Insurance Fundamentals, Plan Types, and Pharmacy Operations

Comprehensive vocabulary flashcards covering health insurance concepts, health plan types, pharmacy benefit processing, DAW codes, Medicare Parts, Part D tiers, and appeals procedures.

Copayment (Copay)

A fixed dollar amount a member pays for a service or medication.

Deductible

The amount a member pays toward applicable covered expenses before the plan begins sharing costs.

Coinsurance

The percentage of a covered expense the member pays after meeting the deductible, when applicable.

Maximum Out-of-Pocket (MOOP)

The maximum dollar amount a member pays for covered services during a plan year, subject to plan rules.

Allowable Charge

The maximum amount recognized or allowed by the insurer for a service, based on contract terms, fee schedules, or UCR.

Prior Authorization (PA)

Approval required by a plan before certain services or medications are covered.

Formulary

A list of generic and brand-name medications that a plan covers or helps pay for.

HIPAA

Federal law establishing protections for certain individually identifiable health information.

PAR Provider

Participating provider who has a contract with the plan and is generally considered in-network.

Non-PAR Provider

Nonparticipating provider who does not have a contract with the plan and is generally considered out-of-network.

Primary Care Physician (PCP)

A physician who coordinates care and may provide referrals to specialists.

Independent Physician Association (IPA)

A group of independent physicians who organize to contract and coordinate services.

Management Services Organization (MSO)

An organization that provides administrative and management support to healthcare practices or providers.

Supplemental Coverage

Additional coverage designed to pay for expenses not covered by primary insurance or to fill coverage gaps.

Calendar Year

The coverage period running from January 1 through December 31.

Plan Year

The 12-month period determined by the plan or group's effective date.

Annual Notice of Change (ANOC)

A document that explains changes to a Medicare plan's costs, benefits, and coverage for the upcoming year.

Evidence of Coverage (EOC - Member-Facing)

A member-facing document that describes a member's plan benefits, costs, and coverage rules.

Health Maintenance Organization (HMO)

A plan type that generally uses a PCP and referrals, coordinates care through its network, and features lower premiums and out-of-pocket costs.

Preferred Provider Organization (PPO)

A plan type that generally does not require referrals and offers both in-network and out-of-network benefits, often at higher costs.

High-Deductible Health Plan (HDHP)

A plan requiring members to pay more upfront by meeting a higher deductible before insurance shares costs.

Private Fee-for-Service (PFFS)

A Medicare Advantage plan where provider participation depends on the provider accepting the plan's payment terms.

Compound Medication

A customized medication prepared for a member's specific needs that is not commercially available in that exact formulation.

Specialty Medication

A medication used for complex or chronic conditions, often requiring special handling or monitoring.

SIG Codes

Prescription instructions explaining how a medication should be taken.

Cash-and-Carry

An internal term describing a member's choice to pay out of pocket for a medication rather than use their pharmacy benefits.

Discount Flag

A pharmacy claim indicator showing whether a discount coupon was used.

DAW 0

Dispense As Written code indicating no product selection is specified.

DAW 1

Dispense As Written code indicating the prescriber requires the brand-name product and substitution is not permitted.

DAW 2

Dispense As Written code indicating the patient requested the brand-name medication.

DAW 8

Dispense As Written code indicating the generic product is unavailable.

DAW 9

Dispense As Written code indicating another reason for dispensing the brand-name drug.

Refill Too Soon (RTS)

A claim rejection that occurs because the medication is being refilled before the plan allows.

Quantity Limit (QL)

The maximum quantity of medication allowed under a plan within a specified time period.

Split Claim

A claim or medication cost divided between two applicable parts of a member's coverage.

True Out-of-Pocket (TrOOP)

Qualifying member expenses that count toward the applicable Medicare Part D out-of-pocket threshold.

Federal Medical Assistance Percentage (FMAP)

The percentage that determines the federal government's share of Medicaid costs.

Medicare Advantage Prescription Drug Plan (MAPD)

A plan combining Medicare Advantage medical coverage (Part C) with Part D prescription drug coverage.

Dual Eligible Special Needs Plan (D-SNP)

A specialized Medicare Advantage plan designed for individuals who are eligible for both Medicare and Medicaid.

Medicare Part A

Hospital insurance covering inpatient hospital care, certain other services, and hospice care.

Medicare Part B

Medical insurance covering outpatient services, provider-administered drugs, and medications administered via durable medical equipment (such as insulin via a pump).

Medicare Part C

Medicare Advantage; private plans that provide Part A and Part B benefits, often including Part D.

Medicare Part D

Prescription drug coverage provided through Medicare-approved private plans, covering many self-administered medications (such as oral drugs and inhalers).

Tier 1 (Part D)

Preferred Generic tier; typically represents the lowest cost-sharing tier on a Part D formulary.

Tier 4 (Part D)

Non-Preferred Drug tier; typically carries a higher cost than Tier 3 Preferred Brand.

Tier 5 (Part D)

Specialty Tier; includes high-cost medications and injectables.

90-Day Preferred Mail Order

The specific pharmacy benefit grid instructed to be used when providing cost estimates.

Single Pharmacy Benefit Manager (SPBM)

An arrangement in which a state designates one PBM to oversee pharmacy benefits for all of its Medicaid managed-care organizations.

Grievance

A formal complaint about an aspect of plan operations, services, or provider behavior.

Appeal

A request to reconsider a coverage or payment decision; must be filed within 65 days of the initial decision.

Expedited Appeal

A faster appeal process used when standard timing could seriously jeopardize health or functional recovery; applies strictly to authorization disputes, not claim disputes.

Tolling

Additional time allowed for a healthcare provider to submit required supporting clinical information.

Tier Exception (TE)

A request to have a covered medication approved at a different, generally lower, cost-sharing tier.

Transitional Fill

A temporary supply of a medication provided while a member resolves a coverage or formulary issue.

Auto Forward (AF)

A process where an appeal automatically advances to the next level under applicable plan guidelines.

Append

A PAHub feature that allows new clinical information to be attached to an open EOC.

Custom Authorized Coverage (CAC)

A claim status code used to process approved tier exception authorizations.

Facts Over Phone (FOP)

A process in which a caller completes a clinical information questionnaire over the phone.

Maximize Your Benefits (MYB)

An outbound group that contacts members to discuss lower-cost medication alternatives.

PAY

A claim status indicating the claim processed without errors because the medication does not require a prior authorization.

Step Therapy (ST)

A plan requirement requiring a member to try a preferred or lower-cost medication before a different medication will be covered.

Episode of Coverage (EOC - PAHub Workflow)

The internal workflow term used in PAHub to represent an open case or episode, distinct from the member-facing Evidence of Coverage document.

Agency for Health Care Administration (AHCA)

The state administrative entity responsible for overseeing healthcare administration and Medicaid programs.

Long-Term Services and Supports (LTSS)

Services and support systems assisting individuals with ongoing needs, distinct from Managed Long-Term Care (MLTC).