Insurance Appeals

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Tips to Appeal the Denial of Coverage for your Compounded Medication

Produced Through a Joint Effort Between MitoAction and Patients and Physicians for Rx Access

Have you received a denial letter for your compounded medications? If your compounded medication coverage has been cut by your Pharmacy Benefit Manager (PBM) or insurance company, you may appeal the decision.

Don’t wait, start the appeal process today! Patients and Physicians for Rx Access is a Coalition consisting of individual patients, patient advocacy groups, pharmacists, physicians, pharmacies and healthcare organizations working together to raise awareness about cuts in compounded medication benefits. MitoAction and Patients and Physicians for Rx Access have prepared various tips below that may help you navigate the appeals process for yourself or a family member.

In reviewing the below tips, there are important things that you should keep in mind:

  • PBM and insurance company policies vary widely, so we suggest you check with your PBM or insurance company directly to verify their process for completing an appeal.
  • The compounded benefit being denied to you was in all likelihood a decision made by the PBM or insurance company and not your employer. These decisions can sometimes be reversed by your employer for an individual and even for an entire group.

Before you start the appeal process, familiarize yourself with the important terms below:

Appeal: A formal request made by a patient or the patient’s representative to a PBM or insurance company to change a decision regarding the patient’s health benefits.

Benefits Manager: This person is responsible for administering and managing employee benefits for a workplace and normally works in a company’s Human Resource Department. This person may be able to instruct a PBM to allow for compounded medications.

Case Manager: An insurance company employee typically assigned to complex patients to assist them in navigating their insurance benefits.

Pharmacy Benefit Manager (PBM): A third-party administrator of prescription drug coverage, primarily responsible for processing and paying prescription drug claims. A PBM takes direction from the benefits manager or insurance plan regarding the management of that plan’s pharmacy benefit.

Prescriber: The person who wrote the prescription. This may be a physician, nurse practitioner, dentist or other individual with prescribing authority.

Formulary: A list of approved ingredients that a compounding pharmacist combines to create a compounded medication.

Some tips to assist you in the appeals process are set forth below:

Tip One: Secure a denial letter in writing. If you received a letter or other notice regarding the denial of compounded medication benefits, thoroughly read that letter or notice. It may set forth the process and/or documentation required for an appeal. If an appeal process and/or required documentation are listed, take time to carefully collect all information necessary for the PBM or insurance company to process your appeal.

Tip Two: Consult with your pharmacist. Ask that your pharmacist assist you in the appeals process. Your pharmacist can provide you information regarding the ingredients in your compounded medication prescription, which is normally necessary for an appeal. Your pharmacist might also have suggestions as to different clinically appropriate formulas that may be covered by your insurance plan.

Tip Three: If your insurance is through your employer (or that of your spouse or parent), consult with the employer’s benefits manager. Ask the benefits manager to assist you in determining the reason for the denial and whether that denial is appropriate under the insurance policy provided by the employer. The benefits manager may need to consult with your pharmacist regarding the prescription and the denial of coverage. The benefits manager should assist you with the appeals process or advise you on how to contact an insurance company case manager who could assist.

You may also ask the benefits manager to “turn back on” compounded medication coverage for all employees or just the individual that needs compounded medication coverage. In many cases, the benefits manager can call the PBM or insurance company to reinstate compounded medication coverage for the individual needing coverage.

Tip Four: Contact your PBM or insurance company. This may be done by you, your benefits manager at work, your prescriber and/or your pharmacist. During this call, you should ask for a coverage determination or exception. You may also want to ask if your insurance company can assign you a case manager to assist you through the appeal process. The phone number for the PBM or insurance company should be listed on the denial letter. If a number is not listed on the denial letter, check the back of your prescription drug or insurance card for a telephone number. Your benefits manager at work may also have a contact number.

Tip Five:  Prepare before calling your PBM or insurance company. As mentioned above, collect any required information before you call your PBM or insurance company. Also, if you decide to call your PBM or insurance company, make sure to know what you want to say before you pick up the phone. The script below may help you navigate your call.

Hi, my name is [NAME] and I’ve recently received a letter informing me that my prescription drug coverage will no longer cover [INSERT DETAILS OF YOUR PRESCRIPTION]. Compounded medications are essential to my health because [INSERT DETAILS OF YOUR SITUATION].

The denial of coverage for a medication prescribed by my doctor is dangerous to my health. What steps do I need to take to receive coverage for this medication?

Tip Six: Keep a log. If you decide to appeal the denial of compounded medication benefits, keep a log of all contact and correspondence with your PBM and/or insurance company. Write down relevant details, such as:

  • The times and dates you mailed the appeal letter(s) or placed phone calls to your PBM or insurance company
  • The instructions or recommendations made by the PBM or insurance company
  • The names and titles of individuals with whom you communicate by phone or mail

Tip Seven: Involve your prescriber or physician. Your PBM or insurance plan may have a Clinical Appeals Process, wherein your prescriber or physician may request reconsideration of the denial of formulary coverage.

Clinical appeal requests may be made by the prescriber or physician to the PBM or insurance company by telephone or in writing. As discussed above, specific rules regarding appeals vary between PBMs and insurance companies. Written requests are often preferred and generally include the following:

  • Reference number from the denial letter
  • Patient’s full name
  • Clear description of the prescribed compounded medication for which coverage was denied
  • Additional information that may have a bearing on the decision, such as:
  • The patient’s diagnosis and relevant history
  • Relevant portions of the patient’s chart
  • The reason(s) a compounded medication is necessary over a commercially available medication

In many cases, the patient should assist the prescriber in compiling this information.

Tip Eight: Determine whether or not to submit a written appeal, which is sometimes called a “formal appeal” by PBMs and insurance companies. Written appeals often include:

  • Reference number from the denial letter
  • The insurance policy number, beneficiary identification numbers and other identifying information
  • Patient’s full name
  • Reason for the appeal, including a clear description of the prescribed compounded medication for which coverage was denied
  • Any evidence you may wish to attach in support of your appeal, including a letter from your prescriber or physician to your PBM or insurance company explaining why you need the compounded medication

Tip Nine: Follow any instructions from your PBM or insurance company for submitting an appeal. Instructions may include using an online form instead of a paper form, or submitting the written appeal to the attention of a specific individual or department.

Tip Ten: Submit appeals in a timely fashion. Many PBMs and insurance companies require that appeals be submitted within a short time following the coverage determination or denial letter date.

Tip Eleven: Look for correspondence from your PBM or insurance company. If coverage for your compounded medication is still not approved, the PBM or insurance company’s notice should explain why your appeal was denied and additional steps you may take. Sometimes, a process is available for an independent review of a denied appeal. Also, ask your benefits manager or other benefits provider regarding additional steps that you may take, such as providing medical literature to support the use of compounded medications to treat your condition or symptoms. Beneficiaries under many insurance plans are granted independent appeal and review rights under the Federal Patient Protection and Affordable Care Act. You may learn more about this process here.

Tip Twelve: Be an advocate for yourself and your loved ones. If your insurance is provided through an employer, ask the benefits manager to consider insurance plans that include coverage for compounded medications at the policy renewal date. If you carry individual insurance, research plans that include compounded medication coverage and be ready to switch plans at the beginning of the next benefit year.