Rebel Distributors Corp. v. Luba Workers' Comp.

129 So. 3d 80, 12 La.App. 3 Cir. 909, 2013 La. App. LEXIS 380, 2013 WL 811969
Louisiana Court of Appeal·Decided March 6, 2013·No. No. 12-909·Published·Cited by 20 cases

Opinion

PETERS, J.

I,The matter now before us is one of nineteen consolidated actions, all of which involve a dispute between a pharmaceutical distributor/repackager and an employer/workers’ compensation insurer over the payment of costs arising from the dispensing of medications directly to an injured employee by his or her treating physician. In this case, the pharmaceutical distributor is Rebel Distributors Corporation, Inc. (Rebel Distributors), a California corporation; the repackager is Physician Partner and Pharmacy Partner (Physician Partner), which is described in the record as a division of Rebel Distributors and a California based pharmaceutical repackager; the employer is Acadiana Plastics Manufacturing, Inc. (Acadiana); and the workers’ compensation insurer is LUBA Casualty Insurance Company (LUBA). The worker compensation judge (WCJ) rendered judgment in favor of Rebel Distributors/Physician Partner and against Acadiana/LUBA, awarding Rebel Distributors/Physician Partner the payment of certain unpaid invoices for medical costs incurred, subject to a statutory limit. Rebel Distributors/Physician Partner appealed the judgment asserting three assignments of error, and Acadia-na/LUBA answered the appeal asserting an additional eight assignments of error. For the following reasons, we reverse the WCJ award to Rebel Distributors/Physician Partner and render judgment in favor of Acadiana/ LUBA, dismissing the claims of Rebel Distributors/Physician Partner. In doing so, we find that Rebel Distributors/Physician Partner is not a health care provider within the contemplation of La.R.S. 28:1021(6) and that the relationship between it and Dr. Thomas Heard and the St. Thomas Clinic is not one of agency. Therefore, Rebel Distributors/Physician Partner has no right of action.

J^DISCUSSION OF THE RECORD

The only difference in the parties at interest in the nineteen consolidated cases is that each case involves a different injured worker and a different employer. In the matter now before us, the injured worker is Mary Doucet, and her employer is Acadiana. The parties common to all of the consolidated cases include Rebel Distributors; Physician Partner; the St. Thomas Clinic (Clinic) in Lafayette, Louisiana, which is owned and operated by Dr. Michel Heard, a Lafayette, Louisiana orthopedic surgeon (hereinafter referred to collectively as “Dr. Heard/Clinic”); and LUBA.

Rebel Distributors is licensed by the Louisiana Board of Pharmacy as a wholesale distributor of both non-controlled and DEA-controlled substances. The eviden-tiary record contains a printout from Physician Partner’s internet website, which sets forth the particulars of the two business entities and the relationship between them. In that website, Rebel Distributors describes itself as follows:

Rebel Distributors Corp. is a National Pharmaceutical Distributor licensed and located in Southern California, USA. Founded in 1984, Rebel Distributors Corp. is licensed to distribute pharmaceuticals in over 30 States as well as licensed by the DEA to handle pharmaceuticals that are Schedule 2, 3, 3N, 4 and 5. We are not a full-line wholesaler, rather more of a specialty or promotional wholesale distributor. Through our aggressive approach to purchasing, we strive to provide our customers with exceptional service on the items they need, at the best possible prices. Our goal is [82]*82to always remain consistent with excellent service and pricing, while continuing to explore new opportunities for our customers.
Our customer base consists of many different classes of trade within the Pharmaceutical Industry with the majority of our customers falling within the following categories: Retail Pharmacies, Institutional Pharmacies, Urgent Care Clinics, Physicians, Home Healthcare, Retail Drug Chains, Surgery Centers, Dentists, Oncology Groups, Workers’ Compensation Clinics, and other licensed wholesalers.
Rebel has sustained continued growth and success for many years. We believe that strong and mutually beneficial relationships with our customers and suppliers have been and continue to be the key to our |songoing growth and success. While always maintaining excellent business fundamentals and core business strategies, Rebel is committed to exploring new means of distribution, new operational methods and innovative technology to further enhance the continued satisfaction of our customers.

That same website describes Physician Partner as a pharmaceutical repackager whose parent company is Rebel Distributors. Its thirty years of experience is “in creating, producing and distributing pharmaceuticals, point-of-care medication and technological dispensing programs for virtually every type of medical professional, community clinic, managed care organization, hospital organization and/or pharmacy.” Basically, Rebel Distributors provides Physician Partner with pharmaceuticals in bulk, and Physician Partner then repackages the pharmaceuticals “in ‘unit of use’ quantities as requested by the physician.” Additionally, the website suggests that Physician Partner provides additional services to its customers:

Utilizing the full scope of our parent company’s extensive financial resources and infrastructure, Physician Partner is extremely well positioned to continue to provide the absolute best products, services and solutions in the industry. In addition to providing prepackaged medications, we offer a full array of value added financial services and products ranging from Workers’ Compensation Claims Processing and Guaranteed Payment Programs to Full Practice Billing Services and Credit Card Processing Solutions.

Dr. Heard directly dispenses medications to his patients in his practice. However, the pharmaceutical wing of his practice does not operate as a normal pharmacy because Dr. Heard does not supply his patients with a prescription to be presented to a pharmacy. Instead, he dispenses the medicine directly to the patient without writing a prescription.

On June 29, 2007, Physician Partner and Dr. Heard/Clinic entered into an eight-page agreement entitled “PHARMACEUTICAL MANAGEMENT SERVICES AND PRESCRIPTION CLAIMS ASSIGNMENT AGREEMENT.” J^The primary purpose of this agreement is to effect an assignment of full ownership of all “Workers!’] Compensation Prescription” transactions arising in Dr. Heard’s practice to Physician Partner.1 This assignment specifically included “rights to bill [83]*83and receive payment for the Claim from insurance carriers or self-insured parties.” In exchange, Physician Partner guaranteed Dr. Heard/Clinic “payment on all accepted claims.” With regard to what constitutes payment, the agreement states in part that:

PHYSICIAN PARTNER shall pay CLINIC a monetary sum, in the amount and at such time as set forth on Exhibit D; provided however, that PHYSICIAN PARTNER shall not pay CLINIC an amount greater than CLINIC’S Usual and Customary Charge for a dispensed medication. Furthermore, noting in this Agreement shall require PHYSICIAN PARTNER to pay CLINIC more than the state fee schedule or state public policy amount for a dispensed medication.

Exhibit D is a list of twenty-seven pharmaceuticals setting forth a specific amount to be paid to Dr. Heard/Clinic for each one listed. Additionally, the final paragraph on Exhibit D explains that “Physician Partner may assign, sell or refer said claims for lien and or litigation at its sole discretion.”

With regard to the pharmaceuticals dispensed by Dr.

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Rebel Distributors Corp. v. Luba Workers' Comp., 129 So. 3d 80, 12 La.App. 3 Cir. 909, 2013 La. App. LEXIS 380, 2013 WL 811969 (La. Ct. App. 2013).

129 So. 3d 80 (Rebel Distributors Corp. v. Luba Workers' Comp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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