Insurance Terms

Question 1

AWP

Answer 1

A standard measure and mean value at which drugs are sold to pharmacies, physicians, or other customers; usually 20% greater than the manufacturer’s price

Question 2

EOB

Answer 2

The insurance company’s written explanation of the details of payment for services/products

Question 3

Refill Too Soon

Answer 3

A rejection message from the insurance company saying that the patient must use up a designated percentage of the medication before they will pay for a refull

Question 4

PPO

Answer 4

Insurance plan where patient can access specific providers and services in the network at a reduced cost, or use providers and services outside of the network at a higher cost

Question 5

PBM

Answer 5

Intermediary claims processor that works with pharmacy (which submit prescription claims) and insurance companies (which pay for the claim)

Question 6

Claims Adjudication

Answer 6

Term used in the insurance industry for the process of paying or denying claims based on the patient’s plan/coverage

Question 7

DUR

Answer 7

A computer alert that halts the prescription filling process when potential harm is detected by the pharmacy’s software (e.g. drug interaction, allergy)

Question 8

BIN

Answer 8

Originally established in the banking industry, a 6 digit number found on the patient’s insurance card that tells the pharmacy which PBM should be billed for the claim

Question 9

Days Supply

Answer 9

The number of days the medication will last the patient. It is entered into the computer software when filling a prescription

Question 10

Medicaid

Answer 10

State-funded program for low income families, children, and expecting mothers, that pays for healthcare services, and some pharmacy-related items such as diabetic supplies

Question 11

Refill Too Soon

Answer 11

A rejection message from the insurance company saying that the patient must use up a designated percentage of the medication before they will pay for a refill

Question 12

Copay

Answer 12

After meeting a deductible, it is a flat fee or percentage of the Rx or medical cost that the patient pays at the time of service

Question 13

Discount Card

Answer 13

Billable card, often funded by drug companies or private organizations, to financially assist those without Rx benefits

Question 14

HIPAA

Answer 14

Federal law that protects patients’ privacy and the security of their health information

Question 15

Fee For Service

Answer 15

Least restrictive insurance plan where the patient can use any provider or service and pays a percentage of the charge, e.g., patient pays 20%/ insurance covers 80%

Question 16

Member ID

Answer 16

Alpha-numeric identifier found on the insurance card that is specific to an individual or family, and used to process an insurance claim

Question 17

Formulary

Answer 17

A list of medications covered on the patient’s drug plan

Question 18

Rx Group

Answer 18

A number found on an insurance card that identifies the covered member’s employer and specific type of insurance plan

Question 19

Part D

Answer 19

Privately administered, federally-funded program for the elderly and disabled which covers most prescription medications