Deceptive “Middleman” Practices Penalize Patients

July 5, 2022

Even as the federal investigation of pharmacy benefit managers begins, patients continue to get cheated by the companies’ practices.

The role of these “middlemen” is to help health insurers define and administer their pharmacy benefit programs. PBMs have, in recent years, been more frequently suggesting that health plans use co-pay accumulator programs and co-pay maximizers. Both programs siphon off financial benefits that were intended to help patients and shift them to insurers.

Co-Pay Accumulator Adjustment Programs

To help patients afford higher-priced novel or specialty medications, manufacturers issue co-pay cards that can be used as payment for a specific drug. The cards are supposed to help offset patients’ costs, but co-pay accumulator programs are getting in the way.

When a health insurer has one of these programs in place, it accepts the co-pay card as payment for the medication, but it doesn’t count that value toward the patient’s out-of-pocket responsibility. So, when the card runs out, patients are on the hook for their whole deductible – an amount that could be thousands of dollars.

Patients often don’t know their insurer is using a co-pay accumulator program, so they end up surprised to learn of their large out-of-pocket responsibility while standing at the pharmacy counter. The unexpected expense can force patients to choose between affording their medication or other essentials.

Co-Pay Maximizers

As states started to ban co-pay adjustment programs, use of co-pay maximizers has picked up.

This tactic also involves the use of co-pay cards, but instead of allowing patients to hold on to and use some of the card’s value each month, patients are required to surrender the card. The insurer cashes it in for the maximum value. While patients get their medication for the duration of the coverage year, they don’t get credit for the card’s value toward their annual deductible or out-of-pocket limit.

State Action

Even ahead of the federal investigation, some states started looking in on pharmacy benefit managers.

As part of a review in Mississippi, the state auditor surveyed pharmacists. Over 90% view PBMs as “an obstacle between the patient and health care provider” and “largely responsible for increasing drug prices.”

And in Florida, lawmakers believed the middlemen needed more oversight. Effective July 1, they will be required to register with the state’s office of insurance regulation or face fines.

With prices of many goods climbing and the economy stumbling, patients’ interest is sure to be piqued by investigation outcomes and policy changes that could be the impetus for better health care coverage and lower out-of-pocket costs.

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