Drug not covered: formulary exceptions

A formulary is the list of drugs your plan covers. If your drug is not on it, you can ask the plan to make an exception. The request turns on one thing: a clear statement from your prescriber of why this drug, and not the covered alternatives, is right for you.

What this means

A “formulary exception” asks the plan to cover a drug it does not list. It is different from asking the plan to try you on a covered drug first (see step therapy exceptions) and different from a request for a lower price tier (see quantity limits, tier exceptions and switches). Research from patient groups, such as the Arthritis Foundation, treats these as separate requests, so name the one you mean.

Medicare drug plans (Part D). The plan’s first decision is called a coverage determination. You or your prescriber can ask for a formulary exception or, for a lower cost-sharing tier, a tiering exception. The prescriber must give a supporting statement, oral or written. For a tiering exception, the statement must say that the preferred drug would not be as effective or would have adverse effects. For a formulary exception, it must say the requested drug is medically necessary for a reason Medicare lists. The plan has:

• 72 hours for a standard decision and 24 hours for an expedited decision, counted from when the plan receives the prescriber’s statement.
• If no statement arrives within 14 calendar days, 72 hours (24 if expedited) after that 14-day period ends.
• 14 calendar days to decide a request to pay you back for a drug you already bought.

If the plan misses a deadline, that counts as a denial and the plan must send your request to the independent reviewer within 24 hours. Plans may exclude specialty-tier drugs from exceptions to non-specialty tiers, and need not move a brand-name drug to a tier that holds only generics.

Employer plans and individual or Marketplace plans. We found no separate federal clock for a drug exception request. Your plan’s document describes its exception process, and a drug denial is a claim with the usual claim deadlines (urgent: 72 hours; other: 15 days before you get the drug, 30 days after). Ask the plan for its exception process in writing. Some states add rules for insured plans.

What to do

1. Ask the pharmacy to tell you why the claim was rejected. Ask them to print the message and whether a hold or partial fill is possible while you sort it out. (You.)
2. Ask the plan for a written denial. A counter rejection is not a notice with appeal rights. The letter requesting a denial in writing and the pharmacy rejection script help. (You.)
3. Ask your prescriber to write the supporting statement. It should name the drug, dose and diagnosis, list covered drugs tried (with dates and results), and say why each alternative is not appropriate for you. The prescriber’s letter kit helps. (Your prescriber.)
4. Submit the request. In Part D, submit it as a coverage determination; the Part D exception request letter is built for this. Elsewhere, use the plan’s exception form or send the formulary exception appeal letter. (You or your prescriber.)
5. If waiting could harm you, ask for an expedited decision. Your prescriber can say so in the statement. Part D must then decide within 24 hours. (Your prescriber.)
6. Appeal if refused. Part D gives you 65 calendar days from the date on the notice for a first appeal (called a redetermination). The next level, the independent review, is not automatic: you must ask in writing within 65 calendar days of the plan’s appeal decision. Employer and non-grandfathered individual plans must give at least 180 days to appeal. Check the date on your notice, which controls.

What the plan may say, and what to say back

“This drug is not on our formulary.” That is why you are asking for an exception. Ask the plan to confirm in writing whether it has an exception process, the form to use, and the decision date.

“A covered alternative is available.” Your prescriber’s statement should address each covered alternative: tried and failed, not appropriate for your condition, or likely to cause harm. Attach the records.

The rule

For a Part D formulary exception the prescriber must give a supporting statement, and the plan’s 72-hour (24-hour expedited) clock starts when it receives the statement. 42 Code of Federal Regulations (CFR) 423.568

Watch for

• New to a plan. In the first 90 days of coverage in a new Part D plan, the plan must give a one-time temporary supply of at least an approved month’s supply of a drug that is not on its formulary. Written notice is due within 3 business days.
• Formulary changes. Before a negative formulary change, a Part D plan must generally give affected members at least 30 days’ written notice.
• State rules. Some states regulate exceptions for insured plans. Self-funded employer plans do not follow them. Check your Washington or Texas page as examples of what state pages list.
• Cost. A plan may cover a drug through an exception and still charge the tier’s cost sharing. Ask the plan what you would pay.

What next

• Step therapy exceptions: if the plan wants you to try other drugs first.
• Quantity limits, tier exceptions and forced switches: if the drug is covered but limited.
• Medicare drug plan appeals: every level for Part D.
• Prescription drugs topic page: all drug guides and letters.