CurrentURACPolicy N/A

PBM Administrative and Operational Policy Framework

Outlines the administrative, operational, risk management, pharmacy management, network, client, member services, performance monitoring, and URAC reporting requirements for a pharmacy benefits manager (PBM). Applies to organizational units and staff responsible for PBM operations and compliance.

Policy Summary

PayerURAC

PolicyPBM Administrative and Operational Policy Framework

Policy CodePolicy N/A

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionSubmit formulary exception requests and follow initial determination and appeal processes under the Drug Utilization Management Program.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

10+policy domains/topics listed

PBM sectionsPBM-specific sections

URACURAC reporting required

Formulary and Drug Utilization Management

Formulary and drug utilization management

Formulary management, exception processes, coverage exclusions, and drug utilization management are governed by the following program elements. Coverage or utilization controls apply when the corresponding program criteria below are met.

ALL of the following

Formulary Management
- PBM-FDM 1: Formulary Management
Formulary Exceptions and Coverage Exclusions
- PBM-FDM 2-1: Formulary Exceptions
- PBM-FDM 2-2: Coverage Exclusions
Drug Utilization Management Program

Policy Summary

PayerURAC

PolicyPBM Administrative and Operational Policy Framework

Policy CodePolicy N/A

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionSubmit formulary exception requests and follow initial determination and appeal processes under the Drug Utilization Management Program.

SourceLink

On This Page

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

Formulary Exceptions and Utilization Management Actions

Prior Authorization

Prior Authorization and Documentation Requirements

Providers must follow formulary exception and drug utilization management (UM) procedures when prescribing non‑formulary or restricted medications. Submit prior authorization requests when a drug is non‑formulary, subject to step therapy, quantity limits, or other UM controls. Include complete clinical documentation to support medical necessity (diagnosis, prior therapies and responses, current medications, relevant labs/imaging, and proposed treatment plan).

Prior authorization required for non‑formulary, step‑therapy bypass, high‑cost specialty drugs, and drugs subject to quantity limits.
Include clinical rationale and supporting documentation (diagnosis code, prior medication trials with dates and outcomes, lab results, and relevant specialty consult notes).
If initial request is denied, follow the payer’s appeal process and submit any additional information within the appeal timeframe.
Maintain documentation in the medical record to substantiate necessity in case of post‑payment review.

Key PBM Definitions

Drug Utilization Management Program (PBM-FDM 3)

Program nameDrug Utilization Management Program (PBM-FDM 3)

ScopeIncludes program implementation, initial determinations, notifications, handling lack of information, appeal determinations, and appeal notifications (PBM-FDM 3-1 through PBM-FDM 3-6)

Related modulesFormulary Management, Formulary Exceptions and Coverage Exclusions, Drug Utilization Review, Adherence Program, Performance Reporting (PBM-FDM 1, PBM-FDM 2, PBM-FDM 4-6)

ReportingProgram performance and utilization reporting required (PBM-FDM 6 and subitems)

Decision pointsInitial determination and appeal determination processes govern coverage decisions under the program (PBM-FDM 3-2 and PBM-FDM 3-5)

PBM-PT (Pharmacy & Therapeutics Committee)

Committee namePharmacy and Therapeutics Committee (PBM-PT)

MembershipDefined committee members and membership requirements (PBM-PT 1 and PBM-PT 1-1)

Conflict of interestConflict of interest policies and membership exclusions govern participation (PBM-PT 1-2 and PBM-PT 1-3)

ResponsibilitiesCommittee meetings, oversight, and responsibilities for therapeutic decision-making and formulary recommendations (PBM-PT 2 and PBM-PT 2-2)

MeetingsRegular committee meetings and related procedures (PBM-PT 2-1)