NCPA seeks to correct flex spending requirements

August 5, 2009

The National Community Pharmacists Association (NCPA) recently wrote to a key standards-setting body requesting action on a number of regarding a new Internal Revenue Service requirement meant to ensure flexible spending account debit cards are used properly that is seen by the association as problematic.

The National Community Pharmacists Association (NCPA) recently wrote to a key standards-setting body requesting action on a number of regarding a new Internal Revenue Service requirement meant to ensure flexible spending account debit cards are used properly that is seen by the association as problematic.

Effective July 1, IRS rules mandate that, in order to continue processing FSA debit card transactions, pharmacies operate an inventory information approval system (IIAS) that meets certification requirements of the Special Interest Group for IIAS Standards (SIGIS). The new standards are intended to enable a broad range of participants in health care benefit payment card transactions, including community pharmacies, to implement consistent systems and processes for transaction processing and data retention.

However, since the IRS mandate took effect, community pharmacists who played by the rules and installed an appropriate “point-of-sale” system and/or qualified for the “90 percent” exemption from the requirement have had transactions involving FSA debit cards consistently rejected, according to a statement from the association.

“Independent community pharmacies have been consistently and comprehensively disadvantaged in transactions of the type SIGIS was established to equitably facilitate,” NCPA Executive Vice President and CEO Bruce Roberts, RPh wrote in the letter. “We are receiving consistent complaints from our membership that SIGIS and its processes are opaque, unresponsive, and lack transparency. Worse, our members consistently find that SIGIS is unresponsive and unhelpful. NCPA officials raised these concerns in a July 23 conversation with SIGIS officials and are hopeful the group will take prompt measures to alleviate some of the problems community pharmacies are experiencing.

Specifically, the NCPA letter outlines the following actions:

1. Establish a dedicated independent pharmacy help-desk that is answered by a live individual during regular business hours. All inquiries received via email or on after-hours voice mail should be responded to within 24 hours.

2. SIGIS should facilitate and expedite the acquisition of MVV and MCID merchant codes by community pharmacies within 24 hours.

In addition, community pharmacies should not be classified as e-merchants or placed in a non-medical category. 3.

SIGIS should notify pertinent parties when an error occurs in the application process within 24 hours for all applicant types i.e., POS vs. 90 percent.

4. SIGIS needs to notify pertinent parties when amendments of applications occur so that an independent pharmacy, the acquirer or other relevant party is made aware of any new information within 24 hours.

5. SIGIS should notify and make available to plan administrators and card processors the list of newly certified merchants on a daily basis.

6. SIGIS should recommend that all plan administrators participate in the 90% Rule Merchant Program by sending them a letter requesting their participation.

7. SIGIS should send correspondence to all plan administrators advising them to stop directing employees/patients to particular pharmacies or pharmacy chains.

Click here to view the full letter