On June 16, 2026, the Pennsylvania Supreme Court made a long-awaited decision on a workers’ compensation provider self-referral case. With its majority opinion, the court ruled the state’s workers’ compensation law does not prohibit a physician from referring an injured worker to a pharmacy in which that physician has a financial interest.
The case
In 700 Pharmacy v. Bureau of Workers’ Comp. Fee Review Hearing Office, the court was to decide if the provision in the Pennsylvania workers’ compensation statute that prohibits certain self-referrals also prohibits physicians from referring injured workers to a pharmacy in which they have a financial interest for prescription drugs and related pharmaceutical services. At issue was this statute:
“Notwithstanding any other provision of law, it is unlawful for a provider to refer a person for laboratory, physical therapy, rehabilitation, chiropractic, radiation oncology, psychometric, home infusion therapy or diagnostic imaging, goods or services pursuant to this section if the provider has a financial interest with the person or in the entity that receives the referral.” [emphasis added]
The debate
The majority opinion held that physician self-referrals for prescription drugs and pharmaceutical services are not prohibited under the current statute’s language, which limits the self-referral prohibition to the eight specifically enumerated categories of laboratory, physical therapy, rehabilitation, chiropractic, radiation oncology, psychometric, home infusion therapy, or diagnostic imaging. The majority opinion stated the phrase “goods or services” at the end of that sentence in the law is not a catch-all phrase encompassing other unlisted items such as prescription drugs and professional pharmaceutical services.
This issue ended up at the state Supreme Court level due to a contrary position taken by the lower Commonwealth Court (the appellate level) that affirmed a Bureau of Workers’ Compensation hearing officer’s decision and concluded that “goods and services” did in fact include drugs and pharmaceutical services and were subject to the statute’s anti-referral provision. The state’s Supreme Court has now reversed the lower court’s prior decision that denied reimbursement for drugs and pharmaceutical services and remanded (sent back) relevant cases for further proceedings to be readdressed under the new opinion.
The impact
Like many court cases regarding statute interpretation, words matter. The decision came down to text and grammar usage and, in this case, partly the use of the word “or” in a sentence. But, this decision has broader implications within the industry and limits the ability of payers to address concerns about self-referrals under the state workers’ compensation law.
Under the statute for self-referrals, a provider is still prohibited from presenting a claim (bill) for payment for certain services provided. Supplementary regulations also provide that if a workers’ comp insurer determines that a bill has been submitted for treatment rendered in violation of the anti-referral statute, the insurer is not liable to pay the bill. However, with the Pennsylvania Supreme Court’s recent decision, prescription drugs and professional pharmaceutical services are not part of the prohibited self-referral categories, so insurers may no longer use this area of law to deny payment to pharmacies in which the referring physician has a financial interest.
More to watch in Pennsylvania
Another pharmaceutical-related workers’ compensation case on appeal and pending decision with the Pennsylvania Supreme Court is Federated Insurance Company v. Summit Pharmacy. This case disputes the Pennsylvania Bureau of Workers’ Compensation’s use of Redbook as its source for average wholesale price (AWP) in pharmaceutical fee disputes. For more on that, view our prior blog post. The MyMatrixx by Evernorth Regulatory Affairs team is following developments on that closely, as well as separate pending legislation in the Pennsylvania General Assembly attempting to amend the related workers’ comp pharmaceutical fee schedule law.
More policy updates
For more information on other policy developments in workers’ compensation impacting pharmacy across the country, please visit and bookmark Statehouse Watch at MyMatrixx.com. Send your regulatory or public policy questions on these topic or others to our Regulatory Affairs team at MMXRegulatoryAffairs@MyMatrixx.com.
Nothing in this content should be considered legal advice nor should it be construed as such.