Exam 2 Flashcards
What are the 3 healthcare functions of the US government?
- Regulator
- Provider
- Payer
What are the examples of the US government being a regulator as one of its healthcare functions?
The government regulates…
* all healthcare providers and services (FDA). This includes the education of the providers
* drugs and medical devices
* financing schemes which are health insurance plans
* standard of quality.
* monitoring healthcare market for inconsistences of cost and availability
What are the examples of the US government being a provider as one of its healthcare functions?
It provides the Federal Veterans Health Administration (VHA) which covers healthcare costs for all veterans.
What are the examples of the US government being a payer as one of its healthcare functions?
Via the 16th amendment, the constitution gave federael government the right to levy a tax on income. This allowed the government to raise money to expand US healthcare via the Social Security Act, the Hospital Survery and Construction act and Medicare and Medicaid overseen by the CMS.
Who is eligible for Medicare?
- 65 or older
- certain young people with disabilities
- people with end-stage renal disease
- people with amyotrophic lateral sclerosis (ALS)
How is Medicare financed?
It is financed by a protion of the payroll taxes by workers and their employers. It is also financed by monthly premiums deducted from Social Security checks.
Where does someone apply for Medicare?
Social Security Administration
What are the two parts of the original Medicare?
Part A and B
What does Part A of Medicare cover?
Hosptial Insurance
Inpatient hosptial care, nursing facilities, hospice care
What does Part B of Medicare cover?
Physician’s services
Medical Insurance
What is the other part of Medicare called the Medicare Advantage Plan?
This is Part C of Medicare
What does the Medicare Advantage Plan/ Part C cover?
Part C combines Part A and Part B to cover both hospital and medical services.
Can you have Part A, B, and C all at the same time?
Yes. Medicare Part C combines Parts A and B coverage through other health organizations that are equivalent to or better than Parts A and B alone, but you must sign up for Part A and B before you can enroll in a Part C plan.
What is Part D of Medicare?
Part D is an optional add-on that covers prescription drugs.
Can you have Part C and D at the same time in Medicare?
Yes. Most Part C plans include prescription drug coverage but some do not which allows you to also have Part D.
What is the initial enrollment period for Medicare?
3 months before and 3 months after your 65th birth month.
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What is the annual enrollment dates for Medicare?
Annual enrollment begins on October 15th and ends on December 7th.
What are the pros of Medicare Part C?
- Bundled plans to consolidate coverage
- Additional benefits are normally covered by prescriptions, dental, vision, and hearing
- Option for $0 premiums and reduced part B (office visits) costs.
What are the cons of Medicare Part C?
- Small networks with limited providers
- Access to care restricted to coverage area
- May require prior authorizations
- Higher copayments and deductibles
What are the pros of Medicare Part C versus Traditional Medicare (Parts A and/or B)?
Pros of Part A and B include the ability to go to any doctor in the US that takes Medicare and not typically needing a referral which is not the case for part C.
What are the cons of Medicare Part C versus Traditional Medicare (Parts A and/or B)?
Who administers Medicare?
Centers for Medicare and Medicaid Services (CMS)
What are the consequences if a person does not enroll on time for Medicare Parts B?
If a person does not enroll on time for Part B, they will pay an extra 10% for each year they could have signed up but did not. The penalty is added to the monthly premium.
What are the consequences if a person does not enroll on time for Medicare Part D?
Medicare calculated the penalty by multiply 1% of the national base beneficiary premium. Once that is calculated, it is added to the monthly Part D premium.
How does a person qualify to NOT have any premiums for Medicare Part A?
Most people do NOT have a premium. To qualify to not have a premium…
1. You or spouse has paid at least 10 years worth of Medicare taxes while working
2. You or spouse had Medicare-covered government employment
What % of Medicare Part A is covered by payroll taxes?
89%
What are the 2 main sources of Medicare funding for Part B and D?
75% from income tax revenue and monthly premiums for part B and D cover the additional 25%.
What factors impact the premium cost range for Medicare Part B?
Monthly premiums for part B are based on income from 2 years prior. The more money that was made means the higher the premium.
What is Medigap in Medicare?
Medigap is extra health insurance that you buy from a private company to pay healthcare costs not covered by the original Medicare. It could cover things like copayments, deductibles, and healthcare outside the US.
Who regulated Medigap in Medicare?
What parts of Medicare costs is Medigap used to cover/support?
Medigap can eliminate out-of-pcoekts costs associated with part A and B. It can cover long-term care and travel abroad healthcare needs.
What is meant by ‘standardization’ in terms of Medigap for Medicare?
Standardized means that of the 10 available Medigap insurances offered they are all the same even though not all states offer all 10 programs.
What is the Medicare Savings Programs?
This is for low-income individuals who need help from the state to pay for Medicare premiums.
Which parts of Medicare is supported by Medicare Savings Programs?
Medicare savings programs can help ay for part A and part B including deductibles, coinsurance, and copayments.
What is Medicare Extra Help?
These are federal assistance programs that help low-income Medicare participants afford part D (prescription drug coverage).
What parts of Medicare are supported with Medicare Extra Help?
Part D
Where does someone locate Medicare Plan C plans that are available?
What determines which Medicare Advantage Programs (Part C) are available to you?
What are the enrollment trends by Medicare recipicents in Medicare Part C versus Traditional Medicare (Part A and B)?
It appears that enrollment between Medicare Advantage and Traditional Medicare are 50/50. Around 10 years ago, more people have traditional Medicare but now it has evened out.
What are the key considerations when selecting a Medicare Part D plan?
The premium costs, copay and coinsurance, gap coverage, formulary, and quality rating
Where do you find Medicare Part D plans that best suit a patient’s needs?
What is TrOOP?
This is the true out-of-pocket costs.
How is TrOOP calculated?
TrOOP is how much the patient, manufacturer, and part D all pay together.
Starting in 2025, what is the maximum out-of-pocket for Medicare Part D recipients?
2,000 annual cap on out-of-pocket spending for prescription drugs
What is the out-of-pocket costs for Medicare Part D recipients in the catastrophic phase in 2025?
In the catastrophic phase in 2025, the out-of-pocket costs will be $0.
How is Medicaid financed?
Federal and state governments
Who administers Medicaid?
CMS (centers for Medicare and Medicaid services) and a single agency in each state
Why doe state Medicaid benefits vary from state to state?
Benefits vary from state to state because federal Medicaid laws allow states broad discretion over Medicaid eligibility policy. Medicaid has flexibility and open-eneded federal matching funds that allow states to extend coverage to low-income peoples.
How is it determined if a single adult qualifies to receive Medicaid in Ohio?
- US citizen or Medicaid non-citizen requirements
- Low-income (<138% of federal poverty limit)
- Pregnant, infant, or children
- Older adults
- Individuals with disabilites
What is FPL?
This is the federal poverty limit. For a regular individual it is <138% meaning that making at or less than $20,120 per year.
What percent of Ohio residents qualify to receive Medicaid?
30%
Through what mechanism are Medicaid healthcare benefits and medications provided?
Managed Care plan for healthcare and Single Pharmacy benefits manager for medications.
What are the advantages of a unified preferred benefits list (UPDL) for the state?
Unified Preferred Benefits List (UPDL) is a concept where Ohio consolidates and standardizes the list of covered benefits, services, or medications across different healthcare programs. The idea behind the UPDL is to create consistency, simplify administration, and optimize healthcare delivery.
What is the most common way for private health insurance to be obtained?
Through employers that offer health insurance as part of a benefit package.
What is indemnity?
A type of fee-for-service insurance. Required patient to collect receipts and submit them for reimbursement for a percentage of the medical charges.
What is managed care and what are the three main components?
Managed care is the most common form of health insurance coverage.
It involves PPOs, HMOs, and point-of-service plans.
What is an HMO (Health Maintenance Organizations)?
These are groups of medical facilities and healthcare services and providers that week to keep patients under the care of providers in the network.
What are the characteristics of an HMO plan?
- Must have a PCP to coordinate care with other providers
- Limited to in-network care
- Low premiums and low deductibles
- Low administrative burden
What is a PPO (Preferred Provider Organizations)?
PPOs operate off a list of preferred healthcare providers that patients can choose from their coverage and they can go out-of-network.
What are the characteristics of a PPO?
- Does not require a PCP to coordinate cre (ie; referrals)
- Low administrative burden for patient
- Higher deductibles and premiums
- Out-of-network will typically cost more than in-network
What is a Point-of-Service plan (POS)?
Point-of-service plans are a combination of HMOs and PPOs. You pick a PCP in-network that coordinates care but you can go out-of-network. With out-of-network, patient is responsbile for completing the paperwork to receive compensation.
What are the differences in PCP referral between HMOs, PPOs, and Point-of-Services Plans?
HMOs you need a PCP to give referral. PPOs you do not need PCP for a referral. Point-of-service you need PCP for a referral.
What is a high-deductible health plan (HDHP)?
High-deductible health plans are plans with a deductible greater than $1,500 for an individual or greater than $3,000 for a family.
What are the pros for a high-deductible health plan?
- Qualify for a health savings account (pre-tax dollars toward healthcare costs)
- Good for those who are generally healthy
- Low premiums
What are the cons for a high-deductible health plan?
- High deductible before maximum coverage
- Not great for those with chronic health issues or if unexpected issues occur
What is an HSA (health savings account)?
An HSA (health savings account) is an account with pre-taxed dollars that can be used for selected health expenses. They accumulate more money and are portable.
What are the two things that health savings accounts (HSAs) require?
HSAs require that you are enrolled in a high-deductible plan and that you contribute to the HSA from your paycheck.
What is an HRA (health reimbursement arrangement)?
An HRA (health reimbursement arrangement) is when the employer contributes to the funds to the account that is used to offset healthcare costs. The employee will lose their HRA if they leave that employer.
What is the difference between an HSA and an HRA?
HSA gets money from the person and it is portable while an HRA get money from the company and is not portable.
What is an FSA (flexible savings account)?
An FSA is an account with pre-taxed dollars that can be used for selected health expenses but it expires annually. They are limited to $3,050 per year per employer.
What is a deductible?
This the amount of a money a patient pay out-of-pocket (a specific amount) over a period of time (a years) before the health insurance plan kicks in.
What is a co-payment?
This is a specific amount of money paid every time a service is done.
What is a co-insurance?
This is when a patient pays a specified fixed percentage of a service (typically 20%)
When was Social Security signed into law?
1935
Who signed social security into law?
Franklin D. Roosevelt
What are the 3 categories of benefits provided by social security?
- Retirement insurance
- Survivors insurance
- Disability insurance
Which social security benefit does the government spend the most money on?
Retirement
How is social security funded?
Workers and their employers pay for social security under the federal insurance contributions act (FICA).
What is FICA?
The Federal Insurance Contributions Act
What % of FICA money is withheld for social security?
12.4% (6.2% from both employee and employer)
What % of FICA money is withheld for Medicare?
2.9% (1.45% from both employee and employeer)
If you are self-employed and make $100,000 per year, how much do you in FICA?
Both Social Security at 12.4% and Medicare at 2.9% totalling 15.3%. This would total $15,300 in money stolen from you to go to the government to be used for shitty ass government programs.
What is the current status of the social security trust fund? What is the prediction for 2035?
It is continuing to decrease and is expected to be gone by 2036.
What are the eligibility requirements for social security retirement benefits?
Must earn and pay FICA for at least 40 quarters and must be 67 years old.
What happens to social security if you retire early?
If retired by the age of 62, you get 75% of your full social security retirement benefit.
What happens to social security is you retire later than the normal age of 67?
Later retirement at the age of 70 gives you 132% of the social security retirement benefit.
What is COLA?
COLA is the cost of living adjustment for social security benefits
How is COLA determined?
It is determined by the consumer price index
What was the number of social security beneficiaries per worker in 2035?
Between 2.7 and 2.3 workers per beneficiary.
Describe the percent replacement income that social security retirement provides with the maximum and lowest income prior to taking the social security benefits.
With the lowest income prior to taking SS benefits, it replaces 50% of that income. With the highest income prior to taking SS benefits, it replaced 25% of that income.
What is a defined benefit plan?
This is basically a pension. It is usually based on a percentage of the salary. It is expensive for the employer but great for the employee. An example would be if you made 100,000 per year and they give you 67% of that after retirement.
What is a defined contribution plan?
Lump some of assets given at the time of retirement that have been contributed by yourself and the company. This is like a 401K that can be roth or IRA.
What are the trends in availability of employer offered defined benefits versus defined contribution plan versus no plan?
2/3 of workers have employer-sponsered retirement savings plans (defined contribution plan).
What is a 401K?
This is a retirement account that is managed by the company and individual.
What is an IRA?
Individual retirement account that are managed and contributed to by the individuals. It allows make contribution of $6,500 per year and it tax-free until 59.5. If money is withdrawal before than the IRS takes 10%.
What is the difference between who manages the account in a 401K versus an IRA?
IRA is managed by individual while 401K is managed by the employer.
Are Roth IRA contributions pre-tax or after tax?
Contributions are taxed up front and not taxed when the money is finally taken out.
List 3 reasons that the US healthcare system needs to be reformed.
The US pays the most for hospital services, prescription drugs, and administration. There are many people that are uninsured and cannot afford.
What are 2 federal healthcare reform efforts that occured between the 70s and 8s to contain the costs of healthcare?
The Health Maintenance Organization Act of 1973 to encourage lower costs of healthcare and the Diagnosis-Related Group of 1983 to control reimbursement of hospitalizations.
What are the 8 provisions of the Affordable Care Act (ACA) related to healthcare access?
- Individual mandate
- Employer mandate (50+ employees)
- State-based insurance exchanges
- Dependent coverage
- Pre-existing condition protections
- Preventive care coverage
- No lifetime caps
- Medicaid expansion
Roth versus non-Roth?
There is 401K and Roth 401k and IRA and Roth IRA
Roth money is put in after it is taxed and is not taxed when taken out. The no ROTH are taxed when taken out and not when put in.
What were the prescription drug proposals included in the Inflation Reduction Act related to Medicare Part D?
- Department of Human Health Services will negotiate prices for high-cost drugs offered to those enrolled in Medicare
- Drug companies must pay rebates to Medicare if the prices rise faster than inflation for drugs used for those with Medicare
- Insulin costs are capped at $35 co-payment for month for Medicare users
What has the impact been of the combined Affordable Care Act/ American Rescue Plan Act/ Inflation Reduction Act on the % of uninsured people in the US?
The number of people uninsured has decreased in all age populations.
What is the trend in percentage of the US population enrolled in Medicaid?
Medicaid enrollment has generally increased, especially due to Medicaid expansion under the ACA and additional funding from the ARP. This upward trend reflects higher enrollment rates, with over 90 million Americans enrolled in Medicaid and CHIP by 2024.
What is the trend in federal government spending on healthcare programs in the last decade?
Federal spending on healthcare programs has steadily increased, driven largely by the expansion of Medicaid, increased Marketplace subsidies, and Medicare spending growth. Rising costs in healthcare services and insurance subsidies have contributed to the growing federal share of total healthcare spending.
What is the earliest known compilation of prescription formulas in existence?
In 1500 BC within the papyrus ebers
The first seperation of medicine and pharmacy took place where and when?
During the 8th century in Baghdad
How did colleges of pharmacy during the early 1800’s differ from colleges of pharmacy today?
In the early 1800s, pharmacy colleges were often apprenticeship-based and focused on compounding and materia medica (study of medicinal substances). Training was shorter, less standardized, and did not require formal coursework in biology or chemistry, unlike modern programs which are more structured and typically require a Doctor of Pharmacy (Pharm.D.) degree with rigorous training in sciences, clinical practice, and patient care.
Why is Albert Prescott known in pharmacy history? (i.e.What change in pharmacy education did he pioneer?)
Albert Prescott was a pioneer in pharmacy education who, in the late 19th century, introduced the concept of a scientific, laboratory-based curriculum in pharmacy schools. He advocated for formal education without the traditional apprenticeship model, which was a major shift in pharmacy training.
Per the APhA Code of Ethics, during which timeframe were pharmacists not permitted to discuss medications with patients?
1952-1969
During which decade did clinical pharmacy begin to grow in the United States? What was happening during this decade to encourage this growth?
Clinical pharmacy began to grow in the 1960s. During this decade, there was an increased focus on patient-centered care, partly driven by advances in pharmaceutical sciences, hospital expansions, and recognition of the pharmacist’s role in direct patient care.
The Harrison Narcotic Act of 1914, via a tax system, made which drugs prescription only?
Opioids and cocaine
Which Federal law required that drugs be proven safe prior to marketing? When was it implemented?
Federal Food, Drug, and Cosmetic Act of 1938
Which Federal law required that drugs be proven effective prior to marketing? When was it implemented?
Kefauver-Harris Amendment of 1962
What is OBRA 90?
OBRA 90 is a federal law that set requirements for pharmacists to improve patient care, particularly for Medicaid recipients. It established standards for drug use review to ensure safe and effective medication use.
What 3 things did OBRA 90 require pharmacists to do?
- Drug Utilization Review
- Patient Counseling
- Maintain patient records
What did the 1994 APhA Code of Ethics “emphasize”?
The 1994 American Pharmacists Association (APhA) Code of Ethics emphasized the pharmacist’s role in providing patient-centered care and prioritizing the welfare of patients. It encouraged pharmacists to be actively involved in improving patient health and ensuring the responsible use of medications.
What year was the deadline by ACPE that all colleges of pharmacy had to implement the Pharm.D. as the entry-level degree?
2000
What was the Asheville project?
The Asheville Project was a community pharmacy-based program in Asheville, North Carolina, where pharmacists provided care management and education for employees with chronic conditions (like diabetes and hypertension).
What was the clinical impact of the Asheville Project?
The Asheville Project demonstrated significant improvements in health outcomes, such as better blood sugar control, and reduced healthcare costs by decreasing hospitalizations and emergency visits.
How did the Asheville Project influence the development of Medicare Prescription Drug Act?
The project highlighted the positive impact of pharmacist-led care on chronic disease management, influencing support for pharmacist involvement in patient care under the Medicare Modernization Act, which created Medicare Part D for prescription drugs.
Define “Hospital at Home”.
“Hospital at Home” is a model of care that provides acute hospital-level treatment to patients in their homes rather than in a hospital setting.
What are the 2 major services provided by pharmacists in the Hospital at Home type of care?
Medication management and patient education
What are Collaborative Care Agreements?
Collaborative Care Agreements are formal partnerships between pharmacists and other healthcare providers that allow pharmacists to perform specific patient care functions (such as adjusting medication dosages) under agreed-upon protocols.
What is BPS?
The Board of Pharmacy Specialties
Define “Credential” and identify examples of a credential.
A designation of qualification, such as a certification or license, that demonstrates a pharmacist’s capability in a specific area (e.g., Pharm.D., BCPS certification).
Define “Credentialing process” and identify examples of credentials.
A process through which a pharmacist’s qualifications, such as education and certifications, are verified to ensure competence in a specialized area (e.g., obtaining Board Certification in a specialty area).
Define “Privileging process” and identify examples.
The process that allows a healthcare provider to perform certain tasks or procedures within a healthcare organization based on their credentials (e.g., allowing a pharmacist to adjust medication under a collaborative care agreement).
Describe the healthcare landscape and why the need for interprofessional collaboration and practice.
The healthcare landscape is increasingly complex due to rising healthcare costs, an aging population, chronic disease prevalence, and diverse patient needs. Interprofessional collaboration and practice (IPC) are crucial as they improve patient outcomes by bringing together the expertise of various health professionals. Working collaboratively allows for holistic, efficient, and coordinated patient care, which helps address challenges such as provider shortages, healthcare disparities, and fragmented care.
Describe the trends (not numbers) regarding availability of nurses, physicians and dentists in 2025.
By 2025, the healthcare industry faces a projected shortage of healthcare professionals, particularly nurses, primary care physicians, and dentists. Trends show a growing demand for healthcare services due to an aging population, but there is a shortage of workers entering these fields, leading to workforce gaps. This scarcity emphasizes the importance of team-based care and maximizing the roles of each professional to meet patient needs effectively.
Why is it important for pharmacists to collaborate with other professionals – and to understand the education/training?
Pharmacists play a critical role in patient care, particularly in medication management and safety. Collaborating with other professionals ensures that pharmacists can contribute their expertise while understanding other professionals’ scopes of practice, training, and perspectives. This knowledge enhances communication, builds trust, and leads to more integrated and effective care for patients.
What is IPCP?
(Interprofessional Collaborative Practice): A practice model where health professionals from different fields work together to provide comprehensive care to patients.
What is IPE?
(Interprofessional Education): Educational experiences where students from various health professions learn together and develop the skills necessary for interprofessional collaborative practice.
What are the three types of professional competencies?
- Individual Competencies: Skills specific to each profession’s scope of practice.
- Common Competencies: Skills shared across professions, such as communication and teamwork.
- Collaborative Competencies: Skills necessary for working effectively with other professionals, like interprofessional communication and coordination.
Identify the 4 IPEC competencies.
- Values/Ethics for Interprofessional Practice: Working with mutual respect and shared values across professions.
- Roles/Responsibilities: Understanding one’s own and others’ roles and responsibilities in a healthcare team.
- Interprofessional Communication: Effectively communicating with team members to support a team approach to patient care.
- Teams and Teamwork: Applying relationship-building values and team dynamics to deliver quality patient care.
Describe the typical length of post medical school training of family medicine and internal medicine physicians.
Family Medicine: Typically a 3-year residency program.
Internal Medicine: Typically a 3-year residency program as well, with options for additional fellowships for subspecialties.
Differentiate LPN, RN and APN regarding the types of practice responsibility. Which nurse have the prescriptive authority in most jurisdictions?
A. LPN (Licensed Practical Nurse): Provides basic nursing care under the supervision of RNs and physicians, limited scope in assessments and interventions.
B. RN (Registered Nurse): Provides direct patient care, performs assessments, administers medications, and develops care plans; has a broader scope of practice compared to LPNs.
C. APN (Advanced Practice Nurse): Includes nurse practitioners, clinical nurse specialists, nurse anesthetists, and nurse midwives. They have an expanded scope of practice, can diagnose and treat conditions, and often have prescriptive authority.
Advanced Practice Nurse (APN), particularly Nurse Practitioners (NPs), generally have prescriptive authority in most states.
What degree is needed to become a physical therapist?
Requires a Doctor of Physical Therapy (DPT) degree.
What degree is needed to become a registered dietician?
Bachelor’s or Master’s degree in dietetics or a related field, followed by a supervised practice program and passing a national exam.
What degree is required to become a nutritionist?
Bachelor’s degree in nutrition or a related field.
Define the 5 steps in the medication use process (MUP).
- Prescribing: A healthcare provider assesses the patient and prescribes a medication based on diagnosis and patient-specific factors.
- Transcribing: The prescription is documented and transferred into the pharmacy system or electronic health record (EHR), ensuring accurate communication of the medication order.
- Dispensing: The pharmacist verifies the prescription, prepares, and provides the medication to the patient or healthcare provider.
- Administration: The medication is administered to the patient, typically by a nurse or the patient themselves, depending on the setting.
- Monitoring: The patient is monitored for therapeutic outcomes and potential adverse effects to ensure the medication is working as intended.
What is a 6th step commonly considered part of the MUP?
Patient Education: Educating patients on how to properly use their medication, potential side effects, and adherence strategies is often considered a sixth step, as it is essential for safe and effective medication use.
What is the MUP heavily influenced by?
The MUP is heavily influenced by technology (e.g., electronic health records and automated dispensing systems), regulatory guidelines (from entities like the FDA and CMS), and evidence-based practices (clinical guidelines and research findings).
Which portion of the MUP does the pharmacist have responsibility and influence?
Pharmacists have significant responsibility and influence in the transcribing, dispensing, monitoring, and patient education portions of the MUP. They verify medication orders, ensure accurate dispensing, monitor patient outcomes, and counsel patients to ensure safe and effective medication use.
What are the external drives that impact the MUP?
- Regulatory and Accreditation Standards: Guidelines from organizations like the Joint Commission, FDA, and CMS.
- Technology Advancements: Electronic prescribing systems, automated dispensing cabinets, and clinical decision support systems.
- Healthcare Policy and Payment Models: Changes in insurance reimbursement and Medicare/Medicaid policies.
- Patient Safety Initiatives: Emphasis on reducing medication errors and improving patient outcomes, supported by organizations like the Institute for Safe Medication Practices (ISMP).
- Pharmacoeconomics: Cost-effectiveness analysis and value-based care influence prescribing and medication choices.
What has the trend been over the last decade regarding dispensing models in US Hospitals?
The trend has been toward decentralized and automated dispensing models in hospitals. There is an increased use of automated dispensing cabinets (ADCs) on hospital floors, allowing medications to be accessed closer to the point of care, which reduces wait times and enhances patient safety. Additionally, clinical pharmacy services have expanded, with pharmacists more integrated into patient care teams, especially in critical care and other specialized areas.
What is a PBM?
Pharmacy Benefit Manager:
A PBM is a third-party administrator for prescription drug programs. They work with insurance companies, employers, and other organizations to manage prescription drug benefits, negotiate prices with drug manufacturers, process claims, and develop formularies (lists of covered medications).
What is a PSAO?
Pharmacy Services Administrative Organization:
A PSAO is an organization that provides business and administrative services to independent pharmacies. These services typically include negotiating contracts with PBMs, managing reimbursements, and handling claims and billing to help pharmacies operate more efficiently.
What is the NADAC?
National Average Drug Acquisition Cost:
NADAC is the average price that pharmacies pay to acquire a specific drug, as calculated by the Centers for Medicare & Medicaid Services (CMS). It’s used to help determine reimbursement rates for drugs under Medicaid.
What is OAAC?
Other Average Acquisition Cost:
OAAC refers to an alternative cost metric used by Medicaid to determine the average cost of a drug based on other acquisition methods. It is sometimes used when NADAC isn’t available or applicable.
What is MAC?
Maximum Allowable Cost:
MAC is the highest price that a payer (insurance company or PBM) is willing to reimburse for a generic or brand-name drug. It is set to ensure that prices remain competitive and within a reasonable range.
What is U&C?
Usual and Customary:
U&C refers to the standard price that a pharmacy charges a patient without insurance or the price paid by patients paying out-of-pocket. It is the typical cost for a medication before any discounts or insurance adjustments are applied.
