CMS Pub. 100-18, ch. 6, § 20.2.2

A drug approved or denied through prior authorization constitutes a coverage determination,

subject to all applicable coverage determination standards, timelines, and requirements.

However, Part D sponsors should rely upon (1) information included by the physician with the

prescription, (2) information communicated by the pharmacist or included with the submitted

claim, such as diagnosis information (e.g., to determine whether the prescription is related to a

Medicare covered transplant), (3) information captured by the plan sponsor previously, such as

diagnosis information from previous PAs, and (4) location of administration (e.g., to determine if

the prescription is being dispensed for a beneficiary in a nursing home) when available to avoid

the need for a separate coverage determination request to obtain the needed information

whenever possible. Assuming the available information is sufficient to correctly assign payment

to Part A or B or Part D, there is no need in such cases to require additional information to be

obtained from the physician.

To the extent that the Part D sponsor requires its contracted pharmacies to report the information

provided on the prescription to assist in the determination of Part A or B versus Part D coverage,

the sponsor should rely on the pharmacist’s report of appropriate information to appropriately

adjudicate the claim under Part D. For example, for cases in which prednisone is prescribed for

a condition other than immunosuppression secondary to a Medicare-covered transplant, and this

is either documented on the prescription, or evident based on the prescriber’s specialty, a known

diagnosis, or concomitant therapies, a sponsor may cover the drug under Part D without seeking

further information from the prescribing physician.

This clarification should not be construed to indicate that a Part D sponsor may not impose prior

authorization or other procedures to ensure appropriate coverage under the Medicare drug

benefit. Part D sponsors may apply prior authorization to establish appropriate payment under

Part A or B or Part D, even if the beneficiary is currently taking the drug. However, CMS

believes that the sponsor will have met appropriate due diligence standards without further

contacting a physician if necessary and sufficient information is available, and the contracted

pharmacy is able to communicate this information to the sponsor in order to make the coverage

determination. Refer to section 30.2.2.3 for additional guidance on the application of PAs. For

more information on Coverage Determination requirements, see Medicare Prescription Drug

Benefit Manual, chapter 18, available at https://www.cms.gov/Medicare/Appeals-and-

Grievances/MedPrescriptDrugApplGriev/Downloads/Chapter18.zip.