Legal Insights

Pennsylvania Supreme Court Ruling Weakens the Anti-Referral Provision of the Workers’ Compensation Act

August 31, 2026
By: Gabriel W. Griffith

On June 16, 2026, the Supreme Court of Pennsylvania (SCOPA) issued a Decision in the matter of 700 Pharm. v. Bureau of Workers’ Comp. Fee Review Hearing Off. (State Workers’ Ins. Fund).[1] In addressing a series of consolidated appeals, SCOPA clarified the limitations of the Anti-Referral Provision of the Pennsylvania Workers’ Compensation Act (the Act).

Key Takeaway: Insurance carriers cannot deny coverage for prescription medications filled by pharmacies even if the doctor that prescribed the medication has a financial interest in the pharmacy that filled the prescription. Instead, the Anti-Referral Provision of the Act is limited to its enumerated list (referenced below).

By way of background, Dr. Miteswar Purewal and Dr. Shailen Jalai treated several patients/claimants for accepted work injuries under the Act. The treatment provided by the doctors included writing prescriptions for medications, which were then filled by 700 Pharmacy. Important to this case, the doctors had a financial interest in 700 Pharmacy.

Due to the doctors’ financial interest in 700 Pharmacy, the insurers of the claimants’ employers refused to pay 700 Pharmacy for filling the claimants’ prescriptions; specifically, the insurers believed the doctors were in violation of the Anti-Referral Provision of the Act for writing prescriptions that were then being filled by the very pharmacy they had a financial interest in.

Section 306(f.1)(3)(iii) of the Act – AKA “The Anti-Referral Provision” – states the following:

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 . . . .[2]

Seeking payment for the prescriptions it filled, 700 Pharmacy filed Fee Review Applications with the Bureau of Workers’ Compensation. Specifically, 700 Pharmacy argued that the Anti-Referral Provision did not include a bar on self-referrals for prescription medications. The Hearing Officer for the Bureau rejected 700 Pharmacy’s argument and found that prescription medications fall within the “goods or services” language of the Anti-Referral Provision. In rendering his determination, the Hearing Officer also relied on a cost containment regulation and prior case law, which dictated that the intent of the Anti-Referral Provision was to contain costs by preventing physicians from acting within their own self-interest. The Hearing Officer therefore denied 700 Pharmacy’s Fee Review Applications.

700 Pharmacy then appealed to the Commonwealth Court, seeking a review of the Hearing Officer’s decision. At the Commonwealth Court, 700 Pharmacy maintained its position that no violation occurred because prescription medications are not specifically listed in the Anti-Referral Provision. The Commonwealth Court rejected this argument and affirmed the Hearing Officer’s decision.

Similar to the Hearing Officer, the Commonwealth Court focused on the “goods or services” language of the Anti-Referral Provision. Relying on various principles of statutory construction, the Commonwealth Court found that the “goods or services” language was included by the legislature to serve as an additional catchall to medical services already identified in the enumerated list. The Commonwealth Court then concluded prescription medications and pharmaceutical services fell within the catchall language, as they were both similar in nature to the medical services found in the enumerated list.

700 Pharmacy then appealed to SCOPA, which ultimately overturned the Commonwealth Court’s decision. Interestingly enough, in reaching the opposite conclusion, SCOPA too focused on various principles of statutory construction. SCOPA determined that a plain reading of the Anti-Referral Provision establishes that the “goods or services” language was not a catchall, but instead part of the larger modifier for each enumerated medical service listed in the Provision.

In support of its conclusion, SCOPA paid particular attention to the use of the word “or” towards the end of the enumerated list: “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 . . . .”

Plainly reading the Provision, SCOPA determined that the use of “or” between “home infusion” and “diagnostic imaging” signaled an end to the enumerated list. Therefore, the language following diagnostic imaging served as a modifier for the enumerated list. In other words, if “goods or services” was to be plainly read as a catchall, the ending of the Provision would read as “home infusion therapy, diagnostic imaging, goods or services pursuant to this section. . . .”

Thus, determining that no catchall existed, SCOPA concluded that only the goods or services included in the enumerated list were subject to the Anti-Referral Provision. Because prescription medicines or pharmaceutical services were not specifically enumerated, the doctors and 700 Pharmacy were not in violation of the Anti-Referral Provision.

To further support its conclusion, SCOPA noted that the legislature explicitly addressed prescription medicines and pharmaceutical services in other sections of the Act; therefore, it should not be implied that the legislature intended to include prescription medicines and pharmaceutical services in the Anti-Referral Provision. In its closing remarks, SCOPA posited that if the legislature wishes to include additional goods or services in the Anti-Referral Provision, it is free to do so.

For any additional questions, please contact Gabriel Griffith, Associate in Post & Schell’s Workers’ Compensation Department at 717-205-3418 or ggriffith@postschell.com, or the Post & Schell attorney with whom you normally consult.

[1] Nos. 97 MAP 2024, 98 MAP 2024, 99 MAP 2024, 100 MAP 2024, 101 MAP 2024

[2] 77 P.S. § 531

Disclaimer: This post does not offer specific legal advice, nor does it create an attorney-client relationship. You should not reach any legal conclusions based on the information contained in this post without first seeking the advice of counsel.