Formulary
A health plan's list of covered drugs, typically organized by tier with associated cost-sharing.
1 min read · Last reviewed May 23, 2026
At a glance
- Category
- Payer
- Primary sources
- 1
- Workspace handoff
- ask d3 →
Where this comes up
Front-office and billing both hit this term — eligibility before the visit, prior auth before the procedure, contract terms during fee-schedule negotiation, and credentialing whenever a new provider joins or a payer roster lapses. Misses here become denials downstream.
Full definition
What it is in practice
Medicare Part D requires plans to cover at least two drugs in each USP therapeutic category. Tiered formularies steer beneficiaries to lower-cost options.
How it shows up in your practice
Check formulary status before prescribing for new patients. Many EHRs surface plan-specific formulary in real-time.
Sources
- CMS — Medicare Part Dhttps://www.cms.gov/medicare/coverage/prescription-drug-coverage
Check formulary status in Ask D3
Open ask d3 →Related terms
- PayerMedicare Part DMedicare prescription drug coverage delivered through stand-alone PDPs or MA-PD plans.
- PayerStep TherapyA payer requirement that less expensive drug or service options be tried before more expensive alternatives are covered.
- PayerPrior AuthorizationPayer requirement that the practice obtain approval before delivering certain services, procedures, or drugs.
D3rx is a healthcare-billing and compliance research aid maintained by D3rx Inc. Articles are drafted by an LLM (Anthropic Claude) against primary HHS, OCR, CMS, eCFR, NIST, and state-regulator publications, and reviewed for restraint and source fidelity by the D3rx team.
Reviewer status: a named credentialed reviewer (CHC, CHPC, or healthcare attorney) is being engaged. Until that engagement is finalized, this page does not claim credentialed review.
Related across the archive
- GlossaryMedicare Part DMedicare prescription drug coverage delivered through stand-alone PDPs or MA-PD plans.
- GlossaryStep TherapyA payer requirement that less expensive drug or service options be tried before more expensive alternatives are covered.
- GlossaryPrior AuthorizationPayer requirement that the practice obtain approval before delivering certain services, procedures, or drugs.
- ComplianceOIG LEIE Monthly Exclusion Screening: Process + Audit-Ready LogsMonthly OIG LEIE and SAM.gov exclusion screening for every workforce member and vendor: the workflow, the log fields auditors require, and the escalation path.
- CompliancePECOS Provider Enrollment Verification (2026) — Quarterly ChecklistQuarterly PECOS provider enrollment verification workflow: who to check, the exact lookup steps, the audit log columns, and the revalidation escalation path.
- Glossary270/271 Eligibility Inquiry/ResponseThe HIPAA standard EDI transactions used to verify patient insurance eligibility (270 query, 271 response).
- GlossaryACA Marketplace PlanHealth plans sold through the federal or state-based health insurance marketplaces under the Affordable Care Act.
- GlossaryAdvance Explanation of Benefits (AEOB)Under the No Surprises Act, the advance benefit statement that insurers must provide to insured patients before scheduled services (implementation deferred).
This glossary entry is a research aid for billing and compliance staff. It does not provide legal, medical, or financial advice and does not replace counsel. References cited link to primary sources at HHS, OCR, CMS, eCFR, NIST, and the relevant payer or industry body.