Most everyone with Medicare prescription drug coverage either through a Medicare Advantage
Prescription Drug plan or a stand-alone Prescription drug plan. This information may
help you decipher the different terms you may encounter with your plans.
Pharmacy Network
To receive benefits, you must use an in-network pharmacy and show your Prescription
Drug Plan (PDP) member ID card. You may receive additional savings on your
prescriptions by using a preferred retail pharmacy or by using the mail service pharmacy
and having your medications delivered to your mailbox.
Drug List (Formulary)
A formulary is a list of the drugs that a plan covers. Each plan has its own drug list. A
Medicare formulary can change throughout the year. Drugs may be added or removed
from the market at any time, and/or drugs may be added or removed from a plan’s
formulary. All Medicare formularies generally must include coverage for at least two
different drugs within most drug categories. There are some categories in which all
available drugs must be included.
Tiered Formulary
Many plans use tiered formularies to group covered drugs according to cost. For example:
- Tier 1 – Preferred generic drugs
- Tier 2 – Generic drugs
- Tier 3 – Preferred brand name drugs
- Tier 4 – Non-preferred drugs
- Tier 5 – Specialty drugs
Step Therapy
One way carriers can help you save money on your prescriptions is by offering lower-
cost drugs that can treat the same medical condition as your current brand name drugs.
You may be asked to try one or more of these lower-cost drugs before the plan will
cover the brand name drug you are currently taking.
Quantity Limits
Some drugs have quantity limits, where the plan will cover only a certain amount of a
drug for one copay or over a certain number of days. The limits may be in place to
ensure safe and effective use of the drug. If your doctor prescribes more or thinks the
limit is not right for your situation, you and your doctor can ask the plan to cover the
additional quantity.
Prior Authorization
Before the plan will cover certain drugs, it may need more information from your doctor
to make sure the drug is being used correctly for a medical condition covered by
Medicare. You may be required to try a different drug before the plan will cover the
prescribed drug.
Asking for an Exception
If you need a drug that’s not currently covered by your plan, you may:
Ask the plan to cover your drug even if it is not on the drug list. This is known as a
formulary exception.
Ask to waive coverage restrictions or limits on your drug. This is known as a
utilization exception.
Coverage Decisions
If your doctor has submitted an exception request on your behalf, generally the plan will
make a decision within 72 hours. You can request an expedited, or fast, decision if you
or your doctor believes your health requires it.