How to Prevent Medicare Prescription Claims Denials

Have you ever had a prescription claim denied by Medicare? It can be stressful and scary. You need your medicine – but it’s too expensive to pay for all of it out-of-pocket — which is why you have coverage to begin with. It can be frustrating too because the denial notice doesn’t adequately explain why your claim was denied or provide you with easily understood next steps.

“Patients complain about Medicare prescription claim denials daily,” says Gordon Wang, MD, MDVIP-affiliated family medicine physician in Punta Gorda, FL. “It’s upsetting for the patients and me.”

While Medicare makes mistakes (there’s an appeal process to correct routine errors), legitimate denials are complicated. However, you can prevent many of them before you even submit the claim—you just need to understand how the system works. Here’s what you need to know.

Check your formulary: Formularies are a list of medications of covered drugs. You can find your formulary on your plan’s website.

Medicare drug plans – referred to as Medicare Part D – may be contracted from a private insurance company or as a stand-alone Medicare prescription drug plan. The “owner” of your Part D plan (an insurance company or Medicare itself) establishes the formulary and decides which drugs are covered and the benefit level.

Regardless of who owns your plan, all Part D drug formularies must cover at least two medications from the six basic drug classifications including HIV/AIDS treatments, antidepressants, antipsychotic medications, anti-convulsive treatments for seizures, immunosuppressive medications and cancer treatments. It’s common for a formulary to cover a combination of brand-name and generics with varying copays.

Formularies have accompanying tier systems that divide drugs into three or four price classes. Affordable drugs are placed into the lower tiers, whereas more expensive drugs are in upper tiers. Refer to your plan’s tier system to anticipate if a drug will be covered, if it will be filled as a generic or brand-name and your copayment.

Keep in mind that Part D formularies will not cover over-the-counter medications or medications for weight loss, coughs and colds, fertility, sexual dysfunction or cosmetic issues.

Understand your plan’s restrictions: Even if your drug is on the formulary, your claim can still be denied. It may be related to a plan restriction. Common restrictions include:

• Prior authorizations. Plans often place restrictions on very strong medications that could pose a safety risk to patients. So even if a drug is on the formulary, you may need special permission.

• Off-label use. The FDA approves a medication for a specific purpose and/or age group. This purpose is clearly spelled out on a drug’s label or insert. But sometimes doctors notice that a medication may have benefits for conditions that aren’t listed on the label and prescribe it for “off-label” uses because they feel it’s the most appropriate medication. For your protection, your plan may push back and require a prior authorization, despite the drug being safe and on the formulary. Off-label prescriptions are very common; in fact, more than one in five outpatient prescriptions written in the U.S. are for off-label purposes, according to WebMD.

• Quantity limits. Plans establish a safe dosage and monthly quantity for each drug on their formulary. When a prescription is written for a dosage or quantity that exceeds these set limits, a plan may deny the claim until the doctor explains why the dosage/quantity is medically necessary.

• Step therapies. Plans control costs by requiring patients to first try a less expensive medication. If your doctor prescribes a medication that is more expensive than its competitors, without an apparent medical reason, you will probably need a prior authorization.

“Many pharmacies head off denials by calling me to confirm the medical necessity of the prescription,” Wang says. However, if your pharmacy has a history of being less proactive, you might ask your doctor to call your drug plan with a prior authorization and provide as much information as possible as to why you need to take a medication that is:

• Stronger than normal
• More expensive than its competitors
• A brand name when a generic is available
• Off label
• Beyond recommended dosage or quantity limits

Be aware of donut holes: Most Medicare Part D have a coverage gap, commonly referred to as a donut hole. You are responsible for your prescription costs until you hit your deductible. After that, all you owe is a copay and Medicare kicks-in the remainder—but only up to a limit determined by Medicare on an annual basis. For instance, in 2017 the limit is $3,700. Once this limit has been met, you must cover your prescription costs until you meet your yearly out-of-pocket spending threshold, which also varies each year. In 2017 the threshold is $4,950. If you submit a prescription claim during your donut hole, it will probably be denied.

Congress designed the donut hole to help offset some of the costs incurred by Medicare, as it picks up almost 90 percent of Part D costs. Most Medicare patients don’t reach their donut holes. “About 80 percent of my patients are on Medicare,” Wang says, “And only about 5 percent fall into the donut hole.”

If you take a lot of medication and risk falling into the donut hole, talk to your doctor; they might be able to prescribe less expensive drugs, helping you manage your costs and keep you out of the donut hole. “For patients on expensive medication, like inhalers for asthma and COPD, I try to give them samples whenever possible and find other creative means to help control their Medicare prescription allowance,” Wang says.

Know your Medicare Part B coverage: Sometimes a Part D claim will be denied if it was paid under your Medicare Part B plan, which covers doctor’s appointments, mental health care, preventive services, hospital outpatient services, lab tests and x-rays, and some home health and ambulance services.

If you feel you were denied a claim unfairly, appeal it. Begin by requesting formal coverage determination and exceptions request forms from your drug plan. As you go through the appeals process, keep detailed records of all related telephone conversations and out-of-pocket expenses for the medications on appeal.

Most importantly, keep your doctor informed of your formulary. They can help you navigate the system and hopeful avoid unexpected prescription drug costs. As part of the MDVIP Wellness Program, your doctor can customize a wellness plan for you and your needs, including reviewing your medications. Don’t have an MDVIP-affiliated doctor? MDVIP has a nationwide network of physicians. Find one near you and begin your partnership in health >>