Responding to HSA/FSA Claim Denials Based on "Prescription Required"

The HSA/FSA administrator denies a claim and states that a prescription is required for reimbursement.

First, identify whether the product in question is:

1. A pharmaceutical drug or durable medical equipment – in which case, a prescription may be required under IRS rules

2. An over-the-counter (OTC) product or general health product being used to treat or prevent a specific medical condition – in which case, a Letter of Medical Necessity (LMN) is sufficient under IRS guidance (per the CARES Act of 2020 and IRS Publication 502)

✅ Most products customers purchase through TrueMed fall under category (2), and therefore do not require a prescription but do require a valid LMN.

When the claim is denied for “missing prescription,” respond with:

• A factual clarification that a prescription is not required for medically necessary OTC products

• An explanation of what is required instead (a valid LMN)

• Reassurance that the LMN provided meets all IRS criteria

• A recommendation to resubmit the claim and request a reassessment

• Under the CARES Act of 2020, over-the-counter items no longer require a prescription to qualify for HSA/FSA reimbursement.

• If the product is being used as part of a medically necessary intervention, an LMN is sufficient under IRS guidelines.

• The LMN must show:

  • A specific medical condition diagnosed by a qualified provider

  • A rationale connecting the product to treatment or prevention

  • That the provider is licensed in the patient’s state and operating within their scope of practice

• The LMN provided through TrueMed meets all these requirements.

Thanks for alerting us to this!
Based on IRS guidance and the CARES Act of 2020, a prescription is not required for over-the-counter health products that are being used to treat or prevent a specific medical condition. In such cases, a Letter of Medical Necessity (LMN) from a licensed healthcare provider is sufficient.

Your LMN includes a diagnosis, treatment rationale, and documentation that aligns with IRS Publication 502 and telemedicine requirements. We recommend resubmitting your claim with this clarification and asking your administrator to reassess it accordingly.

If they continue to deny the claim, let us know and we can help escalate.

If the administrator still denies the claim after this clarification, escalate internally to assess if additional documentation or provider follow-up is required.

• IRS Publication 502 – Defines eligible medical expenses and documentation requirements

• CARES Act (2020) – Eliminated the requirement for prescriptions for most OTC items