Pharmaceutical Management Medicaid 2026
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This policy governs McLaren Health Plan's Medicaid drug formulary administration, coverage rules (including prior authorization, step therapy, quantity limits, specialty and compounded medications), and provider procedures for requesting exceptions. It applies to providers and members under McLaren Health Plan Medicaid.
No material clinical or coverage changes in this revision.
Coverage Criteria and Medical Necessity
Medical necessity and authorization criteria
Covered when ALL of the following are met:
Based on Review Criteria items 1-3 (Formulary preferred; contraindication or trial/failure of formulary alternatives required).
PA process: complete and fax the PA/Drug Exception Request form to MedImpact or call Customer Service for emergency supplies; see PA contact 888-274-9689 and Customer Service 888-327-0671.
ST edits define a sequence of medication alternatives; coverage for step-required medications is provided only after required alternatives have been tried and failed.
These items correspond to the policy's Review Criteria used when evaluating medication requests.
See Medication Request Form instructions and contact details on the PA form.
Requests for excluded indications will be denied per non‑covered benefits policy.
Quantity limits may be specified per day, month, year, lifetime, or across a drug class.
Confirm appropriate billing route and site before submitting PA.
Covered when ALL of the following are met: use of formulary drug products is preferred; requests for non‑formulary or brand products must demonstrate that formulary alternatives are contraindicated or have failed. Prior authorization is required for medications identified with PA restrictions and for compounded medications, and approval is required before pharmacy coverage unless an emergency supply protocol is used. If a step therapy edit applies, the member must have tried and failed the required formulary alternatives unless medically contraindicated. Providers must submit a completed Medication Request/Prior Authorization form with patient and prescriber information, the requested drug, diagnosis (ICD‑10 if known), quantity, duration, reason for request, prior medications tried/failed, and relevant history; then fax the form to MedImpact or call the PA contact for assistance.
This policy does not cover medications that are not listed on the MPPL (Michigan Pharmaceutical Product List). Medications designated by MDHHS as Carve‑Out are not reimbursable by the plan and must be billed to Fee‑for‑Service (FFS) Medicaid. Medications prescribed for cosmetic or convenience purposes, experimental or unproven uses, cough and cold products, sexual enhancement/erectile dysfunction agents, fertility‑promoting medications, and medical foods or agents that are not regulated by the FDA are excluded from coverage.
The drug benefit also does not reimburse for drug products acquired for, or administered at, an inpatient hospital, outpatient hospital, emergency room/clinic, or physician's office/clinic. Providers seeking coverage exceptions (including PA overrides for step therapy) must document contraindication to or failure of required formulary alternatives on the PA form and submit supporting clinical information per the PA instructions.
Use of medications for cosmetic or convenience purposes and experimental or unproven uses are considered not medically necessary and are excluded from coverage. Examples called out in the policy include cough and cold products, sexual enhancement/erectile dysfunction medications, and fertility‑promoting drugs. Medical foods or agents not regulated by the FDA are also excluded.
Medications identified by the Michigan Department of Health and Human Services as Carve‑Out must be billed to straight Fee‑for‑Service (FFS) Medicaid and are not reimbursable under McLaren Health Plan. For questions about carve‑out medications, providers may contact the Magellan Medicaid Beneficiary Help Line at the number listed by MDHHS.
Coding and Diagnosis Requirements
| ICD-10 | Diagnosis code (if known) is requested on PA form |
Provider Actions: Prior Authorization, Forms, and Submission
Submit completed PA/Drug Exception Request to MedImpact before coverage
Certain medications identified with PA restrictions must have a completed Prior Authorization/Drug Exception Request form submitted to MedImpact for approval before pharmacy coverage; if questions or status updates are needed, contact MedImpact at 888-274-9689. For emergency supplies of a PA medication, contact Customer Service at 888-327-0671 for assistance.
- Submit the completed PA/Drug Exception Request form (see form on page 5) by fax to the number on the form or call the PA contact.
- PA is required when medications are identified with PA restriction to ensure safety or that a cost‑effective formulary alternative cannot be used.
Enforce step therapy trials; use PA to request overrides with justification
Step therapy edits require that the member trial and fail the defined formulary alternatives before MHP will cover step‑required medications; if alternatives are contraindicated or have failed, submit a PA to request an override with documentation supporting the medical necessity.
- ST edits define a sequence of medication alternatives; coverage provided only after required alternatives have been tried and failed.
- Overrides of step therapy must be requested via the PA process with documentation that alternatives are contraindicated or unsuccessful.
Complete and submit the Medication Request / Prior Authorization form with required fields
Complete the Medication Request/Prior Authorization form in full before submission: include physician and patient identifiers, requested drug (name/dose/strength), diagnosis (ICD‑10 if known), quantity, length of treatment, reason for request, other medications tried/failed, and pertinent history; fax the form to MedImpact at (858) 790‑7100 or call (800) 788‑2949 for assistance.
- Physician information fields: name, ID#, specialty, contact information, and diagnosis (ICD‑10 code if known).
- Pharmacy/drug fields: requested drug name, dose, strength, quantity, dosage form, length of treatment, reason for request, prior medications tried/failed, and pertinent history.
- Submit by fax to (858) 790‑7100 or call 1‑800‑788‑2949; address shown on form for Prior Authorization Department.
Do not request coverage for non‑MPPL, cosmetic, experimental, or excluded site‑of‑care medications
Do not expect coverage for medications not listed on the Michigan Pharmaceutical Product List (MPPL); medications prescribed for cosmetic/convenience purposes, experimental/unproven uses, cough/cold, sexual enhancement/ED, fertility drugs, or non‑FDA regulated medical foods are excluded and will be denied. Also note the drug benefit does not reimburse drugs acquired for or administered at inpatient/outpatient hospitals, emergency rooms/clinics, or physician offices/clinics.
- Medications not on the MPPL are non‑covered and should not be submitted for PA.
- Cosmetic/convenience uses and experimental/unproven indications are considered not medically necessary and excluded.
- Do not bill the plan for drug products acquired for or administered in hospital/outpatient/emergency/physician clinic settings (not reimbursed).
Background and Policy Alignment
This policy aligns McLaren Health Plan’s Medicaid Drug Formulary with the Michigan Medicaid Common Drug Formulary and the MDHHS Single Preferred Drug List to promote clinically appropriate, safe, and cost‑effective medication use. It applies to management of the Medicaid drug benefit including formulary decisions, prior authorization, step therapy, quantity limits, and specialty pharmacy processes.
Specialty Pharmacy (SP) medications—defined as therapies used to treat complex medical conditions that may require special storage and handling (for example, cancer, endometriosis, hepatitis C, multiple sclerosis, osteoporosis, rheumatoid arthritis)—are managed under specialty pharmacy processes. Quantity limits and dose optimization are applied per the formulary to enhance safety and adherence.
Definitions
Step Therapy Requirements
| Step | Required formulary alternatives (trial/failure) | Prior authorization override — allowable justification (examples) | Provider action to request override |
|---|---|---|---|
| {"text":"1","status":""},{"text":"Formulary drug alternatives as defined by MHP's step therapy edit (member must have tried and failed appropriate formulary or related agents)","status":""},{"text":"Documented contraindication to all required formulary alternatives; documented trial and failure of formulary or related agents; clinical necessity where formulary choices are not suited for patient safety or would provoke detrimental medical condition","status":""},{"text":"Submit completed Medication Request/Prior Authorization form with patient and prescriber information, diagnosis (ICD-10 if known), medications tried/failed, reason for request and supporting clinical documentation to MedImpact (fax or phone as listed on the form). For urgent needs, mark request as expedited per form instructions.","status":""} |
Quantity Limits and Restrictions
Site of Care and Reimbursement Limitations
Do not bill pharmacy benefit for drugs acquired/administered in hospital or clinic settings
The drug benefit does not reimburse for drug products acquired for, or administered at, an inpatient hospital, outpatient hospital, emergency room/clinic, or physician's office/clinic; do not bill the drug benefit for products provided in these settings.
- Do not seek pharmacy drug benefit reimbursement for medications acquired for or administered in hospital inpatient or outpatient settings, ER/clinic, or physician office/clinic.
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