Court Strikes Down HHS Copay Accumulator Rule

Court sides with patient groups, copay accumulators now limited to branded drugs with generic equivalents

On September 29, the U.S. District Court for the District of Columbia struck down a federal rule that allowed health insurers not to count drug manufacturer copay assistance towards beneficiary out-of-pocket costs.

The 2021 Notice of Benefit and Payment Parameters rule allowed insurers to implement “copay accumulator” programs, which allow patients to use manufacturer assistance to pay for the medication but not to apply the value of the manufacturer assistance to their deductible or annual out-of-pocket maximum. As a result, patients were paying significantly more in out-of-pocket costs and insurers were collecting more than they would have without a copay accumulator in place.

The lawsuit was filed in August 2022 by the HIV+Hepatitis Policy Institute, Diabetes Leadership Council, Diabetes Patient Advocacy Coalition and three affected patients against the U.S. Department of Health and Human Services. The plaintiffs argued that the HHS rule “directly contradicts the government’s own definition of cost-sharing” and “allows insurers to ‘double dip,’ receiving payments in excess of the amount to which they are legally entitled.” The Court agreed with the plaintiffs that the rule was “arbitrary and capricious because it allows insurers to decide for themselves whether copay assistance is included in the definition of ‘cost-sharing’ based on contradictory interpretations of the same law and regulations.”

Insurers will now have to comply with the 2020 Notice of Benefit and Payment Parameters rule that stated copay accumulators were only allowed for branded drugs that have a generic equivalent, if allowed by state law.

The US Oncology Network submitted comments to CMS on the 2021 Notice of Benefit and Payment Parameters proposed rule, opposing the copay accumulator policy and arguing that “(e)xcluding copay coupons from patients’ annual maximum out-of-pocket or deductible amounts would compound [cancer patients’] financial burden, threatening treatment adherence and potentially altering outcomes.”

To read the Court’s opinion, CLICK HERE.
To read the final order from the Court, CLICK HERE.
To read a press release from the plaintiffs, CLICK HERE.
To read The Network’s comments on the 2021 NPBB rule, CLICK HERE