LANSING – Michigan’s changes in 2012 to the rules governing reimbursement for physician-dispensed prescriptions for workers’ compensation claims have so far not seen major increases in new strengths or new formulations of certain pain-relieving medications, but the trend is growing across numerous other states, including neighboring Illinois, a study has found.
The Workers Compensation Research Institute had previously found evidence in two states – California and Illinois – of increased physician dispensing of higher-priced new drug strengths for essentially repackaged drugs, but upon further examination saw a similar growing trend in states like Florida and Pennsylvania.
“The rapid growth of physician dispensing of these new strengths was behind substantial increases in the average prices paid for the common physician-dispensed drugs associated with these new strengths, raising an important question about the effectiveness and sustainability of reforms,” the study said. “In addition to three new drug strengths, we also found that a new formulation of topical pain medication was recently introduced to workers’ compensation health care and dispensed by some physician-dispensers at a much higher price.”
The report focuses on two types of drug products sharing the same issue: new strengths and new formulations. The products have new National Drug Codes and are assigned much higher average wholesale prices by a generic manufacturer, not a repackager, and because of that, the drug products would not be subject to the specific reimbursement rules targeting high-priced repackaged drugs.
Michigan was among 22 states studied by the WCRI given its recent changes to the drug reimbursement schedule but its numbers did not sound any major alarms when compared to the four worst states – California, Florida, Illinois and Pennsylvania – for the total number of prescriptions from the first quarter of 2012 to the first quarter of 2014 among physician-dispensed prescriptions for three new strengths and one new formulation.
Specifically, those included 7.5-milligran cyclobenzaprine HCL, 2.5-325-milligram hydrocodone-acetaminophen (products like Vicodin), and 150-milligram tramadol HCL (products like Ultram) extended release – all common opioid drugs prescribed to injured workers for pain relief. The new formulation of topical lidocaine pain medication, lidocaine-menthol, began to appear in the latest study quarters, WCRI noted.
On average per quarter, the number of prescriptions included in the study ranged from 7,794 in Kansas (the lowest) to 215,719 in California (the highest). Michigan fell right in the middle of the pack with an average of 20,325 prescriptions per quarter, averaging 7,596 medical claims with a prescription per quarter.
When it came to products like Vicodin, for example, Michigan’s physicians filled only three prescriptions from Q1 2012 to Q1 2014, while neighboring Illinois filled 1,788 and California filled 3,292.
One drug where Michigan soared above most studied states but did not quite meet the same rate as the four worst offenders was lidocaine-menthol, which saw 42 prescriptions during that time period while lower states averaged fewer than 10 prescriptions between the two quarters. The only other state to come close to Michigan’s number was Louisiana, which filled 53 prescriptions, though both are still a far cry from those filled in California (2,087), Florida (733), Illinois (885) and Pennsylvania (153).
Still, Michigan remained one of the better states in terms of pricing and the percentage of prescription payments being lower than the percentage of all prescriptions dispensed by physicians. Michigan was one of only three states where physicians who dispensed prescriptions tended to prescribe a small number of pills compared with physicians who did not dispense.
“A smaller cost share than frequency share for physician-dispensed prescriptions was largely due to differences in the mix of drugs in terms of prices paid between physician-and-pharmacy-dispensed prescriptions,” the study noted.
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