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What Is Step Therapy And How Does It Actually Work?

Step therapy is part of the Medicare Prescription Drug Plan. This means that Medicare will cover a particular drug only if your doctor shows that you medically need it. You start with an inexpensive over the counter drug, like a generic, that has worked for a significant number of patients.

If that doesn’t help you, Medicare moves you up to a Tier 1 medicine. If that also doesn’t work and you met the step therapy requirements, Medicare will pay for the expensive Tier 3 medication.

The Medicare step therapy plan ensure wants cost-effective medications that are prescribed appropriately.


step therapy


Step Therapy: Quantity Limit

For safety and cost reasons, plans may set quantity limits on the amount of drugs they cover over a certain period of time. For example, a person may be prescribed a medication to take two tablets per day, or 60 tablets per month. If the plan has a quantity limit of 30 tablets per month for that medication, call your doctors.They must work with the Medicare Prescription Drug Plan to get authorization for a higher quantity.


However, your doctor has to contact Medicare if you have already tried the more affordable drug and it didn’t work. To get the more expenive drug, Medicare has to approve it.

The more expensive drugs are known as “Step 2” prescription drugs. Medicare will not cover them until Step 1 drugs are first tried. If your doctor can show that the step 1 drug is ineffective,  you can then apply for the exception.


For safety and cost reasons, these Medicare Drug Plans plans set quantity limits on drugs. For example, a person may be prescribed a medication to take two tablets per day, or 60 tablets per month.

If the plan has a quantity limit of 30 tablets per month for that medication, your doctor needs to get an authorization for a higher quantity.


Step Therapy: The Negatives

While the step therapy plan has good intentions, there are many negatives.

As science makes once-unthinkable treatments available, patients are increasingly facing a harsh reality: Insurance companies are forcing them to try older, less expensive drugs for months before covering pricier ones.

While on the surface this makes sense, to save money and spare patients from expensive medications they might not need, there are negatives.

A woman with lupus said her vision got worse after an insurer denied her request for better drugs. A patient with lung cancer took a break from successful chemotherapy, then was forced to start over with OTC drugs.


If there are specific reasons where a doctor believes the more expensive drug is better, an application must be submitted.


Step Therapy: Where Does It Go From Here?

The rise in step therapy policies is primarily being driven by rising drug costs. Employer-sponsored health plans are growing more restrictive with coverage. Participants in Obama Care health care exchanges are also affected. Many patients have switched carriers, either by choice or because insurers have exited the exchanges. When they do, patients are told to restart their step therapy protocols.

For patients with serious illness, they and their doctors believe this policy is insane.


State laws restricting the practice of step therapy vary widely.


According to the National Patient Advocate Foundation, a nonprofit group, Indiana’s law is the most aggressive. It bars insurers from restarting the step-therapy sequence if  you failed certain treatments with a previous insurer. For example, insurers must adjudicate appeals within three days.

Patients in other states will do well to review the step-therapy policies of prospective insurers before signing up. Larger insurers will often post lists of drugs that are subject to step-therapy restrictions. However, sometimes even those restrictions can vary based on a particular employer’s health plan, for instance.

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