Over the counter medications: what to use as 3rd-party substantiation?

[SLuskin]

What are you all going to use as the third party substantiation?

The only concern that we have had with regard to using the computerized cash register receipts is that no name appears anywhere. It would be so easy for someone in danger of losing money to get slips from an ineligible person and submit them.

Or are all of those claims just blanket-approved?

Thanks for your insights.

[Guest MSMA]

I see this as no different than saline solution etc....Our claim form requires them to sign a statement indicating that the expenses are only for eligible persons within their "family" (dependents etc)

MY question is this...WHERE DO WE DRAW THE LINE?

Bandaids, peroxide, athletes foot powder, wart remover....

This is going to be a real mess.

[Guest JerseyGirl]

I think that for users of paper claims, the participant's signature on the claim form will/should be a reminder to the participant that they are *testifying* to the validity of their claim. As a Claritin user, I think the new regs are great, but see we are in for an adjudication nightmare as to what exactly is an eligible expense. If products for PMS become eligible expenses, which I would assume would be permitted in the same spirit as tylenol and aspirin, what about tampons? Same *medical condition*!

I also am wondering how this fits into the use of debit cards within an FSA. Won't reimbursing for OTC muddy the waters? We've all been told that the coding of products prevents the use of the debit card for unauthorized products, but will there be so many codes required now that the safeguards that should be in place will be impossible to maintain?

[Guest Carolynn]

I'm not in agreement that the coding of products prevent the use of the Debit Card to purchase ineligible products. I've audited extensively and have actually seen lawn furniture purchased at a Wal Mart type of store.

Carolynn

[GBurns]

I have not seen or heard of any card that codes for products only for providers and even then not very well. Which cards claim to code for products and how UPC, SKU ??

[Sandra Pearce]

I see the issue of what is payable as a giant can of worms also. However, since you could be more restrictive in what your plan reimburses than what the regulations actually allow, couldn't you just not allow OTC?

[Guest Jeff V]

From Thompson Publishing:

"At a minimum, employees seeking reimbursement for their nonprescription drug purchases through a health flexible savings account (FSA) must present a receipt of purchase indicating the date of purchase, the amount and the name of the product, IRS official Harry Beker noted. Recently Beker discussed the impact of Revenue Ruling 2003-102 with Thompson Publishing Group. That ruling, issued Sept. 3, essentially reversed the agency's previous position on the tax treatment of nonprescription drugs.

A nonprescription drug receipt is not expected to include the employee's name, Beker noted."

Employee should affirm the drug was for his/her family's use in writing.

[Guest lschaab]

I agree with Sandra Pearce on the Plan exclusion of OTC's as a way to minimize the 'nightmare', however, I think it would be difficult to get the buy in of the plan sponsor. As a sponsor and a TPA, I have very mixed emotions. MSMA ditto on the mess!

[g8r]

I agree that you would need the same type of substantion you would obtain for any other medical expenses that aren't dr. visits, etc. For example, it would be handled the same as someone buying a battery for a hearing aid.

Which raises a question I have. If any of you use credit/debit cards, are they limited to just Dr. visits?

The reason I ask is because, as evidenced by my example above, OTC drugs aren't the sole problem. You have all sorts of medical expenses that can be purchased at the store (the battery above, bandaids - which are medical equipment not an OTC drug, crutches, etc.). There are no codes for those so I could easily see that debit/credit cards be limited to use in facilities that have codes. Hey... isn't EDI going to solve all the diagnostic coding problems? : ).

[Guest MSMA]

Any thoughts on this?

Would any of you consider putting a limit on the number of any one OTC item to be reimbursed in one claim?

Example: END of plan year claimant has money to spend...goes out and buys 10 boxes of Claritin. Gets reimbursed. Problem with this is that these items would conceivably be used for dates-of-service outside the Play Year.

Can also envision this scenario with an employee who anticipates termination with employer and wants to get as much as he can...THEN returns items to store/gets refunded.

We've already decided to alter our Plan Doc to include specific items as per the Private Letter Ruling...but wonder how to control the quantity.

[Guest lschaab]

I think setting a limit on the OTC's is a good idea, such as limiting the quantities that can be purchased on a particular date, or setting an annual cap, of say $300 - $500. By limiting quantities you ultimately reduce the abuse if someone is trying to overspend their account in anticipation of a termination, or spending down their account by purchasing mass quantities of OTC's (that may not be "necessary", or end up as stocking stuffers). Limiting quantities of setting annual limits would the claims processing slightly more sticky, but allows for a little more control over this can of worms. The claims processing is going to be pesky no matter what?

Also, if that attestation language on a claim form is modified to shift the burden of proof on a participant, what are the consequences, in light of the fact that the IRS has not issued the specifics we are all struggling with?

This board has been a great sounding board, the exchanges have been great as this issue (and others) evolves.