Some Medicare Part D prescription plans have restrictions on coverage for certain medications, even if they’re on the plan’s list of covered drugs, which is called a formulary.
The three most common restrictions:
Part D plans set these restrictions, not Medicare, and they vary from plan to plan. You may need to get special permission before your plan will cover the drug or dosage prescribed.
Prior authorization means that you or your doctor must contact the plan and get permission before you can fill certain, generally expensive, prescriptions. Your physician must verify that the drug is medically necessary for your specific situation. In some cases, a plan may require prior authorization because a powerful drug poses safety concerns if taken inappropriately, used for too long or prescribed for a medical condition other than its original purpose.
Medicare Advantage also uses it. Part D, which you buy from a private insurer that Medicare regulates, isn’t the only part of Medicare that may require prior authorization. Most Medicare Advantage plans, also offered by private insurance companies with Medicare approval, require prior authorization for some prescriptions you take and drugs administered in your doctor’s office.
The key question that insurance company officials want answered is: Why was this particular drug prescribed and not an alternative that might be less expensive or considered safer?
A plan may also require prior authorization if the drug could be covered under Medicare Part A, Part B or Part D and the plan wants to know more about the circumstances under which it was prescribed. Part D usually covers a drug you take in your own home. Medicare Part B usually covers treatment in a doctor’s office, and Medicare Part A or Part B may cover drug therapy in a hospital.
If your plan is satisfied that the treatment falls under Part D, it will cover the drug. If not, your doctor should file your claim with Medicare under Parts A or B.
Step therapy often requires you to try a less expensive drug that’s proven effective for people with your condition before the plan will cover a more expensive, prescribed drug, even if both drugs are on the plan’s formulary. For example, some plans may require you to try a generic drug first and then a less expensive brand-name drug before they’ll cover a more expensive brand-name drug.
Your doctor can contact the plan to request an exception if he or she believes that you’ll experience a reaction to the less expensive drug or it will be less effective.
Quantity limits are imposed when your doctor prescribes a dosage or quantity that’s higher than the plan considers normal to treat your condition or one that’s prescribed for a long period of time. The plan won’t cover the amount prescribed unless your doctor asks for an exception and shows that the extra medication is necessary to treat you effectively.
Medicare has an appeals process if you think that a prescription you need was unjustly rejected after your physician asked for an exception. And if you think that your health could be seriously harmed while you wait for resolution, first ask your plan for a fast decision.
If you and your doctor ask for a fast decision, plan officials must make a determination within 72 hours. Your plan has to tell you in writing how to file an appeal. If the plan’s decision is not in your favor, an independent organization that works for Medicare, not the plan, reviews the appeal.
In all, Medicare has five levels to its appeals process, which can culminate in a federal district court review:
Each plan decides which drugs to restrict, not Medicare. So you may find that one plan covers your drug automatically while another limits coverage or requires prior authorization.
Before you choose a Part D plan for the year, find out whether it has any restrictions on your drugs. You can get a list of the plan’s drugs requiring prior authorization, step therapy or quantity limits within the insurer’s plan documents, which are usually posted on its website.
You can also see if the plan has any restrictions on your drugs when comparing Part D plans in Medicare’s Plan Finder. After typing in your zip code and identifying Part D plans, add your drugs and preferred pharmacies. You may find that your drugs and pharmacies are already listed if you log in to your online Medicare account before accessing the Plan Finder.
In the Plan Finder, you’ll see a list of plans available in your area with an estimate of your medications’ yearly drug and premium costs. In each plan, under the Drugs heading, you can click on View drugs & their costs and scroll below Estimated total monthly drug cost. Then click + View more drug coverage.
If you scroll down to Other drug information, you’ll see a checklist for your drugs with sections for prior authorization, quantity limits or step therapy. A Yes will be noted in the boxes that have restrictions for your drugs.
Some plans allow you to carry over coverage granted through an exception from year to year. Others require you to request an exception for the same drug annually or in some cases more frequently.
If your current plan has granted you an exception to use your drug and you are considering switching to another plan during open enrollment, make sure the other plan doesn’t place restrictions on the same drug.
If you’re already taking a medication, you have the right to a 30-day refill within the first 90 days of enrolling in a new plan regardless of whether the plan places restrictions on this drug or doesn’t cover it at all. This grace period, also called a “transition refill,” gives you time to work with your doctor to change to an alternative drug or request an exception.
One thing to note: If you file an exception request and your plan doesn’t process the exception by the end of your 90-day transition refill period, it must provide additional temporary refills until the exception is completed.
Updated September 21, 2022
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