Legislation to Reduce Workers’ Compensation Costs Becomes Law

Date: November 03, 2014

Governor Corbett signed House Bill
1846 into law, marking it as Act 148 of 2014. 
The bill puts limits on the practice of physicians dispensing drugs to
injured workers from their office at inflated prices and for extended periods
of time.  It passed the Senate 48-0 and the House 196-0.

a loophole in the Workers Compensation Act, physicians could dispense
prescription drugs to workers right from their office at highly inflated prices.  Driven largely by out of state drug
repackaging companies, the practice is unique to workers compensation as the
practice is not currently found in other health insurance systems (private
insurance, Medicare, Medicaid, etc.).

to a report released by the Workers, Compensation Research Institute, while a
single Percocet costs on average 64 cents at a pharmacy, physicians who
dispense were charging $3.55!  For an
Ibuprofen, it cost almost 3 times as much.

same study noted that in 2014, physician-dispensed medications accounted for
29% of all prescriptions under workers compensation and accounted for nearly
half of all prescription costs.

problem with the practice doesn’t just lie in the medical costs.  Research also shows that injured workers who
were treated by a dispensing physicians experienced longer treatment times and
returned to work later than those injured workers whose medications were
purchased at a pharmacy.  That’s
problematic in a system where the goal is to treat injured workers and return
them to the workforce as soon as possible. 
It’s in the best interest of both the employer and the employee.

The new law will allow doctors to
continue to prescribe to injured workers but limits the price to 110% of the Average
Wholesale Price (AWP) and imposes a general 30-day limit on physician-dispensed
drugs.  For Schedule II and III drugs
(opioids), the law establishes a seven-day limit with a conditional 15-day
extension if a patient has surgery.

Based on an analysis by the
Pennsylvania Department of Labor and Industry, it is estimated that this reform
will reduce workers’ compensation premiums by at least one percent for

A special thank you to Rep.
Marguerite Quinn (R-Bucks) for sponsoring the legislation and to House Majority
Leader Mike Turzai (R-Allegheny) for his support of the bill.  NFIB would
also like to thank Senator Lisa Baker (R-Luzerne) and Senate President Joe
Scarnati (R-Jefferson) for shepherding the bill through the Senate.




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