A formulary exception is a type of coverage determination request whereby a Medicare drug plan member asks their drug plan for an exception to the plan's Medicare Part D coverage rules.
The most common situations in which Medicare plan members may
request a formulary exception or coverage determination include:
- Add coverage of a non-formulary Part D drug
If a Medicare plan member is prescribed a non-formulary drug - or 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 plan member can ask the plan to cover (or continue to cover) the non-formulary drug.
If the Medicare drug plan agrees to cover the non-formulary drug, the cost-sharing for coverage may be anywhere from 25% to 50% of the retail drug cost, depending on the plan. You can use our Medicare plan search tools (PDP-Finder.com or MA-Finder.com) to see your plan’s formulary exception cost-sharing tier by clicking on the plan name.
- Lower the cost-sharing tier for a formulary drug (tiering exception)
A Medicare Part D plan member has the right to ask their Medicare drug plan to move a formulary drug to a lower-costing formulary tier (for example, the person may ask that their drug be moved from a Tier 3 copay of $47 to a Tier 2 copay of $10). In addition, the plan member can ask for this tiering exception if they are 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 ( on this site). However, a person cannot ask their Part D plan to cover a non-formulary drug (as in the first example) and, once granted, ask the plan for a tiering exception covering the non-formulary drug for a lower price.
- Change a formulary drug's usage management restriction
If a Medicare drug plan member is prescribed a drug on the plan's formulary that is subject to a utilization management restriction (for example a prior authorization or step therapy requirement), the member has he right to ask the plan to 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, a plan member might ask for a formulary exception of 60 pills per 30-days).
Who can file a formulary exception request?
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 should be a fast, straightforward way to make sure
people with Medicare can get the drugs they need. And generally, Medicare Part D drug plans should approve formulary exceptions when they find that the drug
is medically necessary, consistent with the supporting information
provided by the member's doctor.
A note about: Timely responses from your plan and expedited formulary exception requests.
To learn more...
on this site has an entire section dedicated to Formulary Exceptions (Coverage Determinations), Appeals & Grievances, and you can learn more about formulary exceptions 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
- Browse Medicare Part D prescription drug plans
- Browse Medicare Advantage plans (MAPD)
- Sign-up for our Medicare Part D Newsletter.
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