Appeal type: unknown
Decision: unknown

Citations used in this letter come from Section 42 of the Code of Federal Regulations which you will find abbreviated 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 be used for a medically accepted indication. A medically accepted indication means a use that is approved by the Food and Drug Administration (FDA), or a use supported by one or more citations in the drug compendia approved by Medicare. Medically accepted indications do not include uses in research or uses described 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 is known as prior authorization. This process requires an enrollee to obtain coverage approval for a drug before 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 limitations and therapeutic substitution. 42 CFR Section 423.578(b)(iii). The exceptions process extends to coverage requests to set aside cost utilization rules for non-formulary drugs. A Part D plan must grant an exception whenever it determines that the drug is medically necessary, consistent with the prescriber's statement, and that the drug would be covered but for the fact that it is subject to cost utilization rules. 42 CFR Section 423.578(b). The statement must show that all of the covered drugs on any tier of the plan's formulary for treatment of the enrollee's condition would not be as effective as the drug at issue, or would have adverse effects for the enrollee. Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance Manual, Section 40.5.3.A Part D Plan may establish tiered cost-sharing for drugs on its formulary. The Plan groups covered drugs into different cost-sharing levels or tiers. Medicare rules permit an enrollee to request a tiering exception for a higher cost-sharing tiered drug to be covered at the cost-sharing level that applies for lower cost-sharing tiered drugs. If a Part D Plan maintains a formulary tier in which it places very high costs and unique items (i.e., specialty tier), the Part D Plan may design its exception process so that very high cost or unique drugs are not eligible for a tiering exception. 42 CFR Section 423.4; Parts C & D Grievances, Organization/Coverage Determinations, and Appeals Guidance Manual, Section 40.5.1.The Part D Plan can only cover drugs prescribed for a medically accepted indication. The Plan requires prior approval (also called prior authorization) before covering some prescription drugs. If prior approval is not obtained, the Plan may not cover the drug. Each drug on the Plan's formulary is assigned to a tier. The Part D Plan contract allows an enrollee to request an exception to the Plan's cost-sharing structure to pay less for a drug. This is called a tiering exception. The Plan does not allow a tiering exception for any drug in the specialty tier.