Glossary
The words a denial letter uses
Every term below is defined from the regulation that defines it, not from a paraphrase. Several of them mean different things depending on which program you are in, so they are grouped by the rulebook the definition comes from.
All programs
- Prior authorizationA requirement that the plan approve the drug before it will pay. It is a condition attached to a covered drug, not a statement that the drug is covered, and the two are routinely confused.
- Step therapyA requirement to try a cheaper drug first and have it not work before the plan will pay for the one prescribed. On GLP-1s the earlier step is often an older weight-management drug rather than another GLP-1.
- Quantity limitA cap on how much the plan will pay for in a given period. It bites on GLP-1s during dose escalation, where the prescribed titration can outrun the quantity the plan will release.
Medicaid
- Adverse benefit determinationThe formal name for the decision you are appealing. In Medicaid managed care it covers more than an outright refusal: a partial approval, a cut to something already authorized, and a plan that simply does not answer in time all count.
- AppealA review, by the plan that said no, of its own adverse benefit determination. It is not the state hearing and it is not a complaint, and in managed care it usually has to happen before the state will look at the case.
- GrievanceA complaint about anything other than the coverage decision itself. Filing one does not challenge a denial, and filing one instead of an appeal is a common and expensive mistake.
- State fair hearingA hearing in front of the state rather than the plan. Federal rules cap the filing window at 90 days from the date the notice of action was mailed, and states are free to allow less.
- Notice of actionThe letter that starts your clock. In fee-for-service Medicaid an "action" is defined to include a cut to something already approved, which is why a prior authorization that expires produces a notice with appeal rights on it.
- Continuation of benefitsKeeping a benefit running while your hearing is decided. In fee-for-service Medicaid it turns on filing before the date the change takes effect, and the state may bill you back if it wins.
- Medical necessityThe standard a denial invokes when it says the drug is not needed. There is no single federal definition; in Medicaid the state writes it, and a managed care plan may not write a stricter one than the state's.
Medicare Part D
- Tiering exceptionA request to have a covered drug charged at a cheaper tier's cost sharing. It turns on a prescriber's statement that the preferred drugs would not work as well for you or would harm you.
- RedeterminationThe first rung of a Part D appeal: the plan reviewing its own coverage determination. Evidence you send in is part of what it has to consider, which is the point of sending some.
Commercial and employer plans
- Formulary exceptionA request to cover a drug the plan does not list at all. For a plan providing essential health benefits the standard answer is due within 72 hours, and an expedited one within 24.
- External reviewA review by an independent body outside your plan, after the plan's own appeals are finished. Whether your state's process or the federal one governs depends on your plan's type, not on where you live.
- Self-funded planAn employer plan that pays claims from the employer's own money and only hires an insurer to administer it. The insurer's name is on the card, but state insurance rules may not reach the plan.
Why a glossary needs sources at all
Most benefits glossaries are written from memory, and it shows in the places where the everyday meaning of a word has drifted from the regulatory one. Two examples from this page. A grievance sounds like the general word for complaining about a denial; it is defined by exclusion as dissatisfaction about anything that is not the coverage decision, so filing one in place of an appeal does not challenge the denial and does not stop the clock. And an appeal, in Medicaid managed care, means the plan reviewing itself — not the state hearing that most people picture.
Getting either of those backwards costs a reader a route, which is why each definition here is quoted rather than summarized, and why the section it came from is printed underneath it. Where a term genuinely means two different things in two programs, both are given and each is labeled.
None of this is legal or medical advice. It is what published documents say the words mean. Your own notice and plan documents govern your case. If you want the procedure rather than the vocabulary, the procedures pages set out what to file and when, the answers settle the harder questions, and the deadline calculator counts to dates from the date on your own notice.