PSG Position: Copay Accumulators

Dave Borden
August 16, 2019

When it comes to copay accumulators,
patient impact – not final rule – should drive plan sponsor’s strategy


As additional guidance is provided, we’ll continue to keep you updated! You can read our latest update in this evolving situation


A lack of clarity in April Final Rule from the U.S. Department of Health and Human Services (HHS) leaves significant room for interpretation and did not provide the specific guidance the industry was hoping for. The nonbinding preamble language suggests that copay coupons should be excluded from counting toward annual deductibles and OOP maximums when an equivalent generic drug is available, but the rule itself does not make a specific recommendation and defers to the states – several of which have already passed or proposed legislation that further governs the use of copay accumulators.

A new subsection added to 45 C.F.R. § 156.130, which defines cost-sharing requirements, is effective for all individual market, small group and large group plans, including non-grandfathered group plans for plan years beginning on or after January 1, 2020:

(h) Use of drug manufacturer coupons. … (1) Notwithstanding any other provision of this section, and to the extent consistent with state law, amounts paid toward cost sharing using any form of direct support offered by drug manufacturers to enrollees to reduce or eliminate immediate out-of-pocket costs for specific prescription brand drugs that have an available and medically appropriate generic equivalent are not required to be counted toward the annual limitation on cost sharing (as defined in paragraph (a) of this section).

However, this language offers plenty of room for interpretation by not defining the term “drug manufacturer coupon” and using the purposely vague language “not required.” Additionally, there is some debate regarding whether the Final Rule applies to self-insured group plans, as the Department of Labor (DOL), not HHS has jurisdiction over this plan type.

Our survey of PBMs indicates their responses to the Final Rule have been mixed as a result. Although PBMs continue to offer copay accumulator programs to plans, they are suggesting that plan sponsors seek legal advice to determine how to proceed. Since plan sponsors assume the risk, consultation with legal counsel is recommended to determine whether or not to continue using a copay accumulator and when and how to apply third party copays paid on behalf of plan beneficiaries.

So, what should plan sponsors do?
With no clear direction from HHS and a PBM industry ready to operationalize a program according to your instructions, the choice is really up to you.

In collaboration with your legal counsel, consider the impact of copay accumulator programs on your plan members and ask these questions:

  • Should your copay accumulator program apply to all brand-name medications – or only those where a generic equivalent is available and medically advised?
  • Have you provided plan members with details of your copay accumulator program in advance and explained how it will affect their copays, deductibles and out-of-pocket costs?
  • Will plan savings generated through a copay accumulator program fully offset medical costs arising from a potential reduction in medication adherence? How does this vary by therapy class?
  • Which alternatives could you consider to help plan members access lower-cost, equally effective medications?

As you consider your options, your PSG consultant can help you evaluate formulary adjustments and other cost-saving strategies that may be less disruptive to members than copay accumulators. We will also continue to monitor developments regarding coupons, accumulators and patient access issues as a patchwork of legislation may continue to unfold in the coming months.

Please note: PSG is not providing legal advice. We recommend that plan sponsors confer with their legal departments or outside counsel to determine the extent to which this final rule impacts their copay accumulator strategy. In addition, health plans, PBMs and plan sponsors should continue to monitor developments regarding coupons, accumulators and patient access issues – especially as proposed state legislation is being considered or in some cases already enacted. As always, your PSG account team is prepared to help you this process and anxious to serve in any way possible.



Copay Accumulators Explained


The intent
When copay accumulators are in effect, the payer effectively stretches the limits of the patient’s deductible and out-of-pocket limits to ensure that a portion of drug costs are paid by manufacturers via a copay coupon, rather than the health plan, while the member retains responsibility for satisfying some or all of their deductible and out-of-pocket maximums.

The good
Copay accumulators force patients to understand the real cost of their medication, evaluate their options and make smart, value-based decisions regarding their health. When brand-name drugs are made free via manufacturer’s copay coupons, patients and providers lose sight of the true cost and have no reason to consider lower-cost alternatives that are equally effective.

Payers and patients save when patients move from high-priced brand-name drugs to equally effective, lower-cost alternatives. By better managing overall plan costs, payers can help keep member rates under control.

The not-so-good
When a payer implements a copay accumulator with little warning or patient education, patients may face substantial price increases for their critical medications. As a result, some patients may have to ration meds or other medical treatments, creating additional health effects that can ultimately result in higher medical costs for the plan. A thoughtful analysis would be recommended to identify the benefits of these programs as well as how to help patients access their medications.