Understanding the future of Copay Maximizers

COPAY MAXIMIZERS – Gone tomorrow?

What is a Copay Maximizer?

Copay Maximizers are programs deployed by Pharmacy Benefit Managers (PBMs) that allow a payer to capture the pharmaceutical manufacturers’ funding that is designated to offset patient copays and further offset payer costs. This is done by applying the funding to their accumulators and maximizing the available funding by increasing the patient copay to the maximum amount of funding available from the manufacturer – hence the name copay maximizer.

There are generally two types of copay maximizers:

  1. The plan benefit copay is increased for all medications that have financial assistance for patient copays, unless prohibited by the manufacturer – a newer trend, to a dollar amount that is greater than the value of the copay program. 
  2. The plan benefit copay remains the same across medications, however, the claims system augments the copay due based on available funding from the manufacturer, on a claim by claim basis.

Pharmaceutical manufacturer programs used to offset copays are intended to reduce any barriers to patients initiating and continuing therapy on medications. Manufacturers are not on board with the use of these programs to reduce plan costs, however, for many payers these programs have been a lifeline to the escalation of specialty medication costs.

A full review of the types of manufacturer funding programs is available in our previous white papers found at https://payerally.com/manufacturer-funding-the-ups-downs/ and https://payerally.com/manufacturer-funding-changes-challenges/.  These are excellent resources to create a deep understanding of this topic.

HIV Court Case

Although Copay Maximizer programs are not disease-state specific, the use of these programs for HIV medications may be the catalyst for change for these programs regardless of which medication or which disease it is treating.

The case was filed by the HIV + Hepatitis Policy Institute, the Diabetes Leadership Council, the Diabetes Patient Advocacy Coalition, and three patients who had depended on copay assistance and whose employers had instituted a copay accumulator policy.

Accumulator adjustment or copay accumulator policies remove the amount of financial assistance received from pharmaceutical manufacturers from the patient’s accumulated out-of-pocket costs to maintain any required patient costs remain solely attributed to the patient and not the funding the patient received from the third party.  As an example, if a patient has a $500 deductible and their $100 copay was paid through a pharmaceutical manufacturer program, the out-of-pocket accumulated amount will be adjusted from $100 to $0 as it was not paid by the actual patient and was attributed to secured funding through a copay assistance program. These are often coupled with a copay maximizer program that adjusts the patient copay to maximize the use of manufacturer funding by increasing the copayment due, directly on the plan benefit or indirectly during claims processing, to use all of the designated manufacturer funding to offset plan costs.

The case focused on the impact to patients when their responsibility associated with their benefit was not forced to use the financial funding to offset both their copayment costs and their accumulated out-of-pocket cost. Their case was against the Department of Health and Human Services (HHS) for not preventing health plans from altering the accumulators of patients using the manufacturer copay assistance, which was allowed under the 2021 Notice of Benefit and Payment Parameters (NBPP) rule. This new court ruling has recognized that as unlawful.

Court case outcome and expected changes/next steps
The 2021 Notice of Benefit and Payment Parameters (NBPP) permits, but does not require, health insurers and group health plans to decline to credit certain financial assistance provided to patients by drug manufacturers during the calculation of cost-sharing obligations under the Affordable Care Act (ACA). The court found that the 2021 NBPP should be disregarded due to the fact that the HHS interpretation contradicts the ACA statutory cost-sharing definition (and a subsequent HHS definition). Because HHS did not have a definitive interpretation of cost-sharing, it vacated the 2021 NBPP and remanded the HHS to offer a definitive interpretation.

With the increase in utilization of high-deductible health plans (HDHPs), there has been a great deal of political pressure related to the use of the programs. HHS has the opportunity to remedy this based on the court’s decision.

The use of copay maximizer programs and the threat to remove them is big money.  Some payers struggle to cover high-cost specialty medications without these mechanisms used to reduce the costs and the alternative – removing coverage and forcing patients to seek complete financial assistance could make things worse. There also seems to be a fundamental disconnect in the understanding of accumulator adjustments and copay maximizers and how they impact patients. In this table, we hope this visual assists in achieving a better understanding in an easy to interperet context.

outcomes chart

What’s Next for HHS?

  • HHS had appealed the ruling, however recently both parties filed a joint stipulation to dismiss the appeal
  • HHS can issue a new regulation and/or guidance addressing the treatment of manufacturer assistance under a plan’s out-of-pocket limit
  • HHS has stated they will not take enforcement action against Plans using copay accumulator programs

What are PBMs or their partner solutions doing?
The recent turn of events has sparked renewed concern about the copay maximizers that have increasingly been part of the mechanism to control specialty medication spend over the last several years. The court ruling and intention of HHS to appeal the ruling have driven questions from current users as to if the copay maximizer programs will be discontinued and have those who were planning to start using a copay maximizer to take a second look at their strategy.

The question being asked is does the recent U.S. District Court for the District of Columbia’s opinion in HIV & Hepatitis Policy Inst. v. U.S. Dept. of Health & Human Svcs. (HHS) impact Navitus’ existing Copay Maximizer and Accumulator Adjustment programs? 

Most PBMs or their partner programs are stating that they are not immediately impacted by the court decision. They plan to continue their accumulator adjustment and copay maximizer programs. Some are also positioning that they intend to directly engage HHS to provide data and support as HHS intends to appeal to the District of Columbia Court of Appeals.

The 2021 Notice of Benefit and Payment Parameters (NBPP) permits, but does not require, health insurers and group health plans to refuse crediting certain financial assistance provided to patients by drug manufacturers during the calculation of cost-sharing obligations under the Affordable Care Act (ACA).

Should you re-evaluate the use of a copay maximizer?
The recommendation is to stay “Business As Usual,” however, include more conservatism in estimations as to the valuation of these accumulator adjustment and copay maximizer programs in the current and out years. 

If the current strategy was to deploy one of these programs, the changes should not alter the course as the programs are not currently in jeopardy, however, the cost-benefit analysis of these programs (for example initial fees/data fees) should be evaluated based on a shorter return of investment.

Finally, all plans currently using these programs should consult two people – their pharmacy benefit consultant and their legal counsel. The pharmacy benefit consultant should assist on the underwriting changes that could impact the business model and look for alternatives for specialty cost mitigation. The legal counsel shall provide guidance and ongoing support as the landscape changes with further developments in this case or legislation.

Institutional Knowledge to help manage the rising cost of medications. All Rights Reserved. © PayerAlly LLC

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PayerAlly’s mission is to provide our clients with industry leading advisement, strategic support and oversight as they look to better manage the rising cost of prescription medication on both the pharmacy and medical benefit. Our services include procurement, PBM auditing, vendor management, strategy, and ongoing financial monitoring. To learn more, please visit our website: www.payerally.com