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District Court Strikes a Blow to Copay Accumulator Programs

By: Andrew Silverio, Esq.

Many of our clients are aware of, or even utilize, “copay accumulator” programs – these programs create plan savings by not counting amounts received by patients from manufacturer assistance programs toward annual deductibles and out-of-pocket maximums.  Some programs go a step further by actually increasing the applicable copayment for certain drugs to maximize the amount a patient may be eligible to receive from manufacturers. 

The Trump Administration’s Notice of Benefit and Payment Parameters for 2021 (“NBPP”) facilitated these programs by explicitly permitting plans to not count manufacturer assistance amounts toward annual deductibles or out of pocket maximums.  That allowed these programs to drastically increase the amounts they can redirect to plan savings – the alternative would be a program which only works until an out-of-pocket maximum is reached, which, with expensive specialty drugs, can happen in an instant.

However, several patient groups brought a legal challenge against HHS and CMS, challenging the NBPP as unlawful.  On September 29 of this year, the United States District Court of the District of Columbia ruled on that challenge and sided with the Plaintiffs (see  The Court found to be arbitrary and capricious the Trump administration’s “interpretation of the same statutory and regulatory provisions as having two different meanings, to be chosen at the discretion of regulated parties.”  Per the Court, payers cannot choose what is and is not cost-sharing paid by or on behalf of a participant – the law clearly defines that.

So, for now, plans should be counting amounts received by patients from manufacturer assistance programs toward deductibles and out of pocket maximums, at least in situations where the drug is a name brand drug and there is no generic equivalent available.  The industry will need further regulations or guidance from the current administration to clarify the current state of the law and state definitively whether this practice is allowed in situations where there is a generic equivalent available.