Key Terms
Audit
A challenge on a reimbursement from a PBM or insurance provider on a prescription claim that has been previously processed.
Average Wholesale Price (AWP)
The average price that wholesale charge the pharmacy for a drug, serving as the benchmark price to estimate reimbursement rates and retail price without insurance.
Charge Back
A rejection of a prior prescription claim by a PBM or an insurance provider that must be investigated and resolved.
Coinsurance
A percentage based insurance plan in which the patient must pay a certain percentage if the prescription price commonly used in high cost specialty drugs.
Coordination Of Benefits (COB)
Online billing of both a primary and a secondary insurer
Copayment (Copay)
the amount that the patient is to pay for each prescription as determined by the insurance carrier
Deductible
An amount on some insurance plans that must be paid by the insured person before the insurance company considers paying its portion of a medical or drug cost
Donut Hole
a temporary limit on what the drug plan will cover for drugs in most Medicare Part D prescription drug plans .
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
DME (Durable medical equipment)
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
Gross Profit
The accumulation of all sales receipts before deducting expenses
Inventory
The entire stick of products on hand for sale on a given day
Inventory Turnover Rate
The amount of time that the average drug inventory will be replaced during a 12 month period; most pharmacies replace inventories every 2-4 weeks
Inventory Value
The total value of the entire stock of products on hand for sale on a given day
JIT (just in time) Purchasing
Frequent purchasing quantities that just meet supply needs until the next ordering time
Mark up
The different between the acquisition cost and the selling price ;also called gross profit
Medicaid
A state governmental health insurance plan for low winsome and disabled citizens
Medicare Part D
A federal and state partnered insurance plan that provides partial coverage of prescriptions prim for patients who are eligible for Medicare
Non-durable medical supplies
Supplies that are usually disposable in nature or have a very limited useful lifetime
Online Adjudication
Real time insurance claims processing via electronic wireless telecommunications
Perpetual Inventory Record
A record that accounts of each unit of schedule 2 drug dispensed or received
PBM (Pharmacy Benefit Manager)
A company that administers drug benefits for many insurance companies
Posting
The process of reconciling an invoice and updating inventory at time of receipt of stock delivery
Preferred Drug List
A formulary provided by an insurance company that indicates preferred prescription generic and brand name drugs and their corresponding copays
PA ( prior authorization)
approval for coverage of a high-cost medication or a medication not on the insurer's approved formulary obtained after a prescriber calls the insurer to justify the use of the drug; must be obtained before the drug is dispensed by the pharmacy to be covered by insurance