Key Terms
AWP
The average price at which drugs are purchased at the wholesale level.
Coordination of Benefits
Online billing of both a primary and a secondary insurer.
health Savings Account
Savings accounts that can be started by patients or their employers to set aside tax-deferred money specifically for healthcare costs not covered by their insurance.
Medicare Part B
Federally sponsored insurance that partially covers the cost of outpatient doctor visits; may cover the cost of nebulizer, nebulizer medication, and diabetic supplies.
Online Adjudication
Real-time insurance claims processing via electronic wireless telecommunications.
Catastrophic Insurance
A plan that is aimed at protecting oneself from the high costs of a severe accident or unexpected, debilitating illness or disease; it has low
Copayment
The amount that the patient is to pay for each prescription as determined by the insurance carrier.
ICD-10
The International Classification of Diseases, 10th revision; a coding system used by prescribers and insurance companies to offer billing codes for specific diagnoses and diseases.
Medicare Part D
A federal- and state-partnered insurance program that provides partial coverage of prescriptions, primarily for patients who are eligible for Medicare.
Out-of-network Provider
Prescribers and pharmacies that do not have a contract with the insurance provider; the cost of services is generally higher.
COBRA Insurance
Insurance policy when employees leave a job; it allows them to keep their health insurance plan at full premium cost for 18 to 36 months.
Dual Copay
Insurance coverage in which a patient pays one copay for brand name drugs and a lower copay for generic drugs; also known as two-tier.
In-network Providers
Prescribers and pharmacies that have a contract with the insurance provider.
Medigap Insurance
Private insurance coverage in addition to Medicare Part B that covers a portion of the costs for outpatient physician visits as well as laboratory and X-ray fees not covered by Medicare Part B.
Preferred Provider Organization
Private practice prescriber that has signed a contract with the health insurer to provide services at a discounted rate.
Coinsurance
A percentage-based insurance plan in which the patient must pay a certain percentage of the prescription price; commonly used in high-cost specialty drugs.
Dual Eligible
A patient who has both a primary and secondary insurance plan.
Medicaid
A state governmental health insurance program for low-income and disabled citizens.
Monthly Premium
The cost a patient pays each month for health and/or drug insurance.
Preferred Drug List
A formulary provided by an insurance company that indicates preferred prescription generic and brand name drugs and their corresponding copays.
Commercial Insurance
Coverage for medical or prescription costs provided by an employer or purchased by an individual; also called private insurance.
Durable Medical Equipment
Medically necessary, reusable equipment such as nebulizers, hospital beds, wheelchairs, and walkers that may be purchased in a community pharmacy.
Medicare Part A
Federally sponsored insurance plan that covers 80% of the cost of hospital stays, as well as limited coverage of skilled nursing facilities, rehabilitation, and home health care.
NPI
The unique number assigned to the provider by the federal government to allow authorized healthcare providers to process insurance claims for pharmacy reimbursement.
Pharmacy Benefit Manager
A company that administers drug benefits for many insurance companies.