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Some Doctors Cash In by Being Their Own Pharmacist

The same goes for a popular muscle relaxant known as Soma, insurers say. From a pharmacy, the per-pill price is 60 cents. Sold by a doctor, it can cost more than five times that, or $3.33.

At a time of soaring health care bills, experts say that doctors, middlemen and drug distributors are adding hundreds of millions of dollars annually to the costs borne by taxpayers, insurance companies and employers through the practice of physician dispensing.

Most common among physicians who treat injured workers, it is a twist on a typical doctor’s visit. Instead of sending patients to drugstores to get prescriptions filled, doctors dispense the drugs in their offices to patients, with the bills going to insurers. Doctors can make tens of thousands of dollars a year operating their own in-office pharmacies. The practice has become so profitable that private equity firms are buying stakes in the businesses, and political lobbying over the issue is fierce.

Doctor dispensing can be convenient for patients. But rules in many states governing workers’ compensation insurance contain loopholes that allow doctors to sell the drugs at huge markups. Profits from the sales are shared by doctors, middlemen who help physicians start in-office pharmacies and drug distributors who repackage medications for office sale.

Alarmed by the costs, some states, including California and Oklahoma, have clamped down on the practice. But legislative and regulatory battles over it are playing out in other states like Florida, Hawaii and Maryland.

In Florida, a company called Automated HealthCare Solutions, a leader in physician dispensing, has defeated repeated efforts to change what doctors can charge. The company, which is partly owned by Abry Partners, a private equity firm, has given more than $3.3 million in political contributions either directly or through entities its principals control, public records show.

Insurers and business groups said they were amazed by the little-known company’s spending spree. To plead its case to Florida lawmakers, Automated HealthCare hired one of the state’s top lobbyists, Brian Ballard, who is also a major national fund-raiser for the Mitt Romney campaign.

“I consider the fees that these people are charging to be immoral,” said Alan Hays, a Republican state senator in Florida who introduced a bill to bar physicians from dispensing pills that was defeated. “They’re legal under the current law, but they’re immoral.”

Physician prescribing works like this: Middlemen like Automated HealthCare help doctors set up office pharmacies by providing them with billing software and connecting them with suppliers who repackage medications for office sale. Doctors sell the drugs but they do not collect payments from insurers. In the case of Automated HealthCare, the company pays the doctor 70 percent of what the doctor charges, then seeks to collect the full amount from insurers.

The number of doctors nationwide who dispense drugs in their office is not known and the practice is prevalent only in states where workers’ compensation rules allow for large markups.

Dr. Paul Zimmerman, a founder of Automated HealthCare, said that insurers and other opponents of doctor dispensing were distorting its costs by emphasizing the prices of a few drugs, rather than the typical price spread between physician- and pharmacy-dispensed drugs.

Both Dr. Zimmerman and physicians who sell drugs also said the workers’ compensation system was so bureaucratic and complex that an injured employee could wait days before getting a needed medication through a pharmacy.

“We did not institute this because of the money,” Dr. Marc Loev, a managing partner of the Spine Center, a chain of clinics in Maryland, testified last year at a public hearing in Baltimore. “We instituted it because we were having significant difficulty providing the care for workers’ compensation patients.”

The loophole that raises the price of physician-dispensed drugs often involves a benchmark called “average wholesale price.” The cost of a medication dispensed through a workers’ compensation plan is pegged in some states to that benchmark, which is supposed to represent a drug’s typical wholesale cost.

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Article source: http://www.nytimes.com/2012/07/12/business/some-physicians-making-millions-selling-drugs.html?partner=rssnyt&emc=rss

For Injured Workers, a Costly Legal Swamp

People like Hopeton Watkis, 64, a laborer, who lost two teeth when he fell and hit a wheelbarrow.

Or Rajcoomar Jagan, 50, a construction worker, who injured a leg falling off a scaffold.

Or Vicki Marquez, 32, a retail sales associate, who hurt her elbow hauling clothes.

They come to the board seeking authorization for medical treatment and replacement wages — in short, a quick and fair resolution from a system set up to replace fractious court fights between employers and employees.

What they find instead is a subbasement of the legal world, a $5.5 billion-a-year state-run bureaucracy that, an examination by The New York Times found, struggles to treat workers with due speed, protect employers from fraud or mute tensions in the workplace.

These struggles are particularly evident each day in Queens, the state’s busiest hearing office, where The Times spent 18 months attending hearings, reviewing cases and interviewing participants, virtually none of whom defended the system as efficient.

At some hearings, as judges looked on, lawyers chatted on cellphones, cracked bawdy jokes or read newspapers during testimony. Expert witnesses seemed biased to the point of caricature. Claims dragged on, but hearings seldom exceeded a few blurred minutes, rarely proved conclusive and were conducted in baffling shorthand.

Mr. Watkis waited two years to get his front teeth fixed. Ms. Marquez had to postpone elbow surgery for a year until the board allowed it. Mr. Jagan exhausted three years trying to get compensated, only to be denied all benefits, a decision that stunned even some insurance company lawyers.

“Comparing Supreme Court, say, to this is like comparing a hospital to a MASH unit,” said Anthony Pizza, a lawyer for insurance companies. “A lot of it is meatball justice.”

Workers’ compensation systems across the country are troubled, and reform efforts are under way here. But New York, a pioneer of the concept and home to the nation’s second-largest system, has some signature claims to dysfunction and is widely recognized as the most adversarial.

Though its commissioners largely function as a legal tribunal, most are not lawyers but relatives or allies of politicians, appointed usually without regard to experience in the field.

Though many cases turn on medical evaluations, the board has not had its own medical director for nearly a decade. Decisions are often driven by the opinions of doctors certified by the state as so-called independent medical examiners. Yet claimant lawyers and treating doctors say these examiners often understate workers’ ailments to win business from the insurers who pay them.

Fines for infractions are usually small, and some insurers ignore paying them for years without consequence. A few months ago, New York City agreed to produce $1.1 million in penalties, some years overdue.

Workers are known to fabricate claims, while employers can be equally uninhibited about pressuring injured workers against filing for compensation, or punishing them if they do.

And everywhere the system tolerates delays that can make the injured wait months or years for money and care. Statewide, in about one in six cases, insurers dispute that injuries are real or were suffered on the job. Until recently, these cases had averaged nearly nine months to resolve. And many of them remain unresolved years later.

Even unchallenged cases plod on. A.I.G., the insurance company, said a review of its 2007 New York cases found that those involving missed work took on average 802 days to reach a final stage, 30 percent longer than in the rest of the country.

A recent task force study found that when insurers reject a medical procedure, say, an operation, it takes more than three or four months for the board to settle the dispute. The delay can mean that injuries heal slowly or improperly, and in 75 percent of those cases, the worker’s need for the procedure is upheld.

Zachary S. Weiss, the chairman of the compensation board since late 2007, said that given the scope of what needs to be done, change must be incremental.

“There are millions of things I would like to correct and I’d like to correct them all immediately, and I can’t,” Mr. Weiss said.

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Article source: http://www.nytimes.com/2009/03/31/nyregion/31comp.html?partner=rssnyt&emc=rss

Exams of Injured Workers Fuel Mutual Mistrust

Dr. Hershel Samuels, an orthopedic surgeon, put his hand on the worker’s back. “Mild spasm bilaterally,” he said softly. He pressed his fingers gingerly against the side of the man’s neck. “The left cervical is tender,” he said, “even to light palpation.”

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A World of Hurt

‘That’s the Game, Baby’

A New York Times examination of New York State’s workers’ compensation system uncovered a universe of delays, suspicion and questionable rulings.

Further Reading

d756e workerscomp topics.190 Exams of Injured Workers Fuel Mutual Mistrust

Workers’ Compensation

A page of resources on the topic of workers’ compensation compiled by the reporters of this series.

Go to the Times Topics Page »

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One Exam, Two Verdicts on Pain



d756e 01comp toriello 190 Exams of Injured Workers Fuel Mutual Mistrust

Dr. Edward Toriello feels that workers’ doctors are often biased. “I think it’s human nature to help your
patient. I think a lot of doctors say: ‘I don’t need the aggravation. It doesn’t hurt to keep him out of work.’”


The worker, a driver for a plumbing company, told the doctor he had fallen, banging up his back, shoulder and ribs. He was seeking expanded workers’ compensation benefits because he no longer felt he could do his job.

Dr. Samuels, an independent medical examiner in the state workers’ compensation system, seemed to agree. As he moved about a scuffed Brooklyn office last April, he called out test results indicative of an injured man. His words were captured on videotape.

Yet the report Dr. Samuels later submitted to the New York State Workers’ Compensation Board cleared the driver for work and told a far different story: no back spasms, no tender neck. In fact, no recent injury at all.

“If you did a truly pure report,” he said later in an interview, “you’d be out on your ears and the insurers wouldn’t pay for it. You have to give them what they want, or you’re in Florida. That’s the game, baby.”

Independent medical exams are among the most disputed components of New York’s troubled workers’ compensation system. Under that system, workers with bona fide injuries are entitled to medical care and replacement wages, usually paid for by their employer’s insurer.

The independent exams are designed to flush out workers who exaggerate injuries or get unnecessary care, and there is no question that some of that goes on. As a check on what a worker’s doctor determines, insurers are allowed to order an ostensibly neutral exam by a doctor they select and pay for. They do so regularly, with more than 100,000 exams conducted each year.

But a New York Times review of case files and medical records and interviews with participants indicate that the exam reports are routinely tilted to benefit insurers by minimizing or dismissing injuries.

“You go in and sit there for a few minutes — and out comes a six-page detailed exam that he never did,” said Dr. Stephen M. Levin, co-director of the occupational and environmental medicine unit at Mount Sinai Medical Center, who has been picked as the interim medical director at the compensation board. “There are some noble things you can do in medicine without treating. This ain’t one of them.”

New York uses independent medical examiners far more extensively than many states do, and critics say the practice adds to the mistrust in the system. The examiners’ opinions can empower an insurer to slash benefits, withhold medical treatment or stall a case. Workers say that psychologically, there is something particularly damaging about being dishonestly evaluated by a medical professional.

“I was in so much pain and felt so hopeless for so long,” said Carol Houlder, a substance abuse counselor who waited a year for surgery on her injured ankle to be approved. “Doctors see you’re in pain and say you’re not. How do they call themselves doctors?”

Many independent examiners are older, semiretired physicians who no longer treat patients, and claimants and lawyers have asserted that the memories and judgments of some of the doctors have at times been impaired by their age and frailties. The examiners do not need special training, only to have a state license and to be authorized in a specialty.

“Basically if you haven’t murdered anyone and you have a medical license, you get certified,” said Dr. Alan Zimmerman, 75, a Queens orthopedic surgeon who does the exams. “It’s clearly a nice way to semiretire.”

Some examiners see dozens of injured workers a day. Often the appointments are booked by brokers who help insurance companies find doctors. Some brokers are not registered with the state, as required, but there has been little enforcement of the rules.

Insurers, examiners and brokers, however, defend the exams as necessary and largely untarnished by bias. Dr. Brian L. Grant, chairman of Medical Consultants Network, a company based in Seattle that arranges independent exams across the country, said, “We never get pressure from an insurer.”

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Article source: http://www.nytimes.com/2009/04/01/nyregion/01comp.html?partner=rssnyt&emc=rss

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Accident & Work Injury Law Group service the following Southern California neighborhoods: San Diego City, Allied Gardens and Del Cerro, City Heights, Clairemont, Chula Vista, Imperial Beach, National City, San Ysidro, College Area, Coronado, Downtown, Encanto, Golden Hill, Hillcrest and Mission Hills , Kensington and Normal Heights, La Jolla, Linda Vista, Logan Heights, Mira Mesa, Mission Valley, Morena, North Park, Ocean Beach, Pacific Beach & Mission Beach, Paradise Hills, Point Loma, San Carlos, Scripps Ranch, Serra Mesa,Sorrento Valley, Tierrasanta, University City, North County Inland, Bonsall, Borrego Springs, Escondido, Fallbrook, Julian, Pala, Palomar Mountain, Pauma Valley, Penasquitos, Poway, Ramona, Ranchita, Rancho Bernardo, Rancho Santa Fe, San Marcos, Santa Ysabel, Valley Center, Vista East, Warner Springs, North County Coastal, Cardiff, Carlsbad, Carmel Valley, Del Mar, Encinitas, Solana Beach, South Bay, Bonita, Chula Vista & Otay Ranch, Imperial Beach, National City, Nestor, San Ysidro , East County, Alpine, Boulevard, Campo, Descanso, Dulzura, El Cajon, Jacumba, Jamul, La Mesa Grossmont, La Mesa Mt. Helix, Lakeside, Lemon Grove, Pine Valley, Potrero, Rancho San Diego, Santee, Spring Valley.

Making a false or fraudulent workers compensation claim is a felony subject to up to 5 years in prison or a fine of up to $50,000 or double the value of the fraud, whichever is greater or by both imprisonment and fine. John Kiwan, Esq., Donald Cline, Esq., Thomas DeBenedetto, Esq.

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