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How Medicare Part D Step Therapy Helps You Save on Prescription Drugs

October 6, 2016

If you have prescription drug coverage under Medicare Part D, your plan may have certain procedures to make sure you’re taking your medications safely and correctly. Whether you have prescription coverage through a Medicare Advantage Prescription Drug plan or a stand-alone Medicare Part D Prescription Drug Plan, each plan has a list of medications that it covers (also known as a “formulary”). Step therapy is a type of prior authorization in which you are required to first try a less expensive medication (in the plan’s formulary) that has been proven effective for most people with your condition before the plan will pay for a more expensive prescription drug.

Under step therapy, the less expensive prescription drug might be a generic option, but it doesn’t necessarily have to be. If the lower-cost medication isn’t effective in treating your condition or results in side effects, the plan might then let you take a “step” up and pay for the more expensive medication.

Cost benefits of Medicare Part D step therapy

Medicare Part D step therapy can help you save money on medications. Medicare Part D Prescription Drug Plans and Medicare Advantage Prescription Drug plans typically categorize covered prescription drugs into tiers, and each individual tier has different out-of-pocket costs. Generally, lower-tier prescription drugs have lower coinsurance and copayment costs than higher-tier medications. By taking a similar, less expensive prescription drug on a lower tier, you could pay much less than you would for a more expensive prescription drug on a higher tier.

Keep in mind that plan formularies can change from year to year. Whether your medications are covered and which tier they fall into can affect your out-of-pocket costs. If your plan makes a change that affects a medication you’re taking, the insurance company is required to send you a written notice at least 60 days before the change goes into effect. Always be sure to review carefully any coverage information your plan sends you. A plan’s formulary may change at any time. You will receive notice from your plan when necessary.

Medicare Part D step therapy exceptions

There are some instances where you might be able to waive the step therapy process. Your plan may cover the more expensive medication, without making you first try the lower-cost alternative, if:

  • You’ve already tried a similar medication, and it didn’t work for your condition.
  • It’s medically necessary for you to be on the more expensive medication.

To request that the plan cover the more expensive medication, you can file for an exception with your doctor’s help. The doctor who prescribed the medication will need to provide a statement that explains why the less expensive drug is not effective, less effective, or potentially harmful for your health condition using a form called “Medicare Part D Coverage Determination Request Form.”

Under normal circumstances, a plan has 72 hours to process your exception request and make a coverage decision. It must include a medical justification for its coverage decision, whether it is approving or denying the exception. If you or your doctor believes that waiting three days would put your health and life at risk, you or your doctor can file an expedited request. Your plan is required to make a coverage decision within 24 hours of receiving your request.

If you do not agree with your plan’s coverage decision, you can file an appeal.

To find out what Medicare Prescription Drug plans in your vicinity may cover your prescriptions, you’re welcome to enter your zip code in the box on this page, which takes you to a page where you can enter your prescriptions to see a list of plans that may cover them.