Medicare discount card program and HIPAA

Although the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 was enacted just a few weeks ago, pharmacists have already realized its complexity. Such is true also for the Medicare Rx drug discount card program created by the act. A person seeking to offer a program must obtain an endorsement from HHS. One of the requirements to receive endorsement is that the person must comply with HIPAA, as applicable. The functions of an endorsed sponsor and its program are covered functions under HIPAA, and the endorsed sponsor is a covered entity. The interim final rule provides that prior to or at the time of enrollment of a beneficiary, an endorsed sponsor must provide a HIPAA-compliant Notice of Privacy Practices. Under the act, an endorsed sponsor may not market a product or service outside its program.