The Employer's Guide Blog for Overseeing PBMs

The Definition of Oversee: to watch over and direct (an undertaking, a group of workers, etc.) in order to ensure a satisfactory outcome or performance.

Physicians Evaluate PPACA

Physicians’ political views on healthcare reform vary widely, but the findings of a recent survey by Jackson Healthcare show that many agree on at least one thing:  PPACA does not sufficiently reform the U.S. healthcare system. Jackson Healthcare conducted an online national survey of physicians to ascertain whether respondents believe PPACA effectively addressed previously stated physician concerns about healthcare reform. Those concerns, identified in earlier physician surveys by Jackson Healthcare, were stated as such:

  • Defensive medicine is a key driver of the ever-expanding cost of U.S. healthcare
  • Defensive medicine has important effects beyond cost
  • Tort reform fails to reduce the practice of defensive medicine

1,440 physicians completed the latest survey. Analysis of the responses indicates physicians do not believe PPACA provides the necessary reforms to alleviate their concerns and they gave PPACA an average grade of D.

Key Findings:

  • Nine out of ten physicians do not believe PPACA provides effective reform
  • 38 percent believe PPACA did nothing to reform the healthcare system
  • 31 percent believe PPACA did not go far enough
  • 22 percent believe PPACA went too far and will impede physicians’ ability to practice medicine
  • 52 percent of physician respondents believe PPACA will negatively affect their practice through    decreased reimbursements, revenues and longer work days
  • 20 percent of physician respondents believe PPACA will positively affect their practice as more patients access care and the number of no-pay cases decreases
  • 11 percent of physicians are making changes to their practices in response to PPACA, including EMR / HER implementation, changing careers / retiring, opting out of Medicare / Medicaid

Physicians are equally divided on whether PPACA should be repealed (52 percent in favor of repeal
vs. 48 percent).

HSA Qualified Medical Expenses: Confusion between 502 and 213

Confusion exists about what is a qualified medical expense for Health Savings Account (HSA) withdrawals.  Different government sources refer to IRS codes sections 502 and 213, as do industry sources.  Consumers want a list of qualified medical expenses yet no one, not even the government, is willing to commit in writing.

I will attempt to clarify this confusing HSA issue. The Treasury Department has released guidance for HSA implementation and use.  Treasury Notice 2004-2 was issued to clarify HSA rules and issues. Answer 26 of the guidance states “qualified medical expenses are expenses paid by the account beneficiary, his or her spouse or dependents for medical care as defined in Section 213d but only to the extent the expenses are not covered by insurance otherwise.”

This seems clear enough.  So where does the 502 language come into play? IRS Publication 969 (instructions for HSAs) says that qualified medical expenses are explained in Publication 502. I believe 213 and 502 provide essentially the same guidance to HSA beneficiaries. Internal Revenue Code 213d is the actual code section dealing with the definition of medical expenses. IRS Publication 502 is the tax filing instructions when claiming medical and dental expenses on your tax return. Publication 502 is a summary of IRC 213 and is more simply written.

Hopefully, this provides some clarification on this matter.  The aforementioned is my opinion; I cannot render tax or legal advise.  Please consult your attorney or tax advisor to review the facts and circumstances of your particular case.

Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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