It Costs More for Pharmacies to Dispense Prescriptions for Workers’ Compensation than Medi-Cal

Sacramento, Calif. (Nov. 11, 2013) – A recently released study supports what pharmacists have long suspected: it costs more for California pharmacies to dispense prescriptions to workers’ compensation patients than to the state’s Medi-Cal recipients.

Conducted by MENTORx/PharmAccount, “A Comparison of Personnel Costs to Dispense Workers’ Compensation and Medi-Cal Prescriptions in California Community Pharmacies,” analyzed pharmacies’ personnel-related dispensing costs and bad-debt expenses. “It found expenses are $6 to $9.90 per script higher for workers’ compensation than Medi-Cal,” said Joseph Paduda, president of CompPharma, a consortium of workers’ compensation pharmacy benefit managers requesting the study.

Key findings:

  • Pharmacies doing their own billing had personnel and bad-debt expenses totaling $10.38 for new workers’ compensation prescriptions and $8.98 per script for refills. Comparable Medi-Cal costs were $4.33 for a new prescription and $3.65 for refills. Therefore, it cost these pharmacies $6.05 more for a new workers’ compensation prescription and $5.33 more for refills.
  • Pharmacies using a third-party billing service incurred costs of $12.87 for new workers’ compensation prescriptions and $11.94 for refills, which was $9.90 higher than Medi-Cal for a new script and $9.19 higher for a refill. The difference was the result of an average cost of $9.56 per prescription for the third-party billing service.

The study involved observing and recording the time required by pharmacy personnel to process, dispense and bill for a sample of workers’ compensation and Medi-Cal prescriptions. “It also factored in ‘bad debt’ as an expense, because pharmacies that do not use a third-party biller may incur it as a result of reversed or denied claims,” said Michael T. Rupp, PhD, managing partner of Mentor Rx/PharmAccount. “Bad debt generally doesn’t occur in Medi-Cal, where drug benefits are known up front.”

To download the survey report, click here.

About Mentor Rx/PharmAccount MENTORx/PharmAccount is an Arizona-based consulting firm specializing in community pharmacy research. Managing Partner Michael T. Rupp, PhD is a nationally recognized expert in community pharmacy practice and professor of pharmacy administration at Midwestern University in Glendale, Ariz.

About CompPharma Established by industry consultants Joseph Paduda and Helen Knight, CompPharma, LLC is a consortium of workers’ compensation PBMs active in workers compensation. More information is available at www.comppharma.com.

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Media Contact:  Helen Knight, 813-837-1701; helen@kingknight.com