Medicaid Prior Authorization

Prior authorization is a process used to determine if a prescribed procedure, service, or medication is necessary, appropriate, and not likely to cause adverse effects. Prescribing providers must submit an authorization request for the drug before Medicaid pays the claim.

Each MCO administers pharmacy prior authorization services for clients enrolled in managed care. The Texas Prior Authorization Call Center manages prior authorizations for clients in Medicaid fee-for-service.

All clients enrolled in Medicaid adhere to the same formulary. Some drugs on the formulary may require prior authorization. There are two types of prior authorizations impacting a covered Medicaid outpatient drug on the formulary

  • Clinical
  • Non-preferred

Some drugs or drug classes are subject to both non-preferred and clinical prior authorizations.

The Texas Drug Utilization Review (DUR) Board reviews classes of drugs every quarter and recommends drugs for preferred or non-preferred status on the Texas Medicaid Preferred Drug List (PDL), and establishes recommendations for clinical prior authorizations.

Medicaid Clinical Prior Authorization

Clinical prior authorizations may apply to a particular drug or an entire drug class on the formulary, including preferred and non-preferred drugs.

HHSC establishes clinical prior authorizations based on recommendations from the DUR board using the latest FDA-approved product labeling, national guidelines, peer-reviewed literature, and evidence-based clinical criteria. The board reviews prospective clinical prior authorizations criteria proposed by HHSC in collaboration with MCOs and other stakeholders.

HHSC and MCOs may implement board-recommended clinical prior authorizations at any time. HHSC requires MCOs to perform specific clinical prior authorizations. The usage of the other clinical prior authorizations will vary between each MCO.

Each clinical prior authorization has a criteria guide describing how Medicaid evaluates requests. All steps in the criteria guide apply to traditional Medicaid claims. MCOs may decide to use any or all of the approved criteria as long as the prior authorization is not more restrictive. Refer to the clinical prior authorization criteria guides for more information on each prior authorization. Refer to the Pharmacy Clinical Prior Authorization Assistance Chart for a list of the clinical prior authorizations each MCO uses and how those authorizations relate to those used for processing fee-for-service Medicaid claims.

Clinical prior authorizations are periodically revised to ensure they reflect prescribing recommendations of the current state and nationally established drug criteria, information from approved compendia, and the peer-reviewed literature.

Optional Managed Care Clinical Prior Authorization

Implementation of all other board-approved clinical prior authorization is optional and will vary between HHSC and the MCOs at the discretion of each MCO. An MCO may use any or all of the board-recommended clinical prior authorizations criteria but is not permitted to implement more stringent prior authorization criteria than the board approved.

Refer to the Managed Care Clinical Prior Authorization page (txvendordrug.com/formulary/clinical-prior-authorizations-managed-care) for the list of clinical prior authorizations MCOs have the option to perform for people enrolled in Medicaid.

Refer to the MCO Search for a link to the clinical prior authorization page on each MCO's website.

Required Managed Care Clinical Prior Authorization

HHSC requires MCOs to implement specific clinical prior authorizations for clients enrolled in managed care. The information below identifies the dates MCOs implemented specific clinical prior authorizations. Clinical prior authorizations with an end date are no longer required and are now optional. Refer to the Pharmacy Clinical Prior Authorization Assistance Chart to identify whether an MCO still uses the criteria.

Clinical Prior AuthorizationRequired Start DateRequired End Date
AntipsychoticsMarch 1, 2012May 15, 2018
Hepatitis C VirusApril 8, 2015Dec. 31, 2022
Hormonal Therapy AgentsMarch 1, 2024 
Orkambi (part of Cystic Fibrosis Agents)Jan. 21, 2016March 1, 2021
Promethazine/Promethazine Containing ProductsMarch 1, 2012 
SynagisSept. 23, 2014 

Medicaid Non-preferred Prior Authorization

HHSC organizes the preferred drug list (PDL) by drug class, and it contains a subset of many, but not all, drugs found on the Medicaid formulary. Preferred drugs on the PDL are selected using criteria based on safety, efficacy and cost, and are available without prior authorization unless there is a clinical prior authorization associated with the drug. Non-preferred drugs require a PDL prior authorization.

The PDL document is separated by therapeutic class, identifying the preferred agents, non-preferred agents, and any prior authorization criteria. The PDL identifies drugs requiring clinical prior authorization with a hyperlink to the clinical criteria document.

The PDL Criteria Guide explains the criteria used to evaluate the non-preferred prior authorization requests.

The Formulary search (txvendordrug.com/formulary/formulary-search) identifies drugs requiring non-preferred prior authorization. Users can click the " PDL PA Required" dropdown and select “yes” for all drugs requiring prior authorization or “no” for all drugs not requiring prior authorization.

MCOs use the same non-preferred prior authorization criteria requirements, but may have non-preferred requirements on a limited set of home health supplies provided by Medicaid-enrolled pharmacies.

Refer to the Preferred Drug List Process to learn how HHSC includes drugs on the PDL. Refer to the Preferred Drug Documents for quarterly PDL recommendations and biannual PDL documents and criteria guide.

Preferred Drug List Process

Refer to the Medicaid Non-preferred Prior Authorization section for more information. Refer to the Preferred Drug Documents for quarterly PDL recommendations and biannual PDL documents and criteria guides.

Tentative Yearly Drug Class Review Schedule Published

At the end of each calendar year, HHSC publishes a tentative schedule of the drug classes planned for review at the following year’s Texas Drug Utilization Review Board meetings. HHSC establishes the schedule and accounts for various seasonal health conditions, such as influenza.

Tentative Quarterly Drug Class Review Schedule Published

After each DUR Board meeting, HHSC publishes a tentative list of drug classes for review at the next board meeting.

DUR Board Agenda Published

A month before the meeting, HHSC finalizes the DUR board agenda with the drugs and drug classes scheduled for review.

Presentation to DUR Board

Contractor staff present information to the board on behalf of HHSC about existing drug classes and therapeutic and clinical drug information regarding new drugs up for the current quarter review. The public can testify in front of the board about these drugs.

Refer to the Testimony information in the Texas Drug Utilization Review Board Handbook for testimony forms and instructions.

Refer to Live and Archived Meetings page on the HHSC website (hhs.texas.gov/about/live-archived-meetings) for webcasts of past DUR board meetings.

PDL Recommendations Published

The board recommends drugs and drug classes for inclusion to the PDL based on clinical, financial, and safety at each board meeting. HHSC publishes a list of the recommendations online within 10 business days after each meeting.

PDL Decisions Published

The Texas HHSC Executive Commissioner reviews and approves the list of recommended PDL changes. HHSC publishes the list of the approved decisions 2-3 months after each meeting.

PDL and Criteria Guide Published

HHSC publishes the PDL document twice a year based on the following schedule:

  • The Jan. PDL includes recommendations from the July and Oct. board meetings
  • The July PDL includes recommendations from the Jan. and April board meetings

The Preferred Drug List Criteria Guide outlines the criteria used to evaluate the non-preferred prior authorization requests. HHSC updates the criteria at the same time as the PDL.

Schedule

The following table identifies the PDL events and when they occur.

Board Meets PDL Recommendations Published PDL Decisions Published PDL Published
Jan. Jan. March-April July
April April June-July July
July July Sept.-Oct. Jan.
Oct. Oct. Dec.-Jan. Jan.

Emergency Override

The pharmacy should provide a 72-hour emergency supply of the prescribed drug when a client needs medication without delay and prior authorization is not available. This applies to drugs that are non-preferred on the preferred drug list and or drugs subject to clinical prior authorization. The emergency override protocol applies to clients enrolled in traditional Medicaid and Medicaid managed care.

Before dispensing a 72-hour emergency supply, the dispensing pharmacist should use professional judgment to determine if taking the prescribed medication jeopardizes the client's health or safety and make good faith efforts to contact the prescribing provider.

A 72-hour emergency prescription will be paid in full, and it does not count toward the three-prescription limit for adults who have not already received their maximum prescriptions for the month. This procedure should not be used for routine and continuous overrides.

Pharmacy providers should submit the information below for emergency override claims. Refer to the Claims Billing (B1) Transaction payer sheets for specific transaction, segment, and field requirements.

Field Number Field Name Value
461-EU Prior Authorization Type Code 8
462-EV Prior Authorization Number Submitted 801
405-D5 Days Supply 3
442-E7 Quantity Dispensed The submitted amount should not exceed the quantity necessary for a three-day supply according to the directions for administration given by the prescriber. If the medication is a dosage form that prevents a three-day supply from being dispensed (e.g., an inhaler), it is still permissible to indicate that the emergency prescription is a three-day supply, and enter the full quantity dispensed.

Download the Dispensing 72-hour Emergency Prescriptions Instructions to display in your pharmacy.

Medicaid Prior Authorization Reconsideration

The prescribing provider may request reconsideration if the prior authorization request is denied.

Prescribing providers should contact the Texas Prior Authorization Call Center for the fee-for-service Medicaid prior authorization reconsideration process. Refer to the Medicaid FFS Prior Authorization Requests for the Texas Medicaid Prior Authorization Reconsideration Request (HHS Form 1322).

Prescribing providers should contact the MCO for its reconsideration process for clients enrolled in managed care.

Obtaining Prior Authorization

In certain instances, pharmacy and medical claims data will be available to indicate when a person has met the prior authorization criteria. In those cases, the prescription is authorized automatically at the point of sale without any notification to prescribing provider or dispensing pharmacy.

If supporting claims data is not available to the automated prior authorization system, the claim will reject with NCPDP error code 75 ("Prior Authorization Required"). The pharmacy should notify the prescribing providers or their representatives about the prior authorization requirement so they can request authorization. Pharmacy providers cannot request authorization. A decision from the prior authorization authority to approve or deny the request is made within 24 hours of the initial request.

Refer to the contact section for FFS Medicaid Clinical Prior Authorization contact information.

Refer to the contact section for FFS Medicaid Non-preferred Prior Authorization contact information.

Refer to the contact section for MCO Prior Authorization contact information.

The Texas Department of Insurance requires HHSC to publish the Texas Standardized Prior Authorization Request Form for Health Care Services (TDI Form NOFR002) for prescribing providers as of Sept. 1, 2015. Refer to TAC Section 19.1820 (Subchapter S: Prior Authorization Request Form for Prescription Drug Benefits, Required Acceptance, and Use).

Providers use this form to request prior authorization by fax or mail. Some medications will require providers to submit an addendum form to capture additional information. Failure to submit both the Standardized Prior Authorization Request and addendum may result in an authorization denial. Refer to the Medicaid Fee-for-service Prior Authorization Requests section for a list of addendum forms.