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Workers comp insurer must pay prescription drug repackager: La. high court

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A workers compensation insurer must pay a prescription drug repackaging company for physician-dispensed medications because Louisiana law allows claims to be assigned to a third party for payment, the Louisiana Supreme Court ruled this week.

Thousand Oaks, Calif.-based repackager Rebel Distributors Corp. Inc. is licensed by the Louisiana Board of Pharmacy to distribute wholesale medications in Louisiana, according to court records. Dr. Michel E. Heard, an orthopedic surgeon in Louisiana, dispensed medications provided by Rebel directly to his workers comp patients, and Rebel billed employers and workers comp insurers for the prescriptions.

In 2008, Baton Rouge, La.-based LUBA Casualty Insurance Co. was billed by Rebel for medication dispensed by Dr. Heard, court records show. The insurer notified Rebel that it would no long pay the repackager directly for medications, and instructed Rebel to direct LUBA claimants to retail pharmacies.

Dr. Heard continued to dispense medication to a LUBA-insured patient, and LUBA refused to pay Rebel for the medication, records show. Rebel soon filed a disputed claim for payment with the Louisiana Office of Workers' Compensation Administration, identifying itself as a “health care provider.”

The workers comp administration sided with Rebel, awarding the repackager a payment of $750 for medications dispensed for one LUBA patient, records show.

However, the Louisiana 3rd Circuit Court of Appeal reversed the workers comp administration's judgment, records show. The court found that Rebel had no right of action because it was “not a health care provider or an agent of a health care provider” under Louisiana workers comp law.

In a 4-3 decision Tuesday, the Louisiana Supreme Court reversed the appellate decision. The majority opinion found that Dr. Heard had a right to assign payment collection to Rebel for medications that he dispensed.

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“There is nothing unique about the workers compensation process that prevents a third party, such as Rebel, from collecting the fees for medications properly dispensed by an injured employee's health care provider,” the majority opinion reads.

The majority also found that Rebel qualified as a health care provider under Louisiana law, which defines providers as “any officer, employee, or agent thereby acting in the course and scope of his employment” for a provider.

In a dissenting opinion, Judge Greg G. Guidry disagreed that Louisiana workers comp law allows claims or payments to be assigned to third parties.

“The legislature reasonably chose to limit the parties who may proceed directly against the assets of the employer or its insurer for reimbursement of medical services provided,” Judge Guidry's opinion reads. “The legislature reasonably envisioned the hardship on employers and their workers' compensation carriers if a multitude of third party claimants were able to present demands for claims and payments due under the workers' compensation laws that were assigned to them by health care providers or others.”

The case was remanded to the appellate court for further proceedings.