Term
The average price that wholesalers charge the pharmacy for a drug, serving as the benchmark price to estimate reimbursement rates and retail price without insurance.
AWP (Average Wholesale Price):
Coordination of Benefits (COB)
Online billing of both a primary and a secondary insurer to ensure the correct sequencing and processing of payments.
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.
Health Savings Account (HSA)
Medicare Part B
Federally sponsored insurance that partially covers the cost of outpatient doctor visits; may cover the cost of nebulizers, nebulizer medication, and diabetic supplies.
Real-time insurance claims processing via electronic wireless telecommunications.
Online adjudication
A plan aimed at protecting oneself from the high costs of a severe accident or unexpected, debilitating illness or disease; it has low monthly premium payments in exchange for a very high deductible (e.g., $5,000–$10,000).
Catastrophic Insurance
Copayment (copay)
The amount that the patient is to pay for each prescription as determined by the insurance carrier.
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.
ICD-10
Medicare Part D
A federal- and state-partnered insurance program that provides partial coverage of prescriptions, primarily for patients who are eligible for Medicare.
Prescribers and pharmacies that do not have a contract with the insurance provider; the cost of services is generally higher.
Out-of-network provider
An insurance policy where a former employer is required to keep a former employee on the employee insurance plan at full premium cost for 18 to 36 months; the ACA guarantees such patients cannot lose coverage with job changes.
COBRA Insurance
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.
Prescribers and pharmacies that have a contract with the insurance provider
In-network providers
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.
A private practice prescriber that has signed a contract with the health insurer to provide services at a discounted rate.
Preferred Provider Organization (PPO)
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.
Coinsurance
Dual eligible
A patient who has both a primary and secondary insurance plan.
A state governmental health insurance program for low-income and disabled citizens.
Medicaid
Monthly premium
The cost a patient pays each month for health and/or drug insurance coverage.
A formulary provided by an insurance company that indicates preferred prescription generic and brand name drugs and their corresponding copays.
Preferred drug list
Coverage for medical or prescription costs provided by an employer or purchased by an individual; also called private insurance.
Commercial Insurance
Durable Medical Equipment (DME)
Medically necessary, reusable equipment such as nebulizers, hospital beds, wheelchairs, and walkers that may be purchased in a community pharmacy or billed to Medicare Part B
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.
Medicare Part A
NPI (National Provider Identifier)
The unique number assigned to the provider by the federal government to allow authorized healthcare providers to process insurance claims for pharmacy reimbursement.
A company that administers drug benefits for many insurance companies.
Pharmacy Benefit Manager (PBM)