The Employer's Guide Blog for Overseeing PBMs

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Tip of the Week: Copay Accumulator Programs are Bad for Business

How’s that for the first blog post of year? Bang, copay accumulator programs are bad for business! Hear me out. Due to a technical glitch that caused scheduled payments to be conducted twice, Santander Bank last week accidentally paid out $175 million to thousands of its customers. The glitch that impacted over 75,000 transactions has affected over 2,000 commercial and corporate accounts. Although the glitch has since been identified and rectified, many people received a Christmas bonus that they were not expecting at all.
The transactions included both, regular payments such as wages as well as one-off payments made to clients that ended up being duplicated due to the glitch. According to CNN Business, wages were paid in duplicate over a period of two days. The second payment, however, was not made from the accounts of the customers but from the reserves, leaving the bank poorer by this amount due to a computer glitch. 

US patients are being left poorer, not by an accident or computer glitch, but by intentional acts. The primary difference between the aforementioned bank scenario and copay accumulators is that no one is policing copay accumulator programs. PBMs are free to pocket greenbacks that were never intended for them without fear of reprisal. Those bank customers will have to return those funds or pay a price. 

Below is an example of a historical payment model for medication versus an accumulator model. For this example, the patient has a $2,000 deductible, 20% coinsurance, and a $4,000 out of pocket max. The drug in this example is $2,000 per month:

Source: National Infusion Center Organization

A copay accumulator – or accumulator adjustment program – is a strategy used by insurance companies and pharmacy benefit managers (PBMs) that stop manufacturer copay assistance coupons from counting towards two costs: 1) the deductible and 2) the maximum out-of-pocket spending. Bank customers should not keep money that was never intended for them. Likewise, PBMs should not profit from cost-sharing assistance programs that are intended solely to benefit patients. 

Drug manufacturers have made it clear their cost-sharing assistance programs were not created to drive profit for PBMs. As drug manufacturers attempt to create programs to subsidize out-of-pocket cost for patients, the payers reduce the value of these programs by exhausting such funds while also requiring the patients to pay their deductibles and coinsurance up to their out-of-pockets to obtain their medications. I’m not alone on the position I’ve taken.

It just doesn’t make sense to me that PBMs, insurers, and third-party payers (e.g. self-insured employers) point the finger at manufacturers of high-cost medications only to turnaround and siphon the cost-sharing assistance that the manufacturer provided to the patient away from counting toward deductibles or out-of-pocket maximums. This is especially harmful when there is no low-cost therapeutic alternative for high-cost formulary drugs. 

Anyone who purports that copay accumulator programs are a good thing either works for a specialty pharmacy or has been influenced by someone who works for a specialty pharmacySure accumulator programs save employers money, but the bulk of the savings accumulated (no pun intended) through slick spreadsheeting and contract wordplay goes to the PBMs and insurers who enforce these programs. That’s just wrong.

Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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