A new study in the Journal of Occupational and Environmental Medicine reveals a negative impact on medical costs, indemnity costs and lost time from work on workers’ compensation claims when physicians, rather than pharmacies, dispense narcotic-related drugs to injured workers within the first 90 days of injury. The study, titled “The Effect of Physician Dispensed Medication on Workers’ Compensation Claim Outcomes in the State of Illinois,” was authored by Jeffrey Austin White, director of Medical Management Practices & Strategy, and members of the Medical Center of Excellence team of Accident Fund Holdings, Inc., in partnership with researchers from the Johns Hopkins University School of Medicine.

The authors studied a sample of 6824 workers’ compensation indemnity claims that were opened and closed between January 1, 2007, and December 31, 2012, by Accident Fund Holdings in the State of Illinois.The number of prescriptions per claim and pharmaceutical, medical, and indemnity costs, as well as time out from work, were significantly higher in claims where a pharmaceutical was dispensed by the physician within 90 days of injury than in claims where physician dispensing did not occur. These differences persisted controlling for age, sex, attorney involvement, and injury complexity.The major findings of the study align with previous research from a February 2013 report on physician-dispensed repackaged drugs in the state of California by the California Workers’ Compensation Institute. “These studies leave little doubt that physician dispensing of medications, especially opioid medications, results in poor outcomes for injured workers,” said Dr. Dan Hunt, corporate medical director of Accident Fund Holdings. “Longer recoveries, more time away from work and increased medical costs are all unfortunate outcomes of this prescribing practice in workers’ compensation.”

In the last several years, there has been a surge in the cost and quantity of drugs dispensed from physician offices in workers’ compensation insurance. A 43% increase in drugs dispensed by physicians and a 63% percent increase in medication payments in the state of Illinois prompted researchers to perform an investigation on claims outcomes. The analysis demonstrated a 2.99 times higher number of prescriptions dispensed from the physician’s office in comparison to the pharmacy. When opioids were dispensed by the physician, the medical costs were 78% higher, the indemnity costs were 57% higher and the number of days off work were 85% higher than pharmacy dispensations after adjusting for differences in age, gender, attorney involvement and injury complexity.

“The ability of physicians to profit from dispensed narcotics in workers’ compensations puts a burden on the industry and jeopardizes the safety and well being of our injured workers,” said White. “State laws for managing and controlling physician dispensing in workers’ compensation are mostly non-existent and are, at the very least, in serious need of careful evaluation and reform.”