Washington, DC – The American Insurance Association (AIA) called for additional improvements in Michigan’s prescription drug repackaging regulation in its recent testimony before the Michigan Workers’ Compensation Agency (WCA) and the Health Care Advisory Committee (HCSAC). While Michigan’s recent adoption of Regulation R 418.101003a Reimbursement for dispensed medications is an important step toward curtailing abuse, AIA believes that additional modifications are needed to ensure that it will operate as intended.
“AIA supports the work being done in Michigan to curtail the unnecessarily high costs and use of prescription drugs dispensed to injured workers,” said Steve Schneider, AIA’s Midwest region vice president. “However, we believe that additional improvements should be made to ensure that the current regulation will operate as intended.”
In 2012, the Workers’ Compensation Research Institute (WCRI) examined, “the rapid growth of physician-dispensed pharmaceuticals for injured workers…in 23 states.” The results of the WCRI research show that in Michigan, while there was only modest growth in the percentage of pharmaceuticals which were dispensed, the percentage of payments for such drugs increased from 15 percent to 22 percent between 2007 and 2011, almost a 50 percent increase in only four years.
AIA supports four important clarifications to the new regulation. First, the addition of Medispan as an additional data source for the determination of a drug’s average wholesale price (AWP) is necessary. Medispan includes more active national drug codes (NDC) and its inclusion will provide for a more comprehensive and accurate benchpoint. Second, clarification that the average wholesale price less 10 percent is the maximum level for reimbursement is needed. Third, there is a need to remove the potential for conflict between subsections (d) and (e) by eliminating (e) which contains somewhat ambiguous language regarding reimbursement for equivalent generic products. Finally, it is necessary to eliminate the uncertainty about how to reimburse bills without specific coding.
“Implementing these important changes will benefit payers, providers and patients alike,” said Schneider. “AIA is appreciative of the WCA’s and HCSAC’s efforts to improve Michigan’s workers’ compensation system and will continue to work with the state’s regulators in that regard.”