The Case for Office-Based Dispensing

In a recent national study, three out of four Americans said that, given the choice, they would prefer to fill their medication prescriptions in their doctor’s office instead of having to go to a pharmacy. Unfortunately, most people are not given that choice.

Only a small percentage of US doctors currently offer office-based prescription fulfillment or dispensing of natural products. Thankfully, more are considering this option. It provides an excellent opportunity to improve your patients’ clinical outcomes while also improving the fiscal health of your practice.

Office-based dispensing makes sense on so many levels. For one, it ensures patients have the therapeutic products they need before they leave your office. Patients who are ill, in pain, or very busy–and who isn’t these days—appreciate the convenience of being able to purchase their medications and supplements at the doctor’s office. It spares them a separate trip and long wait at the pharmacy or health food store.

It also enhances compliance by ensuring that prescriptions and recommendations actually get fulfilled. Studies suggest as many as 20% of all prescriptions and recommendations go unfilled each year. If patients don’t have to make a separate stop, they’ll be much less likely to postpone the fulfillment, lose the slip, or simply forget.

It is also a win for doctors. Declining insurance reimbursement and the emergence of consumer driven healthcare are pushing many doctors to explore new ways to heighten the patient experience and find new revenue sources. Dispensing certainly meets both those needs.

At the same time, many doctors are understandably uneasy about selling products—whether pharmaceutical, nutraceutical, or cosmetic—directly to their patients. After all, you didn’t go to medical school to become a sales clerk, and the bond of trust between you and your patients is essential to the healing process.

But the reality is that if you’re prescribing drugs or recommending supplements, your patients must buy them somewhere. They (or their health plans) are going to pay that money to someone. It might as well be you.

Increased Practice Revenue

An office-based dispensing system can generate significant additional revenue for a primary care practice. For a single physician seeing 25 patients per day, the average annual net income range from dispensing is between $25,000 – $45,000. This could potentially be doubled by the inclusion of nutraceuticals & natural products in the formulary.

pc_logo_2As part of our ongoing effort to find ethical, science-based solutions to help physicians improve their patients’ health while strengthening the economic health of their practices, Physician Consulting Inc (PCI) began to look for a platform for office-based dispensing that will dispel ethical concerns.

Our research led us to a turnkey Rx in-office dispensing program that allows physicians to dispense safety sealed, pre-packaged, generic medication at the point-of-care. The program increases profitability within the practice by introducing a new revenue source while utilizing non-revenue generating staff time. It also provides a needed platform to comfortably dispense nutraceuticals. With this system, you can prescribe an antibiotic and a probiotic at the same time!

This program provides a “One Stop Shop” model for patients, who pay the same amount as they would at a pharmacy; in no way does this system put doctors in the position of over-charging patients.

There is no upfront cost to the practice for installation of equipment (DEA-approved hand held scanners, labels & software). Medication supplies are delivered with a 15-30-day net due invoice, via express courier with signed delivery receipt. The 15-30-day invoicing allows the practice to cover costs on a cash & carry basis from day one. Most practices receive their 2nd or 3rd re-supply orders prior to payment of the first invoice!

Sophisticated Software, Simple Set-Up

This system is very easy to implement. We provide training for doctors and staff, enabling them to establish a workflow for dispensing. Training requires approximately one hour. The process is facilitated by customizable, web-based dispensary management software.

You or your staff can load patient information into the database when you dispense a medication, and you can pull dispensing history reports by patient, medication, or date. The software has a sophisticated password protection system; each function performed by the software can be password-protected, if you wish. A double-check system prevents dispensing something that does not have a code match to the scanned bottle.

Password protection, an automatic inventory system, and dispensing records of who dispensed what make it difficult to hide theft. Every container is accounted for, and the reports allow the staff to easily and quickly determine if there is a problem; unlike the basic supply closet.

Is it Legal?

This is the most common question we get from physicians considering office-based dispensing. The answer is, an unqualified Yes!

Every physician is permitted by law to dispense medications to his/her own patients within his/her practice. Under Stark regulations, physician dispensing is acceptable when the dispensing is limited to the physician’s own patients, and the medications and products dispensed meet FDA guidelines for repackaging and labeling. However, be aware that a few states have more restrictive laws concerning point-of-care dispensing.

The Stark laws pertain to physician self-referral for Medicare and Medicaid patients. There are exemptions for in-office ancillary services, including dispensing. The in-office ancillary services exception permits physician-owners of a medical group, and other members of the group, to refer patients to their group for certain Designated Health Services (DHS). An outpatient prescription drug given to a patient in the physician’s office, but taken by the patient at home, is now covered by this exemption.

Most states do not require anything beyond your existing DEA and state license in order to dispense meds. However, some states require each dispensing physician to have a special dispensing license. Several states require an inventory or sales tax. PCI provides guidance and support for compliance with specific state regulations.

Improving Safety, Reducing Contamination

The PCI-recommended Rx system complies with all DEA and FDA requirements. Repackaging companies like the one supplying products for this system are held to more stringent guidelines than community pharmacies; all medications are repackaged in sterile environments. This is important; contamination of prescriptions obtained from pharmacy counters is responsible for a large number of adverse drug reactions.

According to the FDA, 50% of all drug reactions in the US are caused by penicillin and cephalosporin contamination. In commercial pharmacies, all medications are sorted using the same trays as the penicillin/cephalosporin-based drugs. Consequently, it is almost impossible to get a prescription from a typical pharmacy that does not have some contamination of dust from penicillin/cephalosporin-based products. Many patients are highly allergic to penicillin/cephalosporin, which can lead to anaphylactic shock. Repackaging medications in sterile negative airflow environments greatly decreases this risk

Venerable History, No Liability

Point-of-care medication dispensing has a venerable history, going back to the earliest days of private practice. It underwent a re-emergence in the early 1980s, when repackaged drugs were first introduced. The retail pharmacy industry tried to eliminate physicians’ rights to dispense, but they lost that battle. In 1985, Congress secured physicians’ right to dispense FDA-approved meds to their own patients. The 1990s saw the emergence of dispensing systems that make the process fast, easy and cost-effective.

In general, no additional personnel are needed to make systems like this work in primary care. In most states, a directive from a physician allows other staff members to dispense medications within the office. A few states do require that the physician actually do the dispensing, but this is the exception not the rule.

Liability for office-based dispensing is the same as for writing a prescription that a patient fills elsewhere. In point-of-care dispensing, there are stringent guidelines concerning packaging and labeling of the re-packaged medications. The PCI-recommended Rx system meets all DEA and FDA requirements. Your malpractice premium is not affected by a decision to bring in a dispensing system.

Your Top 20

Bringing in a dispensing system doesn’t make your office a full-service pharmacy. In fact, the key to a successful dispensing program is to identify the most common drugs you prescribe and natural products you recommend, and build your dispensing system around those. An ideal in-practice formulary consists of the most frequently prescribed products in their most commonly ordered strengths and package sizes.

The PCI-recommended Rx dispensing program can supply any Schedule II – V controlled substance, as well as over-the-counter meds and injectables. We generally recommend that physicians begin by stocking one week’s supply of the 15-20 most commonly prescribed meds. The offerings can always be expanded or modified seasonally. The system will track all dispenses, and accurately determine which meds you are using most frequently. Accurate inventory control prevents you from running low on particular products, while simultaneously preventing over-stock.

The system will notify you when you are running low on a particular product. Reordering is as easy as clicking a button. You can expect delivery, under normal circumstances, within 3-5 business days from order submission. It really is that simple!

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Kauley Jones is President of PCI, a medical development company that assists physicians in addressing the challenges of increasing costs and declining reimbursements. With over 20 years in the holistic medical field Kauley is an expert in researching the very best in cutting-edge evidence based ancillary services that enable doctors to improve their bottom line while improving patient outcomes.

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