On October 19th, the Idaho Advisory Committee on Workers’ Compensation held a special subcommittee meeting to discuss ongoing concerns with physician-dispensed medication. Healthesystems attended the meeting and captured key highlights.

Despite reimbursement limits adopted in 2025, physician dispensing still comes with high costs, and the subcommittee is now considering whether additional measures may be needed to strengthen existing cost controls, making this an issue to watch for potential changes to reimbursement and utilization controls.

Meeting participants reported prices for physician-dispensed medications, including creams and patches, substantially above pharmacy alternatives. Additionally, stakeholders noted a pattern of continued dispensing despite issues such as injured workers reporting nonuse or lack of benefit, duplicate therapies, and insufficient medical necessity documentation.

Utilization patterns were described a “whack-a-mole” challenge, with changes in drug strengths or formulations potentially placing high-cost products outside the existing therapeutic-equivalent reimbursement cap.

Pricing differences were also attributed to other factors Drug selection and PBM-negotiated pharmacy discounts affect costs. Participants noted that high-cost dispensing can also occur through pharmacies, including mail-order or out-of-state pharmacies.

Payment disputes remain challenging, as high charges may comply with the fee schedule, and reviewing medical necessity after dispensing creates additional burdens for payers.

Participants reported concerns involving a small number of prescribers and requested provider input to better understand the issue. The subcommittee plans to review other states’ approaches to dispensing restrictions, reimbursement limits, and prior authorization, along with pharmacy price comparisons. The findings will help inform discussions of potential recommendations for the full advisory committee.