Pharmacy Tech Ch.8 Keyterms

Audit

A challenge on a reimbursement from a PBM or insurance provider on a prescription claim that has been previously processed.

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.

Benefit

The provision of health and drug insurance coverage by an employer.

Catastrophic insurance

A plan that is 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 (i.e. $5,000-$10,000) and is also referred to as catastrophic coverage.

Charge back

A rejection of a prior prescription claim by a PBM or an insurance provider that must be investigated and resolved.

Cobra insurance

Insurance policy when 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.

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.

Commercial insurance

Coverage for medical or prescription costs provided by an employer or purchased by an individual; also called private insurance.

Coordination of benefits (COB)

Online billing of both a primary and secondary insurer.

Copayment

The amount that the patient is to pay for each prescription as determined by the insurance carrier.

days’ supply

The time that a given amount of prescribed medication lasts a patient until the next refill; required on drug claims submitted for online insurance billing.

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

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An insurance coverage gap in Medicare Part D programs under which the patient must pay a higher portion of the cost of the medication; to be phased out by 2019.

dual copay

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Insurance coverage in which a patient pays one copay for brand name drugs and a lower copay for generic drugs; also known as a two-tier.

dual eligible

 A patient who has both a primary and secondary insurance plan.

**DME-** (durable medical equipment)

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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.

first party

The person who directly receives the benefits of a service or product and is responsible for paying for it.

group number

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An important piece of information on the insurance card that identifies the employer sponsor of the drug insurance program.

health insurance

 Coverage of incurred medical costs, such as physician and emergency room visits, laboratory costs, and hospitalization.

health savings accounts(HSAs)

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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.

healthcare exchange

 An online shopping tool to find insurance for the uninsured or self insured; made possible by the Affordable Care Act.

**ICD-10-** 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.

in-network providers

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 Prescribers and pharmacies that have a contract with the insurance provider.

Medicaid

 A state governmental health insurance program for low-income and disabled citizens

Medicare

health insurance primarily for patients over age 65.

PART A

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 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; drugs are not covered under this plan.

PART B

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 Federally sponsored insurance that partially covers the cost of outpatient doctor visit; may cover the cost of nebulizer, and nebulizer medication, and diabetic supplies

PART C

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 Federal- and state- sponsored insurance that covers both health and prescription insurance from the same insurance provider; also called a Medicare advantage plan; may include coverage for eye and hearing examinations, glasses, hearing aids, etc.

PART D

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A federal- and state- partnered insurance program that provides partial coverage of prescriptions, primarily for patients who are eligible for Medicare.

Medigap insurance

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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.

**NPI-** ( national Provider Identifier)

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The unique number assigned to the provider by the federal government to allow authorized healthcare providers to process insurance claims for pharmacy reimbursement.

online adjudication

 real-time insurance claims processing via electronic wireless.

out-of network providers

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Prescribers and pharmacies that do not have a contract with the insurance provider; the cost of services is generally higher.

Patient ID number

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 Identifies the primary drug insurance card holder and may identify other dependents on the policy.

Person code

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 A two- or three digit number added to the patient identification number listing family members covered by the insurance plan. 

PBM(Pharmacy benefits manager)

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A company that administers drug benefits for many insurance companies.

preferred drug list

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A formulary provided by an insurance company that indicates preferred prescription generic and brand name drugs and their corresponding copays.

**PPO-** (Preferred provider organization)

Private practice prescriber that has signed a contract with the health insurer to provide services at a discount rate.

Prescription drug insurance

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 Specifically covers some of the cost for medications.

**PA-** (Prior authorization)

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 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.

**PCN- (**Processor control number)

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 An important piece of information located on most drug insurance cards to identify the correct PBM in order to process a prescription claim.

Tricare

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 Government insurance program for active and retired military and their families.

workers compensation

Insurance provided for a patient with a medical injury from a job-related accident; also called workers’ comp or workman’s comp.