Glossary & Acronyms

Use this handy Glossary and Acronyms reference guide to help make sense of Medicare coverage options. Please choose one of the following to begin:
GlossaryAcronyms
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A
Actual costThe negotiated price for a covered Part D drug when the drug is purchased at a network pharmacy, and the usual and customary price when a beneficiary purchases the drug at an out-of-network pharmacy.
Actuarial equivalenceA state of equivalent value demonstrated through the use of generally accepted actuarial principles and with CMS actuarial guidelines.
Allowable retiree costsGross covered retiree plan-related prescription drug costs that are actually paid (net any manufacturer or pharmacy discounts, charge-backs, rebates, and similar price concessions) by either the qualified retiree prescription drug plan or the qualifying covered retiree
Annual coordinated election periodFor 2008 and subsequent years – For coverage beginning 2008 or any subsequent year, the annual coordinated election period is November 15th through December 31st for coverage beginning the following calendar year.
AppealAny of the procedures that deal with the review of adverse coverage determinations made by the Part D plan sponsor on the benefits under a Part D plan the enrollee believes he or she is entitled to receive.
B
Basic prescription drug coverageCoverage of Part D drugs that is either standard prescription drug coverage or basic alternative coverage.
BeneficiaryA person who has healthcare insurance through the Medicare or Medicaid program.
Benefit optionA particular benefit design, category of benefits, or cost-sharing arrangement offered within a group health plan.
BiologicsSee: Specialty Drugs
Brand name drugA drug for which an application is approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(c)), including an application referred to in section 505(b)(2) of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 355(b)(2)).
C
Catastrophic coverageA name for the step of a Part D plan in which the plan pays nearly all of your drug expenses until the end of the year once your yearly out-of-pocket drug costs reach $4,550. During catastrophic coverage, you will pay the greater of 5% co-insurance or $2.50 for generics or a preferred brand that is a multi-source drug and $6.30 for all other drugs.
Centers for Medicare & Medicaid Services (CMS)Formerly known as the Health Care Financing Administration (HCFA), CMS is the federal agency that administers the Medicare, Medicaid and several other health-related programs. CMS sets standards for Part D insurance plans.
Co-insuranceCost sharing, where costs are split on a percentage basis. For example, a SilverScript Insurance plan might pay 80 percent and you would pay 20 percent.
Contracted pharmacy networkPharmacies, including retail, mail-order, and institutional pharmacies, under contract with a Part D sponsor to provide covered Part D drugs at negotiated prices to Part D enrollees.
Co-paymentCost sharing where you pay a pre-determined, flat amount for each prescription. In a SilverScript Insurance plan, for example, you might pay $15 for each prescription you receive and the plan would pay the remaining cost of the drug.
Coverage determinationThe decision the Plan makes about the prescription drug benefits you are entitled to get under the plan, and the amount that you are required to pay for a drug.
Coverage gapThe period in your SilverScript Insurance plan in which you usually pay all of your expenses for eligible drugs. The coverage gap occurs after you have spent $2,830, until your total out-of-pocket costs reach $4,550. See Donut Hole.
Covered Part D drugA Part D drug that is included in a Part D plan’s formulary, or treated as being included in a Part D plan’s formulary, and can be obtained at a network pharmacy or an out-of-network pharmacy.
Creditable prescription drug coverageThe actuarial value of the coverage equals or exceeds the actuarial value of defined standard prescription drug coverage as demonstrated through the use of generally accepted actuarial principles and in accordance with CMS actuarial guidelines.
D
DeductibleA term for the amount you pay first, before your plan pays the additional costs of a prescription drug. Depending on your Plan, you may have a $50 or $310 deductible.
Disenroll or disenrollmentThe process of ending your membership in our Plan Disenrollment can be voluntary (your own choice) or involuntary (not your own choice).
Disruptive behaviorA PDP enrollee is disruptive if his or her behavior substantially impairs the plans ability to arrange or provide for services to the individual or other plan members. An individual cannot be considered disruptive if the behavior is related to the use of medical services or compliance (or noncompliance) with medical advice or treatment. A cause for Involuntary disenrollment by the PDP.
Donut holeThe period in our plans in which you usually pay all of your expenses for eligible drugs. This occurs after you have spent $2,830, until your total out-of-pocket costs reach $4,550. In the donut hole you may receive our negotiated discounted prices, but you will generally pay for 100% of the cost. See Coverage gap.
Dual eligible membersPersons who are eligible for Medicare and Medicaid. Full-benefit dual eligible beneficiaries are automatically enrolled in a Medicare prescription drug plan by CMS.
E
EligibilityAn eligible Part D beneficiary who is entitled to Medicare benefits under Part A and/or enrolled in Part B and resides in the service area of the Part D Plan. You may be enrolled in only one Part D plan at a time.
Eligible drugsDrugs that may be covered by a SilverScript Insurance plan and listed in the formulary. See formulary.
Employer-sponsored group prescription drug planPrescription drug coverage offered to retirees who are Part D eligible individuals under employment-based retiree health coverage approved by CMS as a prescription drug plan.
EnrolleeA Part D eligible individual who has elected or has been enrolled in a Part D plan.
Evidence of Coverage and disclosure InformationThis document, along with your enrollment form and any other attachments, which explains your coverage, defines our obligations, and explains your rights and responsibilities as a member of our Plan.
Evidence of Coverage RiderA document we send members who receive extra help paying for their prescription drugs. It explains their specific plan pricing and information compared to what is printed in the Evidence of Coverage.
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I
Insurance riskFor a participating pharmacy, risk of the type commonly assumed only by insurers licensed by a State and does not include payment variations designed to reflect performance-based measures of activities within the control of the pharmacy, such as formulary compliance and generic drug substitutions, nor does it include elements potentially in the control of the pharmacy (for example, labor costs or productivity).
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Late enrollment penaltyIf you do not have creditable prescription drug coverage, you will have to pay a late enrollment penalty in addition to your monthly plan premium.
Limited risk planA prescription drug plan that provides basic prescription drug coverage and for which the PDP sponsor includes a modification of risk level in its bid submitted for the plan. This term does not include a fallback prescription drug plan.
Long-term care pharmacyA pharmacy owned by or under contract with a long-term care facility to provide prescription drugs to the facility's residents.
M
Mail service pharmacyCaremark is our network mail service pharmacy. Mail service can be used to fill prescriptions for drugs that you take on a regular basis, for a chronic or long-term medical condition. Mail service offers a convenient 90-day supply mailed directly to you.
Marketing materialsInclude any informational materials targeted to Medicare beneficiaries which: (1) Promote the Part D plan. (2) Inform Medicare beneficiaries that they may enroll, or remain enrolled in a Part D plan. (3) Explain the benefits of enrollment in a Part D plan, or rules that apply to enrollees. (4) Explain how Medicare services are covered under a Part D plan, including conditions that apply to such coverage.
MedicareThe federal health insurance program for people 65 years of age or older, some people under age 65 with disabilities, and people with End-Stage Renal Disease (generally those with permanent kidney failure who need dialysis or a kidney transplant).
Medicare Advantage Plan with Prescription Drug CoverageA benefit package offered by a Medicare Advantage Organization that offers a specific set of health benefits at a uniform premium and level of cost-sharing to all people with Medicare who live in the service area covered by the Plan. A Medicare Advantage Organization may offer more than one plan in the same service area.
Medicare Health PlanA benefit package offered by an insurance company that contracts with Medicare. The plan is available to anyone who lives in the plan service area and who has Medicare Parts A and/or B, except those who have end-stage renal disease (unless certain exceptions apply).
Medicare prescription drug accountThe account created within the Federal Supplementary Medical Insurance Trust Fund for purposes of Medicare Part D.
Medicare Prescription Drug CoverageInsurance to help pay for outpatient prescription drugs, vaccines, biologics, and some supplies not covered by Medicare Part B.
Medigap (Medicare supplement insurance) policyMany people who have original Medicare also buy Medigap or Medicare supplement insurance policies to fill gaps in original Medicare coverage.
Member (member of our Plan)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).
N
Network PharmacyThere are more than 64,000* participating pharmacies in our network. These pharmacies contract with us to provide your prescription drug benefits. The network includes many neighborhood retail pharmacies and a convenient mail service pharmacy. In most cases, your prescriptions are covered only if they are filled at one of our network pharmacies.* As of 6/2009, Caremark Network Services states that there are more than 64,000 contracted network pharmacies.
O
Out-of-network pharmacyA licensed pharmacy that is not under contract with a Part D sponsor to provide negotiated prices to Part D plan enrollees.
P
PACE PlanA plan offered by a PACE organization.
Part D drugA drug that may be dispensed only upon a prescription and may include a biological product, insulin, Medical supplies associated with the injection of insulin, including syringes, needles, alcohol swabs, and gauze, or a vaccine, but does not include drugs for which coverage is available for that individual under Part A or Part B, or drugs or classes of drugs, which may be excluded from coverage or otherwise restricted under Medicaid, except for smoking cessation agents.
Part D plan (or Medicare Part D plan)A prescription drug plan, an MA-PD plan, a PACE Plan offering qualified prescription drug coverage, or a cost plan offering qualified prescription drug coverage.
Part D plan sponsor or Part D sponsorRefers to a PDP sponsor, MA organization offering a MA-PD plan, a PACE organization offering a PACE plan including qualified prescription drug coverage, and a cost plan offering qualified prescription drug coverage.
PDP sponsorA nongovernmental entity that is certified under this part as meeting the requirements and standards of this part that apply to entities that offer prescription drug plans. This includes fallback entities.
Preferred drugA covered Part D drug on a Part D plan's formulary for which beneficiary cost-sharing is lower than for a non-preferred drug in the plans formulary.
Preferred pharmacyA network pharmacy that offers covered Part D drugs at negotiated prices to Part D enrollees at lower levels of cost-sharing than apply at a non-preferred pharmacy under its pharmacy network contract with a Part D plan.
Q
Qualifying planA full-risk or limited-risk prescription drug plan, or an MA-PD plan, that provides required prescription drug coverage. An MA-PD plan must be open for enrollment and not operating under a capacity waiver to be counted as a qualifying plan. A PDP must not be operating under a restricted enrollment waiver, such as those that may be granted to special needs plans or employer group plans, in order to be counted as a qualifying plan in an area.
R
S
Special Enrollment PeriodCMS will grant a special enrollment period if certain circumstances apply, such as moving to a new state, and entering or leaving a skilled nursing facility. During this time you may enroll or disenroll from a prescription drug plan.
Specialty DrugsHigh cost injectable and/or oral medications used to treat complex or rare conditions such as rheumatoid arthritis, multiple sclerosis, hepatitis C and cancer.
Standardized bid amountFor a prescription drug plan that provides basic prescription drug coverage, the PDP approved bid; for a prescription drug plan that provides supplemental prescription drug coverage, the portion of the PDP approved bid that is attributable to basic prescription drug coverage; for a MAPD plan, the portion of the accepted bid amount that is attributable to basic prescription drug coverage.
Subsidy-eligible individualA subsidy eligible individual is a Part D eligible individual residing in a State who is enrolled in or seeking to enroll in a Part D plan and has income below 150 percent of the FPL applicable to the individual's family size.
T
Therapeutically EquivalentRefers to drugs that are rated as therapeutic equivalents under the Food and Drug Administration's most recent publication of Approved Drug Products with Therapeutic Equivalence Evaluations.
Tiered cost-sharingA process of grouping Part D drugs into different cost sharing levels within a Part D sponsors formulary.
U
Usual and customary (U&C) priceThe price that an out-of-network pharmacy or a physician's office charges a customer who does not have any form of prescription drug coverage for a covered Part D drug.
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