Patient groups challenge policy prohibiting copays from counting toward out-of-pocket spending
Insurers and pharmacy benefit managers have instituted policies that do not apply copay assistance toward beneficiaries' out-of-pocket costs and deductibles, according to the plaintiffs.
Several patient groups are challenging a federal rule that allows health insurers to avoid counting the value of drug manufacturer copay assistance toward patients’ out-of-pocket cost obligations. The HIV+Hepatitis Policy Institute, the Diabetes Leadership Council and the Diabetes Patient Advocacy Coalition filed suit in the U.S. District Court for the District of Columbia in late August.
Insurers and pharmacy benefit managers have instituted policies that do not apply copay assistance toward beneficiaries’ out-of-pocket costs and deductibles, according to the plaintiffs. These policies, often are referred to as “copay accumulator adjustment programs,” allow the insurer to divert the benefit of the assistance away from the patient to the plan. They then require the patient to pay that amount again before meeting their deductible and other out-of-pocket cost obligations.
The U.S. Department of Health and Human Services’ 2021 Notice of Benefit and Payment Parameters rule allows insurers to implement these programs. The complaint challenges the legality of the rule under the Administrative Procedures Act and contends it is arbitrary and capricious.
“This practice is not only illegal but increases the cost of prescription drugs for millions of patients nationwide,” says Carl Schmid, executive director of the HIV+Hepatitis Policy Institute. “Nearly 1 in 4 Americans taking prescription drugs struggle to afford them. The growing practice of insurers and PBMs not counting copay assistance is one reason why. We trust the court will side with us and invalidate the ability to implement these punitive practices that impact people with HIV, hepatitis and so many other health conditions that are treated with prescription drugs.”
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According to the complaint, the HHS rule is arbitrary and capricious for several reasons, such as allowing insurers to interpret cost sharing to either include or exclude copay assistance from cost-sharing calculations. The HHS also abandoned its previous rule that copay assistance must count toward beneficiaries’ out-of-pocket cost obligations, except for brand-name drugs that have a generic equivalent.
“People today are struggling with an ever-increasing cost of living, including prescription drugs,” says George Huntley, CEO of the two diabetes organizations. “On behalf of patients with diabetes who depend on copay assistance, we must end this cruel practice orchestrated by health insurers and PBMs. As we urge HHS to reverse the rule, we continue to work at the federal and state levels to pass laws outlawing this practice. While we have been successful in 14 states and Puerto Rico, helping millions of patients in those jurisdictions, we need to end copay accumulator programs nationally. Success with this claim will do that.”