CurrentGeorgia Department of Community HealthPolicy N/A

Georgia Medicaid Fee-for-Service Compounded Drugs Prior Authorization

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Defines prior authorization (PA) requirements and coverage criteria for compounded drug products under Georgia Medicaid Fee-for-Service; affects prescribers, pharmacies, and members seeking compounded medications.

Policy Summary

PayerGeorgia Department of Community Health

PolicyCompounded Drugs Prior Authorization (Georgia Medicaid Fee-for-Service)

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateN/A

Next Review DateN/A

Key ActionInitiate prior authorization by calling OptumRx at 1-866-525-5827 and provide documentation that each active ingredient is FDA-approved or supported by national compendia and that two commercially available alternatives were tried or an exception applies.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

Up to 1 yearLength of authorization

2Required failed alternatives

FDA or compendiaIngredient approval standard

OptumRx

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CurrentGeorgia Department of Community HealthPolicy N/A

Georgia Medicaid Fee-for-Service Compounded Drugs Prior Authorization

Customize your policy alerts

Sign up for all Georgia Department of Community Health policy alerts

Know when Georgia Department of Community Health releases new policies or updates existing guidance.

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Policy Summary

PayerGeorgia Department of Community Health

PolicyCompounded Drugs Prior Authorization (Georgia Medicaid Fee-for-Service)

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateN/A

Next Review DateN/A

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

Up to 1 yearLength of authorization

2Required failed alternatives

FDA or compendiaIngredient approval standard

OptumRx

Coverage Criteria for Compounded Drugs

Initial PA criteria

Covered when ALL of the following are met

Compounded drug PA criteria: Each active ingredient in the compounded drug is Food and Drug Administration (FDA)-approved or supported by national compendia for the condition being treated

Therapeutic amounts are supported by national compendia or two peer-reviewed literature sources for the condition being treated in the requested route of delivery

Drug-specific criteria: If any prescription ingredients require prior authorization and/or step therapy, all drug-specific criteria must also be met

Safety: The compounded drug must not include any ingredient that has been withdrawn or removed from the market due to safety reasons

Alternative therapy failure: Patient has tried and failed therapy or had an intolerance to two FDA-approved commercially-available prescription therapeutic alternatives, one of which is the same route of administration as the requested compound, unless an exception applies2 alternatives

Exceptions listed as nested conditions

Cosmetic exclusion: The compounded drug must not be used for a cosmetic purpose

Targeted compound program: If the compound is subject to the drug-specific/targeted compound program, the member meets all applicable drug-specific criteria for all targeted ingredient(s)

Compounded drug products that are intended or used for a cosmetic purpose are excluded from coverage under this policy. The PA criteria require that the compounded drug must not be used for a cosmetic purpose; any request where the compound’s purpose is cosmetic should be denied as not meeting coverage criteria.

Compounded products that include any ingredient that has been withdrawn or removed from the market due to safety reasons are not covered. Such compounds fail the policy’s safety requirement and should be denied authorization.

Prior Authorization, Documentation, and Provider Responsibilities

Prior Authorization

Prior authorization required; initiation and length

Prior authorization is required for compounded drugs. The PA process may be initiated by calling OptumRx at 1-866-525-5827. Length of authorization: up to 1 year.

Step Therapy

Drug-specific PA/step therapy applies to compound ingredients

If any prescription ingredient included in a compound is subject to prior authorization and/or step therapy, the applicable drug-specific criteria (including any step therapy requirements) for those ingredients must also be met prior to approval.

Documentation Required

Exceptions and Definitions

Exceptions (no requirement to fail two alternatives)

General rulePatient must have tried and failed or had intolerance to two FDA‑approved commercially available prescription therapeutic alternatives (one must share the same route of administration as the requested compound), unless an exception applies.

ContraindicationNo failure required if the patient has a documented contraindication to commercially available products.

Limited alternativesNo failure required if one or no other therapeutic alternatives are commercially available.

Strength or supply issueNo failure required if the compound is prepared in a strength not commercially available or is currently in short supply.

Dosage form necessityNo failure required if the compound is prepared in a different dosage form for a patient unable to take the commercially available formulation (mixing/reconstituting per manufacturer instructions does not qualify).

Quantity Limits and Related Coding

Compounded drugs — See current Quantity Level Limits (QLL)

Quantity limits referenceSee current Quantity Level Limits (QLL) for compounded drugs via the MMIS portal (www.mmis.georgia.gov/portal) under Pharmacy > Other Documents > most recent quarters QLL List.

Access methodOnline access through the MMIS portal provides the up‑to‑date QLL list.

Location on siteHighlight Pharmacy and click on Other Documents, then select the most recent quarters QLL List.

Background and Purpose

Compounded medications combine multiple active ingredients or use nonstandard formulations to meet individual patient needs. This policy outlines the prior authorization requirements and clinical safeguards for compounded drugs under Georgia Medicaid Fee-for-Service to ensure safety and therapeutic appropriateness. Specifically, the policy requires that each active ingredient be FDA-approved or supported by national compendia, that therapeutic amounts be supported by national compendia or two peer-reviewed studies for the requested route, and that the compound not contain any ingredient withdrawn for safety reasons. Additionally, members must have tried and failed (or been intolerant to) two FDA‑approved commercially available therapeutic alternatives (one matching the requested route) unless a documented exception applies. The policy also excludes compounds used for cosmetic purposes and requires compliance with any drug-specific prior authorization or step therapy requirements for ingredients within the compound.

Policy Summary

PayerGeorgia Department of Community Health

PolicyCompounded Drugs Prior Authorization (Georgia Medicaid Fee-for-Service)

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateN/A

Next Review DateN/A

SourceLink

On This Page

Required documentation for each active ingredient

Documentation must demonstrate that each active ingredient is FDA‑approved or supported by national compendia, that therapeutic amounts are supported by national compendia or two peer‑reviewed literature sources for the condition and route requested, and that no ingredient has been withdrawn or removed from the market for safety reasons.

Evidence each active ingredient is FDA‑approved or compendia‑supported
Support for therapeutic amounts from national compendia or two peer‑reviewed studies for the requested route
Confirmation that no ingredient has been withdrawn/removed for safety reasons

Denial Risk

Denial risks for compounded drug PA

Prior authorization may be denied if any active ingredient is not FDA‑approved or supported by national compendia, if therapeutic amounts are not supported by compendia or two peer‑reviewed studies, if the compound contains an ingredient withdrawn/removed for safety reasons, or if required drug‑specific criteria (including step therapy) or the two‑alternative failure requirement are not met (unless an exception applies).

Lack of FDA approval or compendia support for any active ingredient
Therapeutic amounts not supported by compendia or peer‑reviewed literature
Inclusion of an ingredient withdrawn/removed for safety reasons
Failure to meet required drug‑specific PA/step therapy criteria or to document trials of two FDA‑approved commercially available alternatives (unless an exception applies)

Documented contraindicationExceptions apply when the patient has a documented contraindication to commercially available products.

One or no therapeutic alternativesExceptions apply when one or no other therapeutic alternatives are commercially available.

Non‑commercial strength or short supplyExceptions apply when the compound is prepared in a strength not commercially available or is currently in short supply.

Different dosage form neededExceptions apply when the compound is prepared in a different dosage form for a patient unable to take the commercially available formulation; simple mixing or reconstituting per manufacturer instructions does not qualify.

Allergy/sensitivity to inactive ingredientsExceptions apply when the patient has an allergy or sensitivity to inactive ingredients (e.g., dyes, preservatives, sugars) found in commercially available products.