Court Curtails Use of Physician Dispensed Medication

A recent Louisiana Supreme Court decision curtails the use of physician dispensed medication. In Lafayette Bone & Joint Clinic v. LUBA, LUBA refused to reimburse the clinic for physician repackaged and dispensed medication that was priced at an amount that was two to eight times higher than the same medication dispensed at a retail pharmacy.

The clinic argued that because it was authorized to provide treatment to the injured worker, it was also authorized to dispense medication to the injured worker.  However, LUBA specifically revoked any authorization for direct dispensing of medication from the clinic, stating that the clinic should refer the injured worker to a retail pharmacy for the medications.  Despite LUBA’s revocation of authorization, the clinic continued to dispense medications to the injured worker.  The clinic then submitted the charges to LUBA and LUBA denied them.  The clinic filed disputed claims seeking to recover the cost of the medications, along with penalties and attorney fees.

The issue made its way to the Louisiana Supreme Court who held that the clinic was not entitled to full reimbursement of the excessive charges for the medications that the clinic dispensed directly to the injured worker without authorization.  The Court determined that the insurer’s obligation to reimburse the clinic for the physician dispensed medication was limited to the $750.00 of unauthorized charges for the medication pursuant to La. R.S. 23:1142.

As to penalties and fees, the court determined that the clinic was not entitled to recover penalties and fees for LUBA’s failure to reimburse charges over and above the $750.00 limit, but that penalties and fees were justified for LUBA’s refusal to pay up to the $750.00 limit.