CurrentAlignment Health PlanPolicy Y0141_IR26294EN_C

Medicare Formulary Transition

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This policy governs temporary prescription drug coverage and transition support for Medicare Part D members when a drug is non-formulary or subject to new utilization management requirements, including temporary fills, notices, exceptions, appeals, and switches to covered alternatives.

Policy Summary

PayerAlignment Health Plan

PolicyMedicare Formulary Transition

Policy CodePolicy Y0141_IR26294EN_C

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionUse the temporary transition supply to allow time to switch the member to an appropriate covered alternative or submit an exception request.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

90 daysInitial coverage period

1 monthLong-term care temporary supply

108 daysPlan-year lookback

31 daysLTC emergency supply

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CurrentAlignment Health PlanPolicy Y0141_IR26294EN_C

Medicare Formulary Transition

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Policy Summary

PayerAlignment Health Plan

PolicyMedicare Formulary Transition

Policy CodePolicy Y0141_IR26294EN_C

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionUse the temporary transition supply to allow time to switch the member to an appropriate covered alternative or submit an exception request.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

90 daysInitial coverage period

1 monthLong-term care temporary supply

108 daysPlan-year lookback

31 daysLTC emergency supply

Transition notice deadline

Transition Coverage Eligibility and Rules

Eligible Members and Applicable Drugs

Transition coverage applies when ALL of the following are met:

ALL of the following

ONE of the following member categories
- New member enrolled in a prescription drug plan after the Annual Enrollment Period.
- Newly eligible for Medicare who had other health coverage before enrollment.
- Member who switched from one plan to another after the plan year began.
- Current member whose formulary changed from one plan year to the next.
- Member residing in a long-term care facility.
The drug is affected in ONE of the following ways
- Part D drug is not on the plan formulary.
- Part D formulary drug requires prior authorization or step therapy.
- Part D formulary drug has a quantity limit lower than the amount the member currently takes.

Temporary Fills and Extension Rules

Temporary transition coverage and extensions are available according to the member's setting, enrollment timing, and coverage-change circumstances.

ALL of the following

The pharmacy processes the transition fill through the automated transition system; the pharmacist does not need to enter an override code or hard edit before a non-formulary claim is paid.
Applicable temporary-fill or extension circumstance
- New member in an outpatient setting may receive a one-time temporary fill of a non-formulary drug at any time during the first 90 days of coverage. After that fill, future transition fills for the drug are not covered and the required authorization must be obtained.
- Member residing in a long-term care facility may receive a temporary supply during the first 90 days of coverage, with refills as needed according to the facility pharmacy's dispensing practices.
- If the prescription is written for less than a month, refills may be provided to reach a full month's supply; if the medication is in non-splittable packaging or multiple packages are needed to provide the prescribed dose, a larger amount may be provided when necessary.

Initial Transition Supply: First 90 Days

During the initial transition period, provide the following minimum supplies.

ALL of the following

Outpatient setting
- Provide at least a one-month supply at a retail pharmacy at any time during the first 90 days of coverage.
- If the prescription is for less than one month, provide refills to reach a full month's supply.
- If packaging cannot be split or multiple packages are needed to provide the prescribed dose, provide the larger amount when necessary.
Long-term care setting
- Provide a temporary supply of at least one month at any time during the first 90 days of coverage, in accordance with the long-term care pharmacy's dispensing practices, with refills as needed.

Long-Term Care Emergency Supply

After the regular transition period, long-term care members remain eligible for an emergency supply while pursuing coverage authorization.

ALL of the following

The member remains in a long-term care facility after the first 90 days of coverage.
The drug is a Part D drug that is not on the formulary.
The member or prescriber is requesting an exception or prior authorization.
Provide an emergency supply of at least 31 days, unless the prescription is written for less than 31 days; provide the prescribed amount in that case.
If packaging cannot be split or multiple packages are needed to provide the prescribed dose, provide a larger amount when necessary.

Extensions, Plan-Year Changes, and Re-Enrollment

Transition coverage may continue or be triggered again when coverage changes across plan years or when a member reenrolls.

ONE of the following continuation or re-triggering conditions

An exception request or appeal remains under review when the transition period ends; extend coverage case by case until an appropriate covered drug is obtained or a decision is made.
A currently used drug is affected by a change from one plan year to the next; provide transition coverage at the start of the new plan year if the drug was filled within a lookback period of at least 108 days, or provide it before the new plan year begins.
The member enrolled with an effective date of November 1 or December 1 and needs transition access; coverage may continue into the next plan year.
The member leaves the plan and later reenrolls; treat the member as new for transition purposes and use the reenrollment date to determine transition benefits.

Level-of-Care Transitions

When an unplanned change in care setting threatens access to a non-formulary drug, maintain access while the member and prescriber use the exceptions and appeals process.

ALL of the following

The member changes between care settings, such as hospital, home, or long-term care, and a prescribed drug is not on the formulary or otherwise requires transition intervention.
The member and prescriber may use the exceptions and appeals process, and coverage decisions and appeals are processed as quickly as the member's health condition requires.
Required access protection
- When the member is discharged home, provide a full outpatient supply before the limited supply received at discharge runs out, including before the member leaves a Part A stay.
- When the member is admitted to or discharged from a long-term care facility and lacks access to the remainder of a prior prescription, provide a one-time refill-too-soon override for each affected medication and allow the refill without an early-refill limit blocking medically necessary Part D access.

Transition-Fill Pharmacy Edits

During transition processing, apply only the permitted pharmacy checks and resolve transition-related utilization management requirements without requiring a manual hard edit.

ALL of the following

Confirm whether the drug is covered under Medicare Part A, Part B, or Part D.
Prevent drugs not covered by Medicare Part D from being billed to the Part D benefit.
Apply safety checks, including opioid safety limits, quantity limits based on FDA-recommended maximum daily doses such as acetaminophen limits, and checks for refilling too early.
Resolve step therapy and prior authorization requirements at the pharmacy through the transition process; the pharmacist does not need to enter an override code or hard edit before payment of a non-formulary transition claim.
Allow the member or prescriber to request an exception or appeal for any transition check and process the request quickly to prevent a gap in medically necessary treatment or unnecessary cost from multiple smaller fills.

Transition Supply Cost Sharing

Apply transition-supply cost sharing according to the member's Extra Help status and the applicable formulary coverage pathway.

ONE of the following cost-sharing rules

Member qualifies for Extra Help (Low-Income Subsidy): charge no more than the maximum copayment amount allowed by law for the temporary transition supply.
Member does not qualify for Extra Help: apply the cost sharing that would apply if the drug were approved through a formulary exception, as required under 42 CFR § 423.578(b).
The drug is on the formulary but subject to a coverage rule: apply the cost sharing that would apply if the member met the applicable coverage requirements for that drug.

Regulatory References and Operational Thresholds

Applicable CMS and Medicare Part D regulationsmixed

42 CFR § 423.120(b)(3)	Regulatory citation for the Medicare Part D transition program
42 CFR § 423.154	Regulatory citation related to Medicare Part D utilization management requirements
42 CFR § 423.578(b)	Regulatory citation related to Medicare Part D formulary exceptions
42 CFR § 423.154(a)(1)(i)	Regulatory citation related to Medicare Part D utilization management

Initial outpatient transition period

Coverage periodFirst 90 days of coverage

SettingOutpatient setting, such as a retail pharmacy

Initial fillOne-time temporary fill for a non-formulary drug

Initial LTC transition period

Coverage periodFirst 90 days of coverage

SettingLong-term care facility

Temporary supplyOne-month supply, with refills provided if needed

Provider and Prescriber Workflow

Prior Authorization

Request a formulary exception

Submit a formulary exception request when a non-formulary drug is medically necessary or when coverage is needed despite a step therapy, substitution, dose, or quantity restriction.

Prior Authorization

Obtain prior authorization

Obtain prior authorization when the drug requires it and work with the member to submit the required authorization after the temporary transition fill. Future fills may not be covered through the transition process once the one-time fill is used.

Step Therapy

Address step therapy

Address step therapy by documenting the use or failure of covered alternatives, or explaining why those alternatives would be unsafe, less effective, or likely to cause a harmful reaction.

Key Terms

Formulary Exception (FE)

PurposeRequest coverage for a drug that is not on the formulary or reduce the member’s cost for a drug that would otherwise cost more

Applicable situationsMay address an excessive dose or amount, an unmet step therapy requirement, or a required substitution

Continued therapyMay support continued use of a drug being removed from the formulary for reasons unrelated to safety, supply, or manufacturer discontinuation

Prior Authorization

DefinitionApproval required before certain drugs are covered

PurposeReviews drugs with a higher risk of misuse, overuse, or inappropriate use

Policy Summary

PayerAlignment Health Plan

PolicyMedicare Formulary Transition

Policy CodePolicy Y0141_IR26294EN_C

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionUse the temporary transition supply to allow time to switch the member to an appropriate covered alternative or submit an exception request.

SourceLink

On This Page

If the pharmacy cannot determine whether a non-formulary prescription is new or ongoing therapy, the prescription is treated as eligible for a temporary transition supply.

If an exception request or appeal remains pending when the transition period ends, coverage may be extended case by case until the member switches to an appropriate covered drug or a decision is made.

If a drug will no longer be covered, will gain a prior authorization, step therapy, or quantity-limit requirement, or otherwise become inaccessible from one plan year to the next, transition coverage is provided at the start of the new plan year when the drug was filled within the prior 108 days, or before the new plan year begins.

For enrollment effective November 1 or December 1, transition coverage may carry into the next plan year when needed.

If packaging cannot be split or multiple packages are needed to provide the prescribed dose, provide a larger amount when necessary.

If an amount or dose exceeds an FDA or clinical-guideline safety limit, first provide the full temporary supply up to the maximum allowed and assist the member or prescriber with filing an exception, or process an exception that has already been submitted.

Prior-fill lookback for cross-year transition

Lookback periodDrug filled within the last 108 days

TriggerCoverage change from one plan year to the next

Alternative timingTransition coverage may be provided before the new plan year begins

LTC temporary supply

Supply amountOne-month temporary supply

SettingLong-term care facility

DispensingProvided according to the long-term care pharmacy’s supply amounts, with refills if needed

Initial transition supply

Minimum supplyAt least a one-month supply

TimingDuring the first 90 days of coverage

Packaging ruleA larger supply may be provided when packaging cannot be split or multiple packages are needed for the prescribed dose

Long-term care emergency supply

Minimum supplyAt least 31 days

TimingAfter the regular transition period

Prescription limitThe supply may be shorter if the prescription is written for less than 31 days

Plan-year transition lookback

Minimum lookbackAt least 108 days

ApplicabilityA drug currently taken that is affected by a coverage change between plan years

Coverage pathCoverage may begin at the new plan year or be provided before it begins

Transition notice mailing deadline

Mailing deadlineWithin 3 business days after the temporary transition fill

Long-term care dispensingFor 14-day or shorter increments, the deadline applies after the first fill

Notice contentExplains that the supply is temporary and provides instructions for meeting coverage requirements or finding a covered alternative

Documentation Required

Document medical necessity

Provide medical-necessity information and explain whether covered alternatives have been tried and caused problems or would not work appropriately for the member.

Include the clinical rationale for requesting continued coverage.
Explain when an alternative would be unsafe, less effective, or likely to cause a harmful reaction.

Documentation Required

Manage transition fills

Use the temporary transition supply to allow time to switch the member to an appropriate covered alternative or submit an exception request. Additional refills may be available when the initial fill was reduced by a quantity limit or other safety-related rule.

A new outpatient member may receive a one-time temporary fill during the first 90 days of coverage.
A long-term care member may receive a temporary one-month supply during the first 90 days.

Documentation Required

Follow up after temporary fill

After a temporary fill, review the transition notice and help the member switch to a covered drug or request prior authorization when needed.

The notice explains that the supply is temporary.
Use the notice instructions to meet coverage requirements or find a covered alternative.

Prior Authorization

Request an exception or appeal

Members and prescribers may request a formulary exception or appeal when a transition drug is not covered or a transition coverage check affects access. Requests should be pursued promptly to help prevent a gap in medically necessary treatment.

Documentation Required

Resolve post-transition coverage requirements

After a temporary fill, work with the plan to satisfy applicable prior authorization, step therapy, or other coverage requirements, or identify an appropriate covered alternative.

Documentation Required

Obtain authorization and exception forms

Obtain prior authorization and formulary exception request forms through the available plan channels: mail, fax, email, or the plan website.

Prior Authorization

Request or manage a transition extension

If an exception request or appeal remains under review when the transition period ends, pursue transition coverage extension on a case-by-case basis until an appropriate covered drug is obtained or a decision is made.

Billing Rule

Process the transition claim without an override code

During transition processing, step therapy and prior authorization requirements are resolved at the pharmacy. For an eligible automated transition claim, the pharmacist does not need to enter an override code or hard edit.

Denial Risk

Address safety-limit denials

Amounts or doses above applicable FDA safety limits or established clinical guidelines may not be approved. Before this occurs, the member must receive the full temporary supply up to the allowed maximum, and the member or prescriber must be assisted with an exception request.

Safety checks may include opioid limits and quantity limits based on FDA-recommended maximum daily doses.
An exception or appeal remains available for applicable transition checks.

Billing Rule

Apply the long-term care transition refill override

For a member admitted to or discharged from a long-term care facility without access to the remainder of a prior prescription, apply the one-time refill-too-soon override for each affected medication.

The override supports medically necessary access during the care-setting transition.
The override is provided for each affected medication.

May also apply when a drug raises cost concerns

Quantity Limit (QL) Exception

DefinitionRequest to cover more than the usual amount of a drug

Who may requestThe member, an appointed representative, or the prescriber

Request conditionSpecific approved clinical criteria must be met

Step Therapy (ST)

DefinitionRequirement to try one or more other drugs first

SequenceThe other drugs must be tried in a specific order

Next stepIf an option does not work, the plan moves to the next option as needed

Utilization Management (UM)

DefinitionProcess used to review healthcare services and procedures

Review criteriaWhether care is medically necessary and appropriate

EfficiencyWhether services are used efficiently under the plan; also called utilization review

Transition supply

DefinitionTemporary supply provided when a member needs access to a non-formulary or coverage-affected drug

PurposeProvides time to switch to a covered alternative or pursue an exception or prior authorization

Initial accessEligible transition fills are processed even when the pharmacy cannot determine whether therapy is new or ongoing

Ongoing drug therapy

DefinitionA member who has already been taking the drug

Pharmacy identification ruleIf the pharmacy cannot determine whether the prescription is new or ongoing, the first fill is treated as eligible for a temporary transition supply

After first fillPrior authorization, step therapy, or quantity limits may apply when appropriate

Protected-class drug

DefinitionDrug category in which prior authorization or step therapy may apply only to new prescriptions

First transition fillAfter the first fill is approved, the member is treated as an ongoing user

EffectThe new-prescription authorization or step-therapy rule no longer applies to that member for that drug

Emergency supply

DefinitionSupply provided to a long-term care resident after the regular transition period

Drug typeNon-formulary Part D drug

PurposeProvides time to request a formulary exception or prior authorization

Re-enrolled member

DefinitionMember who leaves the plan and later returns

Transition dateThe re-enrollment date determines transition benefits

TreatmentTreated as a new member for transition purposes

Level of care change

DefinitionMove between care settings, such as hospital, home, or long-term care

TriggerThe change creates an unplanned need for access to a non-formulary prescribed drug

Coverage accessExceptions, appeals, supplies, and refill access may be used to prevent a gap in medically necessary treatment

Extra Help

DefinitionLow-Income Subsidy program

Temporary-supply cost sharingCost cannot exceed the maximum copayment allowed by law

If the member does not qualifyCost sharing follows the applicable formulary-exception or formulary coverage rule