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Major workers’ comp bill passes first committee

A workers' compensation bill aimed at holding down the cost of prescription drugs to employers passed the Senate Banking and Insurance Committee today.

SB 668 survived its first committee in a 7 to 4 vote. But some senators who voted in favor said they may change their minds if answers to their questions aren't forthcoming by the time it gets to the Senate floor.

The sponsor, Sen. Alan Hays, R-Umatilla, said the bill closes a loophole in the workers' compensation system that lets doctors dispense "repackaged drugs" at huge price markups. His bill limits the amount doctors can charge to a price more in line with community pharmacies.

Opponents of the bill say that while pharmacies can buy drugs in bulk, doctors can't, so it would effectively preclude physician-dispensing.

Reports by the state Department of Financial Services and a private workers' compensation research institute have said that allowing drug repackaging without limits on markups is costing Florida businesses millions of dollars a year. The amount of the estimated savings was one of the questions that arose in today's hearing.

Associated Industries, National Federation of Independent Business, and many other groups are pushing the bill. Some medical groups oppose it, along with a major South Florida company that sells repackaged drugs to doctors' offices, Automated Health Care Solutions (AHCS).

Tom Panza, the company's attorney, said injured workers recover sooner if they take their medications, and they are  more likely to take them if they get them from the doctor, saving them the trip to the pharmacy.

Panza said if the insurers don't like the amount that physicians are charging for repackaged drugs, they could refuse to contract with them. Sens. Gwen Margolis and Eleanor Sobel, both from South Florida, echoed that argument.

But a business coalition backing the bill has argued that the fees in workers' comp are set by law. The physician dispensers are making "exorbitant" profits by exploiting a loophole in that law, they said.

Within minutes of the vote, workers' comp consultant Joe Paduda posted a commentarypraising the progress. But Paduda, who has been highly critical of Florida's failure to rein in repackaging costs, said the bill proponents could have done a much more effective job of answering questions and correcting misinformation.

"This is a big step, a critically important one, but only a step," Paduda wrote. "There's much to be done to get this bill passed by the Senate and signed into law." (Disclosure: Paduda is a donor to Health News Florida).

Both chambers passed the repackaging bill in 2010 on the last night of the legislative session, but when the Florida Medical Association cried foul, then-Gov. Charlie Crist vetoed it.

In September 2010,  Health News Florida reported that the company benefiting from repackaging, AHCS, had contributed heavily to Crist and was dumping a lot of money into lawmakers' campaigns. Subsequent reports show AHCS continues to be a major political donor.

--Health News Florida is an independent online publication dedicated to public-service journalism. Contact Carol  Gentry, Editor, at 727-410-3266 or by e-mail.

Carol Gentry, founder and special correspondent of Health News Florida, has four decades of experience covering health finance and policy, with an emphasis on consumer education and protection.