In a recent case, 700 Pharmacy v. Bureau of Workers’ Compensation Fee Review Hearing Office (State Workers’ Insurance Fund), the Commonwealth Court addressed the issue of unlawful self-referrals for prescriptions. The Claimant’s treating pain physicians, Dr. Miteswar Purewal and Dr. Shailen Jalali, whose office is upstairs from the Pharmacy, wrote and supervised the prescriptions for medications at issue. The Pharmacy filed five Applications for Fee Review. The Insurer challenged the prescriptions for compounding creams. The Fee Review Hearing Officer concluded that the Insurer met its burden of proving that Dr. Purewal, the physician who wrote the prescriptions, has an admitted financial interest in the Pharmacy. The Pharmacy filed a timely Petition for Review of the Hearing Officer’s Decision.
The Commonwealth Court relied upon Section 306(f.1)(3)(iii) of the Pennsylvania Workers’ Compensation Act, 77 P.S. § 531(3)(iii). The Commonwealth Court noted that the self-referral provision applies to physician referrals to pharmacies because, although neither drugs nor pharmaceutical services are specifically referred to in the Pennsylvania Worker’s Compensation Act, the phrase “goods or services” is sufficiently broad to cover drugs and pharmaceutical services. The Commonwealth Court rejected the Pharmacy legal argument that pharmacies are not specifically enumerated in the anti-referral provision, so this statutory provision does not apply to pharmacies. The Commonwealth Court noted that the anti-referral provision seeks to contain costs by preventing physicians from acting in their own self-interest.
Next, the Commonwealth Court accepted the Insurer’s legal argument that the medications prescribed by the physician here, whom the Pharmacy conceded has a financial interest in the Pharmacy, are goods and services to which the self-referral prohibition applies. The prescriptions at issue were compounding creams. The Commonwealth Court noted that the service is the compounding and the goods is the cream itself. Thus, the Commonwealth Court relied on the statutory language and found this self-referral unlawful under the anti-referral provision.
Zachary M. Rubinich is a partner in our Philadelphia office. He focuses his practice on the defense of insurance carriers, self-insured entities and third-party administrators against workers’ compensation claims in Pennsylvania. Based on his extensive experience, the Pennsylvania Bar Association Workers’ Compensation Law Section has certified him as Specialist in the practice of workers’ compensation law. Zach has handled all aspects of litigation before workers’ compensation judges, the Workers’ Compensation Appeal Board, the Commonwealth Court and the Pennsylvania Supreme Court. Zach has been appointed to the following American Bar Association Tort Trial and Insurance Practice (TIPS) leadership positions: Chair-Elect of the Litigation and Trial Practice Committee; Vice-Chair of the Appellate Advocacy Committee; member of the Ethics and Professionalism Standing Committee; and member of the CLE Board Committee. He is the Past Chair of the ABA’s Tort Trial and Insurance Practice (TIPS) Workers’ Compensation and Employers’ Liability Law Committee from 2018-2019. He served as Vice-Chair of this committee for 2015 to present. In addition, Zach served as Vice-Chair of the 2017-2018 American Bar Association Standing Committee for Diversity and Inclusion. He is also a Committee Member of the ABA’s Legal Opportunity Scholarship Fund. Zach has been rated AV Preeminent by Martindale-Hubbell for the twelfth consecutive year for 2024. He has been selected as a 2019, 2020 and 2021 Pennsylvania Super Lawyer by Super Lawyers. He was selected as a Pennsylvania Rising Star by Super Lawyers from 2010 to 2014. He was selected as an International Advisory Experts (IAE) Award recipient in 2019 for his accomplishments as a workers’ compensation attorney in Pennsylvania. Zach has been selected as a Fellow of the College of Workers’ Compensation Lawyers Class of 2020. Mr. Rubinich was recognized as a Main Line Today 2023 and 2024 Top Lawyer.
Zach can be reached directly at: (215) 575-4340 • zrubinich@rawle.com
Workers’ Compensation Section
CHAIR: Claudio J. DiPaolo
PARTNERS: Zachary M. Rubinich; J. Brendan O’Brien; Jennifer Schwartz; Christian M. Stein; Anisha S. Abraham
OF COUNSEL: Edward J. Chiodo; James Curry; Kara Anne Hager; Daniel Spafford; Jennifer Chun Strawn
ASSOCIATES: Mary Bergmann, Iyanna Greene
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