The Louisiana Supreme Court issued a landmark decision last week granting employers choice of pharmacy, resolving a split in circuit courts up to this point.
In Burgess v. Sewerage & Water Board of New Orleans (download the case in full below), Chief Justice Johnson, writing for the majority, noted that the Legislature could have explicitly given injured workers choice of pharmacy like it explicitly gave injured workers choice of physician, but it didn’t. The court reasoned that given the ambiguity (and because prescription medications need only be furnished in a timely manner regardless of where they come from) combined with the cost-consciousness implicit in the statute, employers should control pharmacy and related dispensing.
Summarizing the case, Jeffrey Napolitano, of Metairie-based Juge Napolitano, said that the original problem was that the employer instituted a prescription card program and advised its employees to use the card only at authorized pharmacies because use at unauthorized pharmacies may result in nonpayment. After instituting the program, the employer also put Injured Workers’ Pharmacy (IWP, the pharmacy at issue in this case) on notice that they were not authorized to dispense medication to SWB employees and any subsequent bills would be denied.
Despite the warning, IWP continued to dispense medication to Burgess and issued a bill for $13,110.82. Burgess filed suit in part to demand payment of the bill, along with penalties and attorney fees.
Napolitano split the claimant’s argument into four parts: (1) the medication was necessary medical treatment under Section 1203; (2) the billing charges of IWP was in compliance with the provisions of the Fee Schedule (Section 1034.2) and 1203(B); (3) Louisiana is an employee choice state; and (4) prescription medication is not “nonemergency diagnostic testing or treatment” and therefore not subject to the $750 cap under Section 1142(B) for failure to obtain prior consent of the payor.
The Office of Workers’ Compensation (OWC) judge ruled in favor of Burgess, and the matter was appealed to the Fourth Circuit, which held that the employee gets the choice of pharmacy, ordered payment of the full bill of $13,110.82 and awarded penalties and attorney fees. The employer submitted writs to the Supreme Court. The Supreme Court remanded the case back to the Fourth Circuit for reconsideration in light of the Lafayette Bone & Joint Clinic v. LUBA decision in which they capped reimbursement at $750 for pharmacy charges incurred without the consent of the payor.
However, according to Napolitano, the Fourth Circuit distinguished the facts of Burgess from the facts of Lafayette Bone & Joint Clinic and reaffirmed their original opinion. The Supreme Court granted writs a second time and overturned the ruling of the Fourth Circuit in the final decision dated June 29th.
Bobby Truitt, of The Truitt Law Firm, who represents both claimants and carriers in his practice, said that the $750 cap issue is still at the forefront of the overall choice of pharmacy debate. “My personal view is that the $750 cap should not apply since I cannot see how prescriptions would fall within the scope of ‘diagnostic testing or treatment,’” he explained. “I think that the statute contemplates the case where someone goes to the hospital and needs x-rays but cannot obtain the employer’s approval prior to presenting for ‘treatment.’ Yet, the Supreme Court did not accept that interpretation in Lafayette Bone & Joint […] the issue has not yet been resolved as to whether there is a $750 limitation applicable to out of state providers.”
For his part, Trey Mustian, President of Louisiana Workers’ Advocates, felt that the case did not clarify the situation appropriately. “I disagree with the Court’s reasoning,” Mustian said. “I simply don’t see why the employer’s duty to furnish drugs cannot be satisfied with employer or employee choice, and I don’t think the Burgess decision adequately answers that question. The Court points out that the employee doesn’t enter into a relationship with a pharmacy as he/she does with a physician as a reason the employee doesn’t need to have a choice. So what? The Court doesn’t articulate any affirmative reason why the employer needs a choice either. The law is simply silent and neutral on this point. I would respectfully suggest that the Court in Burgess legislated from the bench in giving employers a right not afforded in the law.”
On the other side, some voices saw cause for optimism. “This certainly is great news for employers in Louisiana,” said Napolitano. “Unfortunately, [the Louisiana Supreme Court’s] analysis did not stop [with giving employers choice of pharmacy.] It appears that even unauthorized pharmacies/providers may still dispense prescription medication to claimants, but they will be limited to reimbursement of the $750 cap provided under Section 1142(B),” he explained.
“We would have hoped that awarding choice of pharmacy to the employer would have given them the absolute right to deny all payments to those outside of their approved network, especially those who were forewarned not to dispense,” Napolitano added.
Speaking to WorkCompCentral, Troy Prevot, Executive Vice President of LCTA Workers’ Comp, emphasized the way in which Burgess could help curb doctor shopping, telling WCC’s Sherri Okamoto that carriers will be better able to monitor prescriptions if workers are not obtaining them through multiple channels.
Particularly if viewed through the lens of Louisiana’s problem with opioid abuse among both the injured worker and general health populations, Burgess may increase the likelihood that payers can prevent an impending addiction.