Feds bless quiet Medicare drug co-pay waiver programs

A federal watchdog agency has created a new “safe harbor” rule that describes when pharmacies can, and cannot, skip collecting Medicare and Medicaid drug plan cost-sharing payments from low-income customers.

The pharmacy benefits safe harbor is part of a collection of new safe harbors from the U.S. Department of Health and Human Services’s Office of Inspector General. The HHS office developed the collection to show how pharmacies, hospitals and other health care providers help low-income patients with federal health plan deductible, co-payment and coinsurance requirements without violating federal anti-kickback rules.

The HHS Office of Inspector General also updated its civil monetary rules. Those are the rules the office uses to impose fines on people and organizations that violate federal health program requirements. One update establishes a $5,000 fine for insurance agents, insurers and other parties that misuse federal health program names and logos in electronic marketing communications, including telemarketing, email and website communications.

The office is preparing to publish the penalty update final rule and the anti-kickback final rule in the Federal Register Wednesday. The Federal Register is an official publication that the federal government uses to put regulations into action.

Congress and federal health program managers have created the anti-kickback rules over the years in an effort to keep payments to patients, health care providers or others from leading to fraud and abuse. Congress and program managers also developed cost-sharing requirements for patients to give what some health policy specialists call “skin in the game.” Supporters of giving patients more skin in the game say that will encourage patients to do all that they can to minimize use of health care products and services.

HHS inspector general’s office officials say in the introduction to the new anti-kickback regulations that they wanted to balance the need to provide efficient, patient-centered care for patients against the goal of preventing fraud and abuse.

In the new pharmacy benefits safe harbor rule, for example, they say that pharmacies can reduce the effects of federal health program cost-sharing requirements only for customers who are poor enough to qualify for the Medicare Part D prescription drug program premium subsidy program.

Pharmacists and others can tell low-income customers about cost-sharing cost waivers in person, and, in some cases, by other means, such as in including information in patients’ right sections on their websites, officials say.

But a pharmacy can waive cost-sharing requirements only if “the waiver or reduction is not advertised or part of a solicitation,” and if “before waiving or reducing the cost-sharing, the pharmacy either determines in good faith that the beneficiary is in financial need or the pharmacy fails to collect the cost-sharing amount after making a reasonable effort to do so,” officials say in the introduction to the regulations.

Health program name and logo abuse

In the introduction to the fine update final rule, inspector general’s office officials say they already have been imposing a $5,000-per-reader fine to people and entities that abuse the names and logos of HHS, the Centers for Medicare & Medicaid Services, Medicaid and Medicare in print ads and direct mail communications.

Officials have been using a different system for calculating fines for violators who misuse federal health program names and logos through television and radio transmissions, because the number of people who affected by those transmissions is harder to quantify, officials say.

Counting the number of telephone calls, electronic messages or website page views is more like counting the number of readers of a print ad than like estimating how many people have seen a television ad, officials say.

To calculate total fines, officials will multiply $5,000 by the total number of telemarketing calls involved, the total number of people who have received an illegal email, or the total number of people who have accessed an illegal message through some other kind of electronic communications system, such as the Internet.