Pharmacies Cannot Require Workers’ Compensation Claimants To Pay Out-of-Pocket, Garamendi Says

Insurance Commissioner John Garamendi (D) on Wednesday said that he would act to stop pharmacies from requiring workers' compensation claimants to personally pay for their prescriptions and then seek reimbursement from their employers' workers' compensation insurance carriers, the Sacramento Bee reports (Furillo/Kassler, Sacramento Bee, 2/5). Sav-on pharmacies, which operates 547 stores in California, requires injured workers to pay for their prescription drugs in cash and later seek reimbursement from employers' workers' compensation insurance carriers, and Walgreens and Longs Drugs have said that they would consider implementing a similar policy if the state does not raise pharmacy reimbursement rates for the workers' compensation system. Last year, the Legislature passed a workers' compensation reform package that included a provision linking the fee schedule for prescription drugs in the program to Medi-Cal reimbursement rates. Pharmacy advocates say that the new fee schedule cuts by about 25% reimbursement rates for pharmacies for workers' compensation claims (California Healthline, 2/4). Garamendi said that he would fine pharmacists three times the cost of the prescriptions if they billed workers' compensation claimants up front and added that he plans to file a class-action lawsuit to stop the practice.

The state Labor Code says that a health care provider "shall not, with actual knowledge that a claim is pending, collect money directly from the employee for services to cure or relieve the effects of the injury" unless the provider has received a written notice that the claim has been rejected by the employer, the Bee reports. "If [pharmacies] do sell the prescription and accept cash from the injured worker, then they would be in violation, presumably," Richard Stephens, spokesperson for the Division of Workers Compensation, said. However, Carlo Michelotti, president of the California Pharmacists Association, said he interpreted the law differently and that filling a prescription was a "private transaction." He added that the state "can't force somebody to do business at an onerous rate of payment" (Sacramento Bee, 2/5).