Throughout the country, there are hundreds of historical depictions of villages, towns, and Main Streets representing pre-colonial times to the early 1900’s. In many of these replica towns, there is a local apothecary complete with jars of various powders, weights, scales and a vintage mortar and pestle. It is not difficult to imagine a wizened scientist with a furrowed brow hunched over the counter crushing and mixing various powders to craft medicines to treat the ailments of the local townsfolk. Modern day pharmacy care evolved from these shops where various ingredients were compounded to make a medicine that was just right for what ailed you. In the workers’ compensation system today, we are seeing an accelerating resurgence of compounded medications. But, are they really just right for what ails the injured worker?
In the modern era of pharmacy care, the use of compounded medications began in response to situations in which a patient was allergic to a medication or had a physical issue that prevented the use of non-compounded medications. In this sense, compound medications were something of a last resort, relied upon when traditional methods of delivering medication failed or were not practical. Over the last few years however, the use of compounded medications as first line therapy to treat injured workers is a growing concern.
Therapeutic Value vs. Financial Gain
In 2011, the RAND Institute prepared a paper1 for the California Commission on Health, Safety and Workers’ Compensation (CHSWC) that examined the use of compounded medications, medical foods, and co-packs in the California workers’ compensation system. The RAND paper noted that “some parties face significant financial incentives to promote the use of these products in questionable situations.” The result of these findings in California led to legislative changes that capped reimbursement for compound medications and instituted a process to verify medical necessity prior to prescribing a compound. The raised awareness in California led other states and payers to begin examining what was happening in their injured worker population.
What they found was that a number of compounding pharmacies were using repackaged medications in their compounded medications and the reimbursement rate for those repackaged medications was often 300% or higher than a similar non-repackaged ingredient. In response, a handful of states adopted rules that required the National Drug Code (NDC) of each ingredient in a compounded medication to be listed separately with reimbursement for repackaged ingredients calculated on the average wholesale price of the NDC of the original product. Most states, however, were not experiencing significant problems with compounded medications.
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In the modern era of pharmacy care, the use of compounded medications began in response to situations in which a patient was allergic to a medication or had a physical issue that prevented the use of non-compounded medications. In this sense, compound medications were something of a last resort, relied upon when traditional methods of delivering medication failed or were not practical. Over the last few years however, the use of compounded medications as first line therapy to treat injured workers is a growing concern.
Therapeutic Value vs. Financial Gain
In 2011, the RAND Institute prepared a paper1 for the California Commission on Health, Safety and Workers’ Compensation (CHSWC) that examined the use of compounded medications, medical foods, and co-packs in the California workers’ compensation system. The RAND paper noted that “some parties face significant financial incentives to promote the use of these products in questionable situations.” The result of these findings in California led to legislative changes that capped reimbursement for compound medications and instituted a process to verify medical necessity prior to prescribing a compound. The raised awareness in California led other states and payers to begin examining what was happening in their injured worker population.
What they found was that a number of compounding pharmacies were using repackaged medications in their compounded medications and the reimbursement rate for those repackaged medications was often 300% or higher than a similar non-repackaged ingredient. In response, a handful of states adopted rules that required the National Drug Code (NDC) of each ingredient in a compounded medication to be listed separately with reimbursement for repackaged ingredients calculated on the average wholesale price of the NDC of the original product. Most states, however, were not experiencing significant problems with compounded medications.
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