Flexible spending accounts become a minor nightmare

As of January 1, over-the-counter medications other than insulin need a prescription to qualify for reimbursement from an employer-sponsored flexible spending account or health reimbursement arrangement.

Janet Adamy noted in the Wall Street Journal, March 9, 2011, that limiting tax deductions for OTC drugs was meant as a "minor tweak" to increase tax revenue and decrease consumer health expenses. Some legislators think FSAs are wasteful and encourage overspending; others disagree. Either way, FSA benefits will drop in 2013 to a yearly maximum of $2,500.

The current "minor tweak" is a minor nightmare for doctors, although they sympathize with their patients. Easton Jackson, MD, of Salt Lake City, Utah, notes that economics are all about incentives.

Moreover, the IRS's position seems like bait and switch. "We are being encouraged to save for health expenditures in these accounts, and now we are being told we can't use them to buy some of our most common medications with it," says Bradley Banko, MD, of the Louis Stokes Cleveland Veterans Affairs Medical Center, in Ohio.

People with HSAs don't lose money at year-end, but 33 million Americans with FSA accounts must "use or lose" their funds.


While defusing patients' ire, doctors must follow sound medicolegal guidelines. Helen Darling of the National Business Group on Health, quoted in October 2010 in the Los Angeles Times, suggested that patients ask for OTC prescriptions during or soon after a visit. (Francesca Lunzer Kritz, "Flexible spending account rules changing in 2011," Los Angeles Times, October 25, 2010.) However, some malpractice carriers recommend physicians only give prescriptions to patients face-to-face.

A prescription certifies treatment as necessary, beneficial, and appropriate, after careful record review and documentation. Clearly, contact by telephone or by virtual or visual visit is indicated-preferably, with payment. Expertise and accountability is what doctors sell with their signature. The implication that doctors should give this away "smells like an unfunded mandate" to Lowell Kleinman, MD, of San Clemente, California-and to me.

For now, the best prescription for doctors might be to educate our patients about the FSA changes to avoid a flurry of irate, December telephone calls.

The author is a solo physician in Naperville, Illinois. Send your feedback to medec@advanstar.com

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