PTCB Billing & Reimbursement flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Payer

Any entity that assumes financial responsibility for a patient's prescription costs, such as a commercial insurer, a Medicare Part D plan, a state Medicaid program, or a workers' compensation carrier.

Pharmacy benefit manager

A third-party administrator that processes prescription claims, maintains formularies and pharmacy networks, negotiates manufacturer rebates, and contracts with pharmacies on behalf of plan sponsors.

Average wholesale price

A published list-price benchmark for a drug; many contracts reimburse it minus a negotiated percentage plus a dispensing fee, though it is widely criticized as inflated.

Wholesale acquisition cost

The manufacturer's list price for a drug sold to wholesalers before any discounts or rebates; used as a reimbursement benchmark in some contracts instead of AWP.

Maximum allowable cost

A payer-set ceiling on the ingredient cost it will reimburse for a specific drug, usually applied to multisource generics in place of AWP-based pricing.

Usual and customary price

The cash price a pharmacy charges the general public for a prescription; claims must report it, and payers commonly reimburse the lesser of contract rate or U&C.

BIN and PCN

Two card identifiers: the BIN routes an electronic claim to the correct processor, and the PCN identifies the specific plan or benefit package within that processor.

Medicare Part D

The voluntary outpatient prescription drug benefit delivered through stand-alone prescription drug plans or Medicare Advantage plans that include drug coverage.

NCPDP Telecommunication Standard

The national claim format used for electronic pharmacy billing; it defines required segments and fields such as BIN, cardholder ID, NDC, quantity, and days supply.

11-digit NDC

The drug code submitted on claims in 5-4-2 segment lengths, with leading zeros added so the labeler, product, and package portions are each fixed width.

Point-of-sale adjudication

Real-time claim processing in which the payer's system evaluates the claim and returns a paid, rejected, or denied response while the patient waits at the counter.

Claim rejection

A response indicating the claim was not adjudicated because of an error or missing data; the pharmacy can correct the information and resubmit the claim.

Claim denial

A response indicating the claim was adjudicated but is not payable, often due to a coverage exclusion, plan limitation, or failure to meet medical necessity criteria.

Reversal transaction

An electronic claim that cancels a previously paid claim so the pharmacy can correct an error and rebill without creating a duplicate payment.

Days supply

The number of days a dispensed quantity is expected to last at the prescribed directions; it drives copay calculation and refill-too-soon edits.

DAW code

A two-digit field indicating whether generic substitution occurred and whether the prescriber or patient required the brand product, which can change pricing.

Ingredient cost

The component of reimbursement that pays for the drug product itself, calculated from AWP, WAC, or MAC depending on the terms of the payer contract.

Patient pay amount

The total the patient owes at the point of sale, including copay, deductible, coinsurance, and any charges for non-covered products or services.

Coordination of benefits

The process that determines the order in which multiple health plans pay, ensuring combined payments do not exceed the total charge for the prescription.

Primary and secondary payers

The primary plan adjudicates first; the secondary plan reviews the remaining balance after the primary payment and may cover part or all of it.

Coinsurance

A patient cost-sharing arrangement in which the patient pays a percentage of the allowed amount, such as 20%, rather than a fixed dollar copay.

Copay tier

A numbered formulary category that sets a patient's cost share; generics usually sit in the lowest tier and specialty drugs in the highest.

TrOOP

True out-of-pocket costs in Medicare Part D: the amounts that count toward moving an enrollee through the benefit phases to catastrophic coverage.

Lesser-of pricing

A contract rule under which the payer reimburses the lowest of the contracted rate, the pharmacy's billed charge, or its usual and customary price.

Prior authorization

A plan requirement that specific clinical criteria be reviewed and approved before a particular drug is covered for a patient; claims reject until approval is on file.

Refill-too-soon reject

An edit triggered when the elapsed days since the last fill are less than the plan's threshold percentage of the billed days supply.

Step therapy

A coverage rule requiring that a preferred, usually lower-cost drug be tried first before a more expensive alternative is approved for payment.

Quantity limit

A plan edit capping the amount of a drug payable per period, expressed in units, dosage form, or days supply; exceeding the limit causes a reject.

DUR reject

A rejection generated by drug utilization review edits such as therapeutic duplication, drug-drug interaction, high dose, or drug-disease contraindication.

Internal appeal

The first formal level of dispute in which the pharmacy or patient asks the plan to reconsider a denied claim or unfavorable coverage decision.

External independent review

A review of a denial conducted by an independent third party outside the plan, available after internal appeal rights are exhausted.

Anti-Kickback Statute

A federal law prohibiting remuneration offered or received to induce referrals or purchases of items reimbursed by federal healthcare programs, including routine copay waivers.