Prior Authorization for Prescription Drugs

It’s a doctor-insurance matter, not your pharmacy

Health plans may require “prior authorization” in order to cover some prescriptions. The prescribing doctor must get this approval from your insurance carrier. It’s one of the controls an insurance company has in place to ensure drug use is appropriate and cost-effective.

If you’re at the pharmacy trying to pick up your prescription and the pharmacist says they “need prior authorization”, there are two things you can do: 

  1. Call your prescribing doctor’s office, and let them know you need prior authorization.

    • The process typically takes days, not hours. Your doctor will need to contact your health insurance to initiate the process. 
    • If appropriate, you could ask about switching to another drug that doesn’t require prior authorization.
  2. Pay for the prescription out-of-pocket. If you go this route, though, you may not get reimbursed even if the prior authorization comes through.

Which prescriptions generally need prior authorization?

Your insurance carrier may want to review prescriptions before paying for them in a variety of situations. These are examples of prescriptions that may require approval:

  • Brand name drugs when a generic is available
  • Drugs that have dangerous side effects
  • Drugs that are harmful when combined with other drugs
  • Drugs that you should use only for certain health conditions
  • Drugs that are often misused or abused
  • Drugs that are usually covered, but at a higher than standard dose
  • Drugs that are not covered by your insurance but deemed medically necessary by your doctor 

Even if the prior authorization is approved now, the approval may only be good for a limited time. If you’ll be taking this drug long-term, you may need to re-authorize the prescription in the future. 

Did you know...? Drugs that need prior authorization may vary from one insurance carrier to another. If you recently changed insurance carriers, or you’re about to, you may want to be proactive and check your plan’s Prescription Drug List (PDL).

What drugs are covered on my plan?

To determine which drugs are covered by your plan, log in to your insurance carrier’s portal to view their Prescription Drug List (PDL). The PDL will also show what pricing tier your drug belongs to.

Drug Tiers

Drugs are typically grouped in three to six tiers, and the tier that your medication is in determines your portion of the drug cost. Generally, the lower the tier, the lower your cost.

Example Tiers

Tier 1Generic drugs
Tier 2Preferred drugs; typically less expensive brand names
Tier 3Non-preferred brand name drugs
Tier 4Specialty drugs for chronic and complex illnesses

Your plan’s Summary of Benefits will have information on your carrier's specific prescription drug tiers. It will break down your copay/coinsurance for each drug tier.

A medication may be placed in a higher tier if it is new and not yet proven to be safe or effective; or, there is a similar drug on a lower tier that may provide you with the same benefit at a lower cost.

Heads up: if you're on a High-Deductible Health Plan (HDHP), it's important to know that you pay all costs out-of-pocket until you meet your plan's deductible. This also includes the cost of prescriptions.

Why didn’t my prior authorization go through?

There are several reasons an authorization may not go through: 

  • It may still be in process. It often takes days for the doctor and insurance carrier to complete the authorization process.
  • Your doctor’s office didn’t contact your insurance company to start the process. Call your doctor’s office to confirm they initiated the process.
  • Your pharmacy may not be properly billing your insurance company. Sometimes a special billing code is needed for a prescription that requires prior authorization. 
  • Your insurance carrier denied your prior authorization request. Call your carrier for more information.

Related reading:

Precertification for Medical Services
Appealing a Claim Denial

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