Glossary
Prior authorization
In one sentence
A 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.
Also written as PA, Pre-authorization, Precertification.
What prior authorization actually means
Prior authorization sits on top of coverage rather than replacing it. A drug can be on the list and still need approval, and a drug can be excluded outright, in which case there is nothing to request. Which of those you are looking at changes what you should do next, and it is the single most useful thing to establish before writing anything.
Medicare's rules do not define the phrase so much as treat it as one of three utilization-management tools that sit beside each other, and the definition of a negative formulary change is where all three appear together. Tightening any of them is a change the rules track, which is a useful reminder that these settings move during a plan year.
Some state exclusions are written so that no request is possible at all. Ohio's rule is the clearest example we have read: obesity drugs are listed as non-covered, and non-covered categories are stated not to be eligible for prior authorization. There is no form for that.
The text it comes from
This is the wording the definition rests on. Where it decides anything for you, read the section rather than our summary of it.
Medicare's rules group the three tools together and treat tightening any of them as a formulary change: "Negative formulary change means one of the following changes with respect to a covered Part D drug: (1) Removing a drug from a formulary. (2) Moving a drug to a higher cost-sharing tier. (3) Adding or making more restrictive prior authorization (PA), step therapy (ST), or quantity limit (QL) requirements."
42 CFR §423.100, Electronic Code of Federal Regulations, effective August 2026 · source
In Medicaid managed care, limits like prior authorization are permitted for utilization control but are bounded: a plan may place limits "on the basis of criteria applied under the State plan, such as medical necessity," or "for the purpose of utilization control," provided "the services furnished can reasonably achieve their purpose." The same section forbids a plan to "arbitrarily deny or reduce the amount, duration, or scope of a required service solely because of diagnosis, type of illness, or condition of the beneficiary."
42 CFR §438.210(a), Electronic Code of Federal Regulations, effective August 2026 · source
Where this comes from
- 42 CFR §423.100, Electronic Code of Federal Regulations, effective August 2026 — www.ecfr.gov/current/title-42/part-423/section-423.100
- 42 CFR §438.210(a), Electronic Code of Federal Regulations, effective August 2026 — www.ecfr.gov/current/title-42/part-438/section-438.210
Where this comes up
American GLP is not a law firm, an insurer, a government office or a clinician, and nothing here is legal or medical advice. This page says what a published rule means by a word. Which rulebook governs you depends on your plan, and your own notice and plan documents govern your case.