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Veto on workers’ comp decried

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By Jim Saunders
6/1/2010 © Health News Florida

Gov. Charlie Crist signed off Friday on bills that could lead to revamping the Florida Department of Health and extending a controversial Medicaid managed-care pilot program. But  he vetoed a measure aimed at controlling costs in workers' compensation..

The measure would have limited the cost of drugs that are repackaged in small doses and then dispensed by physicians to workers' compensation patients. Some physicians choose to do such dispensing instead of writing prescriptions that patients can fill at pharmacies. 

The veto drew immediate reaction from workers' compensation experts, including consultant Joseph Paduda of Health Strategy Associates. He said the veto of HB 5603 was a mistake because the law runs up the price of drugs that employers and insurers pay on behalf of injured workers. 

California, Arizona and other states have cracked down on the repackaging of drugs and direct dispensing by doctors, Paduda said, so many of those practitioners moved to Florida. As a result, Paduda says, "Price gouging is rampant." 

A study of 16 states by Workers Compensation Research Institute in April found Florida's drug claims were 38 percent higher than the average. It also found that workers were getting more drugs on average, especially painkillers and muscle-relaxers that can be abused.

The bill  had the backing of state Chief Financial Officer Alex Sink and the business group Associated Industries of Florida. But the Florida Medical Association and Florida Orthopaedic Society lobbied Crist to veto it, arguing that  lawmakers added the dispensing restrictions late in the legislative session with little debate. Crist sided with them.

"While limiting reimbursement rates for relabeled and repackaged prescription drugs sounds like a reasonable way to control costs, this is a complicated issue that was not fully vetted during the legislative process,'' Crist wrote.

But Sink issued a statement Friday blasting Crist for vetoing the bill, which also included other issues dealing with workers' compensation and state risk management.
"This legislation was an important step in holding state agencies accountable and reducing workers’ compensation costs, and I am very disappointed that Governor Crist chose today to favor special interests instead of Florida taxpayers," Sink said. 

Crist drew little attention, however, for signing the bills that related to the Department of Health and the extension of the Medicaid pilot program. Both issues were controversial during the legislative session that ended April 30, though the final versions of the bills were not as far-reaching as earlier proposals.

House leaders wanted a major overhaul of the Department of Health, but the final bill (HB 5311) takes a more toned-down approach. It includes requirements for the department to evaluate and justify its operations and sets a March 1, 2011, deadline for submitting findings to legislative leaders. That would leave time for lawmakers to consider the issues during next year's session, which starts in March. 

As an example, the bill will require the department to review the costs and purposes of divisions and programs. Also, it will require looking at the possibility of eliminating divisions and programs and whether duties could be better performed by other parts of government or private entitites.

The bill, however, includes some more immediate changes, such as requiring legislative approval before the department can start new programs or apply for federal or private grants of $50,000 or more. Also, the bill will shift the department's oversight of drugs, devices, cosmetics and household products to the Florida Department of Business and Professional Regulation.

Also during the session, lawmakers heavily debated proposals to expand requirements that Medicaid beneficiaries enroll in managed-care plans. But in the end, they put off a sweeping decision and directed the Agency for Health Care Administration (SB 1484) to seek federal approval for a three-year extension of a pilot program that requires managed-care enrollment in Broward, Duval, Baker, Clay and Nassau counties.

The current federal waiver is scheduled to expire at the end of June 2011, and Florida needs to apply for an extension a year in advance. Extension is critical to hospitals because the pilot-program waiver also includes the Low Income Pool program, which provides about $1 billion a year to help care for low-income and uninsured people.

--Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at jim.saunders@healthnewsflorida.org.