The End of Copay Accumulator Programs – Not So Fast, My Friend!
Co-pay accumulators or accumulator adjustment programs are well-meaning initiatives enacted by some pharmacy benefit managers and insurers to create more patient engagement and “skin in the game” in terms of selecting the most cost-effective medications. These programs prohibit manufacturer copayment cards or other forms of manufacturer assistance from being used to pay down a patient’s deductible or out-of-pocket (OOP) maximum. The theory behind this is if you have multiple medication options, these programs incentivize patients to select the more cost-effective option and not just accept a more expensive medication that provides a copay card. Under the scenario where the copay card counted toward the OOP maximum, the more expensive medication would be equal to the less expensive options in terms of what the patient would pay, and there would be no incentive for the patient to use a less expensive alternative. Under the copay accumulator program, when a copayment card limit has been reached, the value on the card will not have counted toward the patient’s deductible or annual out-of-pocket maximum. Instead, patients must pay the full deductible before cost-sharing protections kick in.
While the copay accumulator approach makes sense when there are multiple therapeutic options available with equal efficacy, it does not work in situations where there are no generic alternatives and all medications are expensive. A prime example is hemophilia. The average hemophilia patient costs for blood factors may run $150K annually, and inhibitor patients can easily reach $750K – $1M. Virtually all of these products come with copay cards. For these patients, having to pay a deductible “out of pocket” that maybe 20% is a tremendous financial barrier and an impediment to the effective management of the condition.
Many patient advocate groups have lobbied against copay accumulator programs and CMS addressed the copay accumulator issue for 2020. In the 2020 Final Notice of Benefit and Payment Parameters (NBPP) Rule, CMS finalized a policy that allows plans to implement co-pay accumulator programs only in limited scenarios, i.e., for brand name drugs when there is a generic alternative, and only when an appeals or exceptions process has found that the brand name drug is not medically necessary.
Patient advocacy groups were pleased with this change, and everyone thought the change pretty much addressed the issue. Unfortunately, since the publication of that rule, there have been questions raised concerning the policy advanced by the 2020 NBPP and prior IRS guidance related to High Deductible Health Plans. It appears there may be a conflict, and therefore the interpretation of how drug manufacturers’ coupons apply with respect to the annual limitation on cost sharing is ambiguous. To address this conflict, HHS, in consultation with the Departments of Labor and the Treasury, intends to undertake rulemaking in the forthcoming HHS Notice of Benefit and Payment Parameters for 2021 to address this potential conflict and fully clarify the issue.
The bad news for patients as a result of this position is that until the 2021 NBPP is issued and effective, there will NOT be any initiation of enforcement action if an issuer of group or individual health insurance coverage or a group health plan excludes the value of drug manufacturers’ coupons from the annual limitation on cost sharing, including in circumstances in which there is no medically appropriate generic equivalent available. States may adopt a similar enforcement policy, and HHS will not consider a state to be failing to substantially enforce the annual limitation on cost sharing in cases where a state does so with respect to health insurance issuers.