Learn about TRICARE Pharmacy Benefit Formulary Changes

FALLS CHURCH, Va. –

TRICARE is the health care program that provides coverage to 9.6 million uniformed service members, retirees, and their family members. The National Defense Authorization Act for Fiscal Year 2000 required the establishment of a Pharmacy and Therapeutics committee to develop and maintain a Uniform Formulary of medications—a list of brand name and generic drugs and supplies that TRICARE covers—which provides pharmacy benefits in the outpatient setting. Implementation occurred in 2005. The TRICARE Uniform Formulary provides three points of service for prescription dispensing and includes military hospitals and clinics worldwide, one TRICARE Mail Order Pharmacy (home delivery) and retail network pharmacies located in the United States and several U.S. territories.

The Department of Defense P&T committee meetings are held quarterly, with recommendations determining which medications are included on the Uniform Formulary based on clinical and cost-effectiveness of the agents. The outpatient TRICARE pharmacy benefit evaluates several components including prior authorization criteria, step therapy, quantity limits, formulary status, and a tiered copay structure. The pharmacy tiered copays are based on the point of service and formulary status (generic, formulary brand and nonformulary agents), with the Tier 3 (nonformulary) copay being the most expensive.

The DOD P&T committee recommendations are then discussed publicly with the Beneficiary Advisory Panel, which is comprised of nongovernmental organizations representing DOD beneficiaries, pharmacy contractors and TRICARE network providers. Federal law requires that the BAP review and comment on the DOD P&T committee recommendations for implementing formulary changes to Tier 3 status, pre-authorization criteria, and implementation periods. The BAP is unique in that it gives beneficiaries a voice in what medications are included on the formulary, while providing transparency to what is often an unpublicized process in other health systems. Following the BAP comments, the final formulary decisions are reviewed and signed by the director of the Defense Health Agency.

Since its creation, the TRICARE Uniform Formulary has evolved considerably. In 2018, the NDAA directed TRICARE to add a fourth “not covered” tier to its formulary, which excludes coverage of pharmaceutical agents that have little clinical effectiveness. Similar to commercial pharmacy benefit plans, beneficiaries must pay the full out-of-pocket cost for Tier 4 drugs at retail network pharmacies and these agents are not available at military hospitals or clinics or TRICARE Mail Order pharmacy. The P&T committee not only evaluates drugs for exclusion from coverage, but also identifies branded drugs that may be moved to Tier 1 status with a lower copayment for beneficiaries. Providers and beneficiaries can refer to the TRICARE formulary search tool² for information on tiered copay status and other requirements, including prior authorization or quantity limits.

Given the variety of formulary changes that have occurred over the years, communication to impacted beneficiaries is essential. Although the 2000 NDAA directed patient notification to inform beneficiaries of pharmaceutical agents changing formulary status to Tier 3 or (nonformulary status), it became apparent that communication on several other formulary actions (e.g., prior authorization criteria, Tier 4 designation) were also needed.

Beginning in October 2007, the DOD has taken key steps to improve communication with beneficiaries concerning formulary changes. Patient-specific notification letters are mailed to beneficiaries impacted by a variety of formulary changes. Examples include removal of a drug from the formulary (Tier 4 status), an increase in the cost-share (Tier 3 status), and a change from a preferred to a non-preferred status, which can include but is not limited to new step therapy or pre-authorization requirements. The DOD beneficiary formulary change communication process is driven by the recommendations found in the published DOD P&T committee meeting minutes³.

TRICARE is unique in that a limited number of over-the-counter drugs are included on the formulary and available all three points of service. Additionally, a variety of OTC products are available only at the military hospitals and clinics. The P&T committee reviews the OTC drug classes to determine which drugs should and should not be covered, and occasionally an OTC drug will be removed from the benefit, in which case affected beneficiaries are notified.

The individual letters describe the upcoming formulary change, lists options for formulary alternatives that the beneficiary and their doctor can consider, includes the associated copay information, and documents the implementation date for the associated change. The letters are mailed to impacted beneficiaries by the pharmacy contractor at least 30 days prior to the formulary change.

In previous years, the formulary change letters resulted in increased beneficiary confusion and call volume. Beneficiaries contacted DHA because they had questions regarding the letter’s content and were confused on what, if any, action should be taken. In addition, beneficiaries were confused on the cost of the medication, relayed they did not understand the medical terminology included in the letters, were unclear about the pre-authorization requirements and were confused about which drug was impacted by the formulary change. Working with several avenues for beneficiaries to submit questions and through different sources, including the PBM contractor, DHA realized the letters had to be streamlined.

The TRICARE formulary change beneficiary letters have significantly evolved since the first communications in 2005. In 2018, due to the beneficiary confusion and comments regarding the letters, DHA created five letter templates for pre-authorization, step therapy, non-formulary, non-covered and OTC removal changes.

Formulary changes that usually warrant a beneficiary letter include the following:

Pre-Authorization: a formulary or non-formulary drug has a new pre-authorization requirement and the beneficiaries currently using the drug are required to go through the pre-authorization process to obtain the drug
Step therapy: a formulary or non-formulary drug has a new step therapy requirement, where a trial of another clinically and cost effective agent is required first before the requested agent
Non-formulary: a formulary drug moves to non-formulary drug status, with a resulting higher copay
Not covered: a formulary or non-formulary drug moves to non-covered drug status (Tier 4)
OTC removal: an OTC drug previously available at the MTFs moves to a not covered status

All letters immediately begin with the date of change and impacted drug in bolded font so beneficiaries can easily know the important details up front. In addition, the letter outlines the reason for the formulary change. A separate letter is attached so that beneficiaries can share the information to review with their health care provider. These options are listed in an easy-to-read table with the preferred alternatives along with the cost options for the alternatives. Lastly, the beneficiaries are provided with the link to the TRICARE formulary search tool that provides more information on TRICARE covered drugs, including any restrictions and which provides any applicable prior authorization forms. Starting in 2019, in addition to mailing letters to beneficiaries 30 days prior to the formulary change implementation date, the letter templates are also published on the beneficiary website⁴ for beneficiaries to access directly. Posting the letters on the website has helped alert beneficiaries of upcoming formulary changes and has also aided in reducing the level of confusion. Since 2018, a total of approximately 189,000 letters were mailed to impacted beneficiaries of the formulary changes.

Over the years, the TRICARE pharmacy benefit has evolved significantly but its focus has always been on its beneficiaries. DHA continues to reflect on lessons learned and feedback from its beneficiaries to streamline the beneficiary communication process.