Why Won’t My Insurance Cover My Prescription?


Each drug formulary has the evidence to support why a medication is included or excluded from a health plan and explaining that to the patient is difficult.

The Institute of Medicine (IOM) defines utilization management (UM) as “a set of techniques used by or on behalf of purchasers of health care benefits to manage health care costs by influencing patient care decision-making through case-by-case assessments of the appropriateness of care prior to its provision." These techniques are premised on evidence-based medicine that promotes the most clinically appropriate and cost-effective utilization.

Patients can experience a pause in the prescription process when the medication may not be the appropriate first-line therapy, may not be on the insurance’s formulary, or is used improperly. However, this is a tool used by clients with good intent to provide the best care.

Let’s define the formulary mentioned above. A formulary is created by a pharmacy and therapeutics committee on behalf of pharmacy benefit managers (PBMs). Formularies list the medications that insurance will cover under a given plan.

These medications are selected based on their safety and efficacy evidence, cost, and treatment guidelines. This list is typically updated no less than every quarter, which ensures that PBMs are accounting for marketplace changes, new drug entrants, and changes to clinical guidelines.

There are 3 main types of utilization management:

  • Prior Authorization
    • Requires the prescriber to obtain pre-approval from the PBM before the medication can be dispensed.
    • A medical necessity needs to justify why the patient cannot use a product on the formulary.
    • Ensures that the product is being used according to the FDA indication.
    • When the medication has a high potential for misuse or abuse.
    • Usually lasts one year before needing to be renewed.
  • Quantity Limits
    • Sets a limit for a given medication that the plan sponsor will allow to fill in a certain amount of time.
    • These limits are set in accordance with the package inserts.
    • Addresses safety and cost concerns, as well as over-utilization of the medication.
  • Step Therapy
    • Trying different medications in a series of steps.
    • Begin with the safest and most cost effective and progressively increase to riskier or costlier medications.
    • Patient must fail two or three therapies before the costlier medication is approved for use.

Patients are often upset when they are told that their prescription requires one of these at the pharmacy counter. They will say that the physician knows best and there is a reason they were prescribed this medication.

While this may often hold true, patients may not always be privy to the costs of medications. These UM policies are in place to keep the patient safe, to be cost effective for the plan, and to ensure that medication utilization is clinically appropriate.

As a retail pharmacist, I have had to explain far too often to patients what this entire process is. The most common utilization management is a prior authorization.

The PBM wants to ensure that the selected medication is appropriate for the patients’ specific disease state. It can also occur when a non-formulary medication has a medical necessity.

What are the options if a prescription requires one of these?

Every scenario goes back to the prescriber. The prescriber will have to submit paperwork to the PBM as to why the specific medication is needed for a prior authorization.

The prescriber will have to justify why the patient needs a higher quantity than what the plan may allow initially. Finally, the prescriber may have to write for a different medication as the originally prescribed medication was not deemed medically necessary.

From there, the member only has two options:

  • Wait for the physician to complete prior authorization.
    • This could be approved or denied.
  • Pay full cash price for the prescription (i.e. not use the prescription plan benefit).


Early in my career as a retail pharmacist, I didn’t fully understand why these policies were in place, and this made it difficult for me to explain to the patient what was happening. The patients are overwhelmed and upset when they are told that their prescription is not covered.

As I became more experienced, this has all changed. The patients were still very upset, but being able to explain the process better made a huge difference for them.

Most of the time the patient would wait until the medication was approved. The other times we would fill the medication for cash and then rebill it after it was approved and give the patient a refund for the difference.

My biggest takeaway from learning about these policies and procedures is that they are in place to provide the best care for the patient. The patients think that cost is the only determining factor, which is not the case.

Each formulary has the evidence to support why a medication is included or excluded. Explaining that to the patient is difficult, but it’s a far better answer than, “The insurance doesn’t want to pay for it.”

The PBM protects the patient, the plan sponsor, and themselves.

About the Author

Ryan Fitzmaurice earned his Doctor of Pharmacy degree from Lake Erie College of Osteopathic Medicine (LECOM) School of Pharmacy and earned his Masters of Pharmacy Business Administration (MPBA) program at the University of Pittsburgh, a 12-month, executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines. He has spent the past several years working across the industry including retail pharmacy management, specialty pharmacy, and 340B pharmacy.

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