A

A Rate – An FDA equivalency code indicating that a generic medication is considered interchangeable with pharmaceutically equivalent brand-name products. Pharmacies may substitute A-Rated generics for the brand-name products unless the physician indicates otherwise.

affiliation – A group of pharmacies joined to negotiate better contracting rates.

appeals process - The process by which members may appeal coverage decisions. Not all clients allow members to appeal coverage decisions, and appeal/grievance criteria vary among clients who do allow members to appeal coverage decisions.

Average Wholesale Price (AWP) – Pharmaceutical prices derived from MediSpan or First DataBank. Insurers and PBMs reimburse pharmacies based on a calculation of AWP, which normally applies to brand-name drugs.

AWP – See Average Wholesale Price.

B

B Rate – An FDA equivalency code indicating that a generic medication is not considered as interchangeable as A-Rated generics with pharmaceutically equivalent brand-name products. Pharmacies may only substitute B-Rated generics for the brand-name products with physician approval.

BadgerRx Gold Program - A program designed to address the increasing number of Wisconsin residents who either are uninsured, or whose insurance has no pharmacy benefit coverage and are unable to purchase affordable prescription drugs. The program is not state-funded. Instead, the program makes the purchasing power of ETF available, via Navitus Health Solutions, to public- and private-sector entities throughout Wisconsin.

BadgerCare - BadgerCare is a state-funded health insurance program for low-income working families with children under the age of 19.  It provides coverage for families with incomes too high for Medicaid who are without access to health insurance. This program provides benefits identical to the Wisconsin Medicaid program.

C

CAG – See Clinical Advisory Group.

CD – Controlled dosage usually indicates a sustained or slow-release pattern of a drug.

C-DUR – See Concurrent DUR.

Clinical Advisory Group (CAG) – A group of clinical staff who meet to address any clinical issues facing an organization. The following are examples of issues a CAG may address:

•Review new products as they become available and determine placement of the products on the Pharmacy and Therapeutics (P&T) Committee agenda.

•Review prior authorization criteria and make recommendations on these criteria to the P&T Committee.

•Review issues arising from complaints, grievances, physician contacts, and other sources, and determine whether to address these issues at CAG or through the P&T Committee.

•Review and make recommendations on clinical rules for Drug Utilization Review (DUR) programs.

COB – See coordination of benefits.

COBRA – See Consolidated Omnibus Budget Reconciliation Act.

co-insurance – A charge, expressed as a percentage of the fee for covered supplies, that an insured is required to pay for certain covered supplies provided under the policy. Payment of any co-insurance charge to the participating pharmacy is the member’s responsibility when covered supplies are received. The rate of this charge is determined by the client.

compound (medication) – The combining, mixing, or altering of ingredients to create a customized medication for an individual patient in response to a licensed practitioner’s prescription. See the Compound Claim Form for more information.

Concurrent DUR (C-DUR) - Drug evaluation at the point of service which sends alert messages and warnings to pharmacists for review. These messages identify potential problems and/or compliance issues with a prescribed drug, including, but not limited to, early refills, excessive drug use, potential drug interactions, potential drug conflicts, and therapeutic duplications.

Consolidated Omnibus Budget Reconciliation Act (COBRA) – COBRA, as it refers to benefit plans, requires that coverage under the plan be continued for up to 18 months, at the employee's cost, when coverage under the plan is lost due to certain events. Continuation is also required for up to 36 months for dependents who lose coverage under the plan due to certain events. COBRA continuation applies to medical, dental, Flex, vision, prescription drug, and all other health-type coverages. It does not apply to disability or life coverages. Each person who has lost coverage under the plan has an individual right to elect COBRA continuation, however the employee or spouse may elect coverage for the entire family.

coordination of benefits (COB) – Refers to claim administration when persons are covered by more than one group health or prescription insurance plan.

copayment – A specified dollar amount determined by the client that the member or family must pay each time those covered prescriptions are provided, subject to any maximums specified in the benefits policy.

D

DEA – Drug Enforcement Agency. Physicians are required to have a valid DEA number in order to prescribe controlled substances. Most third-party processors require a DEA number to process claims.

deductible – A preset dollar amount determined by the client that the member pays prior to receiving the full benefit. Some drug benefits utilize only deductibles, some utilize deductibles and maximum out-of-pocket (MOOP), some utilize only MOOPs. For example, under some plans, members are required to pay 100% of all prescription costs up to $100, after which only a co-insurance of 25% is required to fill a prescription.

disposable medical supplies (DMS) – Items generally used once and then discarded, such as examination gloves, bandages and wound dressings, and gowns. However, drug plans cover only a few DMS products (diabetic supplies), such as test strips, lancets, alcohol pads, pen needles, and insulin syringes.

DME – See durable medical equipment.

DMS – See disposable medical supplies.

Dose Optimization Program – A clinical program that helps control prescription drug benefit costs while maintaining therapeutic effectiveness.  Dose optimization can be accomplished in two ways:

•Tablet Splitting: Splitting a higher-strength tablet in half to deliver a prescribed dose.

•Tablet Gluing: Replacing multiple daily doses of a lower-strength medication with a single-unit, higher-strength form of the same product.

Both methods allow members to get the intended dose while purchasing fewer tablets. Participation in such programs are usually voluntary and is only available for a select group of drugs that are approved for dose optimization by a Pharmacy and Therapeutics (P&T) Committee.

drug rider – An outline of prescription benefits, including but not limited to copayments and maximum out-of-pocket (MOOP) information.

Drug Utilization Review (DUR) – A system of drug-use review that can detect potential adverse drug interactions, drug-pregnancy conflicts, therapeutic duplication, drug-age conflicts, etc. There are three forms of DUR: prospective (before dispensing), concurrent (at the time of prescription dispensing), and retrospective (after the therapy has been completed). Appropriate use of an integrated DUR program can curb drug misuse and abuse and monitor quality of care. In addition, DUR can reduce hospitalization and other costs related to inappropriate drug use (adapted from amcp.org).

DUR – See Drug Utilization Review.

durable medical equipment (DME) – Reusable devices, controls, or appliances that serve a medical purpose and enable patients to increase their ability to perform activities of daily living, or to perceive, control or communicate with the environment in which they live. DME includes items necessary for life support, ancillary supplies, and equipment necessary for the proper functioning of such items. Most drug benefit plans cover only a few DME products, such as diabetic meters, aerochambers, and peak flow meters.

E

EOB – See explanation of benefits.

ER – See extended release.

explanation of benefits (EOB) – A document explaining why the benefit was paid or not paid.

extended release (ER) – An extended-releasing action dosage form of a medication, usually resulting in fewer doses per day.

F

FDA – See Food and Drug Administration.

Food and Drug Administration (FDA) – A federal consumer protection agency that is part of the U.S. Department of Health and Human Services. The FDA reviews, monitors, and regulates dietary, supplementary, medical, and cosmetic products, as well as electronic products that emit radiation.

formulary – A specific list of drugs of which the plan sponsor pays a portion of the cost.  Placement on the formulary is determined by the Pharmacy and Therapeutics (P&T) Committee.  Medications that are on the formulary may be covered at various tiers (e.g., Level 1, 2, or 3), require prior authorization or step therapy, or be restricted by a quantity limit.  Medications that are not on the formulary are Not Covered and are only available via the Medical Exception process.

G

Generic Copay Waiver Program  - Also know as a Generic Sampling Program, the Generic Copay Waiver Program is designed to allow drug plan members to receive a fill for a generic medication at no charge as an alternative to using a higher cost, brand name alternative. This is also a voluntary program. Therefore, all plan sponsors may not decide to participate in the program.

generic drug – A chemically equivalent copy designed from a brand-name drug whose patent has expired. A generic is typically less expensive and sold under a common or “generic” name for that drug (e.g., the brand name for one tranquilizer is Valium, but it is also available under the generic name diazepam).

generic product identifier (GPI) – A series of 14 characters defined by MediSpan that consists of a hierarchy of seven subsets, each providing increasingly more specific information about drug products. In addition, GPIs provide categories of brand-name and generic drugs in like-therapeutic classes.

Generic Sampling Program – See Generic Copay Waiver Program.

GPI – See generic product identifier.

grandfathering – A process that allows exceptions for certain products from standard formulary guidelines. Each new client decides whether they want to make grandfathered products available to members, which products will be grandfathered, the duration of the grandfathering period, and the criteria for member eligibility for grandfathering.

The following are typical examples of grandfathering:

•Designated Level 3 products are available to qualified members at a Level 2 copayment.

•Designated non-covered (NC) products are covered for qualified members.

•Designated products requiring prior authorization approval for a reduced copayment (PA*) are available to qualified members without having to go through the PA* process.

•Designated products requiring products requiring prior authorization approval for coverage (PA) are available to qualified members without having to go through the PA process.

grievance process – See appeals process.

H

Health Insurance Portability and Accountability Act (HIPAA) – A privacy rules standard that addresses the use and disclosure of individuals’ health information (called “protected health information”, or “PHI”) by organizations and individual involved in the health care process.

HEDIS - Health Plan Employer Data and Information Set. See the HEDIS website for more information.

HIPAA – See Health Insurance Portability and Accountability Act.

HIRSP - Health Insurance Risk Sharing Plan. See the HIRSP website for more information.

I

ID card – A pocket-size identification card issued to members which indicates entitlement to receive prescription coverage from participating pharmacies. The card includes processing information (RxBin and RxPCN numbers), member identification (ID and group numbers) for each eligible member on the policy, and drug plan contact information (web address, toll-free phone number, hours of operation, and mailing address).

IM – See intramuscular.

Independent Review Organization (IRO) – A group of medical professionals, who have no connection to your benefit plan, who review your dispute or grievance. In Wisconsin, you choose the IRO from a list of review organizations certified by the Office of the Commissioner of Insurance (OCI). The IRO assigns your dispute to a clinical peer reviewer who is an expert in the treatment of your medical condition. The IRO has the authority to determine whether the treatment should be covered by your benefit plan.

intramuscular (IM) - A drug, nutrient solution, or other substance administered within a muscle. IM drugs are usually covered by the medical benefit, not the pharmacy benefit.

intravenous (IV) - A drug, nutrient solution, or other substance administered into a vein. IV drugs are usually covered by the medical benefit, not the pharmacy benefit.

IRO – See Independent Review Organization.

L

legend drug – A drug that, by law, can be obtained only by prescription and bears the label, “Caution: federal law prohibits dispensing without a prescription.”

M

MAC – See Maximum Allowable Cost.

maintenance therapy - Ongoing (medication) therapy delivered after the acute phase of an illness has passed. It begins when a member's recovery has reached a plateau or improvement in his/her condition has slowed or ceased entirely and only minimal rehabilitative gains can be demonstrated.

Maximum Allowable Cost (MAC) – MAC almost always applies to generic drugs. Drug plans may adopt a MAC price schedule for generic drug reimbursement to pharmacies. Some plans may add or subtract a percentage from the MAC to arrive at the final pharmacy reimbursement amount.

Maximum out-of-pocket (MOOP) – The preset dollar amount determined by the client that the member pays out-of-pocket for prescription expenses according to their drug rider policy. The MAC price schedule is often updated monthly because some generic drugs experience sharp declines in prices during the first 1-2 years of their release onto the market.

Medicaid – A joint federal and state program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from state to state, but most health care costs are covered if you qualify for both Medicare and Medicaid.

Medical Exception – A process that applies to two-tier or Covered/Not-Covered plans, which clients may choose to make available to members in order to request products that are not typically covered on their formulary. First, Physicians must fill out a Medical Exception form; then the drug plan’s Prior Authorization team conducts a clinical review of the information provided on the form and determines whether or not to grant coverage of the product.

Medicare – The federal health insurance program for people 65 years of age or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure with dialysis or a transplant, sometimes called ESRD).

MediSpan – A private agency that works with pharmaceutical manufacturers to develop pricing and product information for all FDA-approved medications.

MOOP – See maximum out-of-pocket.

N

National Committee for Quality Assurance (NCQA) – An organization that performs quality-oriented accreditation reviews on HMOs and similar managed care plans.

National Council for Prescription Drug Programs (NCPDP) – A non-profit organization that creates and promotes standards for transferring data. The organization provides a forum and support wherein their diverse membership can efficiently and effectively develop and maintain these standards through a consensus-building process. NCPDP also offers its members resources, including educational opportunities and database services, to better manage their businesses.

NCPDP provides guidelines for claims processing (online and batch), manufacturer rebates, payment and billing tapes, member enrollment, ID card format, professional pharmacy services, and the Universal Claim Form. In addition, NCPDP is responsible for assigning pharmacy IDs (NABP number) and demographic information. NCPDP also maintains affiliations and payee IDs.

National Drug Code (NDC) – A series of 11 digits assigned by the FDA to a manufacturer’s drug product. The first five digits indicate the manufacturer, the next four identify the product, and the last two indicate quantity or strength of product. Drug plans receives updated NDC information from either Medispan or First DataBank via electronic file transfers.

NCPDP – See National Council for Prescription Drug Programs.

NCQA – See National Committee for Quality Assurance.

NDC – See National Drug Code.

non-par (nonparticipating) pharmacy – Refers to a pharmacy who has not signed an agreement with a drug plan to participate in the plan.

O

OOP - See maximum out-of-pocket.

oral suspension (OS) - An oral, liquid dosage form of a medication.

OS – See oral suspension.

out-of-pocket expense – The portion of covered charges for which the member is responsible because of applicable deductible, co-insurance, and/or copayment provisions, or noncovered charges. The portion of coverage is determined by the client.

out-of-pocket maximum - See maximum out-of-pocket.

P

PA – See Prior Authorization.

par (participating) pharmacy – Refers to a pharmacy who has signed an agreement with a drug plan to participate in the plan.

payee – Pharmacies, pharmacy headquarters, and payment facilities who receive reimbursement checks from payers (i.e., insurance companies, other PBMs, etc).

PBM – See Pharmacy Benefits Manager.

P-DUR – See Prospective DUR.

P&T Committee – See Pharmacy and Therapeutics Committee.

PHI – See Protected Health Information.

Pharmacy Benefits Manager (PBM) – A third party administrator of a prescription drug program that is primarily responsible for processing and paying prescription drug claims. In addition, a PBM typically negotiates discounts and rebates with drug manufacturers, contracts with pharmacies, and develops and maintains the formulary.

Pharmacy Network – A group of pharmacies with which a PBM contracts to provide pharmacy services to its members.

Pharmacy and Therapeutics (P&T) Committee – An advisory committee that is responsible for reviewing clinical information regarding medications and making formulary recommendations to the drug plan. The P&T Committee is comprised of primary-care and specialty physicians, as well as pharmacists with or without lay person representation. The members of the P&T Committee are not usually employees of the drug plan. The following are some of the responsibilities of the P&T Committee:

•Review clinical information around new products and make recommendations regarding placement on the drug plan’s formularies.

•Review and make recommendations on utilization tools such as prior authorization, step-therapy, and quantity limits.

•Review clinical policies and procedures related to formulary management, including prior authorization.

•Review ongoing Clinical Advisory Group (CAG) activities and decisions based on updates that CAG provides at P&T Committee meetings.

Prior Authorization (PA) –Approval required by the drug plan for a select drug before authorizing coverage for the medication. Unless otherwise indicated by the drug plan, the prior authorization must be in writing from the provider. Determinations for prior authorizations are at the discretion of the drug plan.

Prospective DUR (P-DUR) - Drug evaluation to identify prescriber practice patterns that deviate from standard practice guidelines. The goal of P-DUR is to educate prescribers to choose the most cost effective, clinically appropriate medication prior to treatment of a condition.

Protected Health Information (PHI) – Information about an individual’s health information that is protected through HIPAA standards. See HIPAA Privacy and Security Training for more information.

Q

QL – See quantity limit.

quantity limit (QL) – Limits that a drug plan places on a product to specify a maximum quantity that drug plan will allow a member to receive per month. Typically, the limits are guidelines or regulations that the Food and Drug Administration (FDA) advise for the product, but clients may also set quantity limits.

R

R-DUR – See Retrospective DUR.

Retrospective DUR (R-DUR) – Drug evaluation after the prescription has been dispensed to the member. R-DUR Seeks to identify patterns of misuse and abuse, cost improvement opportunities, and ways to optimize a member's drug regimen.

S

SR – See Sustained Release.

ST – See Step Therapy.

Step Therapy (ST) – A protocol that requires the member to try a preferred formulary medication before approving a more expensive preferred product or non-formulary product. If a trial of the preferred product is present in the member’s claim history in the computer prescription claims system, the non-preferred product is automatically covered.

subcutaneous - A drug, nutrient solution, or other substance administered just beneath the skin. Subcutaneous drugs are usually covered by the pharmacy benefit, not the medical benefit.

subscriber – An eligible primary cardholder who is enrolled for (a) single coverage; or (b) family coverage and whose dependents who may also be eligible for benefits.

Sustained Release (SR) – A slower-releasing action dosage form of a medication, usually resulting in fewer doses per day.

T

Tablet Gluing - a form of dose optimization achieved by replacing multiple daily doses of a lower-strength medication with a single-unit, higher-strength form of the same product.

Tablet Splitting (TS) – A form of dose optimization achieved by breaking a higher strength tablet in half to deliver a prescribed dose.

TS – See Tablet Splitting.

X

XR – See Extended Release.