CurrentAlignment Health PlanPolicy Y0141_IR26294VI_C

Medicare Part D Transition Drug Coverage

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This policy governs Alignment Health Plan’s Medicare transition process for members who need temporary coverage for drugs that are not on the formulary or are subject to prior authorization, step therapy, or quantity limits. It applies to new, changing, existing, and long-term-care members receiving prescription drugs through retail pharmacies or long-term-care facilities.

Policy Summary

PayerAlignment Health Plan

PolicyMedicare Part D Transition Drug Coverage

Policy CodePolicy Y0141_IR26294VI_C

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionRequest the applicable formulary exception, prior authorization, quantity-limit exception, or step-therapy exception when coverage is needed for a non-formulary drug or a drug subject to utilization-management requirements.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

90 daysInitial transition period

1 monthMinimum temporary supply

31 daysLong-term-care emergency supply

3 business days

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CurrentAlignment Health PlanPolicy Y0141_IR26294VI_C

Medicare Part D Transition Drug Coverage

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Policy Summary

PayerAlignment Health Plan

PolicyMedicare Part D Transition Drug Coverage

Policy CodePolicy Y0141_IR26294VI_C

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

90 daysInitial transition period

1 monthMinimum temporary supply

31 daysLong-term-care emergency supply

3 business days

Written notice deadline

108 daysPlan-year lookback period

Eligibility, Supply, and Transition Coverage

Eligibility and temporary supply criteria

Temporary transition coverage is available when an eligible member needs a Part D drug that is non-formulary or is subject to prior authorization, step therapy, or a lower quantity limit than the member is currently using.

ONE of

New member enrolled in a prescription drug plan after the annual enrollment period
Newly Medicare-eligible member previously covered by other health insurance
Member who changed plans after the plan year began
Existing member whose formulary changed between plan years
Member residing in a long-term-care facility

ONE of

Part D drug not included on the plan formulary
Formulary Part D drug requiring prior authorization
Formulary Part D drug requiring step therapy
Formulary Part D drug with a quantity limit lower than the quantity the member is currently taking

ALL of the following

Eligible new outpatient member obtains a non-formulary prescription within the first 90 days of coverage
Provide one temporary supply; increase a prescription written for less than one month to a one-month supply, or provide the larger non-divisible package quantity when necessary.

ALL of the following

Eligible member resides in a long-term-care facility and obtains the drug within the first 90 days of coverage
Provide a temporary supply for one month at any time during the first 90 days, using available long-term-care pharmacy stock and refilling as needed.

ALL of the following

Temporary supply has been provided
Future fills are not covered under the transition process unless the required authorization or exception is approved; the member should transition to a covered alternative or pursue the applicable exception.

ALL of the following

A formulary exception request or appeal remains under review when the transition period ends
Coverage may be extended case by case until the member changes to a covered drug or receives a final decision.

ALL of the following

An existing member's drug will become non-covered or will receive new prior authorization, step-therapy, or quantity-limit requirements
ONE of
- Provide transition medication at the beginning of the new plan year if the member purchased the drug within the preceding 108 days.
- Provide transition medication before the new plan year begins.
- For November 1 or December 1 effective enrollments, continue transition coverage into the new plan year when needed.

Adjudication and medical-necessity review

The automated transition process verifies benefit eligibility and applies safety checks before adjudicating the temporary supply.

ALL of the following

A transition claim is submitted
Check whether the drug is payable under Part A, Part B, or Part D and prevent a drug not covered under Part D from being billed to the Part D benefit.

ALL of the following

The member requests continued coverage for a non-formulary drug
Review medical necessity, prior use or failure of covered alternatives, and prescriber-supported reasons that alternatives may be unsafe, ineffective, or otherwise unsuitable.

Initial transition supply

Temporary transition supplies are available according to the member's dispensing setting and the applicable transition period.

ALL of the following

Member is within the first 90 days of coverage, or otherwise qualifies under a documented transition circumstance.
ONE of
- Retail pharmacy: provide a quantity sufficient for at least one month, subject to prescription duration and package-size rules.
- Long-term care: provide at least one month through the facility pharmacy process, with refills as needed during the first 90 days.

Long-term-care emergency supply

Long-term-care members may receive additional temporary coverage after the initial transition period while pursuing an exception or prior authorization.

ALL of the following

Member resides in or is receiving medication through a long-term-care facility.
Drug is not on the formulary and the member is seeking a formulary exception or prior authorization.
Provide up to 31 days, unless the prescription is written for a shorter period; additional quantity may be supplied when packaging cannot be split or multiple packages are required.

Cross-year transition

When a medication is affected by a change in coverage from one plan year to the next, transition coverage is provided at the start of the new year or before the new year begins under the stated conditions.

ONE of

At the beginning of the new plan year, the member purchased the medication during at least 108 days of the review period.
Transition coverage is provided before the new plan year begins.
For members whose coverage began November 1 or December 1, transition coverage may continue into the next plan year when needed.

Change in level of care

Members changing care settings receive protections intended to prevent interruption of Part D access.

ONE of

ALL of the following
- Member changes between hospital, home, or long-term-care settings and the prescribed drug is not on the formulary
- Process an exception or appeal promptly according to the medical urgency of the member's condition.
ALL of the following
- Member enters or leaves long-term care and cannot access the remaining supply
- Allow a one-time early-refill exception for each affected drug.

Transition claim and safety criteria

Transition claims remain subject to benefit-category verification and safety controls.

ALL of the following

Verify whether the medication is covered under Medicare Part A, Part B, or Part D.
Do not bill Part D for medication that Medicare Part D does not cover.
Apply opioid safety limits, FDA-recommended maximum daily-dose quantity limits, and early-refill checks.
Before denying quantities or doses exceeding safety limits, provide the permitted temporary amount and support an exception request or ensure the request has been resolved.

Transition cost sharing

Cost sharing depends on the member's eligibility for Low-Income Subsidy and the applicable coverage pathway.

ONE of

If the member qualifies for Low-Income Subsidy, temporary transition-drug cost sharing must not exceed the legally applicable maximum copayment.
If the member does not qualify for Low-Income Subsidy, apply cost sharing equivalent to an approved formulary exception or to the applicable covered formulary drug with coverage restrictions.

Coverage Categories, Timing, and Operational Parameters

Medicare benefit coverage categoriesmixed

Part A	Medicare Part A coverage category to verify before processing a transition claim
Part B	Medicare Part B coverage category to verify before processing a transition claim
Part D	Medicare Part D pharmacy benefit under which transition coverage is administered

Transition regulatory referencesmixed

42 CFR § 423.154(a)(1)(i)	Regulatory citation governing transition notice timing for applicable long-term-care dispensing
42 CFR § 423.578(b)	Regulatory citation referenced for cost sharing when a formulary exception is approved

Initial outpatient transition period

Coverage windowWithin the first 90 days of coverage

Outpatient supplyOne temporary fill for a non-formulary drug

Short prescriptionIf prescribed for less than one month, the fill may be increased to a one-month supply

Initial long-term-care transition period

Coverage windowWithin the first 90 days of coverage

Temporary supplyA one-month supply may be provided at any time

Provider, Pharmacy, and Plan Responsibilities

Prior Authorization

Request the applicable exception or authorization

When a member needs coverage for a non-formulary drug or a drug subject to utilization-management requirements, the prescriber or member may request the applicable formulary exception, prior authorization, quantity-limit exception, or step-therapy exception.

Documentation Required

Document medical necessity and failed alternatives

During medical-necessity review, provide information about covered alternatives previously tried and the problems encountered. If alternatives were not tried, explain why they are expected to be unsafe, ineffective, or otherwise unsuitable.

Transition Policy Terminology

Formulary exception (FE)

Primary definitionA request for coverage of a drug that is not on the formulary

Covered request scenariosThe request may involve a higher-cost drug, a quantity exceeding the usual limit, or a drug for which step therapy has not been completed

Formulary removalIt may also apply when a drug was removed from the formulary for reasons unrelated to safety, supply, or manufacturer discontinuation

Prior authorization

DefinitionApproval required before certain drugs are covered

Risk rationaleIt generally applies to drugs with higher risks of misuse, overdose, or inappropriate use

Policy Summary

PayerAlignment Health Plan

PolicyMedicare Part D Transition Drug Coverage

Policy CodePolicy Y0141_IR26294VI_C

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

SourceLink

On This Page

When discharge medication restrictions expire, provide an outpatient supply sufficient for treatment when applicable, including while the member remains under Part A care.

Refills are provided as needed, subject to the long-term-care pharmacy's available stock

Existing-member plan-year transition lookback

Review pointAt the beginning of the new plan year

Utilization lookbackThe member must have purchased the medication within the prior 108 days

Additional timingTransition coverage may also be provided before the new plan year begins

Initial transition period

Duration90 days from the start of coverage

Retail settingRetail transition coverage applies during the first 90 days of coverage

Long-term-care settingLong-term-care transition coverage also applies during the first 90 days of coverage

Retail minimum transition supply

Minimum quantityAt least 1 month

Short prescriptionA prescription written for less than one month may be increased to a one-month supply

Package handlingA larger quantity may be supplied when the package cannot be split or multiple packages are needed

Long-term-care initial temporary supply

Minimum supplyAt least 1 month

RefillsRefills are provided as needed during the first 90 days

Dispensing processSupply is provided through the long-term-care pharmacy's dispensing process

Long-term-care emergency supply after transition

Supply duration31 days

Prescription shorter than 31 daysThe member receives the amount prescribed when the prescription is for a shorter period

PurposeThe emergency supply supports the member while seeking a formulary exception or prior authorization

Prior-year utilization threshold

Utilization requirementMedication purchased during at least 108 days of the review period

Applicable timeAt the beginning of the new plan year

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

Written notice deadline

Notice deadlineWithin 3 business days after the temporary transition fill

Long-term-care short cyclesFor 14-day or shorter dispensing cycles, notice is due within 3 business days of the first fill

Notice recipientReasonable efforts are also made to notify the prescriber

Early-refill exception

TriggerEntering or leaving a long-term-care facility

FrequencyOne exception for each affected drug

PurposeThe exception prevents an early-refill limit from blocking access to the remaining supply

Unsplit package quantity

Retail package ruleA quantity greater than one month may be supplied when packaging cannot be split or multiple packages are needed

Long-term-care package ruleA quantity greater than 31 days may be supplied when packaging cannot be split or multiple packages are needed

Prescribed doseThe additional quantity must be needed to complete the prescribed dose

Denial Risk

Address a denied transition request

If coverage is not approved based on medical necessity, review the stated reason and the covered alternatives identified by the plan. Work with the member to transition to an appropriate covered option or submit an exception request.

Billing Rule

Process transition claims without manual override

Submit an outside-formulary transition claim through the automated process without entering an override code or modifying evidence. The system communicates whether the eligible transition claim is approved or denied.

Billing Rule

Dispense the temporary transition supply

Provide the temporary transition supply when the member meets the applicable outpatient or long-term-care transition circumstances. Additional medication may be provided when the initial fill was reduced by quantity or safety limits.

For eligible outpatient members, one temporary fill may be provided within the first 90 days of coverage.
For long-term-care members, a one-month temporary supply may be provided at any time during the first 90 days.
If a prescription is for less than one month, increase the fill to one month; use the larger quantity when packaging cannot be split or multiple packages are needed.

Prior Authorization

Handle unresolved exception or appeal cases

If an exception request or appeal remains unresolved when transition coverage ends, coverage may be extended case by case until the member changes to a covered drug or receives a final determination.

Documentation Required

Transition outreach and follow-up

Use claims information to identify members who require transition-drug information and provide follow-up about covered alternatives or prior-authorization requirements. After a temporary fill, explain the next steps needed to continue coverage.

Prior Authorization

Classify new versus ongoing therapy

If the pharmacy cannot determine whether a non-formulary prescription is new or represents ongoing therapy, treat the request as eligible for a temporary transition supply. After the first temporary fill, prior authorization, step therapy, or quantity limits may apply when appropriate.

Step Therapy

Protected-class continuation

For certain protected drug classes in which prior authorization or step therapy applies only to new prescriptions, treat the member as continuing therapy after the first successful fill. New-prescription requirements then no longer apply to that therapy.

Prior Authorization

Long-term-care emergency supply and extension

For a long-term-care member using a non-formulary drug, provide an emergency supply after the ordinary transition period while the member seeks a formulary exception or prior authorization. Extend coverage case by case when an exception or appeal remains pending.

Provide at least 31 days, unless the prescription is written for a shorter period.
Provide additional quantity when packaging cannot be split or multiple packages are needed to complete the prescribed dose.

Denial Risk

Care-setting transition handling

When a member changes care settings or enters or leaves long-term care, process exception and appeal requests promptly according to the urgency of the member’s condition. Permit one early-refill exception for each affected drug when the member cannot access the remaining supply.

Billing Rule

Pharmacy claim processing

Before processing a transition claim, verify whether the medication is covered under Medicare Part A, Part B, or Part D, and do not bill Part D for drugs excluded from the Part D benefit. Transition processing is automated; the pharmacist does not need to enter an override code or alter the claim.

Verify the applicable benefit category.
Do not bill Part D for a medication Medicare Part D does not cover.
Process the transition claim without manual override or evidence modification.

Denial Risk

Safety and quantity controls

Apply opioid safety limits, FDA-recommended maximum daily-dose quantity limits, and early-refill checks during transition. If the requested quantity or dose exceeds a safety limit, provide the permitted temporary amount and support an exception request before denying the excess.

Prior Authorization

Exception and appeal access

Members and prescribers may request a formulary exception or appeal any transition check. Make standard prior-authorization and exception forms available by mail, fax, email, or website, and send transition-specific claim notifications to the pharmacy when an eligible non-formulary claim is processed.

Documentation Required

Transition notice

Send written notice within three business days after a temporary transition fill. For long-term-care members receiving 14-day or shorter dispensing cycles, send notice within three business days of the first fill and make reasonable efforts to notify the prescriber.

Explain that the transition supply is temporary.
Describe the covered alternatives or coverage requirements.
Explain the right and process to request a formulary exception.
When notifying the prescriber, include the member’s name and address, drug, and reason for notice.

Prior Authorization

Pending-case continuation

If an exception request or appeal is unresolved when transition coverage ends, consider extending coverage on a case-by-case basis. Continue the extension until the member changes to an appropriate covered drug or the exception request receives a decision.

It may also apply to drugs that raise cost concerns

Quantity-limit exception (QL)

DefinitionA request to cover more than the usual quantity

Who may requestThe member, the member's authorized representative, or the prescribing physician may submit the request

Qualifying conditionSpecified approved clinical criteria must be met

Step therapy (ST)

DefinitionA requirement to try one or more other drugs in a specified sequence before the initially prescribed drug is covered

Alternative optionsIf those options are unsuitable, the next option may be considered

Coverage sequenceThe initially prescribed drug is considered only after the required sequence

Utilization management (UM)

DefinitionThe process used to review healthcare services and procedures

Medical necessityThe review considers whether services and procedures are medically necessary

Appropriateness and efficiencyThe review also considers whether care is appropriate and used efficiently under the plan

Transition benefit

DefinitionTemporary drug coverage that gives the member immediate access to a needed medication

Transition purposeIt gives the member and prescriber time to transition to a covered alternative

Exception pathwayThe member may use the time to seek an exception based on medical necessity

New prescription versus continuing therapy

Classification issueThe pharmacy may be unable to determine whether a non-formulary prescription is entirely new or ongoing therapy

Default ruleWhen the status cannot be determined, the request is treated as eligible for a temporary transition supply

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

Temporary transition supply

DefinitionA limited supply provided during the applicable transition period

Retail and long-term careThe supply is generally at least one month in retail or long-term-care settings

Quantity limitsPackage-size and prescribed-duration rules may affect the quantity supplied

Emergency supply

DefinitionA long-term-care supply provided after the ordinary transition period

DurationThe supply is generally 31 days unless the prescription is for a shorter period

PurposeIt supports the member while seeking a formulary exception or prior authorization for a non-formulary drug

Unplanned transition

DefinitionAn unplanned transition caused by movement between care settings

ExamplesExamples include movement between a hospital, home, or long-term-care facility

Drug circumstanceThe transition involves prescribed drugs that are not on the formulary

Re-enrolled member

DefinitionA member who leaves the plan and later returns

Transition treatmentThe member is treated as a new member for transition purposes

Applicable dateThe re-enrollment date determines the applicable transition benefits

Transition notice

DefinitionA written communication explaining that the transition supply is temporary

Required guidanceThe notice describes covered alternatives or coverage requirements and explains how to work with the plan and prescriber

Exception informationThe notice explains the member's right to request a formulary exception and the steps for doing so