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PDF Editor FAQ

Why do pharmacies need "prior authorization" to fill some prescriptions? Is the prescription itself not enough? What is prior authorization?

It's been a while since I worked retail or managing a drug formulary for an HMO. Many health plans have drug formularies to try to contain costs. They have contracts with drug companies and will receive a rebate if conditions are met.For example, the statin drug class for treating high cholesterol contains multiple drugs. Some are older and are available as generic. Some are newer, and are brand name only and are more expensive. The manufacturer of the brand name statin may tell your health plan, if 70% of your patients on statins are on 'OUR EXPENSIVE BRAND NAME STATIN' we will give you a rebate. This rebate would typically be more than what the health plan would save by everyone being on the generic statins.For another example, I take Flovent for asthma. I've been on it forever and want to continue to be on it forever. My mail order pharmacy, Express Scripts, automatically switched my Flovent to some chalky icky inhaler which I refuse to take!!! So I can pay $200 out of pocket for my Flovent inhalers, or switch to chalky icky inhaler.So, the retail pharmacist must get a prior authorization from your doctor (DAW 5), or from the drug formulary committee. The prior authorization usually states that for whatever reason…you cannot take the alternative medication that is designated as preferred on the formulary. Reasons range from allergy to preferred medication, failure of preferred medication, cost savings to health plan if you continue to use the prescribed medication instead of the preferred medication on the formulary.Prior Authorization might be increasing in the wake of the opioid epidemic. Pharmacists who dispense and doctors who prescribe controlled substances are being highly scrutinized.

I don’t want my doctor to have my insurance info. If I use my insurance at the pharmacy, will they share that with my doc without my consent somehow?

Oh yes!They have to. The state of Medicare drug plans, being separate from Medicare proper and Medicare supplemental plans, as your nurse I have no idea what kind or with whom you have drug coverage. And, what it covers is different from year to year, even if the patient does not actively change plans. (Please! Actively change plans!). Telling me it is “express scripts” only tells me where to send the Rx. It isn't at all your Rx insurance.There are thousands of Medicare drug plans. Within each company offering med d plans, there are countless plans. Pharmacies need to know to get paid. I only need to know when your insurance won't pay for something, when they want a prior authorization. Then your pharmacy is the first to know, and they generally send us a request or, yeah!, the actual *#%+’ form.

What is, and what is the significance of, a 'pharmacy benefit Manager' (e.g. MedImpact)?

see about 40 papers I have written over the past 16 year at What is a Pharmacy Benefit Manager? - Economics, Accounting, Financial AnalysisI have a work in progress that compares delivered drug spend on a per member per year basis and MedImpact is able to deliver a 20% trend reduction compared to the 2nd largest PBM Express Scripts due to 94 more formulary exclusion and 62 more prior authorizations.

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