Jul 12, 2024
Compliance News Week Ending July 12, 2024
In this Article:
- Change Healthcare - HIPAA Breach Notifications
- Supreme Court Decision - Change in Administrative Power
- Federal Trade Commission Report on Pharmacy Benefit Managers
Change Healthcare – HIPAA Breach Notifications
After a large-scale cybersecurity incident in February 2024, Change Healthcare has decided to go forward in contacting affected parties regarding the incident and offer to have those parties’ notification duties delegated to Change Healthcare, according to communications received by clients on June 20, 2024.
Ideally, employers as plan sponsors will have their own HIPAA policies and procedures to guide them in their process of how to handle a breach of their participants’ protected health information. A source of confusion in this case is that the incident has not yet been declared a breach by Change Healthcare (nor has Change Healthcare reported the incident as a breach to HHS), but this latest move seems to indicate that it is being treated like a breach, and has employers questioning what their own notification obligations are.
Clearly, a vast amount of information was compromised in this incident, and affected individuals should be notified to mitigate any potential harm. However, the lack of available information in this case has made it difficult for employers to know who to notify, and what to tell them – and a blanket notification of a potential threat to personal information would likely cause more confusion than clarity. For now, it is recommended that employers take up Change Healthcare on their offer to take over notification duties to ensure that their participants get the latest information.
For more information, HHS has a FAQ page regarding this specific incident.
In addition, if employers need help with their HIPAA policies and procedures for their group health plans, Benefit Comply can assist.
Supreme Court Decision – Change in Administrative Power
A Supreme Court decision released last week overturned a 40-year precedent known as the Chevron Doctrine. Under the doctrine, when a federal statute was silent or ambiguous, courts were expected to defer to federal agency interpretations (e.g., for health and welfare benefits, regulations and guidance interpreting federal statutes are generally issued by the DOL, IRS and HHS). Going forward, courts have the power to interpret federal statutes that are silent and ambiguous and are not required to defer to federal agency interpretations. The court case was not benefits-related and does not have any immediate impact on any benefit-related regulations or guidance issued by federal agencies. Employers should continue to follow the current interpretations of agencies such as the DOL, IRS and HHS. However, such interpretations are perhaps more likely to be successfully challenged in the courts over upcoming months and years, potentially creating some confusion and instability for employers who currently rely heavily on federal agency interpretations of various requirements under ERISA, COBRA, HIPAA, ACA, tax law and more. For now, employers should stay the course. We’ll see how this plays out over time as agency interpretations specific to health and welfare benefit compliance are challenged in the courts.
The Supreme Court’s opinion in Lopez Bright Enterprises v. Raimondo.
Federal Trade Commission Report on Pharmacy Benefit Managers
As many employers are struggling to manage rising costs related to prescription drug coverage, the Federal Trade Commission (FTC) released a report highlighting the role that pharmacy benefit managers (PBMs) play in the accessibility and affordability of prescription drugs. The report is intended to make the FTC’s findings available to the public, not requiring any particular action by any parties.
More detail on the FTC's Report.
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