Key Terms
Audit
a challenge on a reimbursement from a PBL or insurance provider on a prescription claim that has been previously processed
Copayment (copay):
that amount that the patient is to pay for each prescription as determined by the insurance carrier
Gross Profit
The accumulation of all sales receipts before deducting expenses
Mark up
the difference between the acquisition cost and the selling price; also called gross profit
PBM
(pharmacy benefit manager) a company that administers drug benefits for many insurance companies
AWP (Average Wholesale Price)
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
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
Inventory
the entire stock of products on hand for sale at a given tim
Medicaid
a state governmental health insurance program for low-income and disabled citizens
Posting
the process of reconciling an invoice and updating inventory at time of receipt of stock delivery
Chargeback
a rejection of a prior prescription claim by a PBM or an insurance provider that must be investigated and resolved
Donut Hole
Medicare part D coverage
Inventory Turnover rate
the amount of time the average drug inventory will be replaced during a 12-month period; most pharmacies replace inventory every two to four weeks
Medicare – Part D Prescription Drug Coverage
A federal- and state-partnered insurance program that provides partial coverage of prescriptions, primarily for patients who are eligible for Medicare
Preferred Drug List
a formulary provided by an insurance company that indicates preferred prescription generic and brand name drugs and their corresponding copays
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 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
Inventory Value
the total value of the entire stock of products on hand for sale on a given day
Online adjudication
real-time insurance claims processing via electronic wireless telecommunications
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 the insurance
COB
(coordination of benefits) online billing of both a primary and a secondary insurer
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
JIT purchasing
Frequent purchasing in quantities that just meet supply needs until the next ordering time
Perpetual inventory record
a record that accounts for each unit of Schedule II drug dispensed or received
Smurfing
when someone pays others to purchase restricted OTC medications, such as those containing pseudoephedrine, for the purpose of making illegal drugs