Formulary
A health plan's list of covered prescription drugs, organized into tiers with different cost-sharing levels.
Updated
A formulary is a list of prescription drugs covered by a health plan, typically organized into tiers. Lower tiers generally contain preferred drugs with the lowest cost-sharing, while higher tiers contain non-preferred or specialty drugs with higher cost-sharing.
Drugs not on the formulary may not be covered, or may require the provider to request a formulary exception before coverage is approved.
In practice
Pharmacy and medical billing teams confirm formulary status and tier to project patient responsibility for a drug. Claims for non-formulary medications may be denied at point of sale, requiring an exception or prior authorization before the plan will cover the drug.
Commonly confused with
- Covered service: A covered service is any service the plan reimburses; a formulary specifically governs prescription drug coverage and tiered cost-sharing.