October 3, 2013
September 19, 2013, the US Department of Health and Human Services (HHS) released guidance on the changes effectuated by the Omnibus Final Rule to the exception to the authorization requirement under the HIPAA Privacy Rule for certain marketing communications to patients regarding prescribed drugs and biologics. The guidance provides several helpful FAQs for providers and extends the compliance date to November 7, 2013, for restrictions on refill reminders and other communications involving prescribed drugs or biologics.
Marketing activities under the Privacy Rule require patient authorization for the use of protected health information (PHI) . The definition of “marketing” expressly excludes refill reminders and communications to patients about drugs or biologics currently prescribed, provided that if the covered entity receives financial remuneration, the remuneration is reasonably related to the cost of providing that communication. Financial remuneration is defined as payment to the covered entity (or business associate) by a third party for the cost of the communication on behalf of a third party. Similarly, the sole purpose for the payment must be for the communication that encourages patients to buy the third party’s product or service.
Significantly, the guidance enables covered entities to make payments to a business associate assisting a covered entity in carrying out a refill reminder or medication adherence program, or to make other excepted communications, up to the fair market value of the business associate’s services. The payments may be made by a third party whose product is being described directly to the business associate or through the covered entity to the business associate. This clarification enables companies such as Adheris, Inc., which filed a complaint seeking injunctive and declaratory relief on September 5, 2013, to prohibit HHS from enforcing the new Omnibus Rule restrictions on what it calls its content and speaker-based protected First Amendment speech. Adheris’s business model consists of sending reminders to customers of participating pharmacies to refill their existing prescriptions before their refills are due, to encourage customers to adhere to their prescribed treatment regimens and to educate them about medication safety.
Following are key observations regarding the HHS guidance:
If you have any questions regarding the guidance, please do not hesitate to contact the authors.