US Health Care System for Pharmacists Exam One
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178 Terms
What is Medicare Part D?
Think of Part D as “D” for Drugs —- it helps pay for prescriptions!
It’s an optional prescription drug coverage for outpatients under Medicare.
When was Medicare Part D implemented and required MTM services?
In 2006, after being created by the Medicare Modernization Act of 2003.
Who is eligible for Medicare Part D?
Anyone with Medicare Part A and/or Part B, including dual-eligible individuals (Medicare + Medicaid)
What extra service is included in Medicare Part D?
Medication Therapy Management Services (MTMS) to help patients manage medications.
If a person does not enroll when eligible and goes without creditable drug coverage for 63+ days ——>
they pay 1% of the national base premium per month for life.
You can typically make changes to your Medicare plans during the Open Enrollment Period, —→
which is usually from October 15th to December 7th each year.
Coverage is provided by private insurance companies through:
Prescription Drug Plans (PDPs)
Medicare Advantage Plans with drug coverage (MA-PDs).
Plans must provide at least a standard level of coverage but can offer:
Lower deductibles
Different drug tiers/copayments
Coverage in the coverage gap
Costs include:
Monthly premium —→
Annual deductible —→
Coinsurance/copayments —→
After spending $2,000 out-of-pocket, enters “Catastrophic Coverage” ——>
national base premium = $36.78
< $590
initial coverage: 25% of drug costs
patient pays NOTHING for their drugs
Which act eliminated the coverage gap in 2025?
Inflation Reduction Act
Previously, patients who spent $5030 in total drug costs entered the coverage gap and had to pay:
25% of brand drugs
25% of generic drugs
25% of dispensing fees
Previously, to exit out of the coverage gap, out-of-pocket costs had to reach $____________ before catastrophic coverage kicked in.
7,400
Standard Benefit Structure:
Deductible Phase —→
Initial Coverage Phase —→
Catastrophic Coverage —→
Patient pays the first $590 before the plan starts covering costs.
Patients pay 25% coinsurance on covered drugs.
After $2,000 out-of-pocket, the patient pays nothing:
Plan pays 60%
Drug manufacturers pay 20%
Medicare pays 20%
Factors to consider when choosing Medicare Part D plans:
monthly premiums
total annual costs (premiums + medication costs)
plan formularies (which drugs are covered)
plan quality ratings
preferred pharmacies in-network
Extra Help (Low-Income Subsidy) - What is it?
A program that helps Medicare beneficiaries with limited income and resourced pay for Medicare Part D prescription drug costs.
What does Extra Help cover?
No monthly premiums
No annual deductible
Lower copayments
$4.90 for generic drugs
$12.15 for brand-name drugs
No late enrollment penalty
Who Qualifies for Extra Help?
Automatically enrolled if:
You have Medicaid + Medicare (dual-eligible).
You receive Supplemental Security Income (SSI).
You are in a Medicare Savings Program.
Can apply separately if income/assets are below certain limits.
What is Medication Therapy Management (MTM)?
MTM is a pharmacist-led service aimed at optimizing medication use and preventing medication-related problems.
Goals of MTM:
Review all medications (prescription, OTC, herbals).
Identify and resolve medication-related problems (MRPs).
Educate patients and caregivers about medication use.
Collaborate with physicians and healthcare providers to optimize therapy.
What role does MTM play in Medicare Part D?
MTM is a required service under Medicare Part D to ensure appropriate medication use and reduce adverse drug events.
What are the three criteria a Medicare Part D beneficiary must meet to qualify for MTM services?
Multiple Chronic Conditions (e.g., diabetes, hypertension, heart failure, COPD).
Multiple Part D Medications (must include at least 2 drugs per category).
High Annual Drug Costs ($2,000 threshold in 2025).
What are the five key responsibilities of pharmacists in MTM?
Conduct medication reviews.
Educate patients on proper medication use.
Identify drug interactions, duplications, and adherence issues.
Optimize treatment plans in collaboration with providers.
Monitor patient progress and follow up.
What is a Comprehensive Medication Review (CMR)?
An annual, interactive review between a pharmacist and a patient to identify medication-related problems and optimize therapy.
What is a Targeted Medication Review (TMR)?
A quarterly follow-up to monitor therapy, address new/existing medication issues, and ensure patient adherence.
What is a Personal Medication Record (PMR)?
A complete list of all medications a patient is taking, including prescriptions, OTCs, and herbal supplements.
What is a Medication-Related Action Plan (MAP)?
A patient-centered document that provides medication self-management guidance.
Why is pharmacist involvement in MTM important?
Prevents medication-related problems (MRPs).
Improves medication adherence and therapy outcomes.
Reduces healthcare costs by preventing avoidable hospitalizations.
How many preventable Adverse Drug Events (ADEs) occur annually in the U.S.?
1.5 million
What are three major medication-related problems (MRPs) that MTM addresses?
Medication Non-Adherence – 50% of chronic disease patients do not take meds as prescribed.
Polypharmacy – Patients taking multiple medications from different prescribers (risk of drug interactions).
Unnecessary or Ineffective Medications – Ensures therapy aligns with clinical guidelines.
How does MTM help reduce healthcare costs?
Prevents unnecessary hospitalizations.
Reduces medication misuse-related expenses (>$500 billion annually).
Ensures proper medication therapy, reducing long-term costs.
What is Medicaid?
A joint federal and state program that provides medical services to low-income individuals based on financial need and/or health status.
When was Medicaid enacted, and when did Arkansas implement its Medicaid program?
Enacted in 1965 (Title XIX of the Social Security Act); implemented in Arkansas in 1970.
What is the difference between Medicaid and Medicare?
Medicare = CARE for elderly (65+)
Medicaid = AID for low-income individuals
Who qualifies for Medicaid in Arkansas?
Age 65+
Children under 19
Pregnant individuals
Disabled individuals (including working disabled)
Caretaker relatives of children
Individuals in nursing homes
Former foster care youth (18-26)
Individuals needing home/community-based services
What are the income limits for Medicaid eligibility in Arkansas (2025)?
Based on Federal Poverty Level (FPL):
1 person: ≤
2 people: ≤
3 people: ≤
$15,650
$21,150
$26,650
What is ARHOME, and who qualifies for it?
ARHOME is a Medicaid expansion program.
Covers individuals earning 100-138% FPL.
Requires a $13 monthly premium.
What is ARKids First, and what are its two categories?
Medicaid for children in Arkansas.
ARKids A: Covers children in families ≤147% FPL (no copays).
ARKids B: Covers children in families ≤216% FPL (some copays).
What percentage of Medicaid costs does Arkansas pay, and what percentage does the federal government cover?
Arkansas pays 30%, and the federal government covers 70%.
What percentage of Arkansas’ general fund is spent on Medicaid?
18% of the general fund.
How much does the federal government contribute to Medicaid for every $1 spent by Arkansas?
$2.30 for every $1 spent by Arkansas.
What mandatory services must Medicaid cover?
Physician services
Hospital services
Home health care
Family planning
Laboratory & X-ray services
Transportation to medical providers
What optional services does Arkansas Medicaid cover?
Prescription drugs
Dental services
Hospice care
Durable medical equipment (DME)
Inpatient psychiatric services
What percentage of Arkansas residents are on Medicaid?
36% (~1.12 million people).
What services account for the majority of Medicaid spending?
Long-term care (26%)
Managed care (23%)
Hospital care (13%)
Physician & outpatient (11%)
Prescription drugs (3%)
40% of births in Arkansas are covered by Medicaid
What percentage of Medicaid recipients are children (≤20 years old)?
18%
What percentage of Medicaid recipients are working adults (21-64 years old)?
53% of Medicaid adults work full-time.
What percentage of Medicare beneficiaries in Arkansas also rely on Medicaid (dual-eligibles)?
24% of Medicare recipients are also on Medicaid.
What is the biggest single category of Medicaid spending?
Long-term care services
What does Medicaid cover for dual-eligible individuals?
Medicare premiums
Copayments & coinsurance
Long-term care services not covered by Medicare
What percentage of Arkansas Medicaid spending is for Medicare beneficiaries?
42%
What is the Medicaid Primary Care Physician (PCP) requirement?
All Medicaid beneficiaries must choose a PCP.
PCPs manage care, referrals, and prescriptions.
What services does the Arkansas Medicaid Pharmacy Program cover?
Prescription drugs & some OTC medications (with a prescription).
Vaccines for individuals 19+.
Cold/cough OTC meds only for children under 21.
How many prescriptions per month are covered for adults (21+)?
6 prescriptions per month.
What medications are not counted toward the monthly prescription limit?
Family planning drugs
Diabetes, high blood pressure, & cholesterol medications
Opioid use disorder treatments
Inhalers for respiratory conditions
What is Medicaid’s policy on brand-name vs. generic drugs?
Pharmacists must dispense generics unless a brand-name is required.
If a drug has a Federal Upper Limit (FUL) or National Average Drug Acquisition Cost (NADAC), Medicaid only reimburses at that rate.
What fraud prevention measures are in place for Medicaid pharmacies?
Pharmacy audits to check for fraud.
Signature logs required for prescription pickups.
Accurate beneficiary & drug details must be maintained.
What is the purpose of Drug Utilization Review (DUR)?
Ensures that prescriptions are:
Medically necessary
Appropriate for the patient’s condition
Not likely to cause harmful drug interactions
How much do Medicaid recipients pay in prescription copays?
≤$10 | $0.50 |
$10.01 – $25 | $1.00 |
$25.01 – $50 | $2.00 |
$50.00+ | $3.00 |
Which groups are exempt from Medicaid copays?
Family planning drugs
Patients under 18
Long-term care & hospice patients
Can a pharmacy deny medication if a Medicaid patient cannot afford the copay?
No, services cannot be denied.
What is Medicare?
A federally funded and administered health insurance program primarily for people:
Individuals 65+ who have paid Social Security for at least 10 years
Disabled individuals receiving Social Security benefits for 24+months
People of all ages with End-Stage Renal Disease (ESRD).
Anyone 65+ willing to pay premiums
What are the four parts of Medicare?
Part A:
Part B:
Part C:
Part D:
Hospital Insurance
Medical Insurance
Medicare Advantage (private plans)
Prescription Drug Coverage (covered separately)
What does Medicare Part A cover?
Hospital stays
Skilled nursing facilities (SNFs) after a hospital stay
Hospice care
Home health care (after a hospital stay)
How is Medicare Part A funded?
2.9% payroll tax (1.45% each from employers & employees) funds the Federal Hospital Insurance Trust Fund.
High-income earners (>$200K individuals, $250K couples) pay 2.35% payroll tax.
Self-employed individuals pay the full tax (2.9% or 3.8% for high earners).
What are the Medicare Part A premiums (2024)?
$0/month for those with 40+ quarters of Medicare-covered work.
$285/month for those with 30-39 quarters.
$518/month for those with less than 30 quarters.
What is a Medicare benefit period?
Starts the day a patient is admitted to the hospital.
Ends when the patient has been out of the hospital/SNF for 60 days.
If readmitted after 60 days, a new benefit period starts, and a new deductible applies.
What are the Medicare Part A cost-sharing amounts (2024)?
Days 1-60: $1,676 deductible per benefit period.
Days 61-90: $419 per day.
Days 91+ (Lifetime Reserve Days, max 60 days): $838 per day.
Beyond Lifetime Reserve Days: Patient pays ALL costs.
What are the requirements for Skilled Nursing Facility (SNF) coverage under Part A?
3-day prior hospital stay required.
Admitted to SNF within 30 days of hospital discharge.
Doctor certification needed.
Must require daily skilled nursing or rehab therapy.
What are the requirements for Hospice care under Part A?
Doctor certification of terminal illness (≤6 months life expectancy).
Focus on comfort care (palliative care), not curative treatment.
What does Medicare Part B cover?
Doctor visits & outpatient care
Lab tests & X-rays
Ambulance services
Preventive services (e.g., mammograms, flu shots)
Certain prescription drugs (administered by a doctor)
How is Medicare Part B funded?
Through a combination of monthly premiums and general tax revenues.
What are the Medicare Part B costs (2024)?
Premium: Varies based on income (standard $185/month).
Deductible: $257 per year.
Coinsurance: 20% of covered services after the deductible is met.
What preventive services are fully covered under Part B?
Annual wellness visit
Vaccines (Flu, Hepatitis B, Pneumococcal)
Screenings (mammograms, diabetes, cardiovascular disease, etc.)
What role do pharmacists play in Medicare Part B?
Can bill for vaccine administration (Flu, Hep B, Pneumococcal).
Can provide durable medical equipment (DME) supply drugs.
Can use "incident to" billing for pharmacist services in a clinic.
What is Medigap insurance?
A private insurance policy that covers out-of-pocket costs (deductibles, copays, coinsurance) for Medicare Parts A & B.
Why is it important to compare Medigap plans?
Plan costs vary widely between insurers.
Some plans cover all Medicare costs, while others only cover partial expenses.
What is Medicare Part C (Medicare Advantage)?
A private insurance alternative to Original Medicare that includes Parts A & B coverage and often additional benefits (e.g., vision, dental, Rx drugs).
Do Medicare Advantage (MA) enrollees still pay Part B premiums?
Yes, Part B premiums are required ($185/month or more).
What are the advantages of Medicare Advantage plans?
Lower out-of-pocket costs (compared to Original Medicare).
Extra benefits (dental, vision, hearing, wellness programs).
Some plans include drug coverage (MA-PD plans).
What are the potential downsides of Medicare Advantage?
May require in-network providers.
Higher cost-sharing for out-of-network care.
Prior authorizations may be required for some services.
What are the types of Medicare Advantage plans?
Health Maintenance Organization (HMO)
Preferred Provider Organization (PPO)
Private Fee-for-Service (PFFS)
What are the Medicare Advantage cost limits (2024)?
In-network out-of-pocket max: ≤ $8,300.
In + out-of-network max: ≤ $12,450.
What changes did the Affordable Care Act (ACA) make to Medicare?
Lowered Medicare Advantage payments to private insurers.
reduces payments over time
Created quality-based bonus payments (Star Ratings).
**Required Medicare Advantage plans to have an out-of-pocket limit.
Lower the rebates of lower quality plans
What was the original purpose of early health insurance?
It was disability insurance, protecting against loss of income due to illness.
When and where was the first hospital insurance plan created?
1929, Baylor University Hospital (for Dallas teachers).
What led to the rapid expansion of employer-based health insurance in the 1940s?
WWII wage controls—companies offered health insurance as a benefit to attract workers.
When did major medical insurance (comprehensive health plans) emerge?
In the 1950s, when Blue Cross and Blue Shield merged.
What is pure risk vs. speculative risk?
Pure Risk:
Speculative Risk:
Only a loss can occur (e.g., fire, illness). INSURABLE.
A loss or gain can occur (e.g., gambling, investments). NOT INSURABLE.
What are the six conditions that make an event insurable?
Probability can be estimated
Event is irregular on an individual basis
Loss is accidental
Loss is substantial
Loss is measurable
Person has an insurable interest
What is risk pooling and why is it important in health insurance?
Combining many people together to spread costs, making losses more predictable using the law of large numbers.
What is a premium?
A fixed monthly payment for health insurance coverage.
What is a deductible?
The amount a patient must pay annually before insurance starts covering costs.
What is a copayment (copay)?
A fixed amount a patient pays for each visit/service (e.g., $20 for a doctor visit).
What is coinsurance?
A percentage of costs the patient pays after meeting the deductible (e.g., 20% of an outpatient bill).
What is an out-of-pocket maximum?
The total limit on what a patient pays per year before insurance covers 100% of all covered services.
What is in-network vs. out-of-network care?
In-Network:
Out-of-Network:
Providers contracted with the insurance plan (lower costs).
Providers not contracted (higher costs or not covered).
What is the open enrollment period?
A specific yearly period (usually Nov 15 – Dec 31) to enroll in or change health plans.
What is a Qualifying Life Event (QLE)?
A life change that allows special enrollment (e.g., marriage, childbirth, job loss).
What is a fully insured employer plan?
Employer pays a premium to an insurance company.
Insurer takes on the financial risk.
What is a self-insured employer plan?
Employer collects premiums & pays claims directly.
Assumes financial risk, but has flexibility in plan design.