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Glossary of Terms

A

Abridged formulary

A list of commonly used drugs covered by your plan. It is periodically updated during the plan year.

Acute drugs

Medications that are taken for a short period of time, usually requiring a supply less than 30 days (i.e., antibiotics).

Annual enrollment period

A time set each fall when Medicare plan members can change their health or drugs plans or switch to Original Medicare. The Annual Enrollment Period is from October 15 until December 7. Your Employer Group's Open Enrollment may differ from Medicare's annual enrollment period.

Annual Notice of Change (ANOC)

A document current members receive each year that details changes in benefits and the formulary for the following coverage year, or based on the former employer's open enrollment period.

Appeal

An appeal is something you do if you disagree with our decision to deny a request for coverage of prescription drugs or payment for drugs you already received. For example, you may ask for an appeal if we don't pay for a drug you think you should be able to receive. Chapter 7 of your Evidence of Coverage explains appeals, including the process involved in making an appeal.

Appointed Representative

An individual either appointed by an enrollee or authorized under State or other applicable law to act on behalf of the enrollee in obtaining a coverage determination or in dealing with any of the levels of the appeals process.

B

Best Available Evidence

A process whereby a member's low income cost sharing level can be changed based on evidence provided by either the member/plan or the pharmacy, as opposed to the Centers for Medicare and Medicaid Services (CMS).

Biologicals / Biologics

Medical preparations, such as insulin and vaccines, made using living organisms and their products. Some biologicals / biologics are covered under Medicare Part D.

Brand name drug

A prescription drug that is manufactured and sold by the pharmaceutical company that originally researched and developed the drug. Brand name drugs have the same active-ingredient formula as the generic version of the drug. However, generic drugs are manufactured and sold by other drug manufacturers and are generally not available until after the patent on the brand name drug has expired.

C

Catastrophic Coverage Stage

The stage in the Part D Drug Benefit where you pay a low copayment or coinsurance for your drugs after you or other qualified parties on your behalf have spent $6550 in covered drugs during the covered year.

Centers for Medicare & Medicaid Services (CMS)

The federal agency that administers Medicare. Chapter 2 of your Evidence of Coverage explains how to contact CMS.

Coinsurance

An amount you may be required to pay as your share of the cost for prescription drugs after you pay any applicable deductibles. Coinsurance is usually a percentage (for example, 20%).

Compliance

The degree to which you follow suggested treatment guidelines as specified by your health care provider.

Comprehensive formulary

A complete listing of all the drugs covered by your plan. It is periodically updated during the year.

Coordination of Benefits (COB)

Coordination of Benefits is a process that is used to determine the amount that different health care plans pay when a member has primary coverage through a Medicare prescription drug plan and secondary coverage through one or more supplemental payers. Although a member cannot have more than one Medicare Part D prescription drug plan at a time, an employer or other plan sponsor may choose to provide additional coverage to an individual's Medicare drug benefit through a secondary plan.

Copayment

An amount you may be required to pay as your share of the cost for a prescription drug. A copayment is usually a set amount, rather than a percentage. For example, you might pay $10 or $20 for a prescription drug.

Cost sharing

Cost sharing refers to amounts that a member has to pay when drugs are received. (This is in addition to the plan's monthly premium.) Cost sharing includes any combination of the following three types of payments: (1) any deductible amount a plan may impose before drugs are covered; (2) any fixed "copayment" amount that a plan requires when a specific drug is received; or (3) any "coinsurance" amount, a percentage of the total amount paid for a drug, that a plan requires when a specific drug is received.

Cost sharing tier

Every drug on the list of covered drugs is in a cost-sharing tier. In general, the higher the cost-sharing tier, the higher your cost for the drug.

Coverage Determination

A decision about whether a drug prescribed for you is covered by the plan and the amount, if any, you are required to pay for the prescription. In general, if you bring your prescription to a pharmacy and the pharmacy tells you the prescription isn't covered under your plan, that isn't a coverage determination. You need to call or write to your plan to ask for a formal decision about the coverage. Coverage determinations are called "coverage decisions" in this booklet. Chapter 7 of your Evidence of Coverage explains how to ask us for a coverage decision.

Coverage Gap Stage

The gap between the Initial Coverage Stage and the Catastrophic Coverage Stage when, under most Medicare drug plans, you are responsible for paying all of your prescription drug costs out of pocket. (Also called the Donut Hole.) A 75% discount on the negotiated price (excluding the dispensing fee and vaccine administration fee, if any) is available for those brand name drugs from manufacturers that have agreed to pay the discount.

You reach the gap under the standard Medicare prescription drug benefit when the amount that you and your plan have spent for your Part D drugs reaches a certain amount specified by the Centers for Medicare & Medicaid Services.

Covered drugs

The term we use to mean all of the prescription drugs covered by our plan.

Creditable Prescription Drug Coverage

Prescription drug coverage (for example, from an employer or union) that is expected to pay, on average, at least as much as Medicare's standard prescription drug coverage. People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penalty, if they decide to enroll in Medicare prescription drug coverage later.

D

Days supply

The number of days a prescription is intended to last. It is calculated by dividing the number of doses in the prescription by the number of doses per day. (For example, 28 doses taken four times per day would be a seven day supply).

Deductible

The amount you must pay for prescriptions before our plan begins to pay.

Disenroll or Disenrollment

The process of ending your membership in our plan. Disenrollment may be voluntary (your own choice) or involuntary (not your own choice).

Dispense As Written

"Dispense as written" (DAW) is a designation on a prescription where the prescribing health care provider specifies by a signature to dispense the medication as it was written on the prescription. Prescriptions with this designation mean that the health care provider does not allow generic substitution. Prescriptions with this designation may have a higher copayment than those where generics can be substituted.

Dispensing fee

A fee charged each time a covered drug is dispensed to pay for the cost of filling a prescription. The dispensing fee covers costs such as the pharmacist's time to prepare and package the prescription.

Donut hole

Another term for the Coverage Gap Stage.

Dosage form

Indicates the form in which the drug is made and taken, such as tablet, capsule, liquid, cream, ointment, kit, spray, drops or other.

Dosing schedule

The amount of a medication you are to take and how often to take it.

Drug exclusion

A drug that does not qualify for Part D coverage and is therefore not covered under your plan. Examples of the types of drugs excluded by Medicare are drugs when used for cosmetic purposes or hair growth and barbiturates and benzodiazepines. (You can find more information about drug exclusions in your Evidence of Coverage and in your formulary.)

Drug tier

Every drug on the list of covered drugs is in a drug tier. In general, the higher the drug tier, the higher your cost for the drug.

Dual eligible

When a person is entitled to both Medicare (Part A and/or Part B) and Medicaid. If you are a dual-eligible beneficiary, you probably qualify for extra help from the government to pay for your prescription drugs and have been automatically assigned to your plan.

E

Emergency

A medical emergency is when you, or any other prudent layperson with an average knowledge of health and medicine, believe that you have medical symptoms that require immediate medical attention to prevent loss of life, loss of a limb, or loss of function of a limb. The medical symptoms may be an illness, injury, severe pain, or a medical condition that is quickly getting worse.

Evidence of Coverage (EOC) and Disclosure Information

This document, along with your enrollment form and any other attachments, riders, or other optional coverage selected, which explains your coverage, what we must do, your rights, and what you have to do as a member of our plan.

Exception

A type of coverage determination that, if approved, allows you to get a drug that is not on your plan sponsor's formulary (a formulary exception), or get a non-preferred drug at the preferred cost-sharing level (a tiering exception). You may also request an exception if your plan sponsor requires you to try another drug before receiving the drug you are requesting, or the plan limits the quantity or dosage of the drug you are requesting (a formulary exception).

Expedited Coverage Determination

A "fast decision" is called an "expedited coverage determination." You can get a fast decision only if you are asking for a drug you have not yet received. (You cannot get a fast decision if you are asking us to pay you back for a drug you are already bought.) You can get a fast decision only if using the standard deadlines could cause serious harm to your health or hurt your ability to function.

Explanation of Benefits (EOB)

A monthly statement that you receive if you have used your prescription drug coverage during the previous month. It specifies the total amount that you have spent on prescription drugs (true out-of-pocket cost or TrOOP) and the total amount that the plan has paid out. All claims that were processed during a particular cycle, whether approved, denied, or reversed, are detailed in the EOB.

Extra Help

A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, such as premiums, deductibles, and coinsurance.

F

Food and Drug Administration (FDA)

The federal agency responsible for overseeing drug safety and effectiveness.

Formulary/Preferred Product

There may be more than one drug within a therapeutic category to treat your condition. As a result, your plan sponsor selects certain drugs as formulary/preferred because of their overall ability to meet your health care needs at a lower cost. If appropriate, ask your physician to consider prescribing a formulary/preferred drug as highlighted in Drug Price Check.

Formulary 30-day notice

A letter notifying you that a change is being made to the formulary. The Centers for Medicare & Medicaid Services (CMS) requires that we notify you at least 30 days in advance of any changes we make to your formulary unless a drug is being removed by the manufacturer or the Food and Drug Administration because of issues with safety or effectiveness.

Formulary drug

Any drug that is covered and listed on a plan's formulary.

Formulary or Drug List (List of covered drugs)

A list of prescription drugs covered by the plan. The drugs on this list are selected by the plan with the help of doctors and pharmacists. The list includes both brand name and generic drugs.

G

Gap Discount Program

See Medicare Coverage Gap Discount Program.

Generic alternative

A generic drug that may be given in place of a brand-name drug to achieve similar results for many people. A generic alternative may contain different active ingredients than the brand-name drug, but it usually provides a similar effect when treating a specific condition.

Generic drug

A prescription drug that is approved by the Food and Drug Administration (FDA) as having the same active ingredient(s) as the brand name drug. Generally, a "generic" drug works the same as a brand name drug and usually costs less.

Grievance

A type of complaint you make about us or one of our network pharmacies, including a complaint concerning the quality of your care. This type of complaint does not involve coverage or payment disputes. See Section 7 of your Evidence of Coverage for details.

Group Number

An assigned number that identifies a specific group under a plan sponsor. This number is listed on your Member ID card.

I

I/T/U pharmacy

A pharmacy operated by the Indian Health Service, an Indian tribe or tribal organization, or an urban Indian organization.

Initial Coverage Limit (ICL)

The maximum limit of coverage under the Initial Coverage Stage.

Initial Coverage Stage

This is the stage after you have met your deductible (if applicable) and before your total drug expenses have reached $4130, including amounts you've paid and what our plan has paid on your behalf.

Initial Enrollment Period (IEP)

When you are first eligible for Medicare, the period of time when you can sign up for Medicare Part B. For example, if you're eligible for Part B when you turn 65, your Initial Enrollment Period is the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.

L

Late enrollment penalty

An amount added to your monthly premium for Medicare drug coverage if you go without creditable coverage (coverage that is expected to pay, on average, at least as much as standard Medicare prescription drug coverage) for a continuous period of 63 days or more. You pay this higher amount as long as you have a Medicare drug plan. There are some exceptions. For example, if you receive Extra Help from Medicare to pay your prescription drug plan costs, the late enrollment penalty rules do not apply to you. If you receive Extra Help, you do not pay a penalty, even if you go without "creditable" prescription drug coverage.

Long-term care pharmacy

A pharmacy owned by or under contract with a long-term care facility to provide prescription drugs to the facility's residents.

Long-term drugs

Any medication that requires more than a short-term supply. Maintenance drugs are taken on a regular basis (3 months or more) for a chronic or long-term medical condition, such as asthma, diabetes, and high blood pressure. (Also called maintenance drugs.)

Low-income subsidy (LIS) ("Extra Help")

A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, such as premiums, deductibles, and coinsurance.

M

Maintenance drugs

Any medication that requires more than a short-term supply. Maintenance drugs are taken on a regular basis (3 months or more) for a chronic or long-term medical condition, such as asthma, diabetes, and high blood pressure. (Also called long-term drugs.)

Medicaid (or Medical Assistance)

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. See Chapter 2, Section 6 of your Evidence of Coverage for information about how to contact Medicaid in your state.

Medically Accepted Indication

A use of a drug that is either approved by the Food and Drug Administration or supported by certain reference books. See Chapter 3, Section 3 of your Evidence of Coverage for more information about a medically accepted indication.

Medically Necessary

A treatment that is appropriate and consistent with the health care provider's diagnosis and is in accordance with accepted standards of medical practice. Treatment could not have been omitted without adversely affecting the patient's condition or the quality of medical care provided.

Medicare

The federal health insurance program for people 65 years of age or older, some people under age 65 with certain disabilities, and people with End-Stage Renal Disease (generally those with permanent kidney failure who need dialysis or a kidney transplant). People with Medicare can get their Medicare health coverage through Original Medicare, a Medicare Cost Plan, a PACE plan, or a Medicare Advantage Plan.

Medicare Advantage (MA) plan

Sometimes called Medicare Part C. A plan offered by a private company that contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. A Medicare Advantage Plan can be an HMO, PPO, a Private Fee-for-Service (PFFS) plan, or a Medicare Medical Savings Account (MSA) plan. If you are enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan, and are not paid for under Original Medicare. In most cases, Medicare Advantage Plans also offer Medicare Part D (prescription drug coverage). These plans are called Medicare Advantage Plans with Prescription Drug Coverage. Everyone who has Medicare Part A and Part B is eligible to join any Medicare health plan that is offered in their area, except people with End-Stage Renal Disease (unless certain exceptions apply).

Medicare Advantage plan with prescription drug coverage (MA-PD)

A Medicare Advantage plan that also provides Medicare Part D prescription drug coverage.

Medicare Cost Plan

A Medicare Cost Plan is a plan operated by a Health Maintenance Organization (HMO) or Competitive Medical Plan (CMP) in accordance with a cost-reimbursed contract under section 1876(h) of the Act.

Medicare Coverage Gap Discount Program

A program that provides discounts on most covered Part D brand name drugs to Part D enrollees who have reached the Coverage Gap Stage and who are not already receiving "Extra Help." Discounts are based on agreements between the federal government and certain drug manufacturers. For this reason, most, but not all, brand name drugs are discounted.

Medicare Health Plan

A Medicare health plan is offered by a private company that contracts with Medicare to provide Part A and Part B benefits to people with Medicare who enroll in the plan. This term includes all Medicare Advantage Plans, Medicare Cost Plans, Demonstration/Pilot Programs, and Programs of All-inclusive Care for the Elderly (PACE).

Medication Therapy Management (MTM) programs

Free programs offered to selected Medicare Part D members who have certain medical conditions or chronic illnesses, who are taking many prescription drugs, and who have high drug costs. MTM programs are designed to help members make better use of their coverage and improve their understanding and use of medication.

"Medigap" (Medicare supplemental insurance) Policy

Medicare supplement insurance sold by private insurance companies to fill "gaps" in Original Medicare. Medigap policies only work with Original Medicare. (A Medicare Advantage Plan is not a Medigap policy.)

Member (Member of our Plan, or "Plan Member")

A person with Medicare who is eligible to get covered services, who has enrolled in our plan and whose enrollment has been confirmed by the Centers for Medicare & Medicaid Services (CMS).

Member number

A unique number that appears on a Member ID card that identifies the member. Also referred to as an identification number.

Member Services

A department within our plan responsible for answering your questions about your membership, benefits, grievances, and appeals. See Chapter 2 of your Evidence of Coverage for information about how to contact Member Services or click the Contact Us link.

Monthly plan premium

The amount that you pay each month for your Medicare prescription drug coverage.

Multi-source drug

A drug that is marketed or sold by two or more manufacturers or labelers, is no longer protected under patent exclusivity, and has a therapeutically equivalent generic available.

N

Network pharmacy

A network pharmacy is a pharmacy where members of our plan can get their prescription drug benefits. We call them "network pharmacies" because they contract with our plan. In most cases, your prescriptions are covered only if they are filled at one of our network pharmacies.

Non-creditable coverage

Prescription drug coverage that is not as good as the standard Medicare prescription drug coverage. If you have non-creditable coverage, you may have to pay a late enrollment penalty if you choose to enroll in a Medicare drug plan after your initial enrollment period.

Non-preferred brand-name drug

A brand-name drug that costs more than generic or preferred drugs. There may be more than one drug within a therapeutic category to treat your condition. These drugs are placed on the non-preferred brand tier because the relative cost of the drug is higher than others in the same category without showing added benefits and value. (See also drug tier.)

Notice of Creditable Coverage

A letter from an employer, union, or other health plan sponsor that tells you that the coverage you have under that sponsor's prescription drug benefit is at least as good as the standard Medicare prescription drug coverage. (See also Creditable Prescription Drug Coverage.)

Notice of Non-creditable Coverage

A letter from an employer, union, or other health plan sponsor that tells you that the coverage you have under that sponsor's prescription drug benefit is not as good as the standard Medicare prescription drug coverage. (See also non-creditable coverage.)

O

Original Medicare ("Traditional Medicare" or "Fee-for-service" Medicare)

Original Medicare is offered by the government, and not a private health plan like Medicare Advantage Plans and prescription drug plans. Under Original Medicare, Medicare services are covered by paying amounts established by Congress to doctors, hospitals, and other health care providers. Under Original Medicare, you can go to any doctor, hospital, or other healthcare supplier who accepts Medicare. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share. Original Medicare has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance) and is available everywhere in the United States.

Out-of-network pharmacy

A pharmacy that doesn't have a contract with our plan to coordinate or provide covered drugs to members of our plan. As explained in the Evidence of Coverage, most drugs you get from out-of-network pharmacies are not covered by our plan unless certain conditions apply.

Out-of-pocket costs

See the definition for "cost sharing" above. A member's cost-sharing requirement to pay for a portion of drugs received is also referred to as the member's "out-of-pocket" cost requirement.

Over-the-counter drug (OTC)

A drug that is available without a prescription.

P

Part A

The part of Medicare that covers much of the cost of hospital care, home health care, skilled nursing facility care, and hospice services. (See also original Medicare plan.)

Part B

The part of Medicare that covers most of the cost of your doctor visits, outpatient care, and other related services. Certain drugs are covered under Medicare Part B, and these cannot also be covered under Medicare Part D.

Part C

See Medicare Advantage (MA) Plan

Part D

The voluntary Medicare Prescription Drug Benefit Program. (For ease of reference, we will refer to the prescription drug benefit program as Part D.)

Part D Drugs

Drugs that can be covered under Part D. We may or may not offer all Part D drugs. (See your formulary for a specific list of covered drugs.) Certain categories of drugs were specifically excluded by Congress from being covered as Part D drugs.

Pharmacy and Therapeutics (P&T) Committee

A group of health care professionals made up of pharmacists from the community and health care professionals from varying specialties. This committee serves as an advisory panel to a pharmacy benefit manager and/or a plan sponsor regarding the safe and effective use of prescription medications. A major function of the committee is to develop and manage a formulary (drug list).

Preferred brand drug

A brand-name drug that requires a higher co-payment than a generic drug but lower than a non-preferred brand-name drug. (Also called a preferred brand-name drug.)

Preferred Network Pharmacy

A network pharmacy that offers covered drugs to members of our plan at lower cost-sharing levels than apply at a non-preferred network pharmacy.

Premium

The periodic payment to Medicare, an insurance company, or a health care plan for health or prescription drug coverage.

Primary coverage

Coverage from the main provider of your prescription drug benefit. This may be from a stand-alone Medicare drug plan, a health plan, or a plan sponsor (such as an employer or union).

Prior authorization

Approval in advance to get certain drugs that may or may not be on our formulary. Some drugs are covered only if your doctor or other network provider gets "prior authorization" from us. Covered drugs that need prior authorization are marked in the formulary.

Q

Quality Improvement Organization (QIO)

A group of practicing doctors and other health care experts paid by the federal government to check and improve the care given to Medicare patients. See Chapter 2, Section 4 of your EOC for information about how to contact the QIO for your state.

Quantity limits

A management tool that is designed to limit the use of selected drugs for quality, safety, or utilization reasons. Limits may be on the amount of the drug that we cover per prescription or for a defined period of time.

R

Retail network pharmacy

A retail pharmacy that participates in your plan's network. In most cases, you need to use a network pharmacy to pay the amounts specified by your plan. A list of network pharmacies can be found in the Pharmacy Directory. (Also called a network pharmacy.)

Retail pharmacy

A chain or independently owned pharmacy. In most cases, a retail pharmacy must be in your plan's network in order for your drug to be covered. (See also network pharmacy.)

S

Secondary coverage

Coverage that pays for some costs not covered by your primary coverage. Many employers and unions help their retirees with prescription drug costs by offering secondary coverage when a retiree enrolls in a Medicare prescription drug plan.

Service area

A geographic area where a prescription drug plan accepts members if it limits membership based on where people live. The plan may disenroll you if you move out of the plan's service area.

Single-source brand drug

A drug that is usually marketed or sold by one manufacturer or labeler is referred to by its trade name and is protected under patent exclusivity.

Social Security Administration (SSA)

The federal agency that determines, among other things, whether you are entitled to and eligible for Medicare benefits.

Special Enrollment Period (SEP)

A set time when members can change their health or drugs plans or return to Original Medicare. Situations in which you may be eligible for a Special Enrollment Period include: if you move outside the service area, if you are getting "Extra Help" with your prescription drug costs, if you move into a nursing home, or if we violate our contract with you.

Specialty drugs

High-cost drugs that are used to treat complex conditions, such as anemia, cancer, hepatitis C, and multiple sclerosis, and that usually require injection and special handling. Plans can include these drugs in a separate "specialty" drug tier if their cost is above an amount specified by Medicare.

State Health Insurance Assistance Program (SHIP)

An organization paid by the federal government to give free health insurance information and help to people with Medicare. The name for this program may vary from state to state.

State Pharmacy Assistance Program (SPAP)

A state-funded, Medicare-approved program (separate from Medicaid) that provides financial assistance for prescription drugs to low-income and medically needy beneficiaries and individuals with disabilities. Medicare approved SPAPs are not available in all states.

Step therapy

A utilization tool that requires you to first try another drug to treat your medical condition before we will cover the drug your physician may have initially prescribed.

Strength

The amount of an active ingredient contained in a drug.

Summary of Benefits

A document that gives an overview of the benefits available under the plan. The Centers for Medicare & Medicaid Services (CMS) requires that a Summary of Benefits be included with all enrollment materials so that Medicare beneficiaries can use it to compare plans.

Supplemental Security Income (SSI)

A monthly benefit paid by the Social Security Administration to people with limited income and resources who are disabled, blind, or aged 65 and older. SSI benefits are not the same as Social Security benefits.

T

Therapeutic alternative

A drug that may be given in place of another drug to achieve the same or similar results for most people. Therapeutic alternatives may contain different active ingredients, but they usually provide a similar effect when treating a specific condition.

Therapeutic category

A group of drugs that are similar in their chemical make-up, the way they work, the conditions they treat, or their specific effects.

Therapeutic class

A group of drugs that are used to treat the same condition or symptom.

Tier

The level of coverage for each drug, for example, "specialty drug tier" or "generic drug tier." Your coinsurance or copayment will depend on which tier the drug is in. You can find more information about tiers in your Evidence of Coverage and in your formulary. (See drug tier.)

Total drug costs

The total amount paid for your prescription drugs. This amount includes what you pay and also what your plan pays for your drugs.

Transition supply

A temporary supply of medication that the plan is required to cover for a new member or a member affected by a change to the formulary.

True out-of-pocket costs (TrOOP)

The amount that you (and others on your behalf) have spent out of pocket during the plan year for Part D drugs. Once TrOOP expenses reach a certain amount, you qualify for what most plans refer to as catastrophic coverage. (See Catastrophic Coverage Stage.)

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Website content was last updated on 1/20/2021.

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