On Thursday, May 7, 2020, the United States Centers for Medicare and Medicaid Services (CMS) released the 2021 Notice of Benefit and Payment Parameters final rule. This rule finalizes the CMS’ proposed modification of existing policy relating to how pharmaceutical manufacturer direct assistance (i.e., coupons) accrues with respect to health plan enrollees’ annual limit on cost sharing.
Background
Under the Final 2020 Payment Rule (the prior Rule), CMS allowed insurers to exclude coupons from an enrollee’s annual limit on out-of-pocket costs in certain circumstances – including if the plan covered a medically appropriate and available generic equivalent. Such an exclusion meant that the insurer would not apply a copay or other manufacturer coupon to an enrollee’s deductible or out-of-pocket maximum.
However, given the confusing way it was written, different interpretations were taken and in August 2019, CMS issued FAQs clarifying – and somewhat walking back – the rule. CMS indicated in the FAQs that insurers and plans do have to count the value of coupons towards the annual cost-sharing limit in all circumstances not indicated in the Rule (i.e., when only a brand-name drug is available or if a generic equivalent is unavailable or medically inappropriate).
The New Proposed and Final Rule
CMS attempted to clarify its position by indicating in the Proposed Rule that CMS proposed to interpret the definition of “cost sharing” to include expenditures covered by pharmaceutical manufacturer coupons (no restrictions).
In the Final Rule, however, CMS determined that it is “subject to interpretation.”
Under the Final Rule, plans may – but are not required to – count financial support offered by pharmaceutical manufacturers to enrollees toward the annual limit on cost-sharing. Insurers can choose to count or not count coupons toward cost-sharing limits regardless of whether the coupon is for a brand drug and, if so, regardless of whether the brand-name drug does or does not have a generic equivalent.
According to CMS, this will allow plans to have flexibility to determine whether to include or exclude coupon amounts from the annual limit on cost-sharing, irrespective of whether a generic equivalent is available. States will also have discretion to require state-regulated plans to count direct support offered by manufacturers toward the annual limit on cost-sharing, or to exclude the amounts from the annual cost-sharing limit.
For plans that choose to exclude pharmaceutical manufacturer coupons from the annual limit on cost-sharing, CMS encouraged transparency with enrollees. For transparency, CMS encouraged prominently including this information on websites and in brochures, plan summary documents, and other collateral material that consumers may use to select and understand their benefits. CMS stated that, if it finds that plans fail to provide such transparency, it may consider future rulemaking to require that plans provide this information. CMS also warned plans that they must ensure that policies regarding the application of pharmaceutical manufacturer coupons toward the annual limit on cost-sharing comply with regulations governing uniform, non-discriminatory benefit design.