When your doctor prescribes a compounded medication, you might assume your insurance coverage will handle it. However, covering compounded prescriptions often comes with unique challenges. Understanding why can help you better manage expectations and advocate for the care you need. Disclaimer: Most of this information is specific to private drug insurance, rather than publicly funded drug coverage (eg, ODB).
What Is Compounded Medication?
A compounded medication is custom-made by a pharmacist to meet individual needs. This could be altering a dosage, removing allergens, or creating a medication that’s no longer available commercially. While personalized, these medications often face hurdles with insurance coverage because they’re not standardized like mass-produced drugs.
Why Insurance Coverage Is Complex
Insurance companies typically cover medications that are on their formulary—or a pre-approved lists of drugs. Compounded medications, being custom-made, don’t fit into these standard lists, making insurance coverage more difficult. Here are a few reasons why:
- Custom Formulations: Since compounded drugs aren’t mass-produced by large pharmaceutical companies, they don’t go through the same marketing and approval process, making it easy for insurers to avoid covering them.
- Higher Costs: Compounding involves specialized ingredients, training, and labour, with a lot of variability between pharmacies, which insurers are often reluctant to cover.
- No DIN: Since compounded medications are customized, they don’t have standard DINs (or Drug Identification Numbers), making the insurance claim process more complicated.
How to Improve Your Chances for Insurance Coverage
If you’ve been prescribed a compounded medication and insurance denies coverage, here’s what you can do:
- Talk to Your Pharmacist: They can help explain why the compounded medication is necessary and may even provide you with information to help communicate with the insurance provider.
- Be Informed: Read the coverage details of your insurance plan. Some insurance plans clearly state the types of medications that they cover or not (eg, cosmetic or fertility medications).
- Request a Letter of Medical Necessity: Ask your doctor for a letter to support your case with your insurance company.
The Future of Insurance Coverage for Compounded Medications
As personalized medicine grows, insurance coverage for compounded medications may improve. Until then, being informed and speaking with your insurance company will minimize surprises.
Conclusion
While compounded medications provide tailored solutions for individual needs, navigating insurance coverage can be tricky. By understanding the complexities and working with your pharmacist and doctor, you’ll improve your chances of understanding your coverage situation.
If you have a question about coverage of your medications, ask us!