The Cost-Shift Conundrum of Copay Accumulator Programs

In this column, Michael C. Schweitz, MD, tackles reader questions on a range of health policy topics and the impact of health care reform on daily rheumatology practice.

Q: What are copay accumulator programs?

A: Copay accumulator programs, also called accumulator adjustment programs, are a new utilization management tool being implemented by pharmacy benefit managers and health plans that exclude copay assistance from counting toward a patient’s deductible or other out-of-pocket maximum.

Copay assistance programs help patients with the out-of-pocket costs of deductibles, coinsurances and copays; however, this assistance is not unlimited and is often exhausted by mid-year. As explained below, accumulator programs are a change to the way insurers count the value of copay assistance for the purpose of calculating whether a patient has met their deductible or out-of-pocket maximum for the year.

Michael C. Schweitz, MD
Michael C. Schweitz

Consider a prescription that would normally cost a patient $100 out of pocket to fill at the pharmacy. Using copay assistance, a patient might pay $5 for the prescription, while the remaining $95 would be covered by the co-pay assistance program. Accumulator programs do not change that. However, they do change what “counts” toward the patient’s deductible. In the past, all $100 would be applied toward that patient’s deductible and/or their out-of-pocket max. However, if a patient’s health plan is using an accumulator adjustment program, only the $5 paid directly by the patient would be applied toward the deductible or out-of-pocket maximum. The $95 paid by copay assistance does not count toward the deductible.

This will make it significantly more difficult for patients to meet their annual deductibles. As more and more patients move into high-deductible health plans, this concern is exacerbated.

Especially egregious is that health plans and pharmacy benefit managers (PBMs) are effectively ‘double dipping’ with this new practice, accepting payment equal to double the full value of a patient’s deductible before they consider it to be met.

An analysis by the health care consulting firm Zitter Health Insights found that approximately 12% of patients in the commercial space are subject to accumulator programs, while 44% of commercial plans have the program in their language. The number of patients affected is expected to grow, with an additional 28% of commercial lives expected to be subject to the program in 2019 and beyond.

Q: How does this affect patients?

A: Patients with rheumatic illnesses are often prescribed expensive biologic medications. Out-of-pocket costs for these drugs can be exorbitant and financially untenable for the vast majority. This is especially true in cases where the patient owes 100% of the drug’s cost prior to the deductible being met. In those cases, copay assistance helps patients get to the other side of their deductibles more quickly, where their out-of-pocket obligations will be lower as the insurer begins to share in the cost of treatment. If copay assistance no longer counts toward getting patients out of the deductible phase, patients may never be able to get out of their deductible in any given year, which means the insurer does not pay for any of their disease treatments. Thus, accumulator programs are just another means to shift more costs onto patients.

Q: What is being done to address the problem?

A: Employers providing coverage and patients comparing coverage options must be vigilant in evaluating their policies for these changes. This is difficult due to the fact that there is no standard term across the insurance industry for these programs; they may be hiding in plan documents under such euphemistic terms as “Out-of-Pocket Protection Program.” Advocacy groups, including the CSRO, ACR and patient groups, are marshalling resources to address the problem. For now, activities at the state and federal levels are directed at increasing awareness of these policies and their impact on patient care, given that accumulator programs are a relatively new trend. In the near future, we are sure to see legislation aimed at correcting this issue, likely at the state level.

Submit your question:

Email us: rheumatology@healio.com

Write to us on Twitter: @HealioRheum

Disclosure: Schweitz reports no relevant financial disclosures.

In this column, Michael C. Schweitz, MD, tackles reader questions on a range of health policy topics and the impact of health care reform on daily rheumatology practice.

Q: What are copay accumulator programs?

A: Copay accumulator programs, also called accumulator adjustment programs, are a new utilization management tool being implemented by pharmacy benefit managers and health plans that exclude copay assistance from counting toward a patient’s deductible or other out-of-pocket maximum.

Copay assistance programs help patients with the out-of-pocket costs of deductibles, coinsurances and copays; however, this assistance is not unlimited and is often exhausted by mid-year. As explained below, accumulator programs are a change to the way insurers count the value of copay assistance for the purpose of calculating whether a patient has met their deductible or out-of-pocket maximum for the year.

Michael C. Schweitz, MD
Michael C. Schweitz

Consider a prescription that would normally cost a patient $100 out of pocket to fill at the pharmacy. Using copay assistance, a patient might pay $5 for the prescription, while the remaining $95 would be covered by the co-pay assistance program. Accumulator programs do not change that. However, they do change what “counts” toward the patient’s deductible. In the past, all $100 would be applied toward that patient’s deductible and/or their out-of-pocket max. However, if a patient’s health plan is using an accumulator adjustment program, only the $5 paid directly by the patient would be applied toward the deductible or out-of-pocket maximum. The $95 paid by copay assistance does not count toward the deductible.

This will make it significantly more difficult for patients to meet their annual deductibles. As more and more patients move into high-deductible health plans, this concern is exacerbated.

Especially egregious is that health plans and pharmacy benefit managers (PBMs) are effectively ‘double dipping’ with this new practice, accepting payment equal to double the full value of a patient’s deductible before they consider it to be met.

An analysis by the health care consulting firm Zitter Health Insights found that approximately 12% of patients in the commercial space are subject to accumulator programs, while 44% of commercial plans have the program in their language. The number of patients affected is expected to grow, with an additional 28% of commercial lives expected to be subject to the program in 2019 and beyond.

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Q: How does this affect patients?

A: Patients with rheumatic illnesses are often prescribed expensive biologic medications. Out-of-pocket costs for these drugs can be exorbitant and financially untenable for the vast majority. This is especially true in cases where the patient owes 100% of the drug’s cost prior to the deductible being met. In those cases, copay assistance helps patients get to the other side of their deductibles more quickly, where their out-of-pocket obligations will be lower as the insurer begins to share in the cost of treatment. If copay assistance no longer counts toward getting patients out of the deductible phase, patients may never be able to get out of their deductible in any given year, which means the insurer does not pay for any of their disease treatments. Thus, accumulator programs are just another means to shift more costs onto patients.

Q: What is being done to address the problem?

A: Employers providing coverage and patients comparing coverage options must be vigilant in evaluating their policies for these changes. This is difficult due to the fact that there is no standard term across the insurance industry for these programs; they may be hiding in plan documents under such euphemistic terms as “Out-of-Pocket Protection Program.” Advocacy groups, including the CSRO, ACR and patient groups, are marshalling resources to address the problem. For now, activities at the state and federal levels are directed at increasing awareness of these policies and their impact on patient care, given that accumulator programs are a relatively new trend. In the near future, we are sure to see legislation aimed at correcting this issue, likely at the state level.

Submit your question:

Email us: rheumatology@healio.com

Write to us on Twitter: @HealioRheum

Disclosure: Schweitz reports no relevant financial disclosures.