Currentalign_powered_by_sanford_health_planPolicy N/A

Transition Policy 2026 Medicare

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Governs the Company's transition procedures to provide temporary access to Part D drugs when an enrollee presents with a non-formulary medication or one subject to prior authorization, step therapy, or quantity limits; applies to new enrollees, transfers, LTC residents, and enrollees affected by formulary changes.

Policy Summary

Payeralign_powered_by_sanford_health_plan

PolicyTransition Policy 2026 Medicare

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateN/A

Last ReviewMay 17, 2024

Next Review DateMay 18, 2026

Key ActionProvide a temporary transition supply at point-of-sale and send a transition notice to the member and prescriber so the prescriber can initiate a prior authorization or exception if needed.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

108transition window (days)

31LTC emergency supply

1 monthminimum retail fill

5 situationsapplies to

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Currentalign_powered_by_sanford_health_planPolicy N/A

Transition Policy 2026 Medicare

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Policy Summary

Payeralign_powered_by_sanford_health_plan

PolicyTransition Policy 2026 Medicare

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateN/A

Last ReviewMay 17, 2024

Next Review DateMay 18, 2026

Key ActionProvide a temporary transition supply at point-of-sale and send a transition notice to the member and prescriber so the prescriber can initiate a prior authorization or exception if needed.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

108transition window (days)

31LTC emergency supply

1 monthminimum retail fill

5 situationsapplies to

Transition Coverage Criteria

inv-01: Transition coverage criteria

Temporary transition supplies are provided and exceptions/prior authorization (PA) are evaluated based on documented medical necessity; retail and long-term care (LTC) provisions apply.

Applies during the plan's transition period (first 108 days of coverage) and to the situations enumerated in scope: new enrollees, newly eligible enrollees, enrollees switching plans after the start of the year, enrollees affected by negative formulary changes, and LTC residents.

Covered items: Part D drugs that are non-formulary AND Part D drugs on the formulary that require PA, step therapy (ST), or have a quantity limit (QL) lower than the beneficiary's current dose (i.e., UM-controlled drugs).

Retail temporary fill rules: provide at least a one-time temporary month's supply (or multiple fills to total a month's supply if prescription written for less) during the first 108 days of enrollment; allowances made for drugs in unbreakable packages.

LTC temporary fill rules: provide a month's supply consistent with dispensing increment requirements with refills as needed during the first 108 days; after the transition period expires, provide a 31-day emergency supply while an exception or PA is requested.

Medical necessity standard for exceptions/PA: the prescriber's supporting statement and/or clinical guideline documentation must demonstrate one of three criteria: (1) other formulary/covered drugs would not be as effective and/or would have adverse effects; (2) no other formulary/covered drugs would be as effective and/or would have adverse effects; or (3) the formulary/covered alternative has caused or is likely to cause an adverse reaction or other harm based on sound clinical evidence.

Actions when a transition claim pays: provide a transition letter to member and prescriber; prescriber may suggest and prescribe therapeutically appropriate formulary alternatives; if no appropriate alternatives, prescriber or member may initiate PA/exception; members notified of appeal/redetermination rights if denied.

Point-of-sale (POS) handling: UM edits (including PA and ST) are resolved at POS through paid transition claims; POS edits include Part A/B vs Part D determination, prevention of non-Part D drug coverage, and safe utilization edits.

inv-02: Transition coverage and operational criteria

Operational rules for temporary fills, cost-sharing, allowed overrides, protected-class handling, and identification of ongoing therapy during transition.

Temporary retail fill: one-time temporary month's supply (or multiple fills totaling one month) allowed during the first 108 days of enrollment; multiple fills allowed when prescription written for less than a month.

LTC transition specifics: month's supply dispensed per facility increments with refills permitted as needed during first 108 days; after transition period, provide a 31-day emergency supply while exception/PA is pursued; do not use early refill edits to prevent access on admission/discharge; LTC enrollees are identified via patient residence code on claims.

Cost-sharing rules: for non-LIS enrollees, cost-sharing for non-formulary drugs is based on client-approved tier consistent with exceptions; cost-sharing for formulary drugs with UM waived for transition is based on the applicable formulary tier; transition cost-sharing will not exceed statutory maximum copayments for insulin and ACIP-recommended Part D vaccines per the Inflation Reduction Act.

Edits and overrides at POS: non-formulary, PA, ST, and QL edits are overridden during the transition period to allow transition fills without pharmacist override; excluded edits that remain (not overridden) include Part B vs D determinations, rejects for non-Part D drugs, safety QLs, and early refill edits.

inv-03: Transition coverage criteria

Options and requirements for handling transitions across contract years, sponsor responsibilities, and system/administrative provisions for extended or alternate supplies.

Sponsor options

Option 1: Sponsor provides transition at the start of the new contract year consistent with new enrollee process—temporary supply and notice that enrollee must switch to formulary or request an exception.
Option 2: Sponsor effectuates transition prior to January 1 by prospectively transitioning enrollees and/or completing exception requests before Jan 1; if exception granted, authorize payment prior to Jan 1; if not transitioned, provide transition supply beginning Jan 1.

Combination approach: sponsors may use both options—provide new-enrollee-style transitions and proactively encourage/complete exceptions prior to the new contract year using multiple notification methods (ANOC, EOBs, mailings, email, online tables, newsletters).

Approved exception duration and payment authorization: when exceptions are approved, the enrollee may continue medication through the end of the contract year (ensure payment is authorized prior to Jan 1) and into the next contract year per Coverage Determinations policy and CMS-approved PA duration.

Coding and System Indicators

Transition fill codesmixed

Prior Authorization, Step Therapy Transition Codes

Two-letter codes used to specify the type of transition fill.

NCPDP pharmacy messaging codesmixed

NCPDP messaging codes

NCPDP-approved message codes and free text messages returned to pharmacy identifying transition fills and reasons.

inv-06: Medical necessity criteria

Medical necessity standardOne of three criteria must be met: (1) formulary/covered drugs would not be as effective and/or would have adverse effects; (2) no formulary/covered drug would be as effective and/or would have adverse effects; or (3) the formulary/covered alternative has caused or is likely to cause an adverse reaction or other harm based on clinical evidence.

Source of determinationVerified through prescriber's supporting statement and/or clinical guidelines adopted by the plan/client.

Actions if determination failsPrescriber or member may initiate a prior authorization or exception (coverage determination) request; members are notified of appeal rights if denied.

inv-07: transition eligibility determination

Determination methodAutomated adjudication at point-of-sale using system-configured indicators to determine transition eligibility.

Provider Actions and Operational Steps

Prior Authorization

Medical review and actions when transition claims pay

The Company conducts medical review and coverage determinations for prior authorization (PA), step therapy (ST), quantity limit (QL) and non‑formulary drug requests; when a transition claim pays the plan provides a transition letter to member and prescriber, allows the prescriber to suggest formulary alternatives, and enables initiation of PA/exception requests as needed. Members are notified of appeal/redetermination rights when denials occur and appeals/redeterminations are available if a PA or exception is denied.

Provide transition letter to member and prescriber when transition claim pays.
Prescriber may suggest/formulary alternatives or initiate PA/exception if no appropriate alternative.
Appeals/redetermination available and expedited on request when denials occur.

Key Terms and Definitions

inv-15: Key transition terms

Transition PeriodFirst 108 days of coverage under a Medicare Part D plan during which temporary fills for non-formulary drugs or drugs subject to PA/ST/QL are provided.

Transition NoticeWritten notice mailed to enrollee following receipt of a temporary fill outlining the temporary nature of the supply, how to work with the plan and prescriber, right to request an exception, and procedures for requesting an exception.

Emergency Fill (LTC)After the initial transition period, LTC facility residents must receive an emergency supply of at least 31 days when ordered non-formulary or UM drugs; multiple fills allowed to reach 31 days if prescription written for less.

Ongoing therapy lookbackCMS auditors use a 108-day lookback to establish ongoing therapy; Company standard is a 108-day transition window.

inv-16: Level-of-care change

Policy Summary

Payeralign_powered_by_sanford_health_plan

PolicyTransition Policy 2026 Medicare

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateN/A

Last ReviewMay 17, 2024

Next Review DateMay 18, 2026

Key ActionProvide a temporary transition supply at point-of-sale and send a transition notice to the member and prescriber so the prescriber can initiate a prior authorization or exception if needed.

SourceLink

On This Page

Identification and automatic handling for level-of-care changes: change in patient residence code (LTC indicator) permits automated override of relevant rejects and allows refill of a month's supply for transition medication.

Protected class drugs: enrollees receiving a transition supply of a PA or ST protected class drug may continue the medication throughout the benefit year, are not considered new starts, do not need to go through the coverage determination/exception process to continue, and should not be sent a transition letter.

Transition notifications: send transition notice within three business days of adjudication to the enrollee and prescriber describing the temporary nature of the fill, how to work with the plan/prescriber, and procedures to request an exception.

Extension of transition: extensions are available on a case-by-case basis when an exception request or appeal has not been processed by the end of the minimum transition period; requests may be initiated by the beneficiary, authorized representative, prescriber, or pharmacy and submitted via written, telephone, email, or fax.

Messaging, forms, and coding: pharmacies will be notified using free text and NCPDP messaging codes; PA/exception forms are made available via mail, fax, email, and plan websites; claims processing uses automated system indicators to determine transition eligibility at POS.

Refill and quantity-limit handling: allow refills for transition prescriptions dispensed for less than the written amount due to QLs or safety edits; do not apply hard edits that prevent payment for transition supplies—claims should pay without pharmacist input.

Multiple transition letters and timing: issue a transition letter per claim/drug even if multiple UM restrictions were waived; mail notices within three business days of adjudication of the temporary fill.

Honoring prior exceptions: plan sponsor may honor prior-year exceptions beyond plan year end; if not honoring, sponsor must offer a prospective exception or provide a temporary supply with notice.

Eligibility for additional transitional fill across years: if enrollee used the drug at least 120 days prior and has not transitioned before Jan 1, the sponsor programs negative formulary changes to allow an additional transitional fill beginning Jan 1 until a meaningful transition is effectuated.

Retail minimum and LTC rules reiterated across contract years: retail—one-time temporary fill of at least a month's supply during first enrollment days; LTC—month supply dispensed incrementally with refills during first 108 days and 31-day emergency supply after transition period while exception/PA is requested; avoid early-refill edits on admission/discharge.

UM edits at POS during cross-year transitions: only Part A vs D determinations, prevention of non-Part D drug coverage, and safe utilization edits are applied; PA and ST edits should be resolved at POS for transition fills.

Extensions and appeals during cross-year transitions: extensions of the transition period can be initiated by beneficiary, rep, prescriber, or pharmacy via writing, phone, email, or fax when exception/appeal not processed by end of minimum transition period; Company will provide case-by-case extensions until transition is completed.

System and reporting requirements: systems must support temporary supplies and distinguish (when possible) ongoing therapy; sponsors must be provided transition policy annually, choose transition supply amount for claims setup, and Company provides regular reporting (e.g., quarterly) on transition fulfillment and timeliness.

Pharmacist actionClaims are processed at POS and do not require additional action from the pharmacist unless an allowable edit is in place.

System supportClaims processing system allows temporary supplies for transition-eligible products and applies configuration to identify eligibility.

Point-of-sale UM edits and adjudication during transition

At point-of-sale the Company resolves step therapy and prior authorization edits by allowing paid transition claims and applies only limited UM edits during transition: Part A/B vs Part D determinations, prevention of coverage for non‑Part D drugs, and edits to promote safe utilization.

Step therapy and prior authorization edits are resolved at POS through paid transition claims.
Applied POS UM edits: Part A vs B/D determinations, non‑Part D prevention, and safe utilization edits.

Prior Authorization

One-time authorizations for level-of-care changes

When a level-of-care change is not automatically identified, the pharmacist must call the Pharmacy Help Desk to notify them so a one-time authorization can be entered to allow the claim to pay; these are entered as one-time authorizations and additional one-time authorizations are placed for subsequent level-of-care changes.

Pharmacist calls Pharmacy Help Desk to report level‑of‑care change if system did not auto-identify.
Help Desk places a one-time authorization to allow the claim to pay.
Enter additional one-time authorizations for subsequent level‑of‑care changes to prevent therapy gaps.

Denial Risk

Overrides at POS and beneficiary exception/appeal rights

If UM edits are overridden at point‑of‑service solely for transition fills, the beneficiary is notified and may begin the formulary exception process; all non‑formulary, PA, ST, or QL edits remain subject to exception and appeal procedures.

Overrides at POS for transition-only fills trigger beneficiary notification (transition letter).
Beneficiary may initiate an exception request and pursue appeals/redeterminations if needed.
Non‑formulary, PA, ST, and QL edits remain subject to exception and appeal even when waived for transition.

Documentation Required

Availability and submission methods for PA/exception requests

Prior authorization and formulary exception request forms are available upon request to enrollees and prescribers via mail, fax, email, and plan sponsor websites; requests may be initiated by the beneficiary, authorized representative, prescriber, or pharmacy and submitted in writing, by phone, email, or fax.

PA/exception forms provided for convenience via mail, fax, email, and plan websites.
Requests may be submitted by beneficiary, authorized representative, prescriber, or pharmacy.
Submission methods include written, telephonic, email, or fax.

Prior Authorization

Case‑by‑case extension of transition period when appeals/requests pending

The Company will extend the transition period on a case‑by‑case basis when an exception request or appeal has not been processed by the end of the minimum transition period; extensions must be initiated by the beneficiary, authorized representative, prescriber, or pharmacy and may be requested in writing, by phone, email, or fax.

Extensions provided until a transition is made or a decision on the exception request is issued.
Initiation permitted by beneficiary, authorized representative, prescriber, or pharmacy.
Requests accepted in writing, telephonically, by email, or by fax.

Note

Attachments

Attachments: None. There are no attachments associated with this policy.

Level-of-care change: When an enrollee changes from one treatment setting to another (examples: discharge from hospital to home or LTC, end of Part A SNF stay reverting to Part D, giving up hospice status, discharge from psychiatric hospital). Identified in adjudication system by patient residence code change.

ApplicationCompany provides transition fills for enrollees experiencing unplanned level-of-care changes and applies transition fill process as required.

PurposeEnsures outpatient Part D prescriptions are available upon discharge once Part A limited supplies are exhausted.

inv-17: Transition claim indicator

Indicator purposeTransition claim indicator: claim-level stamp used by the adjudication system to identify transition supplies and define the type and reason for the transition (e.g., non-formulary, PA, ST).

Types markedIncludes 'Formulary Change across Contract Year' and 'Level-of-Care Emergency Fill' transition claims.

UseIndicators drive the content of CMS-compliant transition letters and notification workflows.

inv-18: Transition supply

Transition supply definitionTemporary supply of non-formulary Part D drugs (including formulary drugs requiring PA/ST/QL) provided to meet immediate enrollee needs while allowing time for prescriber to switch therapy or complete an exception request.

System requirementSystems must allow temporary supplies of non-formulary Part D drugs and apply transition processes when system cannot distinguish new vs ongoing prescriptions at POS.

Post-transition LTC provisionFor LTC residents, after the transition period an emergency supply of at least 31 days must be provided while seeking exception/PA.

inv-19: Retail transition fill

Retail minimum fillOne-time temporary retail fill of at least a one-month supply (unless prescription written for less, in which case multiple fills are allowed to total one month) during the first enrollment days specified (Company references first 90 days in some retail rules but standard transition period is 108 days).

Multiple fillsIf prescription is written for less than a month's supply, multiple fills are permitted to reach a total month's supply.

Application windowRetail temporary fills are provided during the initial enrollment/transition window (company standard transition window is 108 days; retail guidance references first 90 days for certain retail rules).

inv-20: Authority/Citations

Authority/CitationsNone (8.1 N/A).

Regulatory basis noteTransition processes are intended to comply with 42 CFR §423.120(b)(3) and CMS guidance, but no specific authority entries are listed in this section of the policy.

inv-21: Title/Version

Policy titleTransition Policy 2026 Medicare (Align Powered By Sanford Health Plan / Optum Rx).

VersionVersion: 12 (document lists version history and updates through 4/29/2025).

Review datesLast review: 2024-05-17; Next review: 2026-05-18.