Step Therapy (Fail-First) Appeals: How to Get an Exception

Step therapy — also called "fail-first" protocols — requires patients to try less expensive treatments before insurers will cover the treatment their doctor actually recommends. While step therapy can be appropriate in some situations, it's frequently applied rigidly in ways that cause patient harm and that violate state and federal law. Over 30 states have enacted step therapy reform laws that require exception processes. Here's how to use them.

What Is Step Therapy?

Step therapy requires patients to try treatments in a sequence determined by the insurer — starting with cheaper options and advancing to more expensive treatments only after cheaper ones fail. For example: trying two generic antidepressants before a brand-name medication your psychiatrist recommends; trying physical therapy and NSAIDs before a biologic for rheumatoid arthritis; or trying several older chemotherapy drugs before a newer targeted therapy.

The Four Grounds for a Step Therapy Exception

Most state step therapy reform laws and federal guidelines recognize four grounds for an exception:

1. Contraindication: The required step therapy drug is clinically contraindicated for this patient due to a drug interaction, allergy, comorbidity, or other documented clinical reason
2. Prior failure: The patient has already tried the required drug and it was ineffective or caused adverse effects — document with medical records
3. Irreversible harm: Requiring the patient to try step therapy first would result in irreversible harm, disease progression, or severe adverse consequences
4. Clinical standard of care: Clinical guidelines indicate the requested drug is the appropriate first-line treatment for this patient's specific profile

State Step Therapy Reform Laws

As of 2025, over 30 states have enacted step therapy reform legislation requiring insurers to grant exceptions in certain circumstances. States with particularly strong protections include New York (enacted 2016), Texas, Florida, Illinois, New Jersey, California, Pennsylvania, Ohio, Michigan, Virginia, and Washington. To find your state's specific law, search "[your state] step therapy reform law" or contact your State Insurance Commissioner.

Federal Protections

• Medicare Part D (42 CFR §423.578): Part D plans must have an exceptions process. Physicians can request coverage of non-formulary drugs when the formulary alternative is not medically appropriate.
• MHPAEA: Step therapy applied more stringently to psychiatric medications than to comparable physical health medications may violate parity law.
• ACA medical necessity: Step therapy that ignores the patient's unique clinical circumstances may violate ACA medical necessity standards.

How to Request a Step Therapy Exception

1. Have your physician document the specific clinical reason for the exception — preferably one of the four grounds above
2. File a formal exception request with the insurer's pharmacy or prior authorization department
3. Cite your state's step therapy reform law by name if applicable
4. Include: physician letter; relevant medical records; prior treatment records if claiming prior failure; documentation of contraindication if applicable
5. If denied, file a formal internal appeal citing the same grounds
6. Request external review if internal appeal is denied