New Louisiana Law Prevents “White Bagging”

Earlier this year, we discussed[1] the impact of mandatory “white bagging” on providers, and more importantly, patients. Briefly, white bagging is a practice where a medication is ordered by a physician for in-office administration (e.g., IV infusion therapy), but is sourced through a particular pharmacy, often a specialty pharmacy, instead of being supplied by the physician him or herself.  This pharmacy then delivers the medication to the physician’s office for ultimate administration to the patient. Without significant safeguards, white-bagged medications can pose a significant cause for liability, particularly for physicians, who often have no oversight into the product integrity, labeling or accuracy, but are nevertheless required to administer the drug product to their patients. Likewise, patients are also affected where white bagging compromises efficient patient care and access, causes interruption to critical treatment, and exposes patients to greater risk of medication errors.

In the wake of actions by major insurers requiring physicians or hospitals to not only accept white-bagged prescriptions filled by insurer-owned specialty pharmacies, several states have introduced laws that prevent white bagging, or similar practices of “redispensing.” Louisiana has joined the ranks of these states and recently passed a law that states that effective June 1, 2021, insurers are not permitted to deny authorization or payment to providers because they receive physician-administrated drug products from an out-of-network pharmacy. See LA. REV. STAT. ANN. 22:1020.51. Further, insurers will be required to pay providers for the drug products at the rate identified in the provider agreement, and if a delineated rate is not associated with a particular drug product, then providers will be reimbursed at their acquisition cost. While insurers argue that healthcare costs can be lowered through white bagging if a member receives drug products from an in-network pharmacy, in passing this new law, Louisiana recognizes that white bagging has a greater, adverse financial impact on healthcare costs, and of greater concern, on the quality of patient care and access. 

How Can Frier Levitt Help?

For reasons mentioned above, white bagging, and similar methods of redispensing, causes significant legal and regulatory risk. Contact Frier Levitt to speak to an attorney for guidance on addressing any white bagging issues your practice or health system may be experiencing. 

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