Formulary, Step Therapy…what’s it all mean?

In Drugs, Medicare by Keith

Understanding how your Medicare prescription drug plan works can be difficult at times. Here are some definitions that might help.

Formulary: This is a list of prescriptions that your insurance plan will cover. This covers both generic and name brand drugs. Typically, generics will be covered on Tiers 1 or 2 and will cost less than name brands. Tiers 3 and maybe 4 will have your name brand and occasionally, some expensive generics on it and they will have higher co-pays. The final Tier is for specialty drugs that are the most expensive.

Prior Authorization: If you have a prescription drug that requires “prior authorization”, the insurance company is requesting that your doctor show medical necessity for the drug that he/she prescribed to you.

Step Therapy: An example of step therapy might be sleeping pills. Your doctor wants you to take a particular brand name of sleeping pills. The insurance company may request that you try a generic or a lower cost brand name drug instead. If you have already tried the recommended generic or lower cost name brand drug and had either adverse effects or it simply didn’t work, your doctor can request an exception.

Quantity Limits: For safety and cost reasons, plans may limit the amount of prescription drugs they cover over a certain period of time. This could occur with prescription heartburn medications or pain killers.

Remember, if you disagree with your Medicare drug plan’s coverage determination or exception decision, you have the right to appeal the decision. Your plan’s written decision will explain how to file an appeal.