BACKGROUND:
Workers' Compensation has experienced a dramatic increase in the prescription of compound medications over the last five years. The reasonableness and necessity of compound medications is largely unknown as a matter of medical science. Historically, compounds such as creams, gels and ointments have been applied to the skin and were considered alternatives for patients unable to swallow medication. There is no FDA requirement for the testing of custom compounds and therefore, their stability either in the short or long term, is medically unknown. In addition, many compounds mixed together are duplicative and serve no rational purpose. A thorough review of compound medications would include proof that conventional treatment has failed and some level of proof as well that the compound is safe. The FDA has not approved compounds in general although this is not a bar to compensability in Pennsylvania.
THE DECISION TO CHALLENGE OR PAY:
Compound medications are expensive and are generally not subject to fee schedule control in Pennsylvania. This is not the case in other jurisdictions. Decisions to outright deny the medical treatment if it is prescribed for an accepted body part is not a sound strategy as it risks the imposition of extensive penalties. If there is no rational basis to deny the treatment on causal grounds, a Utilization Review should be considered. The Utilization Review will challenge the reasonableness and necessity of the treatment and needs to be filed within 30 days of receipt of the medical bill and report being challenged. Filing the Utilization Review will act as an automatic supersedeas during the pendency of the review process.
THE ANTICIPATION OF LITIGATION:
Given the amount at stake, one should expect that the losing party on the Utilization Review will be filing a Petition to Review Utilization Review which will then act as a de novo review before a Workers' Compensation Judge. If the employee files, the employer can maintain its denial which provides leverage for any potential compromise of the medical bills. If the employer files, supersedeas relief must be requested followed by the obligation to pay the outstanding medical bills, unless supersedeas is granted.
PRACTICE POINT: Request a Supersedeas Order at the first hearing in order to document your right to go against the Supersedeas Fund if you prevail on the underlying litigation.
In anticipation of litigation, if the amount in question is substantial, it is recommended that you seek out a medical record review during the pendency of the Utilization Review which will allow you to argue when we file a Petition to Review the Utilization Review, that you have at a minimum, a reasonable contest. You can secure an independent medical review after you file a Petition to Review. However, this does not ensure a reasonable contest.
In order to aid the record review, it is recommended that you consider a canvas of all local pharmacies to ensure against prescription abuse, review all drug screens, request drug screens from any relevant providers periodically, consider social media surveillance and perform routine index and hospital admission indexes to rule out other causes of the use of the medication.
The medical record review will form the basis of the Review Petition. In addition, a thorough cross-examination of the employee will explore the past and current medical history and will ensure that all appropriate records have been obtained. Cross-examination of the employee's medical expert will be more meaningful once you have completed your due diligence which will then give the Workers' Compensation Judge a powerful argument to consider on your behalf versus simply relying on the employee testifying that the medications are helpful. That, in and of itself, is a losing strategy.
PRICING OF COMPOUND MEDICATIONS:
Pennsylvania Act 184 took effect on December 26, 2014. It mandates that all physician-dispensed medication will now be subject to the reimbursement cap of 110 percent of the average wholesale price of the prescription. The original manufactures' NDC number must now be included on all bills and reports seeking reimbursement. A repackaged NDC number will no longer be acceptable.
Physician Dispensed Schedule II and III prescriptions would be limited to one initial seven day supply commencing upon the injured worker's initial treatment by a healthcare provider. If the injured worker undergoes a medical procedure or surgery, an additional 15 day supply may be dispensed on the date of the procedure.
Act 184 applies to all physicians treating in the aggregate, so an injured worker is prevented from having multiple physicians dispensing prescriptions. Finally, only licensed pharmacies are entitled to seek reimbursement for dispensing over-the-counter medications. Act 184 is prospective only and does not apply to any treatment prior to December 26, 2014.
CONCLUSION:
It is recommended that the most effective way to limit or avoid exposure short of an obvious outright causal denial is to thoroughly investigate the employee's use of medication in anticipation of litigation on a Petition to Review Utilization Review.
For more information, please contact Peter Harrision at pharrison@wglaw.com or 267.765.4133