Managed Care Pharmacy Flashcards

Question 1

What is managed care in the context of health insurance?

Accepted Answer

Managed care is a health insurance approach in which a plan coordinates the cost and quality of care for enrolled members. It usually relies on contracted provider networks, defined benefits, and management tools that guide which services and medications are covered. Its aim is to balance access to care with controlled spending.

Question 2

What is the main difference between an HMO and a PPO?

Accepted Answer

A health maintenance organization, or HMO, generally requires members to use a defined network and often a primary care provider for referrals. A preferred provider organization, or PPO, usually allows out-of-network visits at higher cost sharing. The main differences involve flexibility, referral rules, and costs outside the network.

Question 3

How does a fixed copayment differ from percentage-based coinsurance?

Accepted Answer

A copayment is a fixed dollar amount a member pays for a covered service or prescription, such as a set amount per fill. Coinsurance is a percentage of the allowed cost that the member pays after the plan pays its share. Both are forms of cost sharing, distinct from the premium.

Question 4

What does the pharmacy benefit cover within a health plan?

Accepted Answer

The pharmacy benefit is the portion of a health plan that pays for prescription drugs and related pharmacy services. It sets rules for which medications are covered, how much members pay at the counter, and which pharmacies may dispense them. Many plans administer this benefit through a separate contracted company.

Question 5

What does it mean when a pharmacy is in network for a plan?

Accepted Answer

A pharmacy is in network when it has a signed agreement with the plan or its benefit manager to dispense covered prescriptions at negotiated rates. Members usually pay lower cost sharing at in-network pharmacies. Out-of-network pharmacies may be covered only in limited situations, often at higher cost or with prior approval.

Question 6

What is a deductible in a prescription drug plan?

Accepted Answer

A deductible is the amount a member must pay out of pocket for covered services before the plan begins to share costs. Some plans apply a separate prescription deductible, while others apply one deductible to all covered care. Once the deductible is met, copayments or coinsurance usually apply.

Question 7

What is an enrollee in a managed care plan?

Accepted Answer

An enrollee, also called a member, is an individual who has enrolled in a health plan and is eligible for its covered benefits. Enrollment usually follows an employer offer, a government program, or an individual purchase. Pharmacists verify eligibility because coverage can change over time.

Question 8

What is a plan sponsor in managed care?

Accepted Answer

A plan sponsor is the organization that establishes a health plan and pays for its benefits on behalf of enrollees. Examples include employers, unions, insurers, and government agencies. The sponsor often contracts with a managed care organization or a pharmacy benefit manager to administer the plan.

Question 9

What is a pharmacy benefit manager and what does it do?

Accepted Answer

A pharmacy benefit manager, or PBM, is a company that administers prescription drug benefits for health plans, employers, and other sponsors. Its core functions include building formularies, processing claims, negotiating with manufacturers and pharmacies, and operating mail-order or specialty services. PBMs act as intermediaries between plans and the pharmacies that dispense medications.

Question 10

What does claims adjudication mean in pharmacy benefit processing?

Accepted Answer

Claims adjudication is the process of reviewing a prescription claim to decide whether it is covered, how much the plan pays, and how much the member owes. The system checks eligibility, benefit rules, formulary status, drug pricing, and possible clinical edits before approving or rejecting the claim. Rejections carry a code explaining the reason.

Question 11

How does a pharmacy benefit manager differ from a health insurer?

Accepted Answer

A health insurer takes on the financial risk of covering a population and sells health plans, while a PBM typically administers the drug portion of those plans under contract. Some insurers own PBMs, though their functions remain distinct. The PBM's role is administrative, focusing on pharmacy claims, pricing, and network operations.

Question 12

What is a mail-order pharmacy service offered by benefit managers?

Accepted Answer

A mail-order pharmacy dispenses maintenance medications through the mail, usually in larger quantities for longer periods than a retail pharmacy fill. Plans often encourage members to use it because it can lower costs and improve adherence to long-term therapy. Members typically receive refills automatically or by request.

Question 13

What is a specialty pharmacy in a managed care setting?

Accepted Answer

A specialty pharmacy dispenses high-cost medications that often require special handling, patient education, or close monitoring. These drugs frequently treat complex, chronic, or rare conditions and may be administered at home. Plans typically route them through designated specialty pharmacies to manage cost and coordinate care.

Question 14

Why do plan sponsors contract with a PBM instead of managing drug benefits directly?

Accepted Answer

Plan sponsors often lack the scale, data systems, and negotiating leverage needed to manage prescription benefits efficiently on their own. A PBM brings established networks, claims platforms, and purchasing volume across many clients. Contracting out also lets the sponsor focus on its core business and budget more predictably.

Question 15

What does a PBM's contracted pharmacy network accomplish for members?

Accepted Answer

A contracted pharmacy network gives members access to covered prescriptions at agreed prices, which helps plans control spending. The PBM negotiates dispensing fees and discounts with participating pharmacies and sets the rules that govern them. Networks also support convenience through many locations and sometimes through home delivery options.

Question 16

What role does pharmacy claims auditing play for a plan sponsor?

Accepted Answer

Claims auditing is a review of processed pharmacy claims to confirm that payments were accurate and matched the plan's benefit rules. Auditors look for duplicate billing, incorrect pricing, unlicensed dispensing, and claims for ineligible members. Findings can lead to recovered funds, corrected payments, and improved controls.

Question 17

What is a pharmacy formulary in a managed care plan?

Accepted Answer

A formulary is a list of prescription drugs that a health plan covers, organized by cost tier and sometimes by therapeutic category. It reflects clinical review, cost considerations, and contract terms negotiated with manufacturers. Drugs not on the list may be excluded or require additional approval before coverage.

Question 18

What is an open formulary compared with a closed formulary?

Accepted Answer

An open formulary includes multiple drugs in a therapeutic class, while a closed formulary covers only selected products and excludes others. Open designs give prescribers more choice, whereas closed designs usually lower costs through tighter control. Many plans use a hybrid approach, combining features of both.

Question 19

What are formulary tiers and why do plans use them?

Accepted Answer

Formulary tiers are groups that place drugs at different levels of member cost sharing, often with lower tiers for generics and higher tiers for brand-name or specialty products. Plans use tiers to steer members toward lower-cost options when clinically appropriate. Tier placement also gives the plan leverage to negotiate prices.

Question 20

What is prior authorization, and when does a pharmacy benefit require it?

Accepted Answer

Prior authorization is a plan's requirement that the prescriber obtain approval before a specific medication is covered. Reviewers check that the drug meets the plan's criteria, such as documentation of the condition and therapies previously tried. Approval is typically time-limited, and the plan may request renewal.

Question 21

What is step therapy and how does it work?

Accepted Answer

Step therapy is a utilization management method that requires members to try one or more lower-cost medications before a plan covers a particular alternative. If a required medication is ineffective or not tolerated, as documented, the plan may approve the requested drug. Step therapy is also called a fail-first protocol in some settings.

Question 22

What is a quantity limit in pharmacy benefit management?

Accepted Answer

A quantity limit caps the amount of a medication a plan will cover within a specified period, such as a number of units per fill or per month. Limits help control waste and align use with accepted guidance. Members or prescribers may request an exception when a higher amount is clinically justified.

Question 23

How does a formulary exception request work for a non-listed drug?

Accepted Answer

A formulary exception request asks the plan to cover a drug that is excluded or placed on a higher tier than the member's situation warrants. The prescriber usually submits supporting clinical information, and the plan reviews it against its coverage criteria. Decisions are typically communicated within set timeframes that vary by plan type.

Question 24

How do clinical pharmacists use drug utilization review in managed care?

Accepted Answer

Drug utilization review is a systematic evaluation of prescribing, dispensing, and use patterns to identify concerns such as duplicate therapy, interactions, or inappropriate dosing. Pharmacists apply it at the point of dispensing through automated edits and retrospectively through periodic reports. Findings guide education, formulary decisions, and policy changes.

Question 25

What does reimbursement mean for a pharmacy filling a claim?

Accepted Answer

Reimbursement is the payment a pharmacy receives for dispensing a covered prescription, usually from the plan or PBM rather than directly from the member. It typically combines the drug's ingredient cost with a dispensing fee, adjusted by contract terms. The member's copayment or coinsurance is subtracted from the total payable amount.

Question 26

What is a maximum allowable cost list used in pharmacy pricing?

Accepted Answer

A maximum allowable cost list sets the highest price a plan will pay for a group of multisource generic drugs with the same active ingredient. Plans and PBMs use these lists to limit payments when several manufacturers make equivalent products. Pharmacies generally receive the lower of the list price or their submitted ingredient cost.

Question 27

What does wholesale acquisition cost mean for a prescription drug?

Accepted Answer

Wholesale acquisition cost is the list price a manufacturer advertises to wholesalers for a drug, before discounts, rebates, or other concessions. It serves as a common reference point in pricing contracts. Because it excludes many negotiated reductions, it often differs from what plans and pharmacies actually pay.

Question 28

What is a manufacturer rebate in managed care drug pricing?

Accepted Answer

A manufacturer rebate is a payment a drug maker returns to a PBM or plan after the plan includes its product on a formulary or meets agreed utilization targets. Rebates are often negotiated as a share of the list price and are paid after dispensing. Plan contracts determine how rebates are shared.

Question 29

What is a pharmacy dispensing fee, and why does it appear on claims?

Accepted Answer

A dispensing fee is a flat amount paid to a pharmacy for the professional and operational work of filling a prescription, separate from the drug's ingredient cost. It covers activities such as verification, labeling, packaging, and counseling. Plan contracts often set different fees for retail, mail-order, and specialty pharmacies.

Question 30

What is a generic dispensing rate and why do plans track it?

Accepted Answer

The generic dispensing rate is the percentage of prescriptions filled with generic drugs rather than brand-name products. Plans track it because generics usually cost less and support cost-control goals. A high rate can also reflect successful formulary design and generic substitution policies.

Question 31

What is therapeutic interchange in a pharmacy setting?

Accepted Answer

Therapeutic interchange is the substitution of a different drug within the same therapeutic class, usually initiated by a prescriber or under a plan's policy, to achieve similar clinical effect at lower cost. It differs from generic substitution, which swaps a brand product for its generic equivalent with the same active ingredient.

Question 32

What are the basic differences between spread pricing and pass-through pricing?

Accepted Answer

Spread pricing means a PBM charges a plan one amount for a drug and pays the pharmacy a lower amount, keeping the difference as revenue. Pass-through pricing means the PBM passes the actual cost to the plan with a defined administrative fee. The models differ mainly in margin visibility to the sponsor.

Question 33

What is medication therapy management in a managed care program?

Accepted Answer

Medication therapy management is a structured service in which a pharmacist reviews a member's medications to optimize outcomes, identify problems, and improve adherence. It often includes a comprehensive review, a written summary for the member, and communication with prescribers. Plans may offer it to members with multiple chronic conditions or high medication use.

Question 34

What is a medication adherence measure used by health plans?

Accepted Answer

A medication adherence measure is a calculated rate showing how consistently members fill prescriptions for chronic therapies, often based on days of supply covered over a period. Plans use these rates for quality reporting, outreach, and improvement programs. Pharmacists can help by addressing barriers such as cost, refill timing, and understanding of instructions.

Question 35

What is a pharmacy quality improvement program in managed care?

Accepted Answer

A pharmacy quality improvement program is a planned effort to measure pharmacy services, identify gaps in care, and apply changes that improve safety and outcomes. It typically sets measurable goals, tracks performance over time, and involves pharmacists, prescribers, and plan staff. Quality programs often rely on standardized measures for comparison.

Question 36

What role do standardized healthcare quality measures play for managed care plans?

Accepted Answer

Standardized quality measures are defined indicators that let plans compare performance on processes and outcomes, such as screening rates or medication use. Many plans report them to regulators, purchasers, and accreditors, which can influence payment and reputation. Pharmacy teams contribute by documenting services accurately so that plans can capture credit for care delivered.

Question 37

What is a medication error reporting system used by pharmacy organizations?

Accepted Answer

A medication error reporting system is a process for recording errors, near misses, and adverse events related to medications so that root causes can be studied. Reports are typically confidential, nonpunitive, and reviewed by a quality team. The goal is to change systems and workflows rather than to assign individual blame.

Question 38

How does a pharmacy network credentialing process protect plan members?

Accepted Answer

Credentialing protects members by verifying a pharmacy's licensure, insurance, accreditation, and compliance history before it joins a network. The process confirms that the pharmacy meets standards for licensed staff, secure records, and proper dispensing. Periodic recredentialing keeps these checks current across the network.

Question 39

What are point-of-sale alerts in pharmacy claims processing?

Accepted Answer

Point-of-sale alerts are messages generated during claims processing that warn the pharmacist about possible concerns, such as a duplicate fill, an early refill, or a potential interaction between listed medications. Pharmacists review each alert and document their response before dispensing. Good alert design reduces alert fatigue by highlighting only clinically meaningful issues.

Question 40

What is a patient assistance program and how does it relate to managed care?

Accepted Answer

A patient assistance program is a manufacturer or nonprofit initiative that helps eligible individuals obtain medications at reduced cost or at no cost. In managed care, these programs can interact with plan benefits, so pharmacists must check rules about whether assistance counts toward cost-sharing limits.

Managed Care Pharmacy Flashcards

1Foundations of Managed Care

2Pharmacy Benefit Manager Functions

3Formularies and Utilization Management

4Pricing, Rebates, and Reimbursement

5Quality, Safety, and Patient Programs

Learning Resources