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HHS Addresses Drug Manufacturer Coupons on Out-of-Pocket Limits

Client Alert

On May 7, 2020, the US Department of Health and Human Services (“HHS”) announced their Notice of Benefit Parameters for 2021 in which HHS addressed the application of prescription drug manufacturer copay coupons towards a patient’s out-of-pocket limit. Under this guidance, HHS will permit, but not require, plans and insurers to count direct support offered to enrollees by drug manufacturers (i.e., coupons) for specific prescription drugs toward the annual limits on cost-sharing, regardless of whether a generic equivalent is available.

In the Notice of Benefit Parameters for 2020, HHS finalized a proposal that for plan years beginning on or after January 1, 2020, amounts paid toward cost sharing using any form of direct support offered by drug manufacturers to enrollees to reduce or eliminate immediate out-of-pocket costs for specific prescription brand drugs that have an available and medically appropriate generic equivalent are not required to be counted toward the annual limitation on cost sharing.[1] HHS received stakeholder feedback indicating confusion on whether plans and issuers are required to count the value of all forms of direct support provided by drug manufacturers, including drug manufacturers' coupons, toward the annual limitation on cost sharing, other than in circumstances in which there is a medically appropriate generic equivalent available, particularly with regard to large group market and self-insured group health plans.

In an effort to alleviate this confusion, HHS is revising the rule to state, “…amounts of direct support offered by drug manufacturers to enrollees for specific prescription drugs towards reducing the cost sharing incurred by an enrollee using any form are not required to be counted toward the annual limitation on cost sharing.”[2] Health insurance issuers and group health plans now have the flexibility to determine whether drug manufacturer direct support to enrollees for specific prescription drugs counts toward the annual limitation on cost sharing.

HHS considered a proposal to interpret the definition of “cost sharing” to exclude expenditures covered by drug manufacturer coupons, but after review of proposal rule feedback and comments, is refusing to adopt this interpretation in this 2021 final rule.

Finally, HHS expects issuers and group health plans to be transparent with enrollees regarding potential out-of-pocket liability and whether the value of direct drug manufacturer support accrues to the annual limitation on cost sharing. HHS is encouraging issuers and group health plans to prominently include this information on websites and in brochures, plan summary documents, and other collateral material that consumers may use to select, plan, and understand their benefits, but this is not a requirement.

Please contact a BMD healthcare attorney if you have any questions regarding this final rule, the application of drug manufacturer coupons on cost sharing, or other general healthcare questions. 


Valley National Bank/Trulieve Loan: A Big Step Out of the Shadows

In a late December press release, Trulieve announced that it had secured a $71.5 million commercial bank loan. In addition to the amount of the loan, which may be the largest commercial bank loan to date to a cannabis company, the release prominently identified Valley Bank and featured both a quote from Valley’s Senior Vice President, John Myers, and a description of the Bank’s service platform and commitment to the cannabis industry.

The End of Non-Competes? The Impact It Will Have on the Healthcare Industry

On January 5, 2023, the Federal Trade Commission (“FTC”) announced a proposed rule that, if enacted, will ban employers from entering into non-compete clauses with workers (the “Rule”), and the Rule would void existing non-compete agreements. In their Notice, the FTC stated that if the Rule were to go into effect, they estimate the overall earnings of employees in the United States could increase by $250 billion to $296 billion per year. The Rule would also require employers to rescind non-competes that they had already entered into with their workers. For purposes of the Rule, the FTC has defined “worker” to also include any employees, interns, volunteers, and contractors.”

2022 Healthcare Recap and 2023 Healthcare Check-Up

As the country begins to return to a new “normal” following the COVID-19 pandemic, there are many healthcare rules changing on both the federal and state levels as a result. Thus, it is important for healthcare providers and their employers to be aware of these changing rules, and any implications they may have on their practice. Look back on healthcare in 2022 and find a checklist for 2023.

Direct Support Professional Retention Payments

On December 15, the Ohio Senate and House passed House Bill 45, which authorizes the Department of Developmental Disabilities (DODD), in conjunction with the county boards of developmental disabilities, to launch their initiative to issue retention payments to Direct Support Professionals (DSPs). These retention payments will be distributed quarterly to participating home and community-based waiver providers to address the workforce crisis in the direct provider sector. Governor DeWine needs to sign the Bill to begin the payments, but he is expected to do so by the end of 2022.

Real Estate Investors Position for 2023 Opportunities

Real estate investors weathered another year in a post-pandemic world, with the year closing with yet another interest rate increase coupled with both uncertainty and heightened interest carrying into 2023. Just last Wednesday, the Federal Reserve raised its benchmark interest rate 0.50 percentage points, shifting the target range to 4.25% to 4.50%. The new level is the highest the fed funds rate has been since December 2007 and marks the seventh rate hike this year. So what does this mean to investors, brokers, lenders, and others in the real estate world? Read a few perspectives below from stakeholders familiar with our BMD clients and the markets in which they do business.