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When CMS issued its Final Rule for the 2020 Annual Notice ofBenefit and Payment Parameters, it included language designed "toencourage enrollees' use of lower-cost generic drugs."

Specifically, CMS stated that "beginning in 2020, we will allowindividual market, small group, large group and self-insured grouphealth plans to except from the maximum out-of-pocket limit costsharing amounts paid using drug manufacturer coupons for specificprescription brand drugs that have an available and medicallyappropriate generic equivalent."

This well-intentioned release has triggered an avalanche ofconfusion and conflicting commentary throughout the industry,spanning the entire spectrum from question on what "specificprescription drugs" means (will CMS be releasing some sort of listof drugs?), to what other types of manufacturer/third partyassistance, if any, could be included given the specific referenceonly to "coupons," to whether this guidance has any impact onsituations in which there is not a "medically appropriate genericequivalent" available.

Related: Copay accumulator programs: Are the risks worth thesavings?

While a definitive answer to these questions has not yet been(and may never be) made available by CMS, at least on this thirdissue, the Departments of Labor, Health and Human Services, and theTreasury (collectively, the "Departments") have granted a reprieve,at least temporarily. In the recent "FAQs About Affordable Care Act Implementation Part40," released August 26, 2019, the Departments conceded thatthe released 2020 rules, as worded, could be interpreted so as toconflict with previous guidance. As such, the Departments indicatedthat:

Until the 2021 NBPP is issued and effective, the Departmentswill not initiate an enforcement action if an issuer of group orindividual health insurance coverage or a group health planexcludes the value of drug manufacturers' coupons from the annuallimitation on cost sharing, including in circumstances in whichthere is no medically appropriate generic equivalent available.States may adopt a similar enforcement policy, and HHS will notconsider a state to be failing to substantially enforce the annuallimitation on cost sharing in cases where a state does so withrespect to health insurance issuers.

As this release makes clear, for at least the duration ofcalendar year 2020, plans will be able to exclude manufacturercoupon amounts from annual out of pocket maximum accumulatorswithout fear of enforcement action from the Departments. Althoughthis is not an official interpretation providing answers to any ofthe questions posed above, this release is nonetheless huge newsfor plans and other stakeholders who are already relying onprograms that utilize such a practice.

Some important caveats to note: the release does not precludeenforcement actions by a state, noting that states "may" adopt asimilar enforcement policy. States are not required to do so, andthe possibility remains of enforcement actions by states againstplans who are subject to state regulation. Additionally, thispolicy illustrates a decision by the Departments not to initiateany enforcement actions based on this specific practice—not anofficial interpretation that this practice is permissible under thelaw.

The possibility remains of a complaint being brought against anaggrieved individual or group of individuals, which could force thehand of the courts in making a definitive finding on the outerlimits of these rules. However, even in the case that occurred, itseems the repercussions to the plan(s) in question would be limitedto actual claim amounts, not any sort of regulatory penalties fromthe Departments.

Andrew Silverio, Esq., is Compliance &Oversight Counsel for the Phia Group, LLC,primary focusing is on the most complex and emerging legal andregulatory issues, both internally and for our clients as a memberof Phia Group Consulting. Andrew is also the Phia Group's HIPAAprivacy officer.

Read more: 

• Copay accumulator programs leave consumers on thehook for high drug costs
• Pharmacy benefit managers crack down on copayassistance programs
• Overall costs for generic drugs decline, butconsumers not seeing the savings