CurrentPacificSourcePolicy PRV829_1024

Medicaid Formulary Exception Criteria

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This policy governs PacificSource Medicaid requests for exceptions to the drug formulary and established medication quantity limits for Oregon Health Plan members.

Policy Summary

PayerPacificSource

PolicyMedicaid Formulary Exception Criteria

Policy CodePolicy PRV829_1024

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionSubmit prior authorization documenting failure or intolerance of formulary alternatives and the absence of other medically reasonable options.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

12 monthsStandard approval duration unless otherwise specified

FDA labelingRequired alignment for dosage, indication, and dosing frequency

Failure or intoleranceRequired for formulary alternatives

Clinical responseRequired for reauthorization

Additional quantities

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CurrentPacificSourcePolicy PRV829_1024

Medicaid Formulary Exception Criteria

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This policy governs PacificSource Medicaid requests for exceptions to the drug formulary and established medication quantity limits for Oregon Health Plan members.

Policy Summary

PayerPacificSource

PolicyMedicaid Formulary Exception Criteria

Policy CodePolicy PRV829_1024

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionSubmit prior authorization documenting failure or intolerance of formulary alternatives and the absence of other medically reasonable options.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

12 monthsStandard approval duration unless otherwise specified

FDA labelingRequired alignment for dosage, indication, and dosing frequency

Failure or intoleranceRequired for formulary alternatives

Clinical responseRequired for reauthorization

Additional quantities

Quantity-limit exception support

Exception Coverage Criteria

Formulary Exception

Formulary exceptions may be allowed when all of the following are met.

All of the following

Required criteria
- The member has documented intolerance to or failure of formulary alternatives for the submitted diagnosis.
- The requested dosage and indication are within FDA-approved labeling.
- For members age 21 or older, the condition is funded under the Oregon Health Plan Prioritized List of Health Services.
- For members under age 21, the condition is medically necessary and medically appropriate under EPSDT.
- The provider has demonstrated that no other medically reasonable formulary options are available.
- When the drug is traditionally billed through the medical benefit and furnished by a healthcare professional, the request provides a reason for requesting it through the pharmacy benefit.
  Apply when this benefit-routing circumstance applies.

Quantity-Limit Exception

Quantity-limit exceptions are evaluated using the following requirements and considerations.

Required criteria

Supporting evidence
- The request is supported by FDA labeling.
- The request is supported by a compendia listing.
- The request is supported by primary literature.
The requested dose is medically safe and effective.
The daily dosage and dosing frequency for the indication are within FDA-approved labeling.

Reauthorization

Reauthorization requires continued clinical benefit.

Required criterion

Documentation demonstrates treatment success and a clinically significant response to therapy.

Initial Exception Requests

Initial Formulary Exception

Initial formulary exception requests must satisfy all of the following criteria.

All of the following

The member has documented intolerance to or failure of formulary alternatives for the submitted diagnosis.
The requested dosage and indication are within FDA-approved labeling.
Applicable coverage requirement
- For a member age 21 or older, the condition is funded under the Oregon Health Plan Prioritized List of Health Services.
- For a member under age 21, the condition is medically necessary and medically appropriate under EPSDT.

Continuation and Reauthorization

Reauthorization

Continuation or reauthorization requires documentation of treatment success and a clinically significant response to therapy.

Required criterion

The member has achieved treatment success and demonstrated a clinically significant response to therapy.

Authorization and Documentation Requirements

Prior Authorization

Formulary Exception Prior Authorization

Prior authorization is required for a formulary or drug-list exception. The provider must submit documentation supporting the requested drug for the member’s diagnosis, including the indication and dosage.

Documented intolerance to or failure of formulary alternatives for the submitted diagnosis.
The requested dosage and indication must be within FDA-approved labeling.
Demonstrate that no other medically reasonable formulary options are available.

Prior Authorization

Quantity-Limit Exception Authorization

A quantity-limit exception requires prior authorization and supporting evidence for the requested quantity. Requests are evaluated against FDA labeling, compendia listings, or primary literature.

Explain why the member requires additional quantities, including dosage titration up to the FDA-approved maximum daily dose or exhaustion of higher dosage strengths.
Document that the requested dose is medically safe and effective and that the daily dosage and frequency are within FDA-approved labeling.

Formulary Option Exhaustion

Step	Requirement	Provider documentation
1	Demonstrate that no other medically reasonable formulary options are available.	Document intolerance to or failure of formulary alternatives for the submitted diagnosis.

Policy Background

This policy establishes when exceptions to the drug formulary or drug list and medication quantity limits may be allowed for PacificSource Medicaid members. Exceptions are intended to support safe, effective, and economical prescribing while addressing clinically supported needs that cannot be met through standard formulary placement or dispensing limits.

Formulary exceptions are evaluated based on FDA-approved labeling, applicable Oregon Medicaid coverage and medical-necessity requirements, and the availability of medically reasonable alternatives. Quantity-limit exceptions may address additional medication needed for dose titration up to the FDA-approved maximum daily dose or after higher dosage strengths have been exhausted, provided the requested dose is medically safe, effective, and consistent with FDA-approved dosing.

Key Definitions

Drug formulary

DefinitionA list used to encourage safe, effective, and economical prescribing of drugs.

Policy useSupports evaluation of exceptions to the formulary or drug list.

Prescribing purposePromotes safe, effective, and economical drug prescribing.

Quantity limit

DefinitionThe maximum amount of a drug that may be dispensed within a specified time frame.

PurposeEncourages appropriate and cost-effective prescribing.

Prescribing basisApplied in accordance with FDA-approved labeling, pharmaceutical manufacturers' information, and peer-reviewed literature.

Policy Summary

PayerPacificSource

PolicyMedicaid Formulary Exception Criteria

Policy CodePolicy PRV829_1024

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionSubmit prior authorization documenting failure or intolerance of formulary alternatives and the absence of other medically reasonable options.

SourceLink

On This Page

The member requires additional quantities due to dosage titration up to the FDA-approved maximum daily dose.

Clinical consideration supporting the additional quantity requested.

The member has exhausted higher dosage strengths of the medication.

Clinical consideration supporting the additional quantity requested.

The provider has demonstrated that no other medically reasonable formulary options are available.

When the drug is traditionally billed through the medical benefit and furnished by a healthcare professional, the request explains why it is being requested through the pharmacy benefit.

Apply when this benefit-routing circumstance applies.

Initial Quantity-Limit Exception

Initial quantity-limit exception requests must be supported by clinical evidence and FDA-consistent dosing.

All of the following

Supporting evidence
- The request is supported by FDA labeling.
- The request is supported by a compendia listing.
- The request is supported by primary literature.
The requested dose is medically safe and effective.
The daily dosage and dosing frequency for the indication are within FDA-approved labeling.

Step Therapy

Formulary Alternative Trial

Before requesting a nonformulary drug, document intolerance to or failure of formulary alternatives for the submitted diagnosis and explain why the alternatives are not medically reasonable for the member.

Identify the formulary alternatives tried or considered.
Describe the intolerance, treatment failure, or other clinically relevant outcome for each applicable alternative.

Documentation Required

Diagnosis-Specific Exception Documentation

Formulary exception documentation must be specific to the member’s diagnosis and explain the clinical rationale for the requested drug. The record must connect the documented alternative failure or intolerance to the submitted indication.

Document failure or intolerance of formulary alternatives for the submitted diagnosis.
Provide the clinical rationale for selecting the requested medication over available formulary options.

Unsupported block type: documentation

Billing Rule

Medical-to-Pharmacy Benefit Routing

When a drug traditionally furnished by a healthcare professional and billed through the medical benefit is requested through the pharmacy benefit, the provider must explain why pharmacy-benefit routing is appropriate.

Provide a specific clinical, operational, or treatment-related rationale for requesting pharmacy-benefit coverage.

Documentation Required

Quantity-Limit Exception Documentation

Quantity-limit requests must include evidence supporting both the requested quantity and the clinical basis for the dosing regimen. The request should address applicable FDA labeling, safety, efficacy, and available formulary options.

Submit FDA labeling, a compendia listing, or primary literature supporting the requested quantity when applicable.
Document titration needs, exhaustion of higher dosage strengths, or other reasons additional quantities are required.
Demonstrate that no other medically reasonable formulary option is available and that the requested dose is safe and effective.

Documentation Required

Reauthorization Documentation

Reauthorization requires documentation that the member has achieved treatment success and a clinically significant response to therapy. Approval is generally limited to 12 months unless otherwise specified.

Describe the member’s response to treatment and clinically significant improvement.
Submit objective or clinically relevant evidence supporting continued therapy at reauthorization.

Denial Risk

Formulary Exception Denial Risks

A formulary exception may be denied when the request does not satisfy the exception criteria or lacks adequate clinical documentation.

No documented intolerance to or failure of formulary alternatives for the submitted diagnosis.
Dosage or indication is outside FDA-approved labeling.
The provider does not demonstrate that no other medically reasonable formulary options exist.
The request lacks diagnosis-specific rationale or supporting documentation.

Denial Risk

Unjustified Pharmacy-Benefit Routing

A request may be denied when a drug traditionally furnished and billed through the medical benefit is routed through the pharmacy benefit without a documented justification.

Explain why pharmacy-benefit routing is requested instead of medical-benefit coverage.
Unsupported or unexplained benefit-channel selection does not satisfy the exception criteria.

Denial Risk

Insufficient Quantity-Limit Support

A quantity-limit exception may be denied when the requested quantity or dosing regimen is not supported by acceptable evidence or does not comply with labeling and safety requirements.

Insufficient FDA labeling, compendia, or primary-literature support for the requested quantity.
No documentation of titration, exhaustion of higher strengths, or another valid clinical basis for additional quantities.
Requested daily dose or frequency exceeds FDA-approved labeling or is not shown to be medically safe and effective.
Failure to demonstrate that no other medically reasonable formulary option is available.

EPSDT

Full nameEarly and Periodic Screening, Diagnostic & Treatment Program.

PopulationMembers under age 21.

RelevanceUsed to assess whether a condition is medically necessary and medically appropriate.

Coverage applicationFor members under 21, the condition must be considered medically necessary and medically appropriate under EPSDT.