Fight Back When Drugs Are Denied

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You make a routine trip to the pharmacy to fill a prescription. But the pharmacist tells you your Medicare drug plan won't cover the drug. You walk away with no medication -- and no clear explanation about why you were denied coverage.

More and more seniors are finding themselves in this confusing and potentially dangerous situation, patient advocates say. Questions about pharmacy-counter denials -- and what to do next -- are among the most common issues raised by callers to the Medicare Rights Center's national helpline, says Joe Baker, the center's president. "The problem of pharmacy denials and people being confused by Part D prescription-drug coverage is a growing trend," he says.

Seniors who are denied coverage at the pharmacy may pay out of pocket for increasingly unaffordable drugs -- or, even worse, go without needed medication. They may need to make several calls to their drug plan to find out the exact reason coverage was denied and then navigate a complex appeals process to seek a reversal. But persistence often pays off: In 2013, nearly 80% of denials that were appealed were subsequently approved, according to the U.S. Centers for Medicare & Medicaid Services.

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Drug denials are rising in part because Medicare drug plans aiming to control costs are imposing "utilization management restrictions" on a growing number of drugs. These restrictions include step therapy, which requires you to try a cheaper alternative before a pricier drug; limits on the quantity of a drug that your plan will cover in a certain time period; and prior authorization, which means your plan must give approval before the prescription is filled. Such restrictions were applied to 39% of drugs on Medicare drug plans' formularies in 2015, up from 18% in 2007, according to the Kaiser Family Foundation.

In other cases, coverage is denied because the drug is not on your plan's formulary. Each fall, review your plan's annual notice of change, which explains how coverage and costs are changing in the coming year. Also call the plan to make sure specific drugs you take are still on the formulary and not subject to any new coverage restrictions. You can switch drug plans during Medicare open enrollment, which runs from October 15 to December 7 each year.

If a drug you're taking is dropped from your plan's formulary, or you change to a plan that doesn't cover the drug, you are entitled to a one-time "transition refill" -- typically a 30-day supply of the drug.

Appeal the Plan's Denial

Don't take the pharmacist's "no" as your final answer. Take note of the drug name and dosage that you were prescribed, the name of the pharmacy, and the date when you tried to fill the prescription. Then call your plan and ask for a "coverage determination" -- a written explanation of the coverage decision.

The plan generally has 72 hours to respond. But you can ask for an expedited decision, which requires the plan to respond within 24 hours, says Diane Omdahl, president of 65 Incorporated, a Mequon, Wis., firm that helps seniors navigate Medicare.

If the plan tells you that the drug is not on the formulary or that it's subject to a restriction, you can ask for a coverage "exception." In this case, your doctor must write a supporting statement. "It has to really explain why this drug and no other is what the patient needs," says Jocelyne Watrous, an advocate at the Center for Medicare Advocacy. The 72-hour clock won't start ticking until the plan gets the doctor's statement.

If the coverage determination is not in your favor, you have 60 days to ask for a "redetermination," the first level of appeal. If significant dollars are at stake, you can pursue several more levels of appeal -- and ultimately have your case heard in federal court. Since in many cases denials are inappropriate, "our advice to clients is always to push back," Baker says. "When we do that, we find that people get the coverage."

Laise covers retirement issues ranging from income investing and pension plans to long-term care and estate planning. She joined Kiplinger in 2011 from the Wall Street Journal, where as a staff reporter she covered mutual funds, retirement plans and other personal finance topics. Laise was previously a senior writer at SmartMoney magazine. She started her journalism career at Bloomberg Personal Finance magazine and holds a BA in English from Columbia University.