Insurance legislators planning model law for physician dispensing

The National Council of Insurance Legislators is gearing up to adopt a model law that would provide guidance for states that wish to tackle such issues as physician dispensing and drug compounding in workers compensation.

The model law aims to establish clear guidelines for reimbursement of pharmaceutical products in order to help reduce workers compensation insurance costs, according to a draft of the Workers Compensation Pharmaceutical Reimbursement Rates Model Act included in NCOIL’s spring meeting agenda, set for March 2-4.

One component of the act would permit an employer, their workers compensation insurer or their designated third-party administrator, under certain conditions, to restrict reimbursement for pharmaceutical products to a directed network of preferred pharmaceutical providers. This aims to rein in on physician dispensing, a practice comp experts have long pegged as costly.

The act also limits physician-distributed drugs to no more than a first fill within seven days from the date of injury, according to a draft of the act.

The act will also limit compound medications, requiring a “critical evaluation, physician documented medical necessity or utilization review of compounded pharmaceutical products prescribed for patients,” according to a draft of the act.