Question 1

What is formulary adjudication?

Accepted Answer

Formulary adjudication is the process of determining whether a drug is covered under a patient's insurance plan — and under what conditions such as prior authorization or step therapy. Formulary Aion runs a deterministic rule engine against sealed, tamper-evident formulary files and returns a coverage decision with cryptographic proof records, each citing the exact rule path and computation that produced it.

Question 2

What is a Medicaid Preferred Drug List (PDL)?

Accepted Answer

A Medicaid PDL is a state-managed list of drugs with preferred formulary status under 42 CFR § 447.518. Preferred drugs are covered with lower cost-sharing. Non-preferred drugs may require prior authorization or step therapy. Formulary Aion adjudicates against sealed PDL rules and cites the exact YAML rule paths that drove the decision.

Question 3

How does the IRA 2025 Medicare Part D out-of-pocket cap work?

Accepted Answer

The Inflation Reduction Act caps Medicare Part D beneficiary out-of-pocket drug costs at $2,000 per year starting 2025, eliminating the catastrophic phase cost-sharing. Formulary Aion calculates exact OOP amounts using rational arithmetic against sealed Part D rules (42 CFR § 423), showing each coverage phase computation and compliance status.

Question 4

What is prior authorization in pharmacy benefits?

Accepted Answer

Prior authorization (PA) requires a prescriber to obtain payer approval before a drug is covered. Formulary Aion evaluates whether a valid PA is on file, returns the applicable SLA hours and auto-approve conditions, and returns a COVERED or COVERED_PA_REQUIRED status with the specific rules that triggered the requirement.

Question 5

What is step therapy and how is it adjudicated?

Accepted Answer

Step therapy requires patients to try less expensive formulary drugs before a payer will cover a more costly alternative. Formulary Aion validates whether the required step therapy sequence is complete and returns COVERED, COVERED_STEP_THERAPY_REQUIRED, or COVERED_PA_AND_STEP_REQUIRED based on the sealed formulary rules.

Question 6

What is the OBRA rebate and how is it calculated?

Accepted Answer

The Omnibus Budget Reconciliation Act (OBRA) of 1990 requires drug manufacturers to pay rebates to state Medicaid programs. The basic rebate is the greater of 23.1% of AMP or the difference between AMP and best price. Formulary Aion computes exact rebate fractions using rational arithmetic with full numerator/denominator audit records.

Question 7

How are Formulary Aion decisions cryptographically verified?

Accepted Answer

Every coverage decision includes proof records citing the BLAKE3 hash of the sealed .aion formulary file that contained the rule, the parent-version hash forming a hash chain, and the Ed25519 author signature. This makes the audit trail independently verifiable — any change to the underlying rules produces a different hash, making tampering detectable.