Who makes formulary and coverage decisions?

While patients might assume that payers are responsible for determining which drugs their health plans cover, that’s not necessarily the case. At MMIT, we label the entity that controls the formulary decision as the controller. The controller may be a payer, a pharmacy benefits manager (PBM), a managed care organization (MCO), or a government entity.

For example, for a managed Medicaid plan with a state-mandated formulary, the state itself is the controller. In addition to deciding which drugs to cover and which drugs will require utilization management restrictions, a controller is also responsible for reviewing any formulary exceptions or appeals.

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