On September 5, 2013, Adheris, Inc. ("Adheris"), a
Massachusetts company that provides, among other services,
prescription refill reminders, filed a lawsuit in the U.S. District
Court for the District of Columbia against Kathleen Sebelius,
Secretary of Health & Human Services ("Secretary"),
and the Department of Health & Human Services
("HHS"), challenging the constitutionality of the HITECH
Final Rule's restrictions on remunerated prescription refill
reminders. Contemporaneous with its lawsuit, Adheris filed a Motion
for Preliminary Injunction seeking to enjoin the Secretary's
enforcement of these restrictions, which was set to begin on
September 23, 2013.
In a joint motion filed by the parties today
seeking to suspend the court's schedule on the Motion for
Preliminary Injunction, the Secretary and HHS have informed the
court that HHS expects to release guidance by September 23, 2013,
on the HITECH Final Rule's "reasonable in amount"
restriction applicable to financially remunerated prescription
refill reminders. The Secretary has also decided not to enforce the
restrictions on financially remunerated prescription refill
reminders until November 7, 2013, 45 days after the general HITECH
compliance date of September 23, 2013.
Under the currently enforced Privacy Rule, covered entities must
obtain an individual's valid authorization prior to using and
disclosing the individual's protected health information for
"marketing" purposes – which includes
communications about a product or service that encourages the
recipients of the communication to purchase or use the product or
service. This requirement, however, included a significant
exception for communications that also met the definition of
"treatment" or "health care operations"
communications, including prescription refill reminders, even where
a third party subsidized the covered entity's
communication.
In a marked departure from the currently enforced Privacy Rule (and
the July 2010 HITECH Proposed Rule), the Final
Rule generally requires authorizations for all third-party
subsidized health care operations and treatment
communications, with a limited exception applicable to prescription
refill reminders. With respect to prescription refill reminders, a
covered entity may still receive some financial remuneration from
third parties for making these communications, but this
remuneration must be "reasonably related to the covered
entity's cost of making the communication." In preamble
language to the Final Rule, HHS made clear that permissible costs
include only the costs of labor, supplies, and postage –
where a covered entity generates a profit or receives payment for
other costs in exchange for making a prescription refill reminder,
the exception would not apply and the covered entity would need to
obtain individual authorization.
Ultimately, what remains unknown is whether HHS will explicitly
permit covered entities, and their business associates, to make a
profit in connection with communicating prescription refill
reminders, or if HHS will merely reaffirm its previously stated
position in the preamble to the HITECH Final Rule.
For more information about the HITECH Final Rule and its
implementation, please see our previous discussion of this topic.
This article is presented for informational purposes only and is not intended to constitute legal advice.