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

Client Alert
May 25, 2020

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. 

HHSUS Department of HealthNotice of Benefit Parametersprescription drugsmanufacturer copay couponsout-of-pocket limitannual limitscost-sharinggeneric equivalentBMD Healthcare & Hospital Law Group
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OSHA COVID-19 EMERGENCY TEMPORARY STANDARD (ETS) Vaccination, Testing, Recordkeeping, and Reporting

November 5, 2021The Occupational Safety and Health Administration has issued its long-awaited COVID-19 Emergency Temporary Standard (ETS). Note that the ETS does not apply to employers covered under the Safer Federal Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors or Subcontractors (see here), or to settings where employees provide healthcare services subject to OSHA’s ETS for the healthcare industry (see here).Client Alert

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November 3, 2021Results of the KFF annual survey of state Medicaid directors reveal some fascinating trends in Medicaid service delivery and benefit coverage. Read on for a summary of the highlights we find most noteworthy. Background As a preliminary matter, many of the trends KFF identifies and that we highlight below are no doubt a result of the Covid-19 pandemic. The pandemic triggered a public health emergency and economic crisis that resulted in increased Medicaid enrollment, service offerings, and flexibility in service delivery, along with a heightened awareness of disparities in access to care and health outcomes.Client Alert

Changes to Physician Assistant Statutes in Florida

October 22, 2021In the last year, there have been many changes to the scope of practice and collaboration/supervision requirements for advanced practice providers such as APRNs and physician assistants in the state of Florida. In a previous Client Alert we discussed House Bill 607, which expanded the autonomous practice of APRNs providing primary care services in Florida.Client Alert

Ohio Senate Bill 49 – Ohio Expands Lien Rights for Design Professionals

October 20, 2021Effective September 30, 2021, Ohio granted limited lien rights to design professionals, including architects, landscape architects, engineers, and surveyors. Ohio Governor Mike DeWine signed Senate Bill 49 into law on July 1, 2021. This new law established a statutory right to lien commercial real estate by Ohio design professionals who, until now, could not file a lien for non-payment of professional services. Senator Vernon Sykes, a primary sponsor of Senate Bill 49, stated that the “legislation ensures that architects, engineers and other designers will get paid for their work, regardless of the outcome of their projects . . . It will support hardworking Ohioans by protecting the value of their labor . . ..”Client Alert

Primary Care Practice Officially Defined in Florida for APRNs Practicing Autonomously

October 12, 2021As many providers in Florida are aware, House Bill 607 (the “Bill”), which was passed in February of last year, gives certain APRNs in Florida the ability to practice autonomously. The only catch is that they must work in primary practice. When the Bill was initially passed, there was question as to what was exactly considered primary care, absent a definition from the Florida Board of Nursing. However, as of February 25, 2021, “primary care practice” has officially been defined.
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