The National Association of Chain Drug Stores has sent a letter to the Internal Revenue Service that calls for clarification of Patient Protection and Affordable Care Act provisions on the use of health debit cards in the purchase of over-the-counter and prescription medicines.


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Retail News Breaks

IRS urged by NACDS to wait longer on debit card changes

October 20th, 2010

ALEXANDRIA, Va. – The National Association of Chain Drug Stores has sent a letter to the Internal Revenue Service that calls for clarification of Patient Protection and Affordable Care Act provisions on the use of health debit cards in the purchase of over-the-counter and prescription medicines.

NACDS said Tuesday that the letter stated its support for a delay longer than the IRS-proposed two-week delay if the agency wouldn't accept the association's proposal to amend its guidance to clarify that debit cards may be used to buy prescribed OTC medications from pharmacies.

A longer delay would help enhance interoperability of the systems needed to distinguish between the types of prescriptions allowed under the Inventory Information Approval System (IIAS), NACDS explained.

"Currently, there is no robust interaction between pharmacy dispensing systems and IIAS systems. IIAS systems cannot distinguish between a medication for which a prescription is required and an OTC that has been prescribed," the letter stated. "To comply with the IRS guidance, pharmacy IIAS systems must be modified to distinguish between the two categories of medications: prescription-only and OTC."

NACDS added that it also requested clarification on the types of prescriptions allowed under the Patient Protection and Affordable Care Act provisions. The letter urged the continued use of flexible spending account (FSA) and health reimbursement account (HRA) debit cards for OTC medication purchases where a pharmacist or other pharmacy professional validates the existence of a prescription at the point of sale.

In other news, NACDS on Monday praised a final rule issued by the Department of Defense that validates the association's position that beneficiaires of TRICARE, the health coverage program for military families and veterans, should be able to choose where they access their prescription medications and other pharmacy services.

The final rule, issued this past Friday, clarifies that manufacturers should discount prices for TRICARE retail prescriptions, according to NACDS. The rule, effective Dec. 27, maintains that the discounts apply to all drugs dispensed after Jan. 28, 2008. The timing of the discounts had been a subject of consideration during an official comment period that preceded the issuance of Friday's final rule.

For fiscal years 2010 through 2015, savings to the Department of Defense as a result of the pricing discounts are estimated at $6.43 billion, NACDS said.

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