Why was my prescription denied by insurance?
Many FDA-approved prescription medications are available to treat asthma, allergies and related conditions. When you see your healthcare provider and they prescribe a specific medication, you may be eager to start the new medicine.
Then you go to the pharmacy only to find out the medication is denied by your insurance company.
This occurrence is all too common. It might be tempting to give up. Understanding how insurance works and the different terms used may help you learn what you (and your providers) can do to help get coverage for your prescription. Health insurance coverage is especially important for people with asthma and severe allergies. They often face high costs for medications.
Typical ways insurance plan work
Insurance plans vary by insurance carriers and employers. They may also vary on whether you have commercial insurance or Medicare/Medicaid. Or you may switch jobs and see that your new employer has the same insurance carrier. You think, “Oh, good, no worries” … only to find out that your new employer’s plans are very different.
Many insurance plans offered by employers have a big say in what they will and will not cover. They may determine your financial responsibility. Medicare and Medicaid plans may also differ by the state you live in or which plan you are on. When you are choosing plans, it is important to understand terms so you can make an informed decision.
- Deductibles. First, most plans have an annual deductible. This is the amount the patient pays out of pocket before the insurance plan kicks in. This can be as low as $0, but can go into the thousands of dollars. It is important to understand the pros and cons so you can decide whether you should choose a high deductible vs. low deductible health plan.
➤ Medication needs should drive your insurance company choice.
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Co-pays. Many services, including prescriptions, have a co-pay. A co-pay is a fixed amount that the patient pays for services after having met their deductible. It can vary based on the service and whether you are using a provider who is in or out of your insurance plan’s network. For example, you may have a $10 co-pay for seeing your primary care, but a $25 for a specific medication. Co-pays may vary by drug class or by tier. Then if you go to an out of network provider, you may pay more or the service may not be covered at all.
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Out of Pocket Maximums (OOPM). This is the maximum amount of money you would have to pay per year. Once you reach the OOPM, the insurance plan pays 100% and you pay $0. There is often a different OOPM for in-network services verses out of network. Your OOPM can be in the thousands of dollars or even tens of thousands dollars. And not all plans have an OOPM. Many plans have a separate OOPM for prescriptions. So, you may go to the pharmacy thinking your cost will be $0 for a certain medication, but find out you still have to pay. While you met your OOPM for your medical plan, you haven’t met it for your pharmacy plan.
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Formularies. A formulary is a list of drugs covered under your pharmacy benefits. Pharmacy benefit managers decide what is on the formulary. They often choose the least expensive medications. When choosing your insurance plan, you can review their formulary to see if the medications you are taking are part of their formulary. Every time you choose your insurance plan, it is important to review the formulary. Sometimes a formulary will not cover the brand name prescription, but it will cover the generic. Know both your brand and generic names for your medications so you make an informed decision. Also, formularies often have different tiers. Medications may be divided based on cost, availability and generic vs. brand name. It is usually a four-tier system that may look something like this:
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Tier 1. Generic versions of brand name drugs. Low Copay
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Tier 2. Common brand name or preferred drugs. Medium Copay
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Tier 3. Brand name drugs with generic versions available. High copay
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Tier 4. Specialty medications. Highest copay or coinsurance
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The formularies and tiered systems may vary from plan to plan. Know your medications and where they fit on the formulary. This will help you predict your financial responsibility.
What are some insurance coverage policies that you might find out when you go to fill a prescription?
➤ Co-pay accumulator adjustment programs
➤ Non-medical switching
➤ Step therapy
➤ Prior authorization
Read more about each of these policies below.
Co-pay accumulator adjustment programs
Your co-pays for services accumulate towards your OOPM. This seems pretty straightforward, right? Well, not always. With co-pay accumulator adjustment programs, some drug manufacturers provide “coupons” to help with co-pays for expensive medications. The problem is that those coupons do not go towards your deductible or meeting your OOPM. And the coupon may not cover a year’s worth of medicine. Let’s say it covers only 6 months. When you go to pick up your next supply of medicine, you may find that the money you owe is significant because that coupon has not counted towards your deductible. This “co-pay surprise” can be hundreds to thousands of dollars. And suddenly you are faced with a difficult choice – pay for the medication (if you can) or leave it at the pharmacy.
The Co-Pay Surprise
Barriers to Patient Access: Co-Pay Accumulator Adjustment Programs
Co-Pay Accumulator
Adjustment Programs
Advocacy Insights:
Co-Pay Accumulators
Non-medical switching
Non-medical switching occurs when a health insurer takes patients off their current medication and switches them to a different medication for non-medical reasons. This may cost the insurance carrier less money. Non-medical switching typically occurs when…
- your insurance plan has changed;
- the formulary of covered medications has changed;
- there is a cheaper equivalent drug available.
This approach may result in increased side effects or a reemergence of symptoms. Some people may become frustrated with their new medication and stop taking it.
Non-Medical Switching Hurts Patients
Qualitative Impact of
Non-Medical Switching
How Non-Medical Switching
Hurts Patients
Step therapy
Step therapy is often referred to as “fail first.” It is a process in which health insurers aim to control costs. Step therapy occurs when the insurer requires the patient to fail the first step of treatment before moving on to a second step, even though the doctor and patient have agreed step two is the best treatment option. The first step is often a generic or low-cost medication. Step two is often a more expensive medication for the insurer to cover.
In some cases, health insurance companies may say that before you can get “medication D,” you have to first try and fail “medication A,” then “medication B,” then “medication C”. Meantime, your condition may not improve if these medications A, B and C are not helpful. Your condition may even worsen.
The step therapy process compromises patient treatment. It can be dangerous and time-consuming. It can lead to increased costs for both the patient and the insurance company in the long term.
If you have tried and failed a required medication from your health insurance company, talk with your doctor about writing a letter to send to the insurer. Your doctor may also appeal the decision on your behalf.
Understanding Step Therapy
Barriers to Patient Access: Step Therapy
Step Therapy Patient Advocacy Insights
Step Therapy
Infosheet
This is one of the most common reasons coverage is denied for a prescription. Certain medications require prior authorization – or approval – from your health insurance company. This means your insurer will deny coverage until your healthcare provider fills out certain forms indicating why you need that medication.
Even if your provider fills out the form, there is no guarantee your plan will cover it. And even if your doctor does fill out the forms, the authorization may be denied. Your doctor will then they have to appeal on your behalf so the medication can be finally authorized. Meanwhile, you have been waiting to start the medicine to treat your condition.
Understanding Prior Authorization
Barriers to Patient Access:
Prior Authorization
Other reasons why your prescription may be denied coverage
Your health insurance company may deny prescription drug coverage for many reasons. Some are easier to resolve than others.
Out-of-network providers
Some health plans require you to use certain pharmacies to fill your medication. In this case, you can have your prescription sent to an in-network pharmacy. However, if your in-network pharmacy cannot provide the medication, this is called a “network deficiency.” It means you need to use an out-of-network provider for the medication. You can request a “gap exception” so your insurer covers an out-of-network provider at an in-network rate.
Plan limitations
In some cases, your plan may have limits. For example, your plan may only cover a 30-day or 90-day prescription. Other times, they may limit the number of refills per year. You can appeal these limits with your insurer.
Too early to refill
Some plans do not allow for a refill of a medication earlier than a week or two in advance. If you need an early refill – due to travel, for example – many plans allow for an appeal. Or if you lost or spilled your medication, you can seek a one-time early refill.
Deductible not met
If your pharmacist tells you that your medication is covered but the insurance company won’t pay, it is likely because you have not yet reached your deductible amount. If you have a plan with a separate pharmacy deductible, you will be required to pay that first before your insurance pays.
Non-covered medications
Your medication may not be on the formulary from the pharmacy benefit manager.
Pharmacy Benefit Managers
Pharmacy benefit managers are a third-party administrators. They manage prescription drug benefits on behalf of health insurance plans, employers and other entities that provide drug coverage. PBMs act as intermediaries between pharmacies, drug manufacturers and insurers. They negotiate drug prices, process claims and administer drug benefit programs. PBMs also create formularies, a list of preferred drugs for insurers, to control costs. But PBMs can limit patient choice and access to medications patients need.
Most PBMs have drug formularies with covered medications. If your medication is not on the formulary, they need to provide an equivalent option. Ask your healthcare provider if the equivalent option is acceptable. If not, your healthcare provider may need to appeal on your behalf.
Denied: How to appeal an insurance company decision
When your insurance company denies a medication or treatment, it is normal to be frustrated and angry. But now is the time for action. You have the right to appeal. How do you get started on the appeals process?
Your health insurer should issue an “explanation of benefits” (EOB). This shows why your medication was denied. It should provide you with your internal appeal rights and information on how to appeal. You can start by following those instructions. Be sure to submit the appeal within the time frame allowed. There should be a phone number to call and a website with the appeals form. Make copies of everything and keep the originals. Submit copies to the insurance.
Your doctor can also file an appeal of the insurance company’s decision on your behalf.
You also have the right to an independent external review and appeal through a third party. Those instructions should also be part of the EOB. Your letter should include the date of the claim, the reasons given for the denial, and why you feel it should be reconsidered. You can also include a letter from your doctor’s office.
Find out what your state’s requirements are for appealing
The first step is to find out what steps you should take based on the state in which you live. Use the search tool at CoverageRights.org to search by state to find out how to proceed based upon your state’s requirements.
How to write a letter of appeal
A letter of appeal is your opportunity to concisely explain why you are appealing the decision to deny your prescription. Your letter should include:
- your name, address and phone number
- insurance ID number
- insurer’s name, address and phone number
- date of the claim and the claim number
- reasons given for the denial
- why you feel the decision should be reconsidered
If you are insured under someone’s plan, include their information as well.
Try to be concise. You can also include a letter from your doctor.
Ask for a case manager
Find out if your insurance company can assign you a case manager. Most insurers have them – even Medicare. Case managers are employed by many health plans. You may think, “Why would someone working for an insurance company want to help?” Case managers are often nurses who work with patients to manage chronic conditions. They find out what treatments have worked in the past. They act as a liaison between you and the PBM. They go to the PBM with information about your condition and your medical needs. And they can advocate on your behalf.
If the medication is helpful, this process can save you and the health insurance company money.
Sometimes your request is sent to a third-party independent administrator to determine if it should be honored. If the administrator approves your request, the insurance company will cover the treatment.
If your medication is still denied, appeal to your state regulator
State insurance regulators ensure that insurance companies are able to pay claims. Contact your state insurance regulator and file a complaint if the health insurance plan denies a prescribed medication.
You do not have to use your health insurance to pay for prescriptions. But many medications may be difficult to afford without using insurance. This may include many asthma medications and epinephrine to treat severe allergic reactions.
What you can do if your insurance doesn’t cover your medications
Allergies and asthma are chronic health conditions. Many need long-term use of medication and regular doctor visits for this reason. Lack of access to affordable medicines can lead to patients…
- not filling a doctor’s prescription;
- reducing the dosage to make a supply last longer;
- buying medicines from foreign countries;
- substituting alternative therapies.
If you have asthma and allergies, you need good health insurance coverage to stay healthy.
Consider changing your insurance plan
Open enrollment season is when you can add or change your insurance plan. For many people, this season is in the fall, usually November and December. Use the annual open enrollment period to compare plans that may work better for you in covering the medications you need. If your medication costs too much or is not covered, this is the time to look at other plans that may work better for you.
Ask your doctor for samples
If you suspect your insurance may deny your medication, ask your doctor for free samples. Or you can reach out to the drug company for free samples. This might hold you over until your insurer approves the medication.
Look into patient assistance programs and discounts
Can’t afford your medication? Here are some tips that might help:
- Shop around – at pharmacies and online. If using your insurance, use an in-network pharmacy. Compare prices at other pharmacies or check prices at GoodRx, Singlecare, Medical Assistance Tool, Amazon Pharmacy and Needymeds.
- Explore the FundFinder on the PAN Foundation website to see if there’s a fund available to cover some or all of your out of pocket costs.
- Consider a generic. Ask your doctor or pharmacist for a generic version of your prescription medication. Generics have the same active ingredients as brand-name drugs. They are equally as safe and effective, and cost less. Two membership-based online websites offer cost savings for generic medications:
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- Amazon Prime members can obtain eligible generic medications for one flat fee of $5 per month through its Amazon Prime RxPass benefit.
- Mark Cuban CostPlus Drug Company offers a limited number of generic medications at cost to members. The company says it cuts out the middlemen involved in the sale of prescription drugs. Instead, it buys directly from pharmaceutical companies. This enables them to sell almost at cost.
- Contact the drug manufacturer. Many manufacturers offer patient assistance programs that include coupons, discounts and rebates. You can find information on patient assistance programs on the drug manufacturer’s website. You can also call their patient assistance telephone line.
How you can advocate for policy changes to improve access to medications
There are many current issues that impact patient access to safe and affordable medications and treatments. By getting involved in advocacy, you can have your voice heard about healthcare issues important to patients and families. You can advocate to change laws and improve medication access.
Patients, families and caregivers make great advocates for policy change. You can reach out to your representatives in Congress any time. We also invite you to join us for Allergy & Asthma Day Capitol Hill (AADCH). At this annual event, held in May, advocates meet with members of Congress and/or their staff on Capitol Hill. At meetings, you can…
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address policy issues;
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share personal stories of living with asthma and allergies;
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encourage legislative changes in Congress.
In turn, policymakers get a better understanding of issues that patients face daily. Your advocacy can put a face on bills and policies as Congress members prepare to vote on legislation.
See Related Pages
Reviewed by:
Dennis Williams, PharmD, is an Associate Professor at the University of North Carolina Eshelman School of Pharmacy. He practices at UNC Medical Center with the pulmonary medicine medical service. He has served as a member of the National Asthma Education Program Coordinating Committee and the National Asthma Educator Certification Board. He also serves on Allergy & Asthma Network’s Board of Directors.