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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. 


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EEOC’s New “Know Your Rights” Poster to Replace “EEO is the Law” Poster

Under federal law, covered employers are required to post a notice in the workplace describing federal antidiscrimination laws. The Equal Employment Opportunity Commission (EEOC) prepares the mandatory posters summarizing antidiscrimination laws and explaining how employees and applicants can file a complaint if they believe they have experienced job discrimination. On October 19, 2022, the EEOC released a new poster: “Know Your Rights: Workplace Discrimination is Illegal,” replacing the “EEO is the Law” poster. Employers must now use the poster captioned as “Know Your Rights: Workplace Discrimination is Illegal – Revised 10/20/22.” Employers may be reprimanded for failure to appropriately and compliantly post the updated poster.

FAQs:  Administrative Fees Under Medicare

Late patients, last-minute cancellations, and difficulty in collecting fees are all common complaints from our healthcare clients.  As such, it is no wonder that a common topic among our healthcare clients revolves around what administrative fees can be charged to patients and related issues.

Community Banks: Collaboration, not isolation, is the key to protecting/ enhancing the cannabis business you pioneered

As we prepare for the plenary session of the informal institutional cannabis lenders community announced in my previous article, I am pleased to advise that participants now include 5 of the best-known dedicated loan funds; a select group of commercial banks ranging in size from single state community banks to mid-size regionals making cannabis loans into the mid-8 figures; and, a syndicator of credit union cannabis loans.

Inflation Reduction Act: Healthcare Provisions

On August 16, 2022, President Joe Biden signed into law the Inflation Reduction Act (the “Act”), a landmark climate, healthcare, and tax bill. Though the Act’s climate provisions have received most of the media attention, the healthcare aspects of the Act present some of the most significant changes to the American healthcare system since the passage of the Affordable Care Act.