States Begin to Take Action Against Copay Accumulator Programs

The CMS recently finalized a rule that would allow health insurers to implement copay accumulator programs to prevent drug manufacturer coupons from applying to a patient’s annual limit on out-of-pocket costs in situations where a generic drug is available.

The copay “accumulator” program tracks employee use of a copay coupon and ensures the money does not apply toward the patient’s annual out-of-pocket spending requirement. When the copay card runs out, the patient must either cover the full copay cost, obtain a new discount card or stop filling the prescription.

Accumulator programs track utilization of manufacturer-sponsored copay assistance to ensure that manufacturer contribution no longer counts toward a patient’s deductible. This ensures that qualified high-deductible health plans (HDHPs) with health savings accounts (HSAs) governed by federal law maintain their legality as the patient cannot receive financial assistance for the deductible with these plans.

Accumulator programs also shift costs toward patients and manufacturers, and ultimately reduce the payer or plan sponsors’ overall contribution to the total spend on high-cost branded prescription medications.

State governments are beginning to take action against copay accumulator programs as Virginia and West Virginia became the first states to ban the programs on the individual market. Another eight states are considering passing their own laws to ban copay accumulators, which patient advocates say limits access to medication.

The state laws only apply to insurance plans sold on the state-regulated individual market and not commercial plans, which would require an act of Congress.

A bill enacted in Arizona takes a more measured approach, by mandating that drug coupon payments be applied if no generic exists or where a generic exists but the beneficiary obtained access to the prescribed drug after undergoing prior authorization, step therapy, or the insurer’s exceptions and appeals process.