The Centers for Medicare and Medicaid (CMS) defines a non-preferred or standard network pharmacy as:
"A pharmacy that's part of a Medicare drug plan's [pharmacy] network, but isn't a
preferred pharmacy. You may pay higher out-of-pocket costs if you get
your prescription drugs from a non-preferred pharmacy instead of a
preferred pharmacy."
And the longer answer . . .
Medicare Part D plans can have multiple types of pharmacies within their network. Each type of pharmacies can have different cost-sharing and different negotiated retail prices.
"Standard" (formerly known as "non-preferred") network pharmacies tend to have higher negotiated retail drug prices and higher cost-sharing.
The two types of pharmacies are:
- "Preferred" pharmacies, and
- "Standard" pharmacies—formerly known as "non-preferred" pharmacies.
The "preferred" or "standard" designation can apply to both retail (brick and mortar) and mail-order pharmacies.
So there can be four (4) different cost-sharing structures per supply length (30-day, 60-day, 90-day):
- "Preferred" retail pharmacies,
- "Standard" (non-preferred) retail pharmacies,
- "Preferred" mail-order pharmacies, and
- "Standard" (non-preferred) mail-order pharmacies.
Our
PDP-Finder,
MA-Finder,
Formulary Browser, and
Drug Finder (Q1Rx.com) tools all have icon
for a link to the plan's cost-sharing details, where you can see the following:
- 30-Day preferred retail pharmacy cost-sharing,
- 30-Day standard (non-preferred) retail pharmacy cost-sharing,
- 30-Day preferred mail-order pharmacy cost-sharing,
- 90-Day preferred retail pharmacy cost-sharing,
- 90-Day standard (non-preferred) retail pharmacy cost-sharing,
- 90-Day preferred mail-order pharmacy cost-sharing,
You can click on the 30-Day or 90-Day cost-sharing value on our
Formulary Browser and
Drug Finder
tools to review cost-sharing details for the particular medication.
This is especially useful if the Medicare Part D plan uses co-insurance
(a percentage of the drug's cost) or if the medication is very expensive
and it crosses multiple phases of your Medicare Part D coverage (also
known as a
straddle claim).
A bit of history . . .
Although the ability to use both preferred and non-preferred pharmacy
cost-sharing has been around since the beginning of the Medicare Part D
program, the use of preferred vs. non-preferred pharmacy cost-sharing
really
accelerated in 2013.
By 2015, so many Medicare Part D plans were using preferred vs.
non-preferred pharmacies, and the term "non-preferred", having a
negative connotation, it became prudent to replaced with the term
"non-preferred" with "standard", that more closely reflects the
pharmacy's status.
And for the
2024 plan year, 93%
of all stand-alone Medicare prescription drug plans (PDPs) use
preferred vs. standard network pharmacy pricing as compared to having
all pharmacies using a single pricing and cost-sharing structure.