Prescription Drug Glossary

Acute Medications

Medications used to treat short-term health conditions such as the flu. Also called "Short-Term Medications."

Appropriateness

The ability of a drug to produce desired outcomes with regard to specific health conditions.

Average Wholesale Price (AWP)

The price of a drug based on a consistent formula in the wholesale marketplace.

Brand Name Drug

A relatively new drug that generally holds a patent, which gives the drug manufacturer the exclusive right to manufacture and market the drug. Manufacturers can have patents for as long as 20 years. Until a patent expires, a generic version of the drug can not be made.

Capitation

A system that bases provider reimbursement upon a specific agreed-upon amount or formula.

Claims Adjudication

The process of verifying participant eligibility for reimbursement of the cost of a medical procedure, determining the amount at which the claim will be reimbursed, and communicating the determination to the participant, usually through an explanation of benefits (EOB) form.

Co-insurance

The participant's share of the total cost of a specific medical procedure, assuming that the participant has met the annual deductible and made the appropriate co-payment.

Co-payment

The up-front amount a participant is required to pay for a covered medical procedure. The co-payment is in addition to any annual deductible a participant must meet before obtaining reimbursement for covered procedures.

Deductible

A pre-set dollar amount that a plan participant must meet before the plan begins to cover the participant's medical expenses.

Disease Management

A method of managing a participant's care according to treatment protocols that are designed to maximize the management of or recovery from a specific condition.

Drug Utilization Review

The process of evaluating the appropriateness, safety, efficacy and cost-effectiveness of drug therapy to treat a specific health condition.

Drug Utilization Management

Management of drug therapy based on information provided by drug utilization review.

Formulary (also known as "Preferred Drug List")

Classification of drugs as preferred drugs, generic drugs and non-preferred drugs and setting co-payments according to the classes in which the drugs belong.

In-Network Pharmacy (also known as "network pharmacy')

One of a large group of independent and chain retail pharmacies under contract with a pharmacy benefits manager to offer discounts to pharmacy benefits plans and sell prescription medications to plan members at pre-set costs.

Generic Drugs

A group of drugs that contain the same active ingredients in the same amounts and with the same efficacy as their brand name counterparts, but that are manufactured and sold for a much lower price.

Generic Substitution

The replacement of a brand name medication with a generic drug. See "Generic Drugs."

Mail Order Service

A convenient, cost-effective service through which participants may order prescriptions and have them delivered to their homes or workplaces.

Maintenance Medication

Medication used to treat long-term or chronic health conditions.

Managed Care

A health benefit management process through which plan sponsors have a certain amount of control over the delivery system. The objectives of managed care are to provide plan participants the most efficacious, cost-effective treatment of their health conditions.

Managed Care Organization

A health care organization that applies managed care measures and principles in determining the optimal treatments of their health conditions.

National Pharmacy and Therapeutics Committee

A committee of practicing doctors and clinical pharmacists who review, select and approve preferred brand name medicines based on their safety, quality and effectiveness.

Network Pharmacy (also known as "in-network pharmacy")

One of a large group of retail pharmacies under contract with a pharmacy benefits manager to offer discounts to pharmacy benefits plans and sell prescription medications to plan members at pre-set costs.

Out-of-Network Pharmacy

A pharmacy that is not a member of the pharmacy network.

Outcomes Research

The study of the results of medical treatment based on such features as cost, health status, absenteeism, and other measurable results.

Over-the-Counter Drugs

Medications that can be purchased without a prescription from an authorized health care provider. Over-the-counter drugs generally are not covered by most medical plans.

Pharmacy Audit

Review and evaluation of the performance of a retail network pharmacy based on such factors as data validation, financial measures and compliance with plan design and eligibility parameters.

Pharmacy Network (also known as "retail pharmacy network")

An extensive group of independent and chain retail pharmacies under contract with a pharmacy benefits manager to offer discounts to pharmacy benefit plans and sell prescription medications to plan members at pre-set costs.

Point-of-Dispensing (POD)

Refers to a physician's ability to dispense medication electronically.

Point-of-Prescribing (POP)

Refers to a physician's ability to prescribe medication electronically.

Preferred Provider Organization (PPO)

An organization that has contractual relationships with physicians, hospitals and other health care providers to accept pre-determined fees for services provided to plan participants.

Pharmacy Benefit Manager (PBM)

An organization that oversees and manages prescription drug benefit programs.

Point-of-Sale (POS)

Refers to the ability of retail pharmacies to dispense prescription medications as authorized by physicians while electronically accessing participants' eligibility information and updating participants' prescription drug history at the time of purchase.

Pre-Authorization

The permission that plan participants must obtain before certain medications are covered under a prescription benefit plan. Medications requiring pre-authorization generally are drugs that may be use to treat more than one condition.

Prescription Drug or Medication

A drug that cannot be sold legally without a prescription authorizing its sale.

Refill Limitation

The maximum number of times a participant may purchase prescription medication refills with the authorization of a physician and according to the design of the participant's prescription benefits plan.

Reimbursement Form

Form that plan participants are required to complete and file, along with the original sales receipt, to obtain reimbursement for the cost of a prescription filled at an out-of-network pharmacy.

Retail Pharmacy Network (also known as pharmacy network)

An extensive group of independent and chain retail pharmacies under contract with a pharmacy benefits manager to offer discounts to pharmacy benefits plans and sell prescription medications to plan members at pre-set costs.

Short-term Medications

Medications used to treat current, acute health conditions such as the flu. Also called "Acute Medications."

Specialty Pharmacy Services

Bio-technical services and medications, primarily injectable medications, used by plan participants who have certain chronic health conditions.

Usual and Customary Price

The standard price that individuals who live in a certain geographic market and do not have prescription coverage would usually pay for prescription medications.


Plan Managers Participants Benefits and Claims Information Formulary & Forms Find a Network Pharmacy My Health Zone Frequently Asked Questions Prescription Drug Glossary Providers	About Us Capabilities Contact Us My Health Zone Login Prescription Drug Glossary Acute Medications Medications used to treat short-term health conditions such as the flu. Also called "Short-Term Medications." Appropriateness The ability of a drug to produce desired outcomes with regard to specific health conditions. Average Wholesale Price (AWP) The price of a drug based on a consistent formula in the wholesale marketplace. Brand Name Drug A relatively new drug that generally holds a patent, which gives the drug manufacturer the exclusive right to manufacture and market the drug. Manufacturers can have patents for as long as 20 years. Until a patent expires, a generic version of the drug can not be made. Capitation A system that bases provider reimbursement upon a specific agreed-upon amount or formula. Claims Adjudication The process of verifying participant eligibility for reimbursement of the cost of a medical procedure, determining the amount at which the claim will be reimbursed, and communicating the determination to the participant, usually through an explanation of benefits (EOB) form. Co-insurance The participant's share of the total cost of a specific medical procedure, assuming that the participant has met the annual deductible and made the appropriate co-payment. Co-payment The up-front amount a participant is required to pay for a covered medical procedure. The co-payment is in addition to any annual deductible a participant must meet before obtaining reimbursement for covered procedures. Deductible A pre-set dollar amount that a plan participant must meet before the plan begins to cover the participant's medical expenses. Disease Management A method of managing a participant's care according to treatment protocols that are designed to maximize the management of or recovery from a specific condition. Drug Utilization Review The process of evaluating the appropriateness, safety, efficacy and cost-effectiveness of drug therapy to treat a specific health condition. Drug Utilization Management Management of drug therapy based on information provided by drug utilization review. Formulary (also known as "Preferred Drug List") Classification of drugs as preferred drugs, generic drugs and non-preferred drugs and setting co-payments according to the classes in which the drugs belong. In-Network Pharmacy (also known as "network pharmacy') One of a large group of independent and chain retail pharmacies under contract with a pharmacy benefits manager to offer discounts to pharmacy benefits plans and sell prescription medications to plan members at pre-set costs. Generic Drugs A group of drugs that contain the same active ingredients in the same amounts and with the same efficacy as their brand name counterparts, but that are manufactured and sold for a much lower price. Generic Substitution The replacement of a brand name medication with a generic drug. See "Generic Drugs." Mail Order Service A convenient, cost-effective service through which participants may order prescriptions and have them delivered to their homes or workplaces. Maintenance Medication Medication used to treat long-term or chronic health conditions. Managed Care A health benefit management process through which plan sponsors have a certain amount of control over the delivery system. The objectives of managed care are to provide plan participants the most efficacious, cost-effective treatment of their health conditions. Managed Care Organization A health care organization that applies managed care measures and principles in determining the optimal treatments of their health conditions. National Pharmacy and Therapeutics Committee A committee of practicing doctors and clinical pharmacists who review, select and approve preferred brand name medicines based on their safety, quality and effectiveness. Network Pharmacy (also known as "in-network pharmacy") One of a large group of retail pharmacies under contract with a pharmacy benefits manager to offer discounts to pharmacy benefits plans and sell prescription medications to plan members at pre-set costs. Out-of-Network Pharmacy A pharmacy that is not a member of the pharmacy network. Outcomes Research The study of the results of medical treatment based on such features as cost, health status, absenteeism, and other measurable results. Over-the-Counter Drugs Medications that can be purchased without a prescription from an authorized health care provider. Over-the-counter drugs generally are not covered by most medical plans. Pharmacy Audit Review and evaluation of the performance of a retail network pharmacy based on such factors as data validation, financial measures and compliance with plan design and eligibility parameters. Pharmacy Network (also known as "retail pharmacy network") An extensive group of independent and chain retail pharmacies under contract with a pharmacy benefits manager to offer discounts to pharmacy benefit plans and sell prescription medications to plan members at pre-set costs. Point-of-Dispensing (POD) Refers to a physician's ability to dispense medication electronically. Point-of-Prescribing (POP) Refers to a physician's ability to prescribe medication electronically. Preferred Provider Organization (PPO) An organization that has contractual relationships with physicians, hospitals and other health care providers to accept pre-determined fees for services provided to plan participants. Pharmacy Benefit Manager (PBM) An organization that oversees and manages prescription drug benefit programs. Point-of-Sale (POS) Refers to the ability of retail pharmacies to dispense prescription medications as authorized by physicians while electronically accessing participants' eligibility information and updating participants' prescription drug history at the time of purchase. Pre-Authorization The permission that plan participants must obtain before certain medications are covered under a prescription benefit plan. Medications requiring pre-authorization generally are drugs that may be use to treat more than one condition. Prescription Drug or Medication A drug that cannot be sold legally without a prescription authorizing its sale. Refill Limitation The maximum number of times a participant may purchase prescription medication refills with the authorization of a physician and according to the design of the participant's prescription benefits plan. Reimbursement Form Form that plan participants are required to complete and file, along with the original sales receipt, to obtain reimbursement for the cost of a prescription filled at an out-of-network pharmacy. Retail Pharmacy Network (also known as pharmacy network) An extensive group of independent and chain retail pharmacies under contract with a pharmacy benefits manager to offer discounts to pharmacy benefits plans and sell prescription medications to plan members at pre-set costs. Short-term Medications Medications used to treat current, acute health conditions such as the flu. Also called "Acute Medications." Specialty Pharmacy Services Bio-technical services and medications, primarily injectable medications, used by plan participants who have certain chronic health conditions. Usual and Customary Price The standard price that individuals who live in a certain geographic market and do not have prescription coverage would usually pay for prescription medications.
© 2006 - 2007 \| Scrip World \| 50 West Broadway \| Suite 1100 \| Salt Lake City, UT 84101