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Prescript Insurance
Insurance Training
| KEY WORDS | DEFINITION |
|---|---|
| INVENTORY TURNOVER | TIMES THE INVENTORY HAS BEEN SOLD AND REPLACED |
| NET PROFIT (NP) | GROSS PROFIT/MARGIN MINUS OVERHEAD EXPENSES |
| PER DIEM REIMBURSEMENT | HOSPITAL COSTS REIMBURSEMENT PER DAY |
| VOLUME PURCHASING GROUPS | PHARMACIES REDUCE DRUG COSTS BY JOINING WITH OTHER PHARMACIES/HOSPITALS |
| WORKFLOW | PROCESS OF DISPENSING A Rx TO A PATIENT IN VARIOUS STAGES |
| COST OF DISPENSING (COD) | OVERHEAD COSTS FOR DISPENSING PRESCRIPTIONS |
| COST OF GOODS SOLD (COGS) | COST OF DRUG INGREDIENTS |
| COST SHIFTING STRATEGIES | WHERE A PHARMACY CAN TAKE SMALL LOSSES AND MAKE ADDITIONAL PROFITS FROM OTHER SALES |
| DIAGNOSIS RELATED GROUPS (DRGs) | ESTABLISHING A FIXED PAYMENT BASED ON DIAGNOSIS OR ADMISSION |
| DIRECT COSTS | COSTS INCURRED ONLY BY THE PHARMACY |
| FORMULARY SYSTEMS | PROCESS THAT CONTINUALLY CHANGES THE DRUGS ON THE FORMULARY |
| GROSS PROFIT OR GROSS MARGIN (GM) | RETAIL SELLING PRICE MINUS COGS |
| INDIRECT COSTS | RENT, UTILITIES, ADVERTISING, INSURANCE |
| INDIRECT FIXED COSTS | COSTS THAT D/N VARY AS A FUNCTION OF SALES VOLUME |
| INDIRECT VARIABLE COSTS | COSTS THAT VARY AS A FUNCTION OF LEVEL OF SALES |
| ACTUARY | DETERMINE THE COST FOR EACH TYPE OF SERVICE PROVIDED THE UTILIZATION RATES FOR THESE SERVICES AND THE ADMINISTRATIVE EXPENSES FOR THE INSURANCE PROGRAM |
| ADMINISTRATIVE SERVICES ONLY CONTRACT | EMPLOYER CONTRACTS WITH ANOTHER COMPANY TO PROVIDE ADMINISTRATIVE SERVICES BUT NOT UNDERWRITING FOR THE HEALTH BENEFITS |
| ADMINISTRATOR | DEVELOPS AND MAINTAINS A NETWORK OF HEALTH CARE PROVIDERS,FILES,BENEFICIARIES,CLAIMS, AUDITS AND REPORTS ON SERVICES AND COSTS |
| CAPITATION | FEE USUALLY PAID MONTHLY BY A PATIENT TO THE PRIMARY CARE PHYSICIAN REGARDLESS OF THE NUMBER OF TIMES THE PATIENT VISITS THE PHYSICIAN |
| CARVE-OUT | HEALTH BENEFIT PLANS THAT ARE ADMINISTERED SEPARATELY(VISION,DENTAL,MENTALHEALTH,SCRIPTS) |
| COINSURANCE | PERCENTAGE OF THE FEES OWED BY THE POLICYHOLDER |
| COMMUNITY RATING | ESTIMATED ADJUSTMENTS BASED ON EXPENSES FOR A GEOGRAPHIC AREA |
| COPAYMENT | SMALL FIXED FEE PAID BY A PATIENT FOR A DRUG OR SERVICE |
| DEDUCTIBLE | AMOUNT PAID BY A POLICYHOLDER EACH YEAR BEFORE BENEFITS FROM A HEALTH PLAN WILL START |
| EXPERIENCE RATING | ESTIMATED ADJUSTMENTS BASED ON EXPENSES FOR A SPECIFIC EMPLOYER GROUP |
| FIRST-DOLLAR COVERAGE | PLANS W/O PATIENT COST SHARING |
| HEALTH MAINTENANCE ORGANIZATION (HMO) | TYPE OF MANAGED CARE ORG WHERE PATIENTS PAY FIXED PREMIUMS AND VERY SMALL COPAYMENTS WHEN THEY NEED SERVICES |
| TRADITIONAL INDEMNITY PLANS | PATIENTS PAY THE PROVIDER FOR EACH SERVICE RENDERED AND SUBMIT THEIR OWN CLAIMS TO THE INSURANCE COMPANY FOR REIMBURSEMENT |
| MANAGED CARE PLANS | METHOD OF SUPERVISING MEDICAL CARE WITH THE GOAL OF ENSURING THAT PATIENTS GET NEEDED SERVICES IN THE MOST APPROPRIATE COST EFFECTIVE SETTING |
| MANGED INDEMNITY PLANS | INCLUDES PROGRAMS THAT ALLOW ANY PROVIDER TO PARTICIPATE AND REIMBURSE ON A DISCOUNTED FEE-FOR-SERVICE BASIS |
| PATIENT COST SHARING | PATIENTS PAYING A PORTION OF THE COST FOR HEALTH SERVICES RECEIVED |
| PHARMACY BENEFIT MANAGER (PBM) | THIRD PARTY ADMINISTRATOR OF PRESCRIPTION DRUG PROGRAMS THAT PROCESSES AND PAYS PRESCRIPTION DRUG CLAIMS |
| PREFERRED PROVIDER ORGANIZATION (PPO) | MOST POPULAR TYPE OF MCO THAT COMBINES FLEXIBILITY IN PATIENTS CHOICE FO PHYSICIANS WITH REDUCED COSTS FOR MEDICAL SERVICES |
| PROVIDER | HOSPITAL PHYSICIAN AND OTHER MEDICAL STAFF MEMBERS AND FACILITIES THAT OFFER MEDICAL SERVICES |
| PROVIDER NETWORK | INCLUDE OR EXCLUDE PROVIDERS BASED ON THEIR COMPATIBILITY WITH THE PLANS OBJECTIVES |
| REINSURANCE | THE INSURANCE COMPANY BUYS ITS OWN INSURANCE POLICY TO LIMIT ITS RISK |
| SELF INSURANCE | WHEN CORPORATIONS DECIDE THAT ITS UNNECESSARY TO USE INSURANCE COMPANIES TO UNDERWRITE HEALTH BENEFIT PROGRAMS |
| SPONSOR | ACIVE-DUTY SERVICE MEMBERS WHOSE SPOUSES AND CHILDREN BENEFIT UNDER TRICARE |
| THIRD PARTY | DIFFERENT PARTICIPANTS WITH SPECIFIC FUNCTIONS IN THE INSURANCE INDUSTRY |
| UNDERWRITER | ASSUMES THE FINANCIAL RISK FOR HEALTH SERVICES IN RETURN FRO PREMIUMS PAID BY THE EMPLOYER GROUP |
| WITHHOLD | A RESERVE FUND IN WHICH A PERCENTAGE OF FEES ARE WITHHELD AND DISTRIBUTED AT THE END OF THE YEAR |
| OVERHEAD COSTS | OVERHEAD EXPENSES (SALARIES,UTILITIES,RENT ETC) |
| ACTUAL ACQUISITION COST (AAC) | THE ACTUAL COST PAID FOR THE PRODUCT |
| AVERAGE MANUFACTURER'S PRICE (AMP) | BASED ON ACTUAL PRICES OF RX CHARGED BY MANUFACTURER AFTER DISCOUNTS |
| AVERAGE WHOLESALE PRICE (AWP) | THE AVERAGE PRICE AT WHICH A WHOLESALER SELLS DRUGS TO PHARMACIES, PHYSCIANS AND OTHER CONSUMERS |
| BREAK EVEN POINT (BEP) | POINT OF WHICH THE PHARMACY DOES NOT MAKE A PROFIT OR LOSS |
| CLAIMS ADJUDICATION | PAYERS PROCESSING OF CLAIM DATA TO DECIDE WHETHER A DRUG IS COVERED BY THE PATIENTS PLAN AND PROPERLY UTILIZED |
| TIERED COPAYMENT | PATIENT INCENTIVE, PATIENTS PAY LESS WHEN BUYING THE LESS EXPENSIVE PRODUCT |
| DAY'S SUPPLY | SIZE LIMITED TO A SPECIFIED NUMBER OF DOSAGE UNITS |
| DISPENSE AS WRITTEN (DAW) | PROVIDER WRITES ON SCRIPT SO THERE IS NO SUBSTITUTE |
| DISPENSING FEE | FEE FOR A PHARMACY'S PROFESSIONAL SERVICE |
| EARNED DISCOUNTS | USUALLY SPECIFIED AS % DISCOUNT OF THE AWP AND AAC |
| ELIGIBILITY | BEING ELIGIBLE FOR BENEFITS |
| ESTIMATED ACQUISITION COST (EAC) | DATA LOOKING AT WHAT THE ACTUAL COST IS INCLUDED DISCOUNTS SO ITS LOWER THAN AWP WHAT PBMs USUALLY REIMBURSE PHARMACIES |
| EXCLUSIONS | PART OF CONTRACT SPECIFYING DRUGS NOT COVERED |
| GENERIC EQUIVALENTS | SAME PRODUCT DIFFERENT SUPPLIER |
| LIMITATIONS | PART OF CONTRACT SPECIFYING DRUGS NOT COVERED |
| LINE CHARGES | CHARGE PHARMACIES INCUR FOR CLAIMS SENT ELECTRONICALLY |
| MAXIMUM ALLOWABLE COST (MAC) | THE GREATEST UNIT PRICE THAT THE PAYER OR PRM WILL PAY |
| MOST FAVORED NATIONS CLAUSE | CLAUSE THAT REQUIRES THE PHARMACY TO ACCEPT THE LOWEST REIMBURSEMENT RATE THAT THE PHARMACY ACCEPTS FOR ANY PLAN, REGARDLESS OF THE AMOUNT SPECIFIED INT THE PPA |
| PARTICIPATING PHARMACY AGREEMENT | PBMS CONTRACT WITH COMMUNITY PHARMACIES TO CREATE A NETWORK OF PHARMACIES |
| PRIOR AUTHORIZATION (PA) | PROCESS TO ALLOW FOR NON-FORMULARY DRUGS TO BE COVERED UNDER SPECIAL CIRCUMSTANCES |
| THERAPEUTIC EQUIVALENTS | EXISTING DRUGS WITHIN THE SAME THERAPEUTIC CLASS |
| TRANSMISSION FEE | CHARGE PHARMACIES INCUR FOR CLAIMS SENT ELECTRONICALLY |
| USUAL AND CUSTOMARY CHARGE (U&C) | THE PRICE THE PROVIDER MOST FREQUENTLY CHARGES THE GENERAL PULIC FOR A DRUG |
| WHOLESALE ACQUISTION COST (WAC) | BASED ON SURVEYS OF WHOLESALE PRICING DATA |
| ACADEMIC DETAILING (COUNTERDETAILING) | PRESCRIBER EDUCATION PROGRAMS AIMED AT COUNTERING THE INFO GIVEN BY PHARMACEUTICAL COMPANIES TO INCREASE USE OF FORMULARY PRODUCTS |
| DAW CODES | SET OF NCPDP CODES USED TO INFORM THIRD PARTIES OF THE REASON WHY A BRAND OR GENERIC PRODUCT WAS USED TO FILL A PRESCRIPTION |
| ELECTRONIC PRESCRIBING | WILL BETTER ABLE PHYSICIANS TO SEE FORMULARY ISSUES BEFORE RX IS SENT TO PHARMACY |
| FORMULARY | DEFINED AS A LIST OF DRUGS IDENTIFIED AS THE PREFERRED TREATMENT FOR SPECIFIC DISEASES OR CONDITIONS |
| OPEN FORMULARIES | LEAST RESTRICTIVE TYPE OF FORMULARY WHICH WILL SOMETIMES COVER MEDICATIONS THAT ARE NOT LISTED |
| CLOSED FORMULARIES | TYPE OF FORMULARY THAT WILL NOT PROVIDE COVERAGE FOR UNLISTED DRUGS WITHOUT AN AUTHORIZED MEDICAL EXCEPTION FROM A PHYSICIAN |
| INCENTED FORMULARIES | PRODUCTS GIVEN PREFERENCE WITH TIERED COPAYMENT SYSTEM |
| POSITIVE FORMULARIES | CLOSED FORMULARIES THAT ONLY LIST PRODUCTS THAT ARE COVERED BY THE PLAN |
| NEGATIVE FORMULARIES | CLOSED FORMULARIES THAT LIST ONLY NON COVERED PRODUCTS |
| LIFE-STYLE DRUGS | COSMETICS,NONPRESCRIPTION DRUGS,APPETTITE SUPPRESSANTS ETC |
| NATIONAL COUNCIL FOR PRESCRIPTION DRUG PROGRAMS (NCPDP) | DEFINES THE RECORD LAYOUT FOR PRESCRIPTION CLAIM TRANSACTIONS BETWEEN PROVIDERS AND ADJUDICATORS |
| PATIENT COMPLIANCE | PRODUCT THAT HAVE ATTRIBUTES THAT WOULD ENHANCE COMPLIANCE (FEWER SIDE EFFECTS,BETTER TASTE ETC) |
| PHARMACY AND THERAPEUTICS COMMITTEE (P&T) | COMMITTEE CONSISTS OF PHYSICIANS AND PHARMACISTS ESTABLISH POLICIES AIMED AT ASSURING SAFE AND COST EFFECTIVE DRUG THERAPY |
| PHARMACOECONOMIC DATA | COST-EFFECTIVENESS OR COST-UTILITY OF THE DRUG RELATIVE TO OTHER PRODUCTS WITH THE SAME INDICATION |
| REPORT CARDS | PHYSICIAN INCENTIVE, PERIODIC PERFORMANCE REPORT WITH PRESCRIBING PATTERNS GIVEN |
| STEP-THERAPY | EDITS USED TO ENCOURAGE THE USE OF LESS EXPENSIVE SIMILARLY EFFECTIVE GENERIC MEDS BEFORE CONSIDERING COVERAGE OF HIGHER COST BRAND NAME PRODUCTS |
| THERAPEUTIC SUBSTITUTES | SUBSTITUTION OF ONE DRUG FOR ANOTHER IN THE SAME THERAPEUTIC CLASS |
| BIRTHDAY RULE | WHERE THE INSURANCE USED IS DETERMINED BY WHICH PARENTS B-DAY IS EARLIER IN THE YEAR |
| CMS-1500 | THE PRESCRIBED PAPER FORM FOR HEALTH CARE CLAIMS PREPARED AND SUBMITTED BY PHYSCIANS AND SUPPLIERS |
| COMPOUNDING | PROCEDURE OF CREATING COMBINATION OF DRUGS THAT ARE PREPARED OR MIXED PRIOR TO PURCHASED |
| COORDINATION OF BENEFITS (COB) | A PROVISION THAT ENSURES THAT WHWEN A PATIENT IS COVERED UNDER MORE THAN ONE POLICY MAX APPROPRIATE BENEFITS ARE PAID BUT WITHOUT DUPLICATION |
| DURABLE MEDICAL EQUIPMENT (DME) | CERTAIN MEDICAL EQUIPMENT THAT IS ORDERED BY A DOCTOR FOR USE IN THE HOME |
| (NCPDP)TELECOMMUNICATIONS STANDARD VERSION 5.1 AND BATCH 1.1 | IS THE HIPAA STANDARD FOR ELECTRONIC RETAIL PHARMACY DRUG CLAIMS |
| NATIONAL DRUG CODE (NDC) | AN ELEVEN-DIGIT CODE ASSIGNED TO ALL PRESCRIPTION DRUG PRODUCTS BY THE LABELER OR DISTRIBUTOR OF THE PRODUCT UNDER FDA REGULATIONS (LABELER CODE PRODUCT CODE PACKAGE SIZE) |
| PRIMARY INSURANCE | THE FIRST INSURANCE THAT THE PATIENT WILL USE FOR CLAIMS |
| REAL-TIME CLAIMS MANAGEMENT SYSTEMS | A PROGRAM THAT ENABLES PROVIDERS TO SUBMIT ELECTRONIC PHARMACY CLAIMS IN AN ONLINE REAL-TIME ENVIRONMENT |
| SECONDARY INSURANCE | THE INSURANCE USED AFTER PRIMARY INSURANCE FOR ANY REMAINING EXPENSE |
| SWITCH VENDORS | SERVICE USED TO VERIFY THAT A CLAIM CONFORMS TO NCPDP TRANSACTION STANDARDS BEFORE FORWARDING IT TO THE PAYERS CLAIM SYSTEM |
| UNIVERSAL CLAIM FORM (UCF) | A TWO-SIDED DOCUMENT THAT THE PHARMACY TECHNICIAN COMPLETES AND SUBMITS FOR PAPER CLAIMS |
| USUAL AND CUSTOMARY PRICE (U&C) | PRICE THE PROVIDER MOST FREQUENTLY CHARGES THE GENERAL PUBLIC FOR THE SAME DRUG |
| ADVANCE BENEFICIARY NOTICE(ABN)OF NONCOVERAGE | A FORM GIVEN TO A PATIENT BEFORE TREATMENT WHEN A PROVIDER THINKS THAT MEDICARE WILL DEEM A PROCEDURE NOT REASONABLE AND NECESSARY AND WILL NOT COVER IT |
| COVERAGE GAP (DONUT HOLE) | POINT WHERE A PATIENT AND THE MEDICARE DRUG PLAN HAVE SPENT A PREDETERMINED AMOUNT OF MONEY FOR COVERED DRUGS AND THE PATIENT IS RESPONSIBLE FOR THE ENTIRE COST OF THE DRUGS |
| CROSSOVER CLAIM | CLAIMS SUBMITTED FIRST TO MEDICARE AND THEN TO MEDICAID |
| DIAGNOSTIC SERVICES | TREATMENT FOR A PATIENT WHO HAS BEEN DIAGNOSED WITH A CONDITION OR WITH A HIGH PROBABILITY FOR IT |
| HOSPICE | PUBLIC OR PRIVATE ORGANIZATION THAT PROVIDES SERVICES FOR TERMINALLY ILL PATIENTS AND THEIR FAMILIES |
| INITIAL PREVENTIVE PHYSICAL EXAMINATION(IPPE) | ONCE-IN-A-LIFETIME BENEFIT UNDER MEDICARE PART B THAT MUST BE RECEIVED IN THE FIRST SIX MONTHS AFTER THE DATE OF ENROLLMENT |
| LIMITING CHARGE | MAXUMUM AMOUNT A NONPAR PROVIDER CAN CHARGE A MEDICARE PATIENT BASED ON THE MEDICARE NONPARTICIPATING FEE SCHEDULE |
| MEDICAL SAVINGS ACCOUNT (MSA) | PROGRAM THAT COMBINES A HIGH DEDUCTIBLE FEE- FOR-SERVICE PLAN WITH A TAX-EXEMPT TRUST TO PAY FOR QUALIFIED MEDICAL EXPENSES |
| MEDICARE | FEDERAL HEALTH INSURANCE PROGRAM FOR PEOPLE WHO ARE SIXTY-FIVE AND OLDER AND SOME PEOPLE WITH DISABLITIES AND END-STAGE RENAL DISEASE (ESRD) |
| MEDICARE ADMINISTRATIVE CONTRACTORS (MAC) | INSURANCE ORGANIZATIONS THE FEDERAL GOVERNMENT CONTRACTS WITH TO PAY MEDICARE CLAIMS ON ITS BEHALF |
| MEDICARE ADVANTAGE | NEW NAME FOR MEDICARE 1 CHOICE PLANS WITH SOME CHANGED RULES TO GIVE PART C ENROLLEES BETER BENEFITS AND LOWER COSTS |
| MEDICARE BENEFICIARY | PERSON COVERED BY MEDICARE |
| MEDICARE FEE SCHEDULE (MFS) | BASIS FOR PAYMENTS FOR ALL ORIGINAL MEDICARE PLAN SERVICES |
| MEDICARE PART A | PROGRAM THAT HELPS PAY FOR INPATIENT HOSPITAL SERVICES,CARE IN SKILLED NURSING FACILITIES,HOME HEALTH,AND HOSPICE CARE |
| MEDICARE PART B | PROGRAM THAT HELPS PAY FOR PHYSCIAN SERVICES, OUTPATIENT,HOSPITAL SERVICES, DURABLE MEDICAL EQUIPMENT AND OTHER SERVICES AND SUPPLIES |
| MEDICARE PART C | PROGRAM THAT ENABLES PRIVATE HEALTH INSURANCE COMPANIES TO CONTRACT WITH CMS TO OFFER MEDICARE BENEFITS THROUGH THEIR OWN POLICIES |
| MEDICARE PART D | PROGRAM THAT PROVIDES VOLUNTARY MEDICARE PRESCRIPTION DRUG PLANS TO PEOPLE WHO ARE ELIGIBLE FOR MEDICARE |
| MEDICARE REMITTANCE NOTICE (MRN) | NOTICE SENT TO AN OFFICE TO SHOW THE AMOUNT OF A PATIENTS MEDICAL BILLS THAT HAS BEEN APPLIED TO THE ANNUAL DEDUCTIBLE |
| PRESCRIPTION DRUG PLAN (PDP) | BASIC MEDICARE OPTION FOR OFFERING PRESCRIPTION DRUG COVERAGE |
| QUALITY IMPROVEMENT ORGANIZATION (QIO) | GROUP OF PRACTICING DOCTORS AND OTHER HEALTH CARE EXPERTS PAID BY THE FEDERAL GOVERNMENT TO CHECK AND IMPROVE THE CARE GIVEN TO PEOPLE WITH MEDICARE |
| SCREENING SERVICE | TREATMENT FOR A PATIENT WHO DOES NOT HAVE SYMPTOMS ABNORMAL FINDINGS OR ANY PAST HISTORY OF A DISEASE |
| SPECIAL NEEDS PLANS (SNP) | PRESCRIPTION DRUG COVERAGE OFFERED BY MEDICARE TO SOME PATIENTS WITH SPECIFIC NEEDS |
| TROOP FACILITATOR | MEDICARE ONLINE ELIGIBILITY AND ENROLLMENT SYSTEM |
| DISEASE MANAGEMENT(DM) PROGRAMS | PROGRAMS THAT ARE OFTEN PROVIDED BY PHARMACY BENEFIT MANAGERS FOR COMMON AND POTENTIALLY HIGH COST CONDITIONS SUCH AS ASTHMA,DIABETES HEART DISEASE AND DEPRESSION |
| REBATES | ATTEMPT TO REDUCE PRODUCT COSTS FOR SINGLE SOURCE (BRAND NAME) DRUGS |
| VOLUME DISCOUNT | EARNED DISCOUNT FOR PURCHASING VOLUME OF PHARMACY |
| CASH DISCOUNT | EARNED DISCOUNT FOR PHARMACYS ABILITY TO PAY EARLY |
| TRADE DISCOUNT | EARNED DISCOUNT FOR SPECIAL DEALS AND PROMOTIONS THE PHARMACY IS ABLE TO OBTAIN |
| PATIENT EDUCATION | A PROGRAM TO PRODUCE VOLUNTARY CHANGE IN PATIENT BEHAVIOR THAT WILL IMPROVE HEALTH |
| DRUG UTILIZATION REVIEW | TOOL USED TO ENSURE SAFETY, IMPROVE CARE QUALITY, AND PROMOTE COMPLIANCE WITH THE FORMULARY |
| PHYSICIAN PROFILING | TOOL FOR COMPARING THE PRACTICE PATTERNS OF PROVIDERS ON COST AND QUALITY DIMENSIONS |
| EXCLUSIVE PROVIDER NETWORKS | EPOS -SUPER RESTRICTIVE-LOWER REIMBURSEMENT RATES |
| OPEN PANEL | ALL PHARMACIES INVITED TO PARTICIPATE IN NETWORK |
| CLOSED PANEL | ONLY SELECTED OR PREFERRED PHARMACIES INCLUDED |
| NETWORK | GROUP OF PARTICIPATING PROVIDERS INCLUDING PHYSICIANS HOSPITALS AND PHARMACIES CREATED BY A MANAGED CARE ORGANIZATION FOR ITS POLICYHOLDERS |
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