April 25, 2019

CMS Approves Copay Accumulator Programs But Only if Generic Alternatives Are Available

On April 19, CMS formally ruled that Medicare and Medicaid recipients can be subjected to copay accumulator programs when they purchase their medications… but only if they choose the “name brand” prescribed by health care provider over a generic version of the medication that is also available. If no generic version is available (as is often the case with antiretrovirals), Medicare and Medicaid recipients will be able to purchase the prescribed drug and use a copay coupon, if they have one, without concern that the value of the coupon will not be applied to her or his deductible. Last June, the Academy circulated this link to a two-minute refresher on Copay Accumulator Programs, just FYI.

If a generic equivalent of the prescribed medication is available, patients in most states will still be subjected to the copay accumulator system if they decide to get the non-generic version of the drug. CMS has approved this in their new rule because it “would encourage patients to use generic drugs and lower drug spending”. But relatively few generic versions of HIV drugs (lamivudine, abacavir and efaverenz among them) are available in the US market. And when no generic is available, Medicaid or Medicare has to cover the cost of the prescribed, non-generic drug. In this case, recipients can use their Copay Coupons with assurance that their value will be applied to the recipient’s deductible without the involvement of any copay accumulator program.

On April 11, Arizona became the third state (after Virginia and West Virginia) to ban copay accumulator programs within their states. California and Massachusetts have voted to allow copay accumulator programs to be involved in prescription purchases when a generic less expensive than the prescribed medicine is also available. Several other states are also considering legislation to similarly limit or eliminate use of copay accumulator programs.

Utah Gets Medicaid Expansion – But Not All the Voters Asked For

Two days after the Federal Court decision blocking Medicaid work requirements in Kentucky and Arkansas, the Centers for Medicare and Medicaid Services (CMS) approved Utah’s proposed plan for Medicaid expansion, including work requirements. The state was compelled to move toward Medicaid expansion by a voter referendum last November. But the plan the state proposed to CMS does not meet many of the voters’ expectations. Earlier this year, legislators passed a bill that repealed Prop. 3, the ballot initiative to expand Medicaid and replaced it with their own plan.

Voters in 2018, for example, approved full expansion as defined in the 2010 health care law. It defines eligibility as having an income of 138% of the federal poverty level (FPL) or less. But Utah subsequently proposed – and has been approved by CMS – to limit the state’s eligibility to people earning 100% of the FPL or less. In exchange for this concession, Utah will receive federal funding to cover only 70% of the cost of expanding their program rather than the 90% available to states that fully expand Medicaid access up to 138% ceiling.

The state proposal will also “freeze” enrollment if the projected cost of covering new recipients exceeds the funds appropriated for it by the State Legislature. Finally, the state is preparing a work requirements component for selected Medicaid recipients that will be implemented next January.

View the latest Policy Update here.