HHS To Issue Guidance On Prescription Refill Communications

On September 11, 2013, the Department of Health and Human Services announced its intention to issue guidance regarding the HIPAA Omnibus Final Rule's limit on remuneration available to covered entities for sending patients refill reminders and other communications regarding currently prescribed drugs and biologics. The announcement came via joint motion filed by HHS and Adheris Inc. in the U.S. District Court for the District of Columbia in Adheris Inc. v. Sebelius, D.D.C., Case No. 13-CV-01342. As currently drafted, HIPAA excludes from the definition of "marketing" those refill reminders that are made in exchange for payment "reasonably related to the covered entity's cost of making the communication." This carve-out creates an exception to HIPAA "marketing" rules that otherwise would require patient authorization for sending subsidized refill reminder communications. Pharmacy industry groups are concerned, however, about the limited scope of the refill reminder exception and what types of costs may be reimbursable to covered entities under the exception.

The Final Rule provides some explanation regarding the "reasonably related costs" remuneration standard, but for certain companies whose viability may depend on making these communications, the Final Rule leaves several important questions unanswered. For example, specialty pharmacies may offer comprehensive, patient-focused services to assist customers with managing their complex health conditions. The Final Rule defines as "permissible costs for which a covered entity may receive remuneration...those which cover only the costs of labor, supplies, and postage to make the communication." Thus, the exception to HIPAA's authorization requirement would not apply to communications for which payment is made beyond the cost of making the communication. According to a letter to HHS sent by the Specialty Pharmacy Association of America...