Appeal type: unknown
Decision: unknown

Citations used in this letter come from Section 42 of the Code of Federal Regulations which you will findabbreviated as 42 CFR with the corresponding section numbers, i.e., 42 CFR Sections 423.578, 423.100.Medicare law defines those drugs that may be covered under Part D. A covered prescription drug must beused for a medically accepted indication. A medically accepted indication means a use that is approvedby the Food and Drug Administration (FDA), or a use supported by one or more citations in the drugcompendia approved by Medicare. Medically accepted indications do not include uses in research or usesdescribed in peer-reviewed medical literature. Please refer to Social Security Act, Sections 1860D-2(e)(1)and 1927(k)(6); and 42 CFR Section 423.100.A Part D plan is permitted to use a number of different tools to manage its formulary. One of these tools isknown as prior authorization. This process requires an enrollee to obtain coverage approval for a drugbefore the drug is dispensed and covered by the plan. 70 Federal Register No. 18, issued January 28, 2005(Preamble to Final Rule).Formulary use includes the application of cost utilization tools, including step-therapy, dosage limitationsand therapeutic substitution. 42 CFR Section 423.578(b)(iii). The exceptions process extends to coveragerequests to set aside cost utilization rules for non-formulary drugs. A Part D plan must grant an exceptionwhenever it determines that the drug is medically necessary, consistent with the prescriber's statement, andthat the drug would be covered but for the fact that it is subject to cost utilization rules. 42 CFR Section423.578(b). The statement must show that all of the covered drugs on any tier of the plan's formulary fortreatment of the enrollee's condition would not be as effective as the drug at issue, or would have adverseeffects for the enrollee. Parts C & D Enrollee Grievances, Organization/Coverage Determinations, andAppeals Guidance Manual, Section 40.5.3.The Part D Plan can only cover drugs prescribed for a medically accepted indication. The Plan requiresprior approval (also called prior authorization) before covering some prescription drugs. If prior approval isnot obtained, the Plan may not cover the drug. Please refer to the Plan's Evidence of Coverage.A Part D Plan may establish tiered cost-sharing for drugs on its formulary. The Plan groups covered drugsinto different cost-sharing levels or tiers. Medicare rules permit an enrollee to request a tiering exception tocover a higher cost-sharing tiered drug at a lower cost-sharing tier level so long as there is a drug on alower cost-sharing tier that is approved for treating the same condition that the requested higher cost -sharing tiered drug is being used to treat. However, Medicare rules also permit a Plan to design its tieringexception procedures so that a Plan does not have to grant a tiering exception for brand or biologic drugs ifthe lower cost-sharing tier or tiers only contain generic drugs approved for treating the same condition. 42CFR Sections 423.4; 423.578(a); 423.578(a)(6); 423.578(c)(3)(ii); Parts C & D Grievances,Organization/Coverage Determinations, and Appeals Guidance Manual, Section 40.5.1.The prescription drug benefit offered by the Part D Plan must meet criteria requirements pertaining to theannual deductible, the initial coverage limit, the coverage gap and catastrophic coverage. For the initialcoverage limit, the rules provide for a benefit of shared coverage of costs between the enrollee and Plan.An enrollee in a Part D Plan may be subject to annual deductibles, coinsurance and copayments (includingtiered copayments) specified by the Plan. 42 CFR Section 423.104.Each drug on the Plan's formulary is assigned to a cost-sharing tier. The Part D Plan contract allows anenrollee to request an exception to the Plan's cost-sharing structure to pay less for a drug. This is called atiering exception. The prescriber must provide medical reasons to support a tiering exception. The Plancannot grant a tiering exception for any drug in the specialty cost-sharing tier. The Plan cannot grant atiering exception for a non-formulary drug being covered under an exception to the formulary. Please referto the Plan's Evidence of Coverage (EOC).