The Coverage Rules for Medicare Part D Plans
If you have Original Medicare and want prescription drug coverage, you’ll want to look into a Medicare Part D plan. These federally approved private plans can cover many of the prescription drug needs you may have. We’ve discussed many of the complexities of Part D coverage, from formularies to coverage determinations to catastrophic coverage, in the past. Surrounding all of these, however, are certain coverage rules set by the Centers for Medicare & Medicaid Services (CMS).
The Medicare prescription drug plan coverage rules may change the way your Part D plan covers your medications, for better or worse. Let’s look at a few of them, and how they influence your coverage.
Prior Authorization and Step Therapy
Depending on your plan, certain drugs may be covered, but only under certain circumstances — usually if you have a specific condition or illness. In these cases, your plan may want a prior authorization before you can fill a prescription and receive coverage. Prior authorizations show the plan that the prescription is medically necessary for you and fits the plan’s coverage requirements. If you don’t meet the requirements for a prescription, it doesn’t mean you’ll just have to do without. There may be an alternative, but comparable, medication available on your formulary that your plan covers. An example of this would be Drug A can treat Conditions X, Y, and Z. Your Part D plan covers Drug A if you have Conditions X and Y, but not Z. If you have Condition Z, however, your plan may have a Drug B that can treat it that it covers. That said, if you and your doctor feel that Drug A is medically necessary for your treatment, you can request an exception.
One type of prior authorization is what’s called step therapy. With step therapy, your plan covers you if you try a less expensive drug on their formulary that may be able to treat your condition. If this doesn’t work, your plan will cover a more expensive option, and in some cases, an even more expensive option if the second option didn’t work. It’d be like trying a Generic Drug A for you condition. If this doesn’t work, you’ll be given a less expensive Name-Brand Drug A before trying the most expensive Name-Brand Drug B. If there is a concern that the less expensive drugs may have adverse effects or would be less effective for you, or that the most expensive drug is medically necessary, your prescriber can file an exception for you to skip the prior steps.
Opioid Safety Checks
We’ve previously written on the opioid epidemic that the United States is still facing. To combat this, drug plans have put into place several rules and safety checks to monitor the use and frequency of prescriptions for opioids and other frequently abused medications on the market. Before the pharmacy fills an opioid prescription, your Medicare Part D plan or the pharmacist may need to discuss the prescription with your doctor. This usually is only the case if a prescription sends up certain red flags that point toward the potential for addiction or abuse. These red flags can be anything from prescribing too many opioids or for too long of a supply or prescribing an unsafe combination of drugs.
If your plan or pharmacist reject a prescription, a notice will be sent to your doctor explaining why they made the coverage decision and how your doctor can challenge it. Your doctor can even request a speedy resolution to the coverage decision if your health is at further risk. If you think a prescription may be rejected before going to the pharmacy, it’s also possible to request an exception prior to picking up the medications. If the plan accepts the exception, this could smooth out the process of picking up the prescription.
Plans are allowed to put a limit on the quantity of a certain drug that they will cover, often for safety or cost reasons. This quantity limit may differ depending on the drug or on the plan, so for specifics, you’ll need to look into your plan. Plans will usually base quantity limits on averages of prescriptions and use. For example, if most people are prescribed Drug A and told to take one pill a day for 30 days, that’s likely what the quantity limit will be. If your doctor prescribes Drug A, but with a 60-day supply, your plan may not cover your prescription. If your doctor believes that this amount is medically necessary or that the plan’s quantity limit is inappropriate in your case, they can request an exception for you.
Outpatient Hospital Settings
Another quirk of Medicare Part D is for drugs given in an outpatient setting. This can be in an emergency room or if you’re in observation status, for example. This puts your coverage in a limbo of sorts: Medicare Part B won’t cover your drugs if they’re considered self-administered drugs, and at the same time, Medicare Part D might not either. While there are some cases where your plan may cover these drugs (specific to your plan), you’ll likely need to pay for the medications out-of-pocket. Once you’ve done that, you can submit a claim to your Part D plan for reimbursement.
This is perhaps the most straightforward of all the Part D rules. Unless Medicare Part B already covers a vaccine (like the flu shot), your drug plan must cover all commercially available vaccines (like the shingles vaccine) when they’re considered medically necessary. This means a vaccine is likely covered by your drug plan, since most approved vaccines are shown to be safe and effective at preventing illness.
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These basics rules help define where your coverage begins and ends with your Part D plan. Understanding things like prior authorization and quantity limits can allow you to get the medications you need, without any surprise costs. While each rule differs in its own way, they all allow you to act proactively, so that you can either request an exception or a different medication and you receive the coverage you want.