Third Party Payments

Question 1

AWP

Answer 1

Average Wholesale Price

An average price that wholesalers charge the pharmacy for a given drug, dose, and package size.

Question 2

prescription reimbursement

Answer 2

AWP + percentage + dispensing fee

Question 3

health insurance

Answer 3

coverage of incurred medical costs such as physician visits, laboratory costs, and hospitalization.

Question 4

PBM

Answer 4

pharmacy benefits manager

a company that provides such service by administering the prescription drug benefits and pharmacy reimbursements for insurance companies

Question 5

deductible

Answer 5

an amount that must be paid by the insured before the insurance company will consider paying its portion

annual deductible is commonly between $100 and $3000 and starts with beginning of new calander or fiscal year depending on the company

Question 6

co-payment

Answer 6

the flat amount that the patient is to pay for each prescription

co-pays vary by both drug (generic vs. brand) and insurance company

Question 7

coinsurance

Answer 7

a percentage-based plan in which the patient must pay a certain percentage of the prescription price

not a common as the deductible and co-pay plans

Question 8

private insurance

Answer 8

most patients have private insurance either through their employer during their wage-earning years, or as a retiree of large company

Question 9

HMO

Answer 9

health maintenance option

lower costs out of pocket for patient however not all providers or pharmacies are covered and the preferred drug list is commonly restriced to generic drugs

Question 10

dual co-pay

Answer 10

one co-pay for brand name drugs and a lower co-pay for generic drugs

Question 11

tiered co-pay

Answer 11

has an escalating cost for a generic, a pereferred brand, and a nonpreferred brand

Question 12

PDL

Answer 12

preferred drug list

Question 13

medicaid

Answer 13

subsidizes the cost of health care, including drugs, for indigent and disabled citizens of each state who meet age and income eligibility requirements

Question 14

usual and customary charges

Answer 14

this term means that the pharmacy cannot charge the state more for the same prescription dispensed to a patient with private insurance.

Question 15

tricare

Answer 15

is a federal health and prescription drug insurance plan that is available to active and retired members of the military and their families

Question 16

medicare

Answer 16

once a patient is aged 65, he or she is eligible for medicare

medicare does not cover prescription drugs and patients require additional coverage or supplimental insurance for physician visits and prescriptions

Question 17

Medicare Advantage

Answer 17

also known as Medicare Part C

combination of both health and prescription insurance from the same provider

Question 18

Medicare Part D

Answer 18

the Medicare Prescription Drug, Inprovement, and Modernization Act (MMA) of 2003 - commonly called Medicare Part D

gives eligable patients the option to add prescription drug insurance to their existing medical coverage for an additional cost.

Question 19

worker’s compensation

Answer 19

provided insurance to cover medical care and compensation for an employee who is injured in the course of employment, in exchange for a waiver of the employee’s right to sue his or her employer

Question 20

COB

Answer 20

coordination of benefits

processing a claim through both a primary and secondary insurer

these patients are called “dual eligible”

Question 21

uninsured

Answer 21

commonly due to no employment or underemployment

prescribers and pharmacies should work together to identify the most common low-cost generic prescription for the required disease or illness

some pharmacies may advertise a list of “free” or low-cost ($4) prescriptions.

Question 22

“loss leaders”

Answer 22

low priced ($4) medication lists advertised by companies

the retailer may choose to lose or break even on drug costs if the lowered preices entice consumers to visit the store and buy more groceries or merchandise

Question 23

drug discount cards and coupons

Answer 23

a benefit to uninsured patients and others

some pharmacies offer a prescription savings club card

other patients will present a drug discount card or coupon

terms of such cards must be carefully reviewd. some do not offer any discount if an insurance claim is made

Question 24

BIN

Answer 24

bank identification number

Question 25

online adjudication

Answer 25

refers to using wireless communications to process prescription claims for private insurance, medicaid and medicare part D

Question 26

days’ supply

Answer 26

the time that a given amount of medication lasts

Question 27

prior authorization

Answer 27

when a medication is not covered by drug insurance, or when the prescirber decided that the patient must have a medication that is not on the PBM’s formulary, the prescriber’s nurse may have to call the PBM to obtain a prior authorization for the prescription to be covered properly

Question 28

insurance fraud

Answer 28

filing a false claim

medication cannot be dispensed to a patient and then the insurance company billed thre days later

the patient must return in three days to pick up the medicaiton once the insurance has been billed

Question 29

audits

Answer 29

a pharmacy is subject to medication audits from any insurer.

an audit is a challenge on a reimbursement form a PBM or insurance provider on a prescription claim that has been previously processed.

can be from processed precriptions from 3-6 months prior

Question 30

charge back

Answer 30

is a rejection of a prescription claim by a PBM or insurance provider that must be investigated and, if possible, resolved by the pharmacy technician.

Question 31

closed formulary

Answer 31

a system in which specific drugs in each therapeutic class are covered.

drugs that are not listed are either not covered at all or require prior authorization

Question 32

dependents

Answer 32

the spouse or children covered under an employee’s insurance policy

Question 33

disease management (DM)

Answer 33

a program of preventative, diagnostic and therapeutic measures intended to provide cost-effective quality healthcare for a patient population suffering from or at risk for specific chronic illnesses or diseases

Question 34

drug utilization review (DUR)

Answer 34

a program that evaluates the safe, effective, and appropriate use of prescribed drugs

Question 35

eligibility

Answer 35

the confirmation that the patient has coverage under a specified insurance plan

Question 36

exclusive provider organization (EPO)

Answer 36

a healthcare benefit arrangement similar to a PPO, but with out-of-network coverage

Question 37

fee schedule

Answer 37

the fee set by a managed care program to be acceptable for a procedure or service, which the provider agrees to accept as payment in full

Question 38

formulary

Answer 38

a listing of drugs that are considered preferred therapy by a managed care program. The drugs listed are predeterminded to be the best medications for cost by the program

Question 39

generic substitution

Answer 39

dispensing a drug that’s the generic equivalent of a drug listed on a PBM plan formulary. In some states this can be done without physican approval

Question 40

health information network (HIN)

Answer 40

a computerized system that links healthcare entities to exchange patient, clinical, and financial information in an effort to provide quality health care and reduce costs

Question 41

override

Answer 41

considered to be an exception to the rule. common examble is a patient requesting a refill too soon because they are leaving for vacation. the pharmacy may then call the insurance company and obtain a vaction override to the rule that prevents refilling a medication too soon.

Question 42

step therapy

Answer 42

certain costly drugs are covered only if less expensive, preferred alternatives have already been tried