Dispensing drugs. Just what the doctor ordered?

By: - November 16, 2018 6:03 am

Is your doctor prescribing the medication you need or the medication your doctor needs to prescribe to make a profit?

“What would you do with an extra $25,000/ $50,000 / $100,000 per year?” the Dispensing Physician website asks medical professionals.Are you fed up with declining insurance reimbursements? Are you seeing more patients to maintain the same income?”

For a single physician practice seeing 30 patients per day on average, the annual income can range from $70,000-$125,000. Workers compensation costs and profit margins vary by state.”

“The advantages to Physician dispensing in Nevada are numerous and include: increases in per patient revenue, enhanced patient control and increases in patient compliance and Physician control,” says the website for Medicus Rx Solutions, just one of many companies that facilitate dispensing practitioners.  The site even includes a revenue calculator, where medical professionals can determine the added income they’ll enjoy from augmenting their patients’ prescriptions.

Allowing doctors to fill their own prescriptions and cut out the middle-man — the pharmacy — has long been legal in Nevada.  The idea was to save rural patients the trouble of a long trip to the nearest drug store. Today, hundreds of physicians, physician assistants and nurse practitioners throughout Nevada are licensed to dispense the drugs they prescribe, and it’s raising costs for patients and their insurance companies, increasing prescription drug use and posing an ethical conflict for medical professionals.

“The regulations for in-office Physician dispensing in Nevada are set forth by the Nevada Board of Pharmacy and are some of the more favorable in the country for the practice,” says the website for Medicus Rx Solutions.“Clinics seeking to increase potential revenue in the state have the option of deploying either our workers compensation program or our cash and carry program.”

“Nevada clinics that dispense medication at the point of care to workers compensation patients are reimbursed based on the workers compensation average wholesale price (AWP) for that medication, plus a $7.62 dispensing fee for each script filled,” the Medicus Rx Solutions notes. “These represent some of the highest reimbursement rates in the country and are one of the reasons dispensing is so popular in Nevada. Clinics that engage in Physician dispensing for workers compensation patients report an increase in per patient revenue and high patient satisfaction.”

Medicus Rx Solutions suggests the “clinic charge a cash copay to the patient” for “non-workers compensation patients.”  

In 2017, Nevada ranked third, according to the U.S. Drug Enforcement Agency, in the sale of Oxycodone and Hydrocodone, at 40.5 kilograms per 100,000 people. Tennessee ranked first at 44.3 kilograms and Oklahoma ranked second at 43.1 kilograms.

The most commonly dispensed drugs for workers comp patients are prescribed at a higher rate and cost more in Nevada than elsewhere in the U.S. on average, according to the National Council on Compensation Insurance.

Oxycontin is prescribed to 6.7 percent of Nevada workers comp patients compared to 4.8 percent nationwide.  The drug costs $9 per unit in Nevada, while averaging $7.76 in the U.S.

Oxycodone is prescribed to 6.2 percent of Nevada workers comp patients and 4 percent nationwide.  The drug costs $1.97 per unit in Nevada and $1.83 nationwide. 

In 2015, Nevada lawmakers passed SB 231, in an attempt to rein in higher costs and higher rates of opioid prescriptions to workers compensation patients by limiting point-of-care dispensing to the first two weeks of care.  

Indiana, North Carolina and Pennsylvania also limit the time during which doctors can dispense to workers comp patients, according to WCRI.

The National Council on Compensation Insurance, which says it collects medical data to better understand insurance claims, reports Nevada’s workers comp system spends more of its money on doctors (54 percent compared to 39 percent nationally) and drugs (13 percent compared to 11 percent nationally) than other states.   

The Division of Industrial Relations, which administers the state’s workers’ comp program, does not collect or monitor medical data.  

If Nevada lawmakers recognize a correlation between point-of-care dispensing and higher costs and volumes of opioid prescriptions, why impose limitations on dispensing only in the case of workers comp patients?

“Because the Nevada State Medical Association is very powerful and the doctors act like gods,” says former state Sen. Patricia Farley, who was a member of the Senate Commerce, Labor and Energy Committee that heard the workers comp measure. “People in business and state government understand managing claims.  They have an incentive to control costs. But of all the issues I worked on, the pain management doctors were the most fiercely hostile.”

Catherine O’Mara, executive director of the Medical Association, said she was unable to respond to our questions by deadline.  

“It’s a wonderful thing when they get Amoxicillin and they don’t have to go elsewhere,” says state Sen. Joe Hardy, Farley’s colleague on that Senate committee, a doctor who has been licensed to dispense and a staunch supporter of physicians’ rights in the past.  But the times, they are a changin’. 

“I can’t see a reason for any practitioner to possess controlled substances,” he says. “Through my 2018 glasses, not only would I limit it, I’d say you shouldn’t do it.  You are just asking for problems. In today’s world I’d probably support a more aggressive limitation of dispensing narcotics,” Hardy says. “ You set yourself up as a physician. Someone is going to break in and steal it. Staff is going to be tempted.  The doctor is going to be tempted.”

At least 20 states have enacted legislation aimed at reforming practitioner-dispensed drugs, according to the Workers Compensation Research Institute (WCRI) in Boston.  Results are mixed.

The WCRI reported in 2014 that Florida banned doctors from dispensing some opioids in 2011, resulting in a 12 percent drop in the percentage of workers comp patients who received Schedule II and Schedule III opioids.

Before the ban, 3.9 percent of injured workers were prescribed strong opioids dispensed by their doctors in the six months following their injuries. After the ban, only one-half of one percent received prescriptions for the strong opioids.   

But a study from the Journal of American Medical Association said the results of Florida’s policy change were not as dramatic, resulting in just a 1.4 percent decrease in opioid prescriptions.

Tennessee implemented a similar statewide ban in October 2013.

In perhaps a testimonial to the profit motive of point-of-care dispensing, rather than send patients to pharmacies to fill prescriptions for opioids, physicians instead prescribed weaker Schedule IV opioids and other drugs they were allowed to dispense in their offices, according to WCRI.   

But the highly-touted “extra income” isn’t worth the hassle, says Hardy, who says he’s not worried about doctors tacking on an unnecessary prescription in order to make a buck.  

“The idea that you’re going to make $75 thousand more — you get real tired of that.  By the time you take all the steps you were supposed to do you would have seen another patient that day.”

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Dana Gentry
Dana Gentry

Dana Gentry is a native Las Vegan and award-winning investigative journalist. She is a graduate of Bishop Gorman High School and holds a Bachelor's degree in Communications from the University of Nevada, Las Vegas.