A formulary exception is a type of coverage determination request where Medicare drug plan member asks the plan for an exception to the plan's Medicare Part D coverage rules.

For example a Medicare plan member has the right to ask their Medicare Part D plan to cover a non-formulary drug - or amend the plan's usage management restrictions that are placed on the drug (for example, if the plan has a 30 pill per 30-day quantity limit, you might ask for a formulary exception of 60 pills per 30-days).

Similar to a formulary exception request is a plan member's right to ask that their drug plan move a formulary drug to a lower-costing drug tier (for example, if your drug is now listed on the plan's formulary as Tier 3, you can ask the plan to cover the drug on a Tier 2 cost-sharing level.)

Q1Medicare.com has an entire section dedicated to Formulary Exceptions (Coverage Determinations), Appeals & Grievances, but here are some highlights with links below.

All Medicare Part D drug plan members have the right to ask for certain Coverage Determinations and all Medicare drug plans must have a timely and efficient process for making Coverage Determination decisions, including decisions on exception requests.  In short, the Coverage Determination (formulary and tiering exception) process is a fast, straightforward way to make sure people with Medicare can get the drugs they need.  Through the Coverage Determination process, a Medicare Part D plan member may be able to:

• have a non-preferred drug covered at a better out-of-pocket cost,
  
• have a prescription drug that isn't on the plan's formulary covered by the Medicare plan, or
  
• ask their plan not to apply a utilization management restriction (for example, prior authorization or step therapy).

A note about:  Timely responses from your plan and expedited requests.
When you or your doctor submit evidence to the plan in support of an exception request, the plan must notify you of its decision no later than 72 hours from the time it receives the supporting information from your doctor or 24 hours from the time it receives the supporting information from your doctor if your case is "expedited" due to an urgent health condition.

Again, the most common situations in which Medicare plan members may request a formulary exception or coverage determination include:

• Add coverage of a non-formulary drug: The member is using a drug on their plan's formulary that is removed during the plan year for reasons other than safety and there is no other drug on the plan's formulary that the member can use (for example, when a new generic drug is introduced, a Medicare drug plan can discontinue the coverage of the Brand drug that the generic is replacing);
  
  
• The member's doctor prescribes a medically necessary drug that isn't on the plan's formulary;
  
  
• Lower the cost-sharing tier: The member is using a drug that is moved, during the plan year, from the preferred to the (higher-costing) non-preferred tier and the member can't use any other drugs on the preferred tier (see Q1FAQ.com/673);
  
  
• The member's doctor prescribes a drug that is in the plan's more expensive cost-sharing tier because he/she believes the drug(s) in the less expensive cost-sharing tier is medically inappropriate for the member (see Q1FAQ.com/673); or
  
  
• Change a user management restriction:  The member's doctor prescribes a drug on the plan's formulary that is subject to a utilization management restriction (for example a prior authorization or step therapy requirement) that he/she believes the member can't meet.

Generally, plans should approve exceptions when they find that the drug is medically necessary, consistent with the supporting information provided by the member's doctor.

For more information, you can learn more about formulary exception at the following links:

• Formulary Exceptions (Coverage Determinations), Appeals & Grievances
• How to Request a Coverage Determination, File an Appeal, or File a Complaint
• Prescribing Physician’s Role in Processes
• Plan Sponsor Contacts for Exceptions & Appeals
• Part D Appeals Process Chart

Sources include:

Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance (Effective August 3, 2022)
https://www.cms.gov/Medicare/Appeals-and-Grievances/MMCAG/Downloads/Parts-C-and-D-Enrollee-Grievances-Organization-Coverage-Determinations-and-Appeals-Guidance.pdf