Pennsylvania Workers Compensation Prescription Drug Reimbursement Restrictions

Contributed by Michael A. Cassidy

On October 27, 2014, the Governor signed Pennsylvania General Assembly enacted House Bill 1846, which limits both the authority and the reimbursement of physicians and providers other than pharmacies for prescription drugs.  It provides as follows:

  • Physicians dispensing prescription drugs from their offices shall receive no more than 110% of the original average wholesale price (AWP) for such prescriptions.
  • No outpatient provider, other than a pharmacy, may receive reimbursement for greater than an initial 7 day supply of any controlled substance or any substance containing Hydrocodone for a workers compensation related service.
  • No outpatient provider, other than a pharmacy, may receive reimbursement for anything more than an initial 30 day supply of any other prescription drug.
  • No provider other than a pharmacy may receive any reimbursement for OTC drugs.

The statute also requires the cost savings for these limitations on prescription drug costs to be passed through to employers by requiring, with an 18 months of enactment, that the Pennsylvania Compensation Rating Bureau shall calculate the savings achieved through implementation of these provisions and use those savings for an immediate reduction in rates for 2016 workers compensation insurance.

The effective date will be, ironically for physicians, December 25, 2014.