WCAN Asks IIABCal Members to Support AB 378

We need your help to pass legislation that will close a costly loophole in California’s workers’ compensation system. Many members of the Workers’ Compensation Action Network (WCAN) took action on this bill earlier this Spring, and it successfully passed out of the California State Assembly in late May. Now we need your help to encourage the State Senate to pass it as well.

The legislation, AB 378, is a common-sense solution in response to growing concern over “compound pharmaceuticals,” the most common of which are mixtures of topical creams used to relieve pain. Because these products are mixtures of different ingredients, there is a problem in how these prescriptions are identified and priced under California’s official medical fee schedule for pharmaceutical products.

This loophole (which also applies to medications known as co-packs and medical foods) has caused an explosion in the prescribing of these medications. According to research by the Commission on Health and Safety and Workers’ Compensation, the costs of prescriptions for compound pharmaceuticals, co-packs and medical foods have grown from 2 percent of all workers’ compensation prescription costs in 2006 to 12 percent in 2009 – a more than 400 percent increase. These costs are passed onto businesses through higher workers’ compensation insurance costs.

Employers and organized labor are working together to support AB 378 and close the loopholes in compound drug billing that creates perverse incentives to prescribe such medications. The bill establishes a pricing structure for such prescriptions that is less subject to abuse while the state crafts a permanent fee schedule for repackaged drugs. It also imposes new controls in how physicians can bill for their “ingredient costs” and prohibits doctors from self-referring patients for pharmacy products the same way they are currently prohibited from self-referral for other medical services.

Please take a few minutes to contact your legislator to express your support for AB 378 or email us at contactus@fixworkerscompnow.org with any questions.

Click HERE to send a letter. Thank you for your help!