Pharmacy Benefits Management (Formulary and Utilization Management)
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Defines MedStar Family Choice DC's processes for managing the closed formulary, utilization management (prior authorization, step therapy, quantity limits), communication of formulary changes, and responsibilities of the P&T Committee; applies to MedStar Family Choice District of Columbia enrollees and providers.
Added subsection 1.4.2 to capture Cell and Gene Therapies as carved out to DHCF.
Subsection 1.5.1 changed from 'will' to 'may' regarding automatic replacement of innovator products when interchangeable generics/biosimilars become available.
Added pharmacy benefit exclusions including weight management, experimental drugs, sexual dysfunction, cosmetic uses, off-label indications, and optional OTC coverage.
Added 3.6.2 and 3.6.2.1 to capture the PBM-managed Specialty Drug Quantity Limits program.
Formulary-change communication procedures now require negative changes be posted and notified to enrollees and prescribers at least 30 days prior to implementation.
All formulary requests will be brought to the P&T Committee within two meeting cycles from initial receipt by the Chairperson.
Formulary Coverage and Exclusions
Formulary inclusion and utilization management
Covered when conditions below are met according to P&T and PA/ST tables
See Sections 1.7 and 1.8 for details on the information considered and sources reviewed.
See Sections 1.3, 1.4 and 1.4.2.
See Section 3; ST/PA application may be automated by the PBM and manual PA is required when claims history does not support automatic approval.
MedStar Family Choice DC excludes certain pharmacy benefits from the formulary in accordance with federal regulations. Exclusions include medications ordered for weight management, experimental or investigational drugs, medications ordered to treat sexual or erectile dysfunction, medications ordered for cosmetic purposes, and medications ordered for off‑label indications. In addition, over‑the‑counter (OTC) pharmaceutical coverage is discretionary and may be cost‑ or quantity‑limited; drugs that are FDA‑approved only for an excluded benefit will be excluded from the MedStar Family Choice DC formulary.
Cell and Gene Therapies (CGTs) are carved out from the MedStar Family Choice DC pharmacy formulary and are billed directly to DHCF. The authoritative list of carved‑out CGTs and the applicable billing instructions are maintained by DHCF and are available on the DHCF website; providers should follow DHCF’s published billing guidance for these products.
Coverage may be denied for medications prescribed for off‑label indications or for benefits excluded under federal regulation (USCFR 42 C.F.R. § 1396r‑8(d)(2)(h)). Medications that are FDA‑approved only for an excluded benefit are not included on the MedStar Family Choice DC formulary and therefore are not covered under the pharmacy benefit.
Provider Responsibilities and Utilization Management Procedures
Obtain prospective prior authorization before dispensing
Prior authorization (PA) is required for drugs listed in the Prior Authorization and Step Therapy Table and must be obtained before dispensing; PA is a prospective process. If automated PA/ST checks fail based on claims history, a manual PA must be submitted and will be processed per Policy 218.DC.
- PA criteria are maintained in the Prior Authorization and Step Therapy Table (see PA/ST table).
- PA must be obtained prior to dispensing the medication to the enrollee.
Follow step therapy trial requirements in the PA/ST table
Enrollees must trial one or more formulary medications per step therapy protocols before accessing the prescribed non-formulary or non-preferred medication; specific ST rules are listed in the Prior Authorization and Step Therapy Table and may be applied automatically by the PBM.
- Step therapy requires trial(s) of one or more formulary medications prior to access to the prescribed drug.
- Application of ST requirements may be automated by the PBM; see PA/ST table for exact protocol details.
Provide required documentation with PA requests
When submitting a PA, include medication details and plan-specific information: medication name (brand or generic), dosage form and strengths, any MedStar Family Choice DC–specific requirements (including covered indications), the requested duration of authorization, and renewal/continuation criteria to support ongoing therapy.
- Provide medication name (brand/generic), dosage form, and strength(s).
- Document any MedStar-specific requirements or covered indication being requested.
- Specify requested duration of authorization and submit information supporting renewal/continuation of therapy.
Claims denials or manual PA triggered by unsupported claims history
Claims may be denied or require a manual prior authorization when the member's claims history does not demonstrate the required step therapy trial(s) or otherwise does not support automated PA/ST criteria; prescribers must obtain PA before dispensing medications that require it to avoid denial.
- If claims history does not support automatic approval, a manual PA request will be required and processed per Policy 218.DC.
- Failure to obtain PA prior to dispensing may lead to claim denial.
Key Definitions
Step Therapy Protocols
| Step | Requirement | Notes |
|---|---|---|
| 1 | Trial of one or more formulary medications may be required before accessing the prescribed drug | Specific step therapy criteria are maintained in the Prior Authorization and Step Therapy Table; application may be automated by the PBM. If claims history does not support automatic approval, a manual prior authorization will be required (processed per Policy 218.DC). |
Quantity Limit Policies
Site of Care and Dispensing Rules
Outpatient medications and DME subject to formulary/UM
Medications and DME administered in outpatient settings or dispensed from retail pharmacies are considered for the formulary and may be subject to utilization management determined by the P&T Committee.
- Outpatient-administered drugs and retail-dispensed medications can have UM controls (PA, ST, MDL/QL).
- P&T may adjust covered day supply for certain medications (e.g., 90-day supply for maintenance meds; oral contraceptives up to 365 days).
Preference for Generics and Biosimilars
Preference for generics and biosimilars
MedStar Family Choice DC prefers generic and biosimilar medications when available; innovator formulary products may be automatically replaced when interchangeable generics or biosimilars become available.
- When an interchangeable generic or biosimilar becomes available, the innovator product on the formulary may be replaced automatically.
- Providers should expect formulary updates per P&T decisions and quarterly postings.
Background and Rationale
Specialty and other high‑cost medications are managed with utilization controls to ensure clinically appropriate use, beneficiary safety, and fiscal stewardship. MedStar Family Choice DC uses prior authorization (PA), step therapy (ST), and quantity limits (including a PBM‑managed Specialty Drug Quantity Limits program) as applicable; PA and ST criteria are maintained in the PA/ST table and reviewed at least annually. These controls require prescribers to obtain PA prospectively for drugs listed in the PA table and may trigger manual PA or claim denial when automated ST/PA checks are not met, ensuring medications are used according to P&T Committee determinations of clinical evidence, safety, and cost‑effectiveness.
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