Waiving Copays for Financial Hardship – A Pharmacy Primer

Category: MDRXLaw News
Published: September 8, 2023

Collection of copayments has traditionally been one of the more difficult aspects of pharmacy practice. Indeed, collection of copayments has become more difficult in recent years, as health insurers have steadily increased copayment amounts as part of the low-premium, high patient cost-sharing model. This has resulted in an increase of patients who, unfortunately, are unable to afford their copayments. While many pharmacies view failure to collect copayments as an innocent oversight, PBMs and governmental payors—who view failure to collect copayments as both a breach of contractual obligations and well as an illegal benefit provided by the pharmacy to the patient—have markedly stepped up their enforcement of this issue.

As a general rule, copayments can only be waived due to the patient’s financial hardship if done on an individual, case-by-case determination. Pharmacies are also generally prohibited from advertising that the pharmacy provides such waivers. What pharmacies often do not realize, however, is that many PBMs, such as CVS Caremark, have strict requirements regarding the documentation of financial hardship waivers. These PBMs have begun to audit copayment collection and have rejected the pharmacy’s claim of granting a hardship waiver where the existence of financial hardship is inadequately documented.

PBMs will typically require pharmacies to have in place a functioning “Financial Hardship Program.” This must include applicable policies and procedures, an application process for screening hardship applicants, and collection of certain documentation establishing financial hardship. Where the pharmacy has been unable to demonstrate the existence of a functioning Financial Hardship Program meeting these requirements, PBMs have deemed illegal copayment waivers to have occurred, and subjected the pharmacy to recoupment and possible termination.

If you have any questions or require legal guidance with respect to a implementation of a Co-payment Financial Hardship Program, or a PBM audit or any other legal issues facing your pharmacy please do not hesitate to call one of our experienced healthcare attorneys at 212.668.0200 or email the firm at