At odds over pri­vacy

Rx in­dus­try pushes back against re­fill re­minder rule

Modern Healthcare - - THE WEEK IN HEALTHCARE -

Ashow­down is shap­ing up be­tween fed­eral health­care pri­vacy reg­u­la­tors and the na­tion’s largest pharmacies and phar­ma­ceu­ti­cal man­u­fac­tur­ers over a health­care pri­vacy rule af­fect­ing up­wards of 100 mil­lion pre­scrip­tion-re­fill re­minders sent to pa­tients each year.

In July, CVS Care­mark Corp. plans to halt its pharma-funded mar­ket­ing pro­gram that mails pre­scrip­tion-re­fill re­minders to cus­tomers. The com­pany cited new lim­its on the use of pa­tient-iden­ti­fi­able “pro­tected health in­for­ma­tion” for mar­ket­ing.

Mean­while, two phar­macy trade groups— the National As­so­ci­a­tion of Chain Drug Stores, or NACDS, and the Food Mar­ket­ing In­sti­tute—have weighed in, too, but more mod­er­ately. They have called on HHS’ Of­fice for Civil Rights to loosen up a por­tion of the om­nibus pri­vacy rule it re­leased in Jan­uary. The rule per­mits pharmacies to re­ceive pay- ments from phar­ma­ceu­ti­cal man­u­fac­tur­ers so pharmacies can send their cus­tomers the re­fill re­minders in the mail.

One in­dus­try source said that be­tween 75 mil­lion to 100 mil­lion of the mail­ings are sent a year, with pharmacies re­ceiv­ing pay­ments of about $1.50 apiece to send them. They pre­dom­i­nantly go to chron­i­cally ill pa­tients on long-term med­i­ca­tions, such as peo­ple with di­a­betes and high blood pres­sure.

The chronic ill­nesses tar­geted by drug com­pli­ance pro­grams in gen­eral are among the most costly dis­eases in health­care. “You’re talk­ing 50 (mil­lion) to 75 mil­lion (peo­ple) in the U.S. with hy­per­ten­sion,” and many take pre­scrip­tion med­i­ca­tions at one time or other, said Dr. David May, chair­man of the Amer­i­can Col­lege of Car­di­ol­ogy Board of Gov­er­nors.

Un­con­trolled high blood pres­sure can lead to car­dio­vas­cu­lar dis­ease, the No. 1 cause of death in the U.S. Com­pli­ance with long-term med­i­ca­tions, mean­while, May said, “is not very good—it’s 50% to 60%.”

And while the value of some com­pli­ance pro­grams is well-doc­u­mented, the ef­fi­cacy of pharma-funded mail­ings through pharmacies is un­clear.

May said “a very ro­bust body of lit­er­a­ture” in­di­cates that re­minders in gen­eral help pa­tients with com­pli­ance, but the re­search fo­cuses on phone and other pro­grams, not mail­ers.

“Whether a snail-mail piece has bet­ter re­sponse is not known,” May said. The drug­mak­ers and pharmacies are prob­a­bly “track­ing that in­ter­nally, (but) there are no pub­lished data that I am aware of which in­di­cate bet­ter ac­cep­tance one way or an­other.”

The new fed­eral rule fleshes out the more strin­gent pri­vacy pro­vi­sions in the Amer­i­can Re­cov­ery and Rein­vest­ment Act of 2009 and up­dates the ini­tial pri­vacy rule cre­ated un­der the Health In­sur­ance Porta­bil­ity and Ac­count­abil­ity Act of 1996. The ef­fec­tive date of the rule is Sept. 23.

The ARRA, how­ever, carved out a spe­cific ex­emp­tion for the use of pa­tient data with­out pa­tient au­tho­riza­tion for third­party-funded mar­ket­ing for pre­scrip­tion re­fills. It per­mits pay­ments from pharma com­pa­nies to the pharmacies for the re­fill mail­ings, so long as the pay­ments are “rea­son­able in amount.”

Congress in­structed HHS to define what was rea­son­able in this con­text, and the agency con­cluded that the no­tices should not be a prof­itable en­ter­prise for pharmacies.

The pri­vacy rule it­self says pay­ments must be “rea­son­ably re­lated to the cov­ered en­tity’s cost of mak­ing the com­mu­ni­ca­tion.” The lengthy pre­am­ble to the rule adds that “only the costs of la­bor, sup­plies and postage to make the com­mu­ni­ca­tion” are al­low­able. It says if a pay­ment “gen­er­ates a profit or in­cludes pay­ment for other costs, such fi­nan­cial re­mu­ner­a­tion would run afoul of the act’s ‘rea­son­able in amount’ lan­guage.” CVS finds that in­ter­pre­ta­tion in­tol­er­a­ble.

“Over the years, we have col­lab­o­rated with phar­ma­ceu­ti­cal com­pa­nies to im­prove pa­tient com­pli­ance to med­i­ca­tion dis­pensed in our re­tail pharmacies by mail­ing se­lect re­fill re­minders to en­cour­age and im­prove their med­i­ca­tion ad­her­ence,” Mike DeAn­ge­lis, di­rec­tor of pub­lic re­la­tions at CVS/phar­macy, said in an e-mail. “How­ever, in light of the re­cent HIPAA om­nibus rule ef­fec­tive this Septem­ber that places new re­stric­tions on the us­age of PHI, we have de­cided to end

sup­plier-funded re­fill re­minders through our re­tail busi­ness.”

DeAn­ge­lis said the phar­macy chain will con­tinue its own pro­grams that pro­mote med­i­ca­tion ad­her­ence, such as phone calls to pa­tients. No other phar­macy chain, so far, has an­nounced plans to fol­low CVS’ lead, ac­cord­ing to the as­so­ci­a­tions.

In their May 3 let­ter to Su­san McAn­drew, deputy di­rec­tor for health in­for­ma­tion pri­vacy at the Of­fice for Civil Rights, the two phar­macy as­so­ci­a­tions asked the agency to is­sue “guid­ance” on the scope of the re­fill re­minder rule.

They want “rea­son­able” com­pen­sa­tion much more broadly de­fined to in­clude many spe­cific costs such as le­gal ad­vice and de­pre­ci­a­tion of equip­ment used for the mail­ing.

With­out such guid­ance, pharmacies may con­clude the pro­grams are too much trou­ble.

“The mar­ket­ing def­i­ni­tion changed, and we also have that pro­hi­bi­tion on the sale of” per­sonal health in­for­ma­tion in the om­nibus rule, said Rebecca Wil­liams, a part­ner with the law firm Davis Wright Tre­maine. There may be “some un­cer­tainty as to what may be deemed to be a rea­son­able amount,” she said, adding that this may be “a gray area they don’t want to be in.”

That’s par­tic­u­larly so since the Of­fice for Civil Rights al­ready has hit the in­dus­try hard. In 2009, CVS Care­mark paid $2.25 mil­lion in a joint HIPAA set­tle­ment with the OCR and the Fed­eral Trade Com­mis­sion. At the time, it was the largest HIPAA set­tle­ment in his­tory. In 2010, OCR and the FTC fol­lowed up by ob­tain­ing a $1 mil­lion HIPAA set­tle­ment with No. 3 chain Rite Aid Corp.

“We’re try­ing to do the best we can to fol­low the in­tent of Congress and HHS and OCR,” said the NACDS’ Kevin Ni­chol­son, a phar­ma­cist and vice pres­i­dent of govern­ment af­fairs and pol­icy for the group. “The rule and the pre­am­ble are un­clear what ex­actly is al­lowed. Con­sid­er­ing the sub­stan­tial penal­ties pharmacies might be sub­jected to, they’re very con­cerned about do­ing some­thing that OCR might con­sider a vi­o­la­tion.”

One pos­si­ble workaround for all con­cerned is if the pharmacies sim­ply ask their pa­tients’ per­mis­sion for the mail­ings.

“If some­one signs an au­tho­riza­tion say­ing ‘mar­ket away,’ you can mar­ket away un­til they re­scind that au­tho­riza­tion,” Wil­liams said.

Asked whether CVS had con­sid­ered seek­ing cus­tomer con­sent for its pharma-funded mail­ers, DeAn­ge­lis said: “We eval­u­ate our var­i­ous pro­grams on a case-by-case ba­sis and stand be­hind our de­ci­sion re­gard­ing sup­plier-funded com­mu­ni­ca­tions.”

Cather­ine Polley, a phar­ma­cist and vice pres­i­dent of health and well­ness at the Food Mar­ket­ing In­sti­tute, said its mem­bers “like the opt-out for­mat” in which cus­tomers’ records are used in the pro­gram by de­fault, but cus­tomers can be re­moved if they ask.

With opt-in, pa­tients must give per­mis­sion be­fore they can be mar­keted to, so “you’re not go­ing to reach the most vul­ner­a­ble folks,” Polley said. “I think the value of th­ese pro­grams far out­weighs the value of do­ing it in opt-in.”

GETTY IM­AGES

The health­care pri­vacy rule af­fects up­wards of 100 mil­lion pre­scrip­tion­re­fill re­minders sent to

pa­tients each year.

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