CMS Pub. 100-18, ch. 6, § 30.2.2

CMS will look to existing best practices to check that Part D sponsors’ use of prior authorization,

step therapy, and quantity limits is consistent with such practices. CMS will look to current

industry standards as well as appropriate guidelines that might be found from expert

organizations and to the use of such standards in existing drug sponsors that are widely used by

seniors and people with disabilities. CMS will ensure that sponsors’ use of such tools is

consistent with best practices. CMS will also compare formularies among the applicants to

analyze the comparative use of practices such as prior authorization, step therapy, and quantity

limits. In cases where a sponsor may fall outside of best practices, the sponsor will be asked to

provide a reasonable justification for its practices.

CMS’ expectation is that formulary benefit management tools will be used in Part D formularies

consistent with the way they are applied in existing formulary systems.

A POS edit that is triggered based on approved formulary criteria or other allowable CMS

restriction does not constitute a coverage determination unless the plan treats the presentation of

a prescription as a request for a coverage determination. However, a plan that approves or

denies a drug through application of such criteria has made a coverage determination that is

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

in chapter 18 of this manual, available at https://www.cms.gov/Medicare/Appeals-and-

Grievances/MedPrescriptDrugApplGriev/Downloads/Chapter18.zip.

In addition, in accordance with chapter 18 of this manual, when a prescription cannot be filled

as written under the Part D benefit and the issue is not resolved at the POS, the network

pharmacy must deliver written notice to the enrollee explaining their right to request a coverage

determination, including an exception, from the plan. Regardless of whether the plan approves

the request, a pharmacist may decide not to dispense a prescription based on the information

obtained in a safety edit and/or on his or her professional judgment pursuant to professional

standards of practice.