In general, the government allows Medicare drug plans some flexibility when choosing what to charge when a formulary exception request is granted and the plan agrees to cover a non-formulary drug. The Medicare drug plan can even choose to provide a lower cost-sharing structure for non-formulary generic drugs as compared to brand drugs.
However, in reality, many Medicare Part D plans cover non-formulary drugs (generic or brand) as Tier 3 or Tier 4 Non-Preferred drugs with 25% to 50% cost-sharing (that is, you pay 25% to 50% of the retail drug price for your non-formulary drugs - or in this case drugs covered as transition fills).
Need help finding your Medicare Part D plans cost-sharing information?
We have all cost-sharing tiers (Copay amounts and Co-insurance percentages) in the this site Medicare Part D Plan Finder (PDP-Finder.com/FL) and Medicare Advantage Plan Finder (MA-Finder.com/15238). You can also review our Formulary Browser to see the amount of your plan’s cost-sharing for different formulary tiers (FormularyBrowser.com).
For stand-alone Medicare Part D prescription drug plans (PDPs), you can begin with our Medicare Part D Plan Finder at PDP-Finder.com, select your state, scroll down to the different Medicare drug plans, and click on the plan name. In the plan details, you will see cost-sharing tier used when a formulary exception is granted (or you are granted a transition fill). For example, for this stand-alone Medicare Part D plan in Florida, you will be charged Tier 4 cost-sharing if you are granted either a formulary exception or a transition fill which we can see is 40% of the retail drug cost.
You can always telephone your Medicare Part D plan's Member Services department (using the toll-free number found on your Member ID card) and ask about the cost of your transition fill.
You can also look in your Medicare Part D plan's Evidence of Coverage (EOC) document where you should find some text such as:
"[i]f [the Medicare Part D plan agrees] to make [a formulary exception] and cover a drug that is not in the [plan's drug list], you will need to pay the cost-sharing amount that applies to drugs in Cost-Sharing Tier 4 - Non-Preferred drugs. You cannot ask for [another formulary] exception to [lower] the copayment or coinsurance amount we require you to pay for the drug." [emphasis added]This cost-sharing information should be found in the Section of your Evidence of Coverage entitled, "What is an exception?", and should be about 100+ pages into your plan's Evidence of Coverage document.
... or...
"If we agree to make an exception and cover a drug that is not on the Drug List, you will need to pay the cost-sharing amount that applies to drugs in Cost-Sharing Tier 3: Non-Preferred Drug. You cannot ask for an exception to the copayment or coinsurance amount we require you to pay for the drug." [emphasis added]
... or...
"[Medicare plan ABC] ensures that appropriate cost-sharing amounts are applied to the transition supply claims. Cost-sharing for a temporary supply of drugs will never exceed the statutory maximum co-payment amounts for low-income subsidy (LIS) eligible beneficiaries. For non-LIS eligible beneficiaries, [Medicare plan ABC] will apply the same cost sharing for non-formulary Part D drugs provided during the transition that would apply for non-formulary drugs approved through a formulary exception in accordance with §423.578(b) and the same cost sharing for formulary drugs subject to utilization management edits provided during the transition that would apply if the utilization management criteria are met."
So, in this example, you will be paying a percentage of the non-formulary drug’s retail cost (25% to 50% of retail) as a Tier 3 or Tier 4 Non-Preferred drug - so, if you have a transition fill for a $100 non-formulary drug, you will pay between $25 and $50 at the pharmacy (depending on your plan's Non-Preferred Tier cost-sharing). From Medicare...
As noted by Medicare in the Medicare Prescription Drug Benefit Manual, Chapter 6 – Part D Drugs and Formulary Requirements, Section 30.4 - Transition (Rev. 18, Issued: 01-15-16, Effective: 01-15-16; Implementation: 01-15-16):
Section 30.4.9 - Cost-sharing Considerations
"Starting in 2015, a Part D sponsor must charge cost sharing for a temporary supply of drugs provided under its transition process such that the following conditions are met:In earlier guidance Medicare noted:
• For LIS [Low-Income Subsidy or Medicare Part D Extra Help] enrollees, a sponsor must not charge higher cost sharing for transition supplies than the statutory maximum copayment amounts.
• For non-LIS enrollees, a sponsor must charge
• The same cost sharing for non-formulary Part D drugs provided during the transition that would apply for non-formulary drugs approved through a formulary exception in accordance with §423.578(b); and
• The same cost sharing for formulary drugs subject to utilization management edits provided during the transition that would apply if the utilization management criteria are met."
For more information see FAQ:"A [Medicare Part D] plan may charge cost-sharing for a temporary supply of drugs provided under its transition process. Cost-sharing for transition supplies for low-income subsidy (LIS) eligibles can never exceed the statutory maximum copayment amounts ([such as] $3 or $5 copays, or 15% coinsurance, depending on the level of LIS for which a particular enrollee qualifies).
For non-LIS enrollees, a plan must charge cost-sharing based on one of its approved drug cost-sharing tiers (if the plan has a tiered benefit design), and this cost-sharing must be consistent with cost-sharing that the plan would charge for non-formulary drugs approved under a coverage exception."
What will I pay for my medication if my Medicare plan agrees to cover a non-formulary drug?