CPhT Chapter 8 - Prescription Drug Insurance in Healthcare

Average Wholesale Price (AWP)

the average price that pharmacies, hospitals, and other healthcare facilities pay for stock of a specific drug

Health Insurance

help patients cover incurred medical costs

Medicare (Parts A,B,C, and D)

those over 64 or disabled, administered through the US Department of Health and Human Services

Medicaid

low-income patients and their dependents, administered by individual states

Children’s Health Insurance Programs (CHIPs)

primarily administered by individual states

Tricare for Active Military

administered through the Defense Health Agency

Primary Health Insurance Plan

pays up to its coverage limits

Secondary Health Insurance Plan

pays what the primary does not

First Party

the person who directly receives the benefits, services, or product

Second Party

healthcare provider

Third Party

organization other than the patient or healthcare provider involved in paying for medical expenses

Monthly Premium

enrollment fee

Insurance Policy

plan

Benefits

specific health services and products

Deductible

designated amount of annual medical costs that must be paid by the patient before the full coverage by the insurance company kicks in

Coinsurance

immediately pay a certain percentage of the cost

Copayment (copay)

flat-out-of-pocket fee that the patient is required to pay for each health visit, service, or product at the time of delivery

Tiered Copayments

ex. $20 per non-emergency office visit and $200 per emergency visit

Dual Copay

one flat fee for generic drugs versus another fee for brand name drugs

Catastrophic Insurance

an insurance plan that is used when a person has experienced a severe accident or unexpected debilitating illness or disease

Health Savings Accounts (HSAs)

saving accounts that can be started by patients or their employers to set aside tax-deferred money specifically for healthcare costs not covered by insurance

Flexible Spending Accounts (FSAs)

patients, through their employer, can also place pretax dollars aside for medical expenses and child and dependent care

Pharmacy Benefit Managers (PBMs)

division of the insurance company or a separate company that processes patient prescription claims

ICD-10 (International Classification of Diseases)

to record diagnoses and disorders

HCPCS (Healthcare Common Procedure Coding System - Level II)

to record supplies, equipment, and devices supplied for medical purposes

CPT (Current Procedural Terminology)

to record procedures and services