Niche Pharmacies and Prescription Drug Fee Reimbursement in the Texas Workers’ Compensation System

One of the current trend issues in medical fee dispute resolution circles is pharmacy reimbursement. Niche pharmacies have entered the Texas workers’ compensation market. These pharmacies only market and provide services to injured workers. They do not fill prescriptions for non-workers’ compensation patients. Some are national retailers to injured workers, and others are more local, servicing their surrounding communities. Regardless of their size and the scope of their market(s), they are all dealing with one common fee dispute in Texas – a proxy for the pharmacy’s usual and customary fee.

The maximum allowable reimbursement (MAR) for prescription drugs is set by Division Rule 134.503(a). Under the Rule, the MAR is the lesser of:

1. The provider’s usual and customary charge;

2. A formula based on average wholesale price, a modifier and a dispensing fee;

or,

3. a negotiated or contract price.

If there was a negotiated or contract price, then there would be little need for litigation over a single prescription bill. The recent cases being set before the Division are disagreements over a pharmacy’s usual and customary charges. The pharmacies are billing an amount greater than the formula-based MAR so that the formula-based MAR is paid in every case.

There are many factors in establishing the price of a product – some unique to the workers’ compensation system. In Medical Dispute Resolution case number M4-02-5033-01, the pharmacy argued that it had to factor into its price the unique aspects of: verification that claims relate to compensable workplace injuries, identification of insurers providing coverage and their adjustors, the preparation and submissions of manual claims forms, verification of eligibility for compensation, and the extension of credit pending payment by insurers that is not required until sixty days after the submission of “clean claims.” Considering that the formula-based MAR uses modifiers ranging from 1.09 to 1.25 with only a $4.00 dispensing fee, it can be easy to see how usual and customary prices can be established that exceed the formula-based MAR.

If these cases involved large pharmacies with high volume non-workers’ compensation services, then the operating costs of providing workers’ compensation-related services would be offset by the efficiency and volume of the non-workers’ compensation-related services. Prices would probably tend to be lower in that scenario. But that is not the case with these niche pharmacies marketing only to injured workers. The only way they can get reimbursement is to navigate complex reimbursement systems that require more sophisticated knowledge, greater manpower and longer delays of payment than non-workers’ compensation systems.

Regardless of the justification (or lack thereof) of the prices established by these niche pharmacies, it is not why the pharmacy charges a particular amount, but whether it can establish that it does usually charge a particular amount that is important. Rule 134.503(a) specifically provides that one of the comparison measures for the selection of the MAR value for prescription drugs is the provider’s usual and customary price. The question is not whether the usual and customary price charged is justified. The question is whether the price charged is in fact usual and customary; is it the regular price charged by that provider?

This is the crux of the dispute in these cases. In non-workers’ compensation situations, many of the larger national pharmacies have negotiated contract prices well below the Texas formula-based MAR. These niche pharmacies that only provide services to injured workers have not. So insurance companies are seeing workers’ compensation providers obtaining a higher reimbursement for a particular prescription than it usually pays in non-workers’ compensation situations. This led to attempts to curb these niche pharmacy’s fee reimbursements.

There is only one Medical Contested Case Hearing so far on this issue, reported as Medical Contested Case Hearing Number 10169, and it went through the system as Tracking Number M4-07-4069-01. In this case, the carrier made a partial reimbursement and urged two main reasons why additional reimbursement should not be paid.

First, the carrier had to make some type of reimbursement as there was no dispute over medical necessity. The carrier had negotiated a contract price with another pharmacy or pharmacy clearing house and paid the amount it would have had to pay under that contract. The carrier then argued that the clearing house’s price is a good proxy for the niche pharmacy’s usual and customary price simply because the clearing house has contracted with other pharmacies to pay less than the niche pharmacy’s price. So the carrier argued that the usual and customary price it pays should be the measure for MAR, not the provider’s usual and customary charge.

Secondly, the carrier attempted to use Texas Labor Code Section 415.005 as a bar to additional reimbursement. That section provides that a health care provider commits a violation if the person charges an insurance carrier an amount greater than that normally charged for similar treatment to a payor outside the workers’ compensation system, except for mandated or negotiated charges. The carrier argued that if the pharmacy cannot show what it charges outside of the workers’ compensation system, then it has not proven its usual and customary charge and would not be owed any additional reimbursement. Being a niche pharmacy, only providing services to injured workers, the pharmacy could not show charges outside of the workers’ compensation system. Of course this begs the question: why did the carrier pay anything at all in the first place? If the argument is that (1) a failure to prove usual charges outside of the workers’ compensation system means there is no usual and customary charge established, (2) which means there can be no determination of whether usual and customary or the formula-based MAR is the lesser charge, so (3) no reimbursement is owed, then no reimbursement would have been owed in the first place.

Judge Cole wrote an opinion that tracked the plain language of the law. He found that there is no provision requiring the pharmacy to establish the usual and customary charge for the prescriptions filled for customers outside of the workers’ compensation system if the pharmacy does not fill prescriptions outside of the workers’ compensation system. Likewise, under the Act and Rules, there is no provision allowing a carrier to substitute a proxy’s charge as the usual and customary charge. There are only three methods to establish the proper reimbursement under the Rule. Allowing a carrier to make up a fourth method is not one of the three methods. The only requirement under Rule 134.503(a) is that the pharmacy establish its own usual and customary charge. Some other pharmacy’s usual and customary charge is not relevant.

Texas Labor Code Section 415.005 is being interpreted to be a comparison of one provider’s own charges inside and outside of the workers’ compensation system. It is not a measure of one provider’s charges inside the system to other provider’s charges outside of the workers’ compensation system. This is a significant distinction in this opinion.

Additionally, Texas Labor Code Section 415.005 addresses the multi-jurisdictional issues that arise with national workers’ compensation pharmacies. These pharmacies may charge a different rate in some states than others because of varying fee schedules. For instance, in New Jersey there is a law forbidding a health care provider from demanding or requesting any payment in excess of those permitted in the fee schedule (N.J.A.C. 11:3-29). That system is not like the Texas system that allows a usual and customary billing that is reduced to the proper fee schedule amount by the insurance carrier. Section 415.005 protects providers in Texas who also provide services in other states for a mandated fee – the lower fees billed in other states due to fee guidelines do not affect the calculation of the Texas provider’s usual and customary charges.

The end result is that we now know that the Rule means what it says: if a pharmacy can show that it has billed its usual and customary charge for a prescription drug, then it will be paid that amount, or the formula-based MAR, whichever is less.

Internet Pharmacy – An Ideal Platform For Drug Purchase

Getting the prescribed medicines from a nearby community drugstore had long been the only option for us. But now, Internet pharmacies have become a far better alternative. Internet pharmacies go a long way in meeting patient’s demands than what the traditional pharmacies could. A good online pharmacy entitles us to a host of benefits and services that the age-old community drugstores are incapable of providing in the near future. Online pharmacies outclass the traditional ones on more than a single ground.

A lot of patients suffer from ailments that they do not wish to make public. It could even be embarrassing for some to publicly buy such drugs at a community drugstore. Conversely, they can buy similar drugs through an Internet pharmacy. The ordering process is easy, secure and confidential. No need to go out of the house to queue up near a drugstore; just fill in the online order form available in the internet pharmacy’s website and wait for the drug to be delivered right at your doorsteps.

Most of us have a busy lifestyle. We need to take some time out for activities that are not a part of our daily routine. To get the drugs from a nearby drugstore, we need to find time to go out and buy them. Furthermore, there are patients who are too weak to move out. Such patients need to depend on others’ help to procure drugs from the nearest store. An Internet pharmacy, on the other hand, not only save our time but also reduces the effort needed to go to a drugstore. Whether at home, office, or anywhere else, all we need is to login to an online pharmacy website and place an order.

The cost of medicines is an essential point of consideration for the patients. Online pharmacies offer drugs at a far cheaper rate than that of the traditional ones. The difference in price is due to the high overhead costs incurred by the community drugstores. Conversely, an online pharmacy does not have similar magnitude of infrastructure or operational costs. Furthermore, online pharmacies operating from Canada offer attractive discounts as compared to others. This is due to the price regulations of prescription medicines by the Canadian government. Such discounts can be as high as 70%!

Safety, security, confidentiality, low prices and good product quality is what drives most patients to login to an online pharmacy. However patients should be careful to check out the legitimacy of the pharmacy. Internet pharmacies have become a booming business and a lot of people try to cash in this opportunity by promising the best and offering the worst. Legal online pharmacies are authorized by an external authoritative agency. Most legitimate Internet pharmacies provide a link to such an agency in support of their authenticity. People should check out for such links. Apart from that, it is always better to stay away from pharmacies that have broken links and look badly managed. Such pharmacies, in all probability, are the ones to stay away from. Online Canadian drug pharmacies are truly the best place to order medicines from; however, just do a bit of research beforehand to crosscheck its legitimacy.

Pharmaceutical Education and Employment Opportunities Are on the Ascent

What are the usual professional responsibilities of pharmacists? Well, they dispense medicine prescribed by the physicians, in the first place. Also they are responsible to give the customers knowledgeable advice regarding the possible side effects and dosage of the medications to be administered. In case the patient should be made aware of the necessity to take certain precautions to be observed during the course of medications, a pharmacist is responsible for informing the patience about such precautions, if any are needed. Such are the most common responsibilities of pharmacists, as they are widely assumed by the general public. Still, as any licensed pharmacist can tell you, the responsibilities are not limited to those mentioned above. First of all, any licensed pharmacist is required to have a degree in pharmacology. Secondly, such specialist should be aware of the various medicines, their generic name, dosage and possible side effects. Besides the good professional understanding of the regulating legislature related to manufacture and sale of various medicines any good professional pharmacist must command sound understanding and knowledge of the composition of medicines. And that is not all, such issues as the right storage conditions for the medicines are of critical importance, since the efficiency of prescription medications during the period of their shelf life largely depends on the correctness of their storage conditions!

As you see, any licensed pharmacist has a long road of learning to go before been accepted as a fully-fledged and respected member of the pharmacists community! But the natural questions are “How good are the employment opportunities in the pharmaceutical industry today? But what do the forecasts for the near future hold in stock for pharmacists? Is it really worthwhile to invest time and hard-earned money into becoming a professional pharmacist?” All these question are quite justified, since nobody would like to send time and money down the drain, investing them into professional specialization that turns out to be without future.

Let us have a closer look at the present-day employment opportunities of freshly graduated pharmacists and the expectations for the near future.

As has been confirmed by the various reports of analytical agencies specializing in the job-market related issues, the pharmacist’s specialization enjoys quite enviable demand. Traditionally, the most of the pharmacists still find employment with community pharmacies and drug stores, as they used to do over the decades. Well, that is no surprise, people got used to seen a pharmacists behind the counter of a drug-store or a pharmacy, handing out the prescription medicines as well as those that do not require prescription (they are justly referred to by the term of “over-the-counter” medicines). On the other hand, during the last decade the professional pharmacists have been in huge demand in public service and pharmaceutical industry. Hospitals, railways, large shopping centers and airports – they all look for good professionals in the field to fill in vacancies in their specialized their drug stores. Another interesting job opportunity for pharmacists could be found with medical drug information libraries and consulting, since the medical and nursing staffs are in need of information about new drugs – the industry of medications is constantly advancing, coming up each month and year with new generations of medications. Many specialists in pharmacology who graduated as pharmacists have developed successful and self-fulfilling careers, finding employment as tutors in colleges and universities. Others prefer to write or edit books of pharmacology, as well as reference guides – as you see, the employment and career opportunities in the pharmacology industry are in plenty!

What about the forecasts and expectations for the near future? The demand for professionals in the pharmacology in general and for the pharmacists in particular is expected only to grow considerably during the period through 2016 and beyond. The reasons for such forecasts are well-grounded. The population will continue growing in numbers – and the numbers of hospitals and other health care establishments are destined to grow accordingly, to accommodate the increasing demand. That means that more and more pharmacists will be required to fill in new outlets and positions – in traditional drug-stores, in hospitals and related job settings. Secondly, the number of senior citizens is also expected to grow considerably. Senior citizens of all the aged population groups are known to be the main consumers of prescription and “over-the-counter” drugs. As the result, the demand for specialists able to handle the growing demand on the part of the patients is guaranteed to increase over the practically foreseeable future period.

What are the usual education and certification requirements for those whishing to take up a career as pharmacists?

The educational and certification demands for pharmacists are very definite and strict. All persons, whishing to build a career of pharmacists are required to have a degree from a college (associate’s, bachelor’s or master’s one), upon which they need to get licensed by the pertinent agency in order to start a professional career of a licensed pharmacist. Besides, the educational establishment they have gradated from should be accredited by the Accreditation Council for Pharmacy Education and Examinations. Such are the basic mandatory requirements for a professional licensed pharmacist, wishing to start up a successful career in the industry.

Besides the specific subjects, related to pharmacist’s specialization, any accredited pharmacy degree program should usually include courses in mathematics, natural sciences, humanities, and social sciences.

As you see, the academic requirements for the pharmacology students are noticeably high. In order to insure the adequate level of academic excellence among their student the majority of the pharmacy colleges have introduced admission tests for aspiring students.

The students, whishing to continue education – as well as those who have already some experience in the professional field and are after the better career opportunities – are offered continuing education options, such as bachelor’s and master’s degrees, as well as doctorates in various specialized areas of pharmaceutical industries.

One of the good options for busy working professionals to continue education and get a higher academic degree in pharmacology would be to make use of modern means of distance education – the online pharmacy degree training schools and programs. Those online establishments – surely, we are speaking about the reputable and properly accredited courses, nothing like some shady “diploma mill” sites – have proved to be a good competition to the traditional, campus-based ones.

Another consideration to be given a serious attention and thought – as far as career advancement in pharmacology and pharmacy industry is concerned – is that your success would largely depend on the type of work you will be able to get and your business talents/skills/experience. As an illustration to this statement you could easily find online the career stories of success: for instance, people who worked for drugstore chains became top-managers. Pharmacists employed at various hospitals – general or specialized – got to be directors of pharmacy services. The government agencies and educational institutions also offer interesting and promising openings. Pharmacy degree specialist could also build excellent careers by taking up teaching or research, that all depends on your personal talents, individual inclinations, career objectives etc. Anyway, besides the required level of academic excellence, necessary for each specific position, any newly graduated pharmacist should realize that their jobs always require them to communicate and interact with people of different types. From this point of view good person-to-person communication skills would always be a great advantage, so take care to acquire them by all means!