In-Office Dispensing Policy Brief

May 2023

Efficacious, high-quality, outcomes-driven care requires attention to the critical pillar of patient compliance after the provider establishes a care plan. To maximize the benefits of these life-extending and lifesaving medications, we must ensure the following: first, that patients are educated about ‘why’ they are taking a medication; two, that patients are not hindered from receipt of their meds, either by logistical or financial hurdles; and three, ensure that patients are compliant with their prescribed regimens and, if not, modify or alter treatment to develop alternatives. This latter consideration—the importance of monitoring patient compliance and adjusting therapy as indicated—is a critical function of the physician practice and is often overlooked by policymakers.

According to a 2017 study by the CDC, between 20 to 31 percent of drug prescriptions are never filled. Due in part to this shortfall, almost 50 percent of patients do not continue their treatment plan, which causes a dramatic increase in long-term healthcare costs. This is unfortunate because, when prescriptions are unfilled, there are potential immediate and long-term adverse impacts on patients’ health with associated increases in resource utilization and healthcare expenses.

Many physician groups within LUGPA offer pharmaceutical dispensing services to their patients. LUGPA believes integrating pharmaceutical dispensing into the physician practice improves patient access, care coordination and facilitates patient compliance monitoring.

Effectiveness of Physician Dispensing

Physician dispensing is permitted in most states.  In-office dispensing of pharmaceuticals has, at a minimum, demonstrated equivalency to that by a pharmacy. In a 2021 article in Health Policy, a study of electronic health records found no relevant differences in selected clinical measurements between physician- and pharmacist-dispensing. The authors concluded that neither method of drug dispensing was superior to the other.

However, the tangible advantages to in-office dispensing are manifold, including enhanced coordination of care, quality of care and patient adherence to care, and, by extension, improvement in outcomes. With an in-office dispensing model, patients do not need to travel to a pharmacy to fill their prescriptions after an appointment with their doctor.

All healthcare is local and based on relationships. In-office dispensing eliminates many factors contributing to medication non-adherence, including unclear or illegible prescription orders. In-office dispensing also allows immediate medication adjustments and direct interaction with physicians to discuss drug or treatment questions if a patient encounters a medication problem.  

The Stark Law and In-Office Ancillary Services

Stark Law regulations outline exemptions for specified in-office ancillary services, which are allowed when specific criteria are met. The IOASE enables physician practices to provide certain critical medical services and procedures, including in-office dispensing, radiation therapy, imaging, and pathology, as a part of a coordinated system within a medical practice.

In 2021 CMS released a Q&A (a “FAQ”) on the ancillary services exception, reiterating that dispensing and filling prescriptions must be completed at the point of care instead of allowing for delivery of medications to vulnerable cancer patients.

This problematic FAQ could profoundly and adversely affect Medicare beneficiaries by limiting their access to prescription medications, especially the panoply of novel medications for advanced oncology conditions.  LUGPA believes this CMS policy needs to be thoughtfully considered and carefully promulgated, with appropriate input and stakeholder comments.

Therefore, it is imperative that CMS rescind this harmful FAQ to mitigate the disruptive effect of this confusing ‘clarification’ to protect access to life-saving medical treatments.

Patients deserve to have access to all available medical options. The decision about what type of treatment is medically appropriate for a patient is best decided by the patient and physician. Limiting the IOASE and in-office dispensing presents significant barriers to appropriate screenings and treatments, increases inefficiencies, and creates significant burdens on a particularly vulnerable patient population along with their caretakers and families.

LUGPA is a strong advocate for access to integrated urology care. Access to integrated care means that patients can receive the best medical care, with the best outcomes, close to home.

On April 28, a letter was sent to CMS by a group of over fifty bipartisan Congressmembers calling on the agency to retract the in-office dispensing FAQ immediately. LUGPA was vital in building support for this letter and secured many signers.

LUGPA’s Advocacy on In-Office Dispensing

  • Advocate for physicians’ ability to continue providing in-office pharmaceutical dispensing (where allowed by state statute).
  • Advocate for the retraction of CMS’s 2021 FAQ on in-office dispensing.
  • Advocate for maintaining the current In-Office Ancillary Services Exception (IOASE) within the Stark Laws, which allow for in-office dispensing.
  • Educate policymakers on the difference between delivery and dispensing and the positive benefits of in-office dispensing.
  • Work with CMS and Congress to ensure that the exception covers LUGPA providers and their ancillary services.