concentrates solely on addressing excessive pricing, fraudulent practices, abuse, and waste regarding drugs used in workers' compensation cases.  He can be reached at 215 588 4901 and cliffagoldstein@gmail.com

This article does not provide legal advice.  All cases are unique and if appropriate, should be discussed with an attorney of the client’s choosing.  This article is intended only to stimulate discussion, and its contents are not a substitute for independent research and legal consultation before taking or refraining from any action.  This article is merely an expression of opinions of the author.  This article does not create or imply an attorney client relationship.  Do not take or refrain from taking any action based on this article and be sure to consult with an attorney of your choice about the risks of taking or refraining from any actions.  The prices and other numbers in this article are examples taken from websites at the time the article was written. Actual prices and other data will be different and change frequently, and the figures presented are only examples.  Not all PBMs work under the same standards, formulae, and terms, and PBM  contracts vary.  Prices for drugs should be examined based on the type of drug, NDC number, provider, billing entity, prescriber, NADAC or other schedules, and other factors, and payments should be made in accordance with the then-current law.  The law in this area is in a state of flux with cases pending appeal.    No particular pharmacy, PBM, billing company, or doctor  is accused herein of any wrongdoing.  This article is based on a small sample of limited data that may not be representative of the industry as a whole.  This article does not represent the opinions of any company or law firm and is the copyrighted property of the author.  It may not be reproduced in whole or in part without the permission of the author.  Cliff Goldstein is licensed to practice law in Pennsylvania and maintains an office in Merion Station, PA.  For more information, please contact Cliff Goldstein at cliffagoldstein@gmail.com.