Health Plans, PBMs Must Disclose Their Accumulators, Maximizer Programs for New Transparency Rules


MHE Senior Editor talks with John “Jack” S. Linehan, a lawyer at Epstein Becker Green, for this week's episode of MHE Talks: Improving Patient Access series. The two discuss copay accumulators and maximizers, as well as how states have moved to prohibit accumulators and maximizers as the federal government takes a hands-off approach.

Coupon accumulators have been controversial for many reasons, but one of them is the element of surprise. Plan members use coupons to cover their copays and out-of-pocket costs. The savings may be a huge relief, but members haven’t always realized that because their health plan or its PBM was using an accumulator, the value of the coupon not counting toward the deductible. The shock comes when the value of the coupon runs out.

“You could get all the way to May and June and you are getting a drug and everything is fine and, boom, you are hit with the deductible. If you can’t pay deductible, you are not getting coverage for that drug,” said John “Jack” S. Linehan, a lawyer at Epstein Becker Green. On the other hand, Linehan noted that health plans and PBMs have defended accumulators as a way to enforce cost-sharing requirements that are designed to manage costs adn promote economical drug utilization.

This interview accompanies Linehan’s article “New state copay accumulators complicate the coupon compliance landscape,” which was posted on the MHE website recently. In the interview, Linehan surveys some of the recent legal developments that would affect the administration of the copay accumulators and maximizers that health plans and PBMs use to blunt the effect of drug manufacturer coupon programs.

Linehan, a legal expert on the coupon accumulators and maximizers, says new transparency rules for health plans issued by CMS in October include a provision that, effectively, requires health plans and PBMs to disclose to their beneficiaries that they are using accumulators or maximizers.

Most large, sophisticated plans and PBMs already do, according to Linehan. Still, he said he sees the new rule as a significant step: “It does create, for the first time, a bright-line disclosure rule.”

“New plans, smaller plans, employer groups and so forth that are starting to use these mechanisms (accumulators and maximizers) should be on notice that they need to properly disclose that they are using these programs,” Linehan continued.

Linehan also sketched the federal government’s role in regulating accumulators and maximizers.

First, anti-kickback statutes prohibit Medicare or Medicaid beneficiaries from using drug coupon, so all the push-and-pull over coupons and the copay accumulators and maximizers concerns that private payers not public ones.

Second, CMS has been inconsistent. According to Linehan, the agency took steps to restrict the use of accumulators and maximizers in 2019 but then reversed course in May 2020. “You have really seen a trend at the federal level to pulling back on any sort of rules that would micromanage in this space,” Linehan told MHE. Partly as a result, some states have stepped in and curbed the use of accumulators and maximizers.

Linehan said that while coupons increase access to certain expensive medications by making them more affordable, health plans and PBMs argue that their job is to manage costs through plan design, including deductibles — and that the coupons undermine those efforts.

What health plans and PBMs are able to do with accumulators and maximizers is “really leverage the value, not just of the coupon itself, but also still holding the beneficiary responsible for the deductible,” he noted.

Maximizers, which even out the value of the coupon over the entire year, are catching on, says Linehan.

“With maximizers you don’t see this sort of situation where halfway through the year a beneficiaries suddenly have to pay the deductible, “Linehan said. “There has been a trend toward going a little bit more toward the maximizers because they are not as controversial.”

Accumulator, Maximizer Regulation Picks up at the State Level

With the federal government backing out of regulating coupon accumulators and maximizers, some states have moved ahead with laws that block health plans and PBMs from using them, according Linehan.

Laws have passed in Arizona, Georgia, Illinois, Virginia and West Virginia that say any payment made by a beneficiary or on the beneficiary’s behalf must count toward a policy’s deductible or out-of-pocket limits, Linehan explained. Laws and regulations that would curb accumulators and maximizers in some way is under consideration in 20 other states.

Drug manufacturers issue coupons to cover patient out-of-pocket costs, so they are saving patients money and for patients. Health plans and PBMS say coupons undercut their efforts to manage costs and steer physicians and patients to make cost-effective choices. So in the past several years, health plans and PBMs have pushed back against the coupons with accumulators, which keep the value of the coupon from applying toward the deductible. But as a result, some patients are caught unawares when the value of the coupon runs out, and they suddenly have out-of-pocket costs and their full deductible looming of them.

Maximizers are a wrinkle on accumulators that even out the value of the coupon across the year.

Health plans and PBMs argue that the use of accumulators and maximizers is justified as a way to enforce legitimate cost-sharing obligations that can offset the cost impacts of the coupons and promote more economical drug selection by physicians and patients.

Related: New state copay accumulator laws complicate the coupon compliance landscape

Linehan said the state laws are similar to one another, but there are some subtle differences; for example, some apply only to drugs paid for through the pharmacy benefit while others cover drugs paid for through both the pharmacy and the medical benefit. In addition, he noted that any state laws that touch on accumulators and maximizers apply to fully insured plans, not to self-insured plans because ERISA (Employment Retirement Income Security Act) exempts self-insured plans from state regulation.

How accumulators and maximizers will fare under the Biden administration is hard to predict, says Linehan.

“There really are tradeoffs on both sides of the issue. It is a more complicated, niche area, which makes it even harder to speculate about what is going to happen.”

Linehan also discussed the rule that CMS proposed in June that would affect how coupons are treated under Medicaid best-price rules. In essence, if the proposed rule were to go into effect, accumulators would increase the amount in rebates manufacturers pay under Medicaid best-price rules. Manufacturers may pull back on patient assistance if this rule were to go into effect, said Linehan. Alternatively, they could “take the financial hit” by deciding presumptively that accumulators have been applied to their coupons.

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