Understanding Medicare Prescription Drug Plan Formularies
Medicare Part D prescription drug plans can seem complex at first. The formularies, tiers, and requirements may seem like a lot to keep up with, but once you understand the process it really isn’t all that complicated. The key to getting the most out of your Medicare Prescription Drug Plan is understanding how it works. This guide will help you get a better handle on the process by explaining how formularies work.
What are the Medicare Part D Formularies?
Simply put, the Medicare Part D Formularies are the drugs that are covered under the plan. These drugs are often placed in different tiers, although not all Medicare drug plans do this – but most do. Each tier denotes a different cost for the drugs within that tier.
The formulary for a Medicare drug plan can be changed during the year. These changes must comply with Medicare’s guidelines. A formulary may be changed if:
- A drug is no longer covered by your plan.
- The plan adds a new drug.
- The drug is switched to a different tier.
- Certain stipulations like quantity limit or prior authorization is change or added for the drug.
- The drug is no longer on the market.
If a change impacts a drug that you are taking, your plan must either:
- Notify you of the change via written notice no less than 60 days before the change goes into effect.
- Notify you of the change via written notice when you request a refill on your prescription and provide you with a 60-day supply of the medication under the plan rules that apply prior to the change.
Most of the time your prescriptions won’t be covered by your Medicare drug plan unless your prescriber is enrolled in Medicare or has filed an “opt-out” request with Medicare. If your prescriber has not opted-out or enrolled in Medicare, you will still be eligible for a 3-month provisional prescription fill. This is intended to give your current prescriber time to enroll in Medicare or for you to find a new Medicare enrolled prescriber.
What are the Medicare Part D Formulary tiers?
The formulary tiers are comprised of both brand name and generic drugs. A drug that is on a higher tier will generally cost more than a drug on a lower tier. Sometimes a prescriber will feel that you need a drug on a higher tier instead of one that is similar with on a lower cost lower tier. In those cases, your prescriber can file a request with your Medicare plan to get an exception allowing you to get a lower copayment.
What are the Medicare Part D Formulary requirements?
The Part D formulary is held to strict requirements. There are certain drugs that qualify for inclusion and those that do not. Just because a drug is a prescription does not mean that it is on the list. There are some general guidelines, but even among those there are exclusions. A drug may be a Part D drug if:
- Its use is medically accepted,
- It is and can only be dispensed as a prescription,
- It is a biological product (restrictions apply – outlined in sections 1927(k)(2)(B)(i) through (iii) of the Act),
- It is insulin,
- It is considered to be medical supplies that are associated with insulin use,
- It is a vaccine that is licensed under the Public Health Service Act (section 351) as well as the administration of the vaccine.
Drugs are not covered by Medicare Part D, according to federal law, if they:
- Are over the counter drugs (non-prescription)
- Are prescribed to treat weight gain, weight loss, or anorexia
- Are prescribed to promote fertility
- Are prescribed to encourage hair growth or other cosmetic purposes
- Are prescribed to relieve cold or cough symptoms
- Are prescription vitamins/minerals (exception: fluoride preparations and prenatal vitamins)
- Are prescribed to treat erectile or sexual dysfunction
- Are covered under Medicare Part A or Part B
- Are not approved by the U.S. Food and Drug Administration (FDA)
- Are purchased outside of the U.S. and U.S. territories
- Are used in a way that is not indicated on its label
How to Locate the Medicare Part D Formulary drug list
You can check your prescriptions against the drug list by visiting the Medicare Plan Finder. You will have to answer a couple of questions and it will take you to the drug list section. Once there, you simply enter your prescriptions.
- Step 1: Type in your zip code in the top box
- Step 2: Answer the two questions: How do you get your Medicare coverage? And Do you get help from Medicare or your state to pay your Medicare prescription drug costs
- Step 3: Enter your prescription information
There are also sites online that allow you to browse Medicare plan formularies. Just complete the requested information and you can view the drug lists.
How are Medicare Part D Formularies developed?
Formularies are developed and managed using very specific criteria. This includes:
- Review by Pharmacy and Therapeutics (P & T) committee to ensure that the formulary meets all requirements for policies and practices including generic substitutions, step therapies, and prior authorizations.
- Management decisions regarding the formulary are based on scientific evidence and often on pharmacoeconomic considerations to ensure that it provides cost effective, safe, and appropriate drug therapy.
- The P & T committee documents and establishes procedures ensuring that each drug review and inclusion is appropriate.
- The therapeutic advantages of the drug, such as efficacy and safety, are taken into consideration when including them in the formulary.
- The P & T committee reviews most new drugs that are FDA approved within 90 days and within 180 days of the drug’s release onto the market and will provide a decision on inclusion.
- The P & T committee approves exclusion and inclusion of drugs in the formulary each year.
Understanding the process for Medicare Part D can help you as you work with your doctor to find drug therapies that work for you. At the very least, having the knowledge of how the system works alleviates much of the frustration that often accompanies health insurance and programs. Knowledge is always a good thing.