Formulary Administration (audit element)
FA audit element that checks rejected claims follow the CMS-approved formulary and that no unapproved utilization management edits are applied.
CMS selects 30 targeted rejected claims tied to formulary administration, such as prior authorization, step therapy, non-formulary drugs and quantity limits, mixing protected-class and non-protected-class drugs. Reviewers check that claims adjudicate according to the CMS-approved formulary, that unapproved utilization management edits do not restrict access, and that authorization records from coverage determinations are applied correctly. Compliance standards 1.1 to 1.5 also cover protected-class drugs, long term care dispensing, prescriber identification and the Part D drug management programs.
Source: FA protocol, Audit Elements Tested, compliance standards 1.1-1.5, PDF pp. 5-6.