Tier Exception

If a plan utilizes a tiered cost-sharing structure to manage its Part D drug benefits, it must establish and maintain reasonable and complete exceptions procedures that permit enrollees to obtain a non-preferred drug at the more favorable cost-sharing terms applicable to drugs in the preferred tier.

A plan is not required to begin processing an enrollee’s request for a tiering exception until the enrollee’s prescribing physician provides a supporting statement. The physician may provide either a written or an oral supporting statement. If the physician provides an oral statement, the Part D plan sponsor may require the physician to subsequently provide a written supporting statement demonstrating factors (1) and (2) discussed below. If the plan sponsor requires a written statement, it must do so immediately. The plan sponsor's request must explicitly state that the physician is required to demonstrate one of the two factors discussed below in the written supporting statement. The plan sponsor may also request additional supporting medical documentation as part of the written follow-up. If the plan sponsor requires additional supporting medical documentation, the plan sponsor must clearly identify the type of information that must be submitted. If the plan sponsor requires the prescribing physician to submit a written supporting statement following the oral statement, the adjudication time frame begins when the plan sponsor receives the physician's written supporting statement. If the plan sponsor does not request a written supporting statement, the time frame begins when the oral supporting statement is received. CMS has developed a model notice that Part D plan sponsors can use to request a supporting statement and/or additional information. If a plan sponsor makes any substantive change to a model notice, the proposed change must be approved through the appropriate CMS marketing procedures.

As noted above, the adjudication time frame does not begin until the plan receives the prescribing physician's supporting statement. However, a plan sponsor must not keep the request open indefinitely. If an exception request is submitted without the physician's supporting statement, the plan must contact the enrollee's prescribing physician, or the enrollee and the enrollee's prescribing physician, and request the supporting statement. A plan must provide the prescribing physician with a reasonable opportunity to provide the supporting statement before making its determination. If the plan does not receive the physician's supporting statement within a reasonable period of time, the plan should make its determination based on whatever evidence exists, if any. A plan must wait at least 24 hours after the expiration of the time frame that the plan would have had to make a coverage determination if the request did not involve an exception request. In other words, plans must wait a minimum of 96 hours after receiving a standard request or a minimum of 48 hours after receiving an expedited request before issuing its determination. In the absence of the prescribing physician's supporting statement, the plan may choose to wait longer than the minimum time frames to issue a coverage determination, but it should not leave the request open indefinitely.

The physician's supporting statement must indicate that the preferred drug for the treatment of the enrollee's condition:

 
1.
Would not be as effective as the requested drug; and/or

 
2.
Would have adverse effects

A plan must grant a tiering exception when it determines that the preferred drug for treatment of the enrollee's condition would not be as effective for the enrollee as the requested drug and/or would have adverse effects. The regulations at 42 CFR 423.578(f) affirmatively state that nothing in the regulations should be construed to mean that the physician’s supporting statement will result in an automatic favorable determination.

When a tiering exception is approved, the plan sponsor must provide coverage at the cost-sharing level that applies for preferred drugs, but not at the generic cost-sharing level. If a plan maintains a formulary tier in which it places very high cost and unique items, it may design its exception process so that drugs placed in that tier are not eligible for a tiering exception.