Glossary
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- 340B Ceiling Price: The maximum price that manufacturers can charge covered entities participating in the Public Health Service's 340B Drug Pricing Program.
- 340B Drugs: Drugs which may be purchased from authorized entities; Section 340B of the Public Health Service Act limits the cost of drugs to federal purchasers and to certain grantees of federal agencies. Significant savings on pharmaceuticals may be seen by those entities that participate in this program.
- 340B Prime Vendor Program: The program for entities in the 340B drug discount program which because of the potential to to control a large volume of pharmaceuticals can negotiate favorable prices and develop a national distribution system that would not be possible for covered entities to obtain individually.
- 340B Program: The 340B Drug Pricing Program enacted by law to limit the cost of drugs to Federal purchasers and to certain grantees of Federal agencies.
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A
- AAC: Actual Acquisition Cost; the net cost of a drug paid by a pharmacy. A drug's AAC includes discounts, rebates, charge backs, and other adjustments to the price of the drug, but excludes dispensing fees.
- ADAP: AIDS Drug Assistance Program; special pharmacy program to cover certain drugs for eligible individuals with HIV/AIDS; also known as the Ryan White Program. The ADAP Program is funded through Title II of the Social Security Act.
- ASP: Average Sales Price; the weighted average of all non-Federal sales to wholesalers and is net of charge backs, discounts, rebates, and other benefits tied to the purchase of the drug product, whether it is paid to the wholesaler or the retailer.
- AWP: Average Wholesale Price; A national average of list prices charged by wholesalers to pharmacies. AWP is sometimes referred to as a "sticker price" because it is not the actual price that larger purchasers normally pay.
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B
- BP: Best Price; the lowest priced available to any Wholesaler, retailer, provider, health maintenance organization (HMO), nonprofit entity, or the government including cash discounts, free goods that are contingent upon purchase, volume discounts, and rebates.
- Big 4: The four largest purchases of pharmaceuticals within the Federal government: Department of Veterans Affairs, Department of Defense, Public Health Service, and Coast Guard. Pricing of drugs purchased by the Big 4 are subject to the to a maximum statutory price called the Federal Ceiling Price.
- Bundled Sales: The packaging of drugs of different types, where the total price for the package is less that the purchase price of the drugs if purchased separately.
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C
- Coinsurance: The percent of the Medicare-approved amount that a Medicare beneficiary has to pay in addition to the deductible for Part A and/or Part B.
- Comprehensive Pharmacy Services: Refers to services that improve the health status of the patient through access to affordable medications, efficient pharmacy management, and pharmaceutical care to improve patient outcomes.
- Contracted Pharmacy: An arrangement through which a covered entity may contract with an outside pharmacy to provide comprehensive pharmacy services utilizing medications purchased under 340B.
- Copayment: In some health plans, this is the amount a beneficiary must pay for each medical service the patient gets, like a doctor visit.
- Covered Drug: An FDA-approved prescription drug, an over-the-counter (OTC) drug that is written on a prescription, a biological product that can be dispensed only by a prescription (other than a vaccine) or FDA-approved insulin.
- Covered Entities: The statutory name for facilities and programs eligible to purchase discounted drugs through the Public Health Service's 340B drug pricing program.
- Critical Access Hospital: A designated limited-service hospital located in a rural area.
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D
- DAW: Dispensed As Written; codes to be used by providers to explain the dispensing of a brand-name product instead of a generic one.
- DEA Number: Drug Enforcement Administration Number; federal registry number used to identify a prescriber.
- DESI: Drug Efficacy Study and Implementation Program; Drugs determined by the Food and Drug Administration as lacking substantial evidence of effectiveness.
- Dispensing Fee: The dispensing fee represents the charge for the professional services provided by the pharmacist when dispensing a prescription (including overhead and profit).
- Disproportionate Share Adjustment: The Medicare disproportionate share adjustment is an addition Medicare payment to hospitals which treat a high percentage of low-income patients.
- Disproportionate Share Hospital (DSH): A hospital with a disproportionately large share of low-income patients.
- Drug Utilization Review (DUR): is a program designed to measure and to assess, both on a prospective and retrospective basis, the proper use of outpatient drugs in the Medicaid program. The primary objectives of the DUR systems are to improve the quality of care and to assist in containing health care costs.
- Drug Utilization Review Board: A group of actively practicing healthcare professionals responsible for the establishment and implementation of medical standards and criteria for the prospective and retrospective DUR programs. It is the goal of the DUR Board to improve the quality of care for West Virginia Medicaid recipients through the use of drugs, assuring that the drugs are appropriate, medically necessary, and not likely to result in adverse medical effects. The DUR Board is charged with making recommendations for educational interventions to prescribers and pharmacists to identify and reduce for both providers and patients, the frequency of patterns of fraud, abuse, gross overuse and inappropriate or medically unnecessary care.
- DSH Payment: Additional payments in the Medicaid and Medicare programs that, along with local tax appropriations, help hospitals finance care to low income and uninsured patients.
- Dual Eligible: Medicaid beneficiaries who are also eligible for health benefits under Medicare or other public-sponsored health programs.
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E
- ESRD: End-stage renal disease.
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F
- FDA: United States Food and Drug Administration.
- FDB: First Data Bank; database company for drug pricing and drug utilization review (DUR) edits.
- Federal Drug Rebates: Established through OBRA '90, a payment made by pharmaceutical manufacturers to the states in order for the states to receive Federal matching funds for drugs dispensed to Medicaid recipients.
- Formulary: A preferred list of drug products that typically limits the number of drugs available within a therapeutic class for purposes of drug purchasing, dispensing and/or reimbursement. A government body, third-party insurer or health plan, or an institution may compile a formulary. Some health plans develop closed (i.e. restricted) formularies where only those drug products listed can be reimbursed by the health plan.
- FUL: Federal Upper Limit; maximum allowable cost established by the Centers for Medicare and Medicaid Services for certain prescribed drugs; also referred to as MAC.
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G
- Generic Drugs: A generic drug is identical, or bioequivalent to a brand name drug in dosage form, safety, strength, route of administration, quality, performance, characteristics and intended use. Although generic drugs are chemically identical to their branded counterparts, they are typically sold at substantial discounts from the branded price.
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H
- Health Resources and Services Administration (HRSA): An agency within the Department of Health and Human Services of the Federal government with a mission to improve and expand access to quality health care for all.
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I
- In-Home Parenteral Therapy: Infusible medications administered in the home.
- In-House Pharmacy Services: Pharmacy services which are housed within a covered entity's facility. The pharmacy must be part of the legal organization of the covered entity.
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- Lock-In Program: Program which restricts recipients to the use of one pharmacy provider if it is determined that the recipient has utilized pharmacy services at a frequency or for an amount of controlled substances that are not medically necessary. These determinations are made by the Retrospective Drug Utilization Review Committee in accordance with predetermined guidelines approved by the Bureau for Medical Services.
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M
- Manufacturer: For purposes of the 340B Program, manufacturer includes all entities engaged in the production, preparation, propagation, compounding, conversion, or processing of prescription drug products, either directly or indirectly.
- Maximum Allowable Cost: (for prescription drugs) (MAC) - Upper limits which may be established by the Federal government or the Federal Department of Health and Human Services.
- Medicaid (aka Title XIX, Title 19): A joint Federal and State program that pays for much or all of the health care services provided to eligible persons with low incomes and limited resources. Medicaid Programs are administered by the States with Federal guidelines and vary from state to state.
- Medicaid AWP: Average wholesale prices established by the Federal Office of the Inspector General as a result of Federal pricing investigations.
- Medicaid BP: Medicaid Best Price is the lowest prices paid to a manufacturer for a brand name drug, taking into account rebates, charge backs, discounts or other pricing adjustments, excluding nominal prices.
- Medicaid Rebate Net Price: The effective price paid for covered outpatient drugs by State Medicaid programs taking into account the manufacturer rebates received by States.
- Medicare: The Federal health insurance program for people 65 years of age and older; certain younger people with disabilities; and people with End-Stage Renal Disease (ESRD).
- Medicare Part A: The part of Medicare that covers hospice care, home health care, skilled nursing facilities, and inpatient hospital stays.
- Medicare Part B: The part of Medicare that covers doctors' services, outpatient hospital care, and other medical services that Part A does not cover such as physical and occupational therapy, x-rays, medical equipment, or limited ambulance service.
- Multi-Source Drugs: Drugs that are marketed or sold by two or more manufacturers or labelers.
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N
- National Drug Code (NDC):The NDC is the identifying drug number maintained by the Food and Drug Administration.
- Network Central Fill: A pharmacy distribution system in which a network member's in-house pharmacy fills prescriptions for the patients of other network members.
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O
- Orange Book: Publication by the FDA which establishes therapeutic equivalency ratings for drugs.
- Over-Utilization: Excessive use of the Medicaid Program by any provider or beneficiary.
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P
- Patient: An individual is considered a patient of a covered entity (with the exception of State operated or funded AIDS drug assistance programs) only if:
- The covered entity has established a relationship with the individual, which includes maintaining records of the individual’s health care;
- The individual receives health care services from a health care professional who is either employed by the covered entity or provides health care under contractual or other arrangements (e.g., referral for consultation) such that responsibility for the individual’s care remains with the covered entity;
- The individual receives a health care service or range of services for which grant funding or federally-qualified health center look-alike status has been provided. (Disproportionate share hospitals are exempt from this requirement.)
- PDL: Preferred Drug List; Medication list recommended to the Bureau for Medical Services by the Medicaid Pharmaceutical and Therapeutics (P & T) Committee and approved by the Secretary of the Department of Health and Human Resources, as authorized by West Virginia Code 9-5-15. The drugs which are indicated as "preferred" have been selected for their clinical significance and overall efficiencies.
- P&T Committee: Pharmaceutical and Therapeutics Committee; recommends drugs to Medicaid for inclusion or exclusion relating to the Preferred Drug List.
- Pharmaceutical Pricing Agreement (PPA): This agreement is required for manufacturers who have executed a Medicaid Rebate Agreement with the Centers for Medicare and Medicaid Services (CMS) and voluntary for those who do not have a Current Medicaid Rebate Agreement.
- Pharmacy Assistance Programs (PAPs): Programs though which many pharmaceutical manufacturers provide free or greatly subsidized medications to indigent patients.
- Pharmacy Benefit Manager (PBM): An organization that provides administrative services in processing and analyzing prescription claims for pharmacy benefit and coverage programs.
- Premium: The monthly payment for health care coverage to Medicare, an insurance company, or a health care plan.
- Prior Authorization (PA): Prior approval necessary for specified services to be delivered for an eligible client by a specified provider before services can be performed, billed, and payment made. A utilization review method used to control certain services which are limited in amount, duration, or scope.
- Prospective DUR: Screens for potential drug therapy problems including therapeutic duplication, drug interactions, drug-disease contraindications, and over or under utilization of a drug before a prescription is dispensed.
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- RDTP: Rational Drug Therapy Program; non-profit agency affiliated with the West Virginia University School of Pharmacy and designated by the Bureau for Medical Services for prior authorization services for prescribed drugs.
- Retro DUR: Retrospective Drug Utilization Review; review of recipient drug history records against predetermined standards to improve quality of healthcare and to educate physicians and pharmacists on common drug therapy issues.
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S
- Single-Source Drug: A drug which is available from only one manufacturer.
- State MAC: Maximum allowable cost for drug products established by the state Medicaid agency.
- State Plan: A comprehensive written agreement between the state agency administering the Medicaid Program and the Centers for Medicare and Medicaid Services, which includes client eligibility requirements and identifies the scope of medical care for which reimbursement is available.
- Supplemental Drug Rebate: A payment from a pharmaceutical manufacturer, negotiated by the state, in addition to the Federal rebate.
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T
- Telepharmacy: The use of electronic and communication technology to provide and support comprehensive when distance separates the participants.
- Third Party: Any entity (including other government programs or insurance program) that is or may be liable for payment of all or part of the medical cost for injury, disease, or disability of a client of Medicaid services. Medicaid is always the payer of last resort.
- Third Party Liability (TPL): Financial resources available to the beneficiary to cover costs for medical care. The third party may be private health insurance, Medicare or Medicaid, or retiree health benefits.
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U
- Unit Rebate Amount (URA): This is the unit amount computed by the Centers for Medicare and Medicaid Services to which the Medicaid utilization information may be applied by States in invoicing the Manufacturer for the rebate payment due.
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W
- Wholesale Acquisition Cost (WAC): The price paid by a wholesaler for drugs purchased from the wholesaler's supplier, typically the manufacturer of the drug. Publicly disclosed or listed WAC amounts may not reflect all available discounts.
- Wholesaler: A wholesaler is a company that serves as a bridge between a drug manufacturer and a covered entity. This means any entity (including a pharmacy or chain of pharmacies) to which the labeler sells the covered outpatient drug, but that does not relabel or repackage the covered outpatient drug.
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