In September, a federal judge struck down a 2021 Trump administration rule that gave health plans and pharmacy benefit managers (PBMs) the latitude to exclude the value of drug manufacturer coupons toward a member’s out-of-pocket cost. Plaintiffs in the case argued the practice conflicts with the Affordable Care Act’s (ACAs) definition of cost sharing, which includes deductibles, coinsurance, copayments, and similar charges.
Understanding copay accumulators
Health plans and PBMs have long viewed copay assistance programs as interfering with strategies to steer members toward lower-cost drug alternatives. For example, if a manufacturer’s coupon could lower a $4,000 monthly drug cost to $30, there was less incentive for a member to consider lower-cost options. As a counter measure, many health plans implemented copay accumulators to prevent the value of the coupon from being applied toward deductible and other cost-sharing obligations. The practice effectively slows the pace at which members hit annual health plan deductibles and out-of-pocket maximums, which when reached, shift more expense to the health plan.
Now what?
The court ruling effectively requires health plans to abide by a 2020 federal rule that permits copay accumulators, where allowed by state law, “for specific prescription brand drugs that have an available and medically appropriate generic equivalent.” CMS also noted that if there was not a medically appropriate generic equivalent available, then the plan was required to apply the manufacturer assistance toward the member’s out-of-pocket limit. As of January 2023, Puerto Rico, Washington, D.C. and 19 states have passed legislation limiting or banning state-regulated insurers and PBMs from implementing copay accumulator adjustment programs, including Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Illinois, Kentucky, Louisiana, Maine, New Mexico, New York, North Carolina, Oklahoma, Texas, Tennessee, Virginia, Washington, and West Virginia. Similar bills have been introduced in 18 states, but not yet enacted.
Bukaty benefits consultants will work with plan sponsors to confirm if a copay accumulator program is in effect and discuss strategies moving forward. Pharmacy spending, fueled by the growth of expensive specialty drugs, can consume a sizeable chunk of health plans dollars. It is more important than ever for health plans to ensure they have a handle on pharmacy cost control. Our expert consultants can conduct pharmacy benefit manager (PMB) reviews, identify member utilization patterns, and mitigate cost-prohibitive barriers for members.
