Are Employers on the Hook for Co-Pay Accumulators’ Harm?

Most patients aren’t familiar with the term “co-pay accumulator,” or its effect.  But they should be, advises a new report from the Alliance for the Adoption of Innovations in Medicine.  

Referred to by different names and buried within policies’ fine print, these programs prevent co-pay coupons from counting toward a patient’s annual deductible.  Patients are often surprised to learn of this change when they pick up their prescription at the pharmacy.  The practice hurts patients, as Madelaine A. Feldman, MD, describes in a June 2018 Institute for Patient Access brief. “They force patients to choose between an untenable financial burden and negative health outcomes,” Dr. Feldman explains.

Despite the potentially disastrous effect on patients, 17 percent of large, multistate employers use the programs.  The National Business Group on Health projects this figure will triple by 2020.

But as “Employers Beware” warns, co-pay accumulator programs carry inherent liability.  The report cautions that using them can “potentially violate state and federal consumer-protection laws.”  It specifically names:

    • The Patient Protection and Affordable Care Act. Co-pay accumulator programs could lead to patients’ exceeding annual out-of-pocket maximums set by the landmark health care bill.  Employers also could be on the hook if they fail to adequately disclose their program terms to patients.
    • Federal Trade Commission Act. Co-pay accumulator programs could be considered an unfair or deceptive practice because they can cause “substantial injury” by allowing patients to be double-billed.
    • Employee Retirement Income Security Act.  Depending on how employers communicate their program, specifically cost-sharing obligations, it could be considered a breach of their disclosure obligations.

And it’s not just legal risks that employers should consider.  The report explains that these programs can actually increase costs.  For example, patients who can’t afford their medication because of co-pay accumulator programs are more likely to ration or stop taking it altogether.  This behavior is risky and can lead to increased physician visits and preventable hospitalizations.

Employers’ indirect costs can add up too.  These include employees missing work because of disease progression and decreased productivity.  These costs can zero out any prescription drug savings.

While co-pay accumulator programs may sound appealing, employers would be wise to consider both the legal and economic implications that come with such a policy.

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