Point-of-care Dispensing: Profit, Penalties, and Your Practice

As my physician clients look for additional ways to reverse their ever-shrinking revenue, an increasing number are considering point-of-care dispensing. This model, which calls for physicians to dispense medicine directly to patients from their office, is permitted in most states as long as the physician stays in compliance with state and federal laws governing labeling and packaging of medication, as well as storage and other security requirements.

There are many touted benefits to point-of-care dispensing. Some physicians argue that it provides convenience to patients who can avoid going to a pharmacy to fill a prescription. Other providers maintain that point-of-care dispensing allows them to make sure patients are filling their prescriptions promptly and leads to better follow-up care.

One undeniable benefit to point-of-care dispensing, however, is the financial profit seen by physicians from the sale of prescriptions to patients who would otherwise have purchased their drugs elsewhere. Whether it’s an antibiotic, acne cream, or narcotic, there is profit to be made by physicians who dispense. It seems, at least from my client experience, that an average single physician can add thousands of dollars to his or her bottom line using point-of-care dispensing. In states with profitable payments for workers’ compensation patient services, physicians may see an even higher margin. On the downside, critics of point-of-care dispending argue that this approach leads to over-prescribing by doctors and easier access to narcotic drugs by patients.

Like everything else in healthcare, physician dispensing is highly regulated. Most physicians become overwhelmed by the many requirements involved in labeling and billing for prescription medication and either suffer financial loss or end up in legal trouble (i.e. loss of ability to prescribe) when they first try to run a prescription program on their own. For this reason, there is an entire industry which has grown up around the physician point-of-care dispensing model. Most of these companies will help order medications and make sure they are properly labeled and stored. They will often oversee the documentation required for tracking medications and will handle billing and collections. Before you hire any such third party, make sure you ask for references, find out whether their clients have successfully passed a DEA audit in the past, and compare pricing. Physicians can sometimes become complacent about meeting documentation requirements and although the use of a third-party company to assist with these regulations can be helpful, the ultimate responsibility lies with the physician.

When it comes to federal patients, physicians need to be extra cautious if they intend to sell medications. A consultation with legal counsel is recommended. Prescription drugs for out-patients are covered as a designated health service under Stark and physician(s) must be sure to satisfy certain Stark exceptions, which include how income from the sale of prescriptions may be distributed within the practice. The process is easier for non-federal patients but it’s still advisable to check the workers’ compensation laws in your state, as well as the rules of your largest payors. Also, be sure you are familiar with state laws regarding prescribing by non-physicians in your office.

If point-of-care is a business in which you are currently engaged or interested in learning more, make sure you take the time to consult with counsel and to speak with experienced third parties who can help you operate properly. While the financial benefits of point-of-care dispensing may be appealing, the penalties of non-compliance must be avoided at all costs.

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