AHCS invests in politics

By John Dorschner
9/30/2010 © Health News Florida

(Part 2 of 2) A little-known but powerful South Florida company stands at the center of a major battle that embroiled the last legislative session and is likely to do so again.
 
The company is Automated HealthCare Solutions. The issue is the cost of doctor-dispensed drugs in workers’ compensation, a practice that some say inflates costs to Florida businesses.

AHCS, related entities, executives and family members contributed about $1.7 million to political committees, parties and candidates over the past two years, according to a Health News Florida analysis of campaign and state corporate records.

Alex Sink, who as state chief financial officer led the fight during the last session to curtail physician dispensing in workers comp, is now the Democratic candidate for governor. AHCS is strongly backing her opponents.

A large part of the AHCS-related political contributions went to entities that supported Attorney General Bill McCollum in the Republican gubernatorial primary, according to the Florida Independent. Since then, AHCS leaders have shifted their support to the Republican primary victor, Rick Scott.

Green Solar Transportation LLC, another venture of AHCS executives, gave $100,000 this month to a committee supporting Scott. Five companies linked to AHCS leaders also each sent $500 checks to Scott's campaign account, state records show.

The physician-dispensing issue came up during the final days of the session. The Florida Insurance Council and Associated Industries of Florida, representing the state’s large business interests, demanded quick action to help cut down workers comp costs by requiring that doctors charge no more than pharmacies for drugs they sold. They modeled their effort on California, which had passed a similar law.

Many legislators were told of a 70-page report from the Workers Compensation Research Institute, a nonprofit group that studied 900,000 prescriptions in 16 states that showed Florida far more expensive than the others.

One example: Carisoprodol, a muscle relaxant, cost an average of $3.05 dispensed through Florida doctors, compared to 62 cents per tablet at a pharmacy.

Another example: The pain killer Vicodin cost 96 cents per tablet through a doctor – double the pharmacy’s 46 cents.

On the final night of the 2010 legislative session, the Republican-dominated House and Senate passed a measure that included an amendment targeting physician-dispensing costs in workers comp.

The Florida Medical Association cried foul, saying there had been no debate and that the measure would hurt many doctors.

Gov. Charlie Crist vetoed the bill. In his explanatory letter, Crist wrote that he supported lowering healthcare costs, but “this is a complicated issue that was not fully vetted during the legislative process. I am concerned that implementing this bill without additional review could result in numerous unintended consequences that could ultimately adversely impact injured workers.”

AHCS executives and family members have contributed at least $24,000 to Crist's U.S. Senate campaign this year.

Sink blasted the governor for rejecting the measure: “This legislation was an important step in holding state agencies accountable and reducing workers’ compensation costs, and I am very
disappointed that Governor Crist chose today to favor special interests instead of Florida taxpayers.”

The analysis of the $1.7 million in contributions by AHCS, related entities, executives and family members shows $615,000 has gone to the Freedom First Committee, linked to incoming Senate President Mike Haridopolos and $600,000 to the Florida Liberty Fund, linked to incoming House Speaker Dean Cannon.  Another $200,000 went to the Florida Chamber of Commerce Alliance.

Yet another $18,500 went to state House candidates, $8,500 to state Senate candidates, and $15,000 to gubernatorial and cabinet candidates. At least $39,000 went to U.S. House and Senate candidates, including the contributions to Crist.

AHCS Co-Chief Executives Paul Zimmerman and Gerald Glass told Health News Florida that they made the donations out of concern for many of their business ventures, not just the billing of physician-dispensed drugs. One of them, Green Solar Transportation, cuts fuel costs by putting solar panels on large trucks. Such a technology can benefit from state and federal subsidies.

Zimmerman said the company supports politicians who “understand the risks employers go through and how we create jobs.”

The executives say studies show workers’ comp drug costs in Florida went down, not up, from 2006 to 2008. AHCS, which employs about 300 in Miramar and handles physicians’ dispensing claims in 40 states, helps keep overall healthcare costs down, they say, adding that in Florida, 89 percent of the drugs the company bills for are generics.

“The proof’s in the pudding. When physicians dispense, patient compliance is 100 percent,” Zimmerman wrote in an e-mail. When patients have to go to pharmacies to get prescriptions filled, he said, about 30 percent don’t do it.

Still, much research, including a report last year from the Miami-Dade Office of the Inspector General, says physician-dispensed drugs are a reason for high medical costs.

Andrew Sabolic, assistant director of the Florida Division of Workers’ Compensation, says these high costs remain “a growing issue.” He says he’s not certain whether a new bill will be introduced in the upcoming legislative session to curb doctors’ drug dispensing, but “it’s a possibility.”

--John Dorschner is the medical-business reporter for the Miami Herald; he reported this story for Health News Florida as a free-lancer. Capital Bureau Chief Jim Saunders contributed to this report.