PHR915 Abbreviations B1

AAC

Actual Aquisition Cost

What does AAC mean:

The amount pharmacies actually pay to aquire a drug- a network of discounts

AWP:

Average Wholesale Price

What does AWP mean?

A published benchmark, usually higher than the actual acquisition costs

“Aint What Paid”

NADAC:

National Average Drug Aquisition Cost

NADC definition:

Survey-based estimate of average pharamcy acquisition cost, publihed by the CMS

What is more transparent about drug costs? AWP or NADAC?

NADAC

U&C:

The “cash price” a pharamcy charges without insurance

What a walk-in, uninsured patient pays

The NADAC is sometimes used for what?

Used in some Medicaid programs for reimbursement

MAC:

Maximum Allowable Costs

MAC definition:

Payer-set ceiling reimbursement for generics/multi-source drugs

What is the benefit of MAC?

Keeping costs down when alternatives exist

FUL:

Federal Upper Limit

FUL definition:

CMS-set ceiling on Medicaid reimbursement

Perk of having an FUL?

Prevents overpayment in Medicaid.

Spread Pricing:

PBM charges the plan more than it reimburses the pharamacy, and keeps the difference

Formulary:

List of covered drugs by an insurance plan, often tiered

What is the lower tier in an insurance formulary?

Cheaper copayW

What are the higher tiers in an insurance copay?

Higher coinsurance

Premium:

Fixed monthly amount paid to maintain insurance coverage.

Paid whether or not drugs are used.

Deductible:

Annual out-of-pocket amount before insurance begins covering the costs

Copay:

Fixed dollar payment for a drug

Coinsurance:

Percentage of drug cost paid by the patient

OOP:

Out-of-Pocket cost

Out of pocket cost definition:

Total the patient pays at pharmacy counter

What does the OOP include?

Deductible + copay/coinsurance + cash price

U&C

Usual and Customary Price