Hello everyone, today we are going to be talking about a little-known technique that can be used to save people potentially thousands of dollars a year on their prescription drug costs. It’s called the tier exception and if you stay to the end I’m going to show you a real world example of where Sustain Meds is able to reduce someone’s total drug spend by more than four thousand dollars a year using this technique. As many of you know, I have a background working in the insurance industry and I have personally reviewed thousands of these things so you’re going to be hearing from an expert how these work and where you can use these to save you a lot of money.
A tier exception in principle is quite simple to understand. Most insurance companies have a tiered formulary where they will assign every drug a tier and each tier has a different price associated with it. Typically, they will have five tiers. Tier one will be the least expensive drugs typically ranging in copay from $0 to $10. The next least expensive tier will generally be between $10 to $20. Tier three ranges from $30 to $35. Tier four is usually about $100 to a percentage of the price of the drug generally ranging from 30% to 50% of the list price. Lastly is the specialty tier. Specialties are often a smaller percentage compared to tier four, but the drugs are usually a lot more expensive in those tiers. Normally about a $1,000 per month or more.
So, what is a tier exception request? A tier exception request put simply is a tier lowering request, so if you have a tier three drug and it’s $47 per month you can request that that copay tier be lowered to a tier one. If you had a $47 per month copay like in this example on a tier three and a tier exception request was granted to a tier one the copay would go from $47 per month to $0 per month. It is obvious what the benefits of the exception are – You’re paying less in copay.
Are there more benefits than just lowering your copay? The answer is yes there are three other benefits, but the last one is a little bit too complicated to discuss. It has it has to do with when you are taking multiple drugs.
Let us go over the two cases in which it can help you with your deductible. Some insurance plans have a policy where certain tiers – generally the first and second tiers – do not have a deductible that applies. That is how a lot of people discover that they have a deductible. They may have been taking less expensive drugs that had no deductible to suddenly they get prescribed a new drug and they must pay $400 because they have a deductible on tier three. So when you do a tier exception and you have one of these plans in which certain tiers do not have a deductible you can see how these savings can accrue quickly.
You can also use tier exceptions as a technique to avoid paying the coverage gap. You may have noticed that for some drugs when you go into the coverage gap or the “doughnut hole” the drug prices go way up (i.e. Generally from let’s say you’re on a tier three from $47 to all of a sudden it’s $170 per month). Some health care plans have something called extra gap coverage. What that means is for certain tiers – typically tier one or tier two – the copay remains the same through the coverage gap or through the doughnut hole so with a tier exception exactly the same thing can be done as with the deductible. If you lower it from a high tier it’s here where it’s covered by the extra gap coverage now you don’t have to pay the coverage gap anymore or you would just pay the normal copay for that tier which is normally a very low copay.
Now that we know what exceptions are and how they can help you save money the next logical step is to ask how do we go about requesting one of these exceptions? It is a two-step process. The first step is to create a request through your insurance. This can be done by your doctor’s office, Sustain Meds, or you could do it yourself. Whichever route you choose you need to ensure the person knows tier exceptions. There was a study done and it found that there is a denial rate in excess of around 90% so it’s very easy to get denied because there are a lot of nuances to the request. Unless the person understands those different nuances, it can be denied when it should not have been.
The second step would be to submit the documentation to the insurance. Again, this can be done by your insurance company, you, or Sustain Meds. This documentation supports why you need this specific drug and argues that the lower-cost drugs have already been tried or they would not be as effective for your condition because of potential side effects.
Now I’m going to show you a real-world example of how we save someone thousands of dollars on their prescriptions using this one technique. Sustain Meds had a customer that filled out our online contact form and what she was taking was a budesonide three milligram capsule three times a day – so 90 per month. Her copay was $480 per month for the tier 4 medication.
Her plan was as follows. She has a 50% copay on a tier four drug and that copay equaled $480. After she goes into the coverage gap her copay goes down, but it is still expensive – It goes from 50% to 25% which is $240 per month. So, she is spending about $4,000 – $5,000 per year depending on when she started this drug regimen.
Sustain Meds was able to get her tier lowered from a tier 4 to a tier 1. We helped her with the request and gathered all the documents. We submitted the case and got the copay down from $480 per month to $0 per month. Not only that but because she had extra gap coverage when it came time to go into the coverage gap her cost did not go up to $240 dollars per month. With the proper submittal of this one case she was able to save thousands on her prescription drugs. She had already had trouble with this drug because she had the same insurance from the year prior and was paying similar amounts. She was ecstatic about the amount that we were able to save her.
I hope you enjoyed the video and I hope you learned something about tier exceptions. It is one of the many methods that you can use to reduce prices. If you are interested in contacting us please reach out at SustainMeds.com. We offer a no-cost consultation so just give us a call and we will see what we can do.