Pharmacy Benefit Management Fundamentals
Expert-defined terms from the Certificate in Pharmacy Benefit Management course at London School of Planning and Management. Free to read, free to share, paired with a globally recognised certification pathway.
AARP #
American Association of Retired Persons, a nonprofit organization that provides health insurance and other benefits to its members, often partnering with pharmacy benefit management companies to offer discounted prescription medications to its members. Related terms: Medicare, Medicaid, health insurance.
Accreditation #
a process by which a pharmacy benefit management company is evaluated and recognized for meeting certain standards of quality and performance, such as those set by the URAC or the NABP. Related terms: URAC, NABP, quality assurance.
ACO #
Accountable Care Organization, a network of healthcare providers that work together to provide coordinated care to patients, often including pharmacy benefit management services to help manage medication use and costs. Related terms: Medicare, Medicaid, healthcare reform.
Actuarial analysis #
a method of analyzing data to predict the costs and outcomes of different pharmacy benefit management strategies, such as the impact of different formulary designs on drug spending. Related terms: Formulary management, drug spending, healthcare economics.
ADHD #
Attention Deficit Hyperactivity Disorder, a condition that often requires long-term treatment with medications, such as stimulants and non-stimulants, which can be managed through pharmacy benefit management programs. Related terms: Medication therapy management, disease management, behavioral health.
Administrative services only #
a type of contract where a pharmacy benefit management company provides administrative services, such as claims processing and customer service, but does not take on financial risk for drug costs. Related terms: ASO, fully insured, self-funded.
Adherence #
the degree to which a patient takes their medications as prescribed, which can be influenced by pharmacy benefit management strategies, such as copay levels and prior authorization requirements. Related terms: Persistence, compliance, medication adherence.
Adjudication #
the process of reviewing and processing claims for reimbursement, which can be automated through pharmacy benefit management systems or manual through customer service representatives. Related terms: Claims processing, reimbursement, payment.
Advanced notice #
a requirement that patients or prescribers provide notice before filling a prescription for a specific medication, which can be used to manage utilization of high-cost or high-risk medications. Related terms: Prior authorization, step therapy, quantity limits.
Aggregate data #
combined data from multiple sources, such as claims data and pharmacy data, which can be used to analyze trends and patterns in medication use and costs. Related terms: Data analytics, reporting, research.
Aggregate spending #
the total amount spent on prescription medications by a plan or population, which can be influenced by pharmacy benefit management strategies, such as formulary design and copay levels. Related terms: drug spending, healthcare costs, budget.
AHIP #
America's Health Insurance Plans, a trade association that represents the health insurance industry, including pharmacy benefit management companies, and advocates for policies that support affordable and accessible healthcare. Related terms: Health insurance, pharmacy benefit management, advocacy.
AHRQ #
Agency for Healthcare Research and Quality, a government agency that conducts research and provides guidance on healthcare quality and safety, including issues related to pharmacy benefit management, such as medication errors and adverse events. Related terms: Healthcare quality, patient safety, research.
Algorithm #
a set of rules or processes used to make decisions or predict outcomes, such as claims processing or medication therapy management, which can be used in pharmacy benefit management to streamline operations and improve outcomes. Related terms: artificial intelligence, machine learning, data analytics.
Allergic reaction #
an adverse response to a medication or substance, which can be severe or life-threatening, and can be managed through pharmacy benefit management programs, such as medication therapy management. Related terms: adverse event, medication error, patient safety.
Allowable cost #
the maximum amount that a plan will reimburse for a particular medication or service, which can be influenced by pharmacy benefit management strategies, such as formulary design and copay levels. Related terms: reimbursement, payment, cost sharing.
Ambulatory care #
healthcare services provided in an outpatient setting, such as a physician office or clinic, which can include pharmacy services, such as medication therapy management. Related terms: outpatient care, inpatient care, healthcare settings.
Ancillary services #
supporting services that are provided in addition to primary healthcare services, such as pharmacy services, laboratory tests, or imaging services. Related terms: supporting services, healthcare services, ancillary benefits.
Anti #
inflammatory medications - a class of medications used to treat inflammatory conditions, such as arthritis or asthma, which can be managed through pharmacy benefit management programs, such as medication therapy management. Related terms: medication therapy management, disease management, chronic care.
Antibiotic stewardship #
a program or initiative aimed at promoting the appropriate use of antibiotics, which can be implemented through pharmacy benefit management programs, such as medication therapy management. Related terms: antibiotic resistance, infection control, patient safety.
Anticoagulant medications #
a class of medications used to prevent or treat blood clots, which can be managed through pharmacy benefit management programs, such as medication therapy management. Related terms: medication therapy management, bleeding disorders, stroke prevention.
Antidepressant medications #
a class of medications used to treat depression or other mental health conditions, which can be managed through pharmacy benefit management programs, such as medication therapy management. Related terms: medication therapy management, mental health, behavioral health.
Anti #
diabetic medications - a class of medications used to treat diabetes, which can be managed through pharmacy benefit management programs, such as medication therapy management.
Antihypertensive medications #
a class of medications used to treat high blood pressure, which can be managed through pharmacy benefit management programs, such as medication therapy management. Related terms: medication therapy management, cardiovascular disease, stroke prevention.
Antipsychotic medications #
a class of medications used to treat psychotic disorders, such as schizophrenia or bipolar disorder, which can be managed through pharmacy benefit management programs, such as medication therapy management.
Antiretroviral medications #
a class of medications used to treat HIV or AIDS, which can be managed through pharmacy benefit management programs, such as medication therapy management. Related terms: medication therapy management, infectious disease, HIV prevention.
Anti #
viral medications - a class of medications used to treat viruses, such as influenza or hepatitis, which can be managed through pharmacy benefit management programs, such as medication therapy management. Related terms: medication therapy management, infectious disease, public health.
APEC #
Academy of Managed Care Pharmacy's Pharmacy Economic Committee, a committee that provides guidance on pharmacy economics and pharmacy benefit management, including issues related to medication therapy management and formulary design. Related terms: pharmacy economics, formulary management, medication therapy management.
Appeal #
a request to reconsider a decision made by a pharmacy benefit management company, such as a denial of coverage for a particular medication. Related terms: grievance, complaint, appeals process.
ASO #
Administrative Services Only, a type of contract where a pharmacy benefit management company provides administrative services, such as claims processing and customer service, but does not take on financial risk for drug costs. Related terms: Fully insured, self-funded, administrative services.
ASP #
Average Sales Price, a method of pricing medications based on the average sales price of the medication, which can be used to determine reimbursement rates for medications. Related terms: pricing, reimbursement, medication costs.
AST #
Antimicrobial Stewardship Team, a team of healthcare professionals that work together to promote the appropriate use of antimicrobials, such as antibiotics, which can be implemented through pharmacy benefit management programs. Related terms: antimicrobial stewardship, infection control, patient safety.
Audit #
a review of claims or other data to ensure compliance with policies or regulations, such as audits of pharmacy claims to detect fraud or abuse. Related terms: compliance, audit, fraud detection.
Autism spectrum disorder #
a condition that affects communication and behavior, which can be treated with medications and therapies, and can be managed through pharmacy benefit management programs, such as medication therapy management. Related terms: medication therapy management, behavioral health, pediatric care.
Average wholesale price #
a method of pricing medications based on the average wholesale price of the medication, which can be used to determine reimbursement rates for medications.
AWP #
Average Wholesale Price, a method of pricing medications based on the average wholesale price of the medication, which can be used to determine reimbursement rates for medications.
Benefit design #
the structure and features of a health plan, including pharmacy benefit management, which can affect costs and outcomes for patients. Related terms: plan design, benefit structure, cost sharing.
Benefit management #
the process of managing benefits to ensure that they are delivered in a cost-effective and high-quality manner, which can include pharmacy benefit management. Related terms: utilization management, care management, cost management.
BIPA #
Biologics Price Competition and Innovation Act, a law that regulates the approval and marketing of biologic medications, which can affect pharmacy benefit management programs. Related terms: biologics, biosimilars, FDA approval.
BIOSIM #
Biosimilar, a type of biologic medication that is similar to an existing biologic medication, but is not identical, which can be used to treat various conditions, such as cancer or rheumatoid arthritis. Related terms: biologics, biotechnology, medication therapy management.
BIPA #
Biologics Price Competition and Innovation Act, a law that regulates the approval and marketing of biologic medications, which can affect pharmacy benefit management programs.
Block grant #
a type of funding where a lump sum of money is provided to a state or organization to fund a specific program or service, such as a pharmacy benefit management program. Related terms: funding, grant, block grant.
BMQ #
Board of Pharmacy Specialties, a board that certifies pharmacists in various specialties, such as pharmacy benefit management, which can demonstrate expertise in a particular area of pharmacy practice. Related terms: certification, specialization, pharmacy practice.
BPC #
Board of Pharmacy Specialties, a board that certifies pharmacists in various specialties, such as pharmacy benefit management, which can demonstrate expertise in a particular area of pharmacy practice.
Brand name medication #
a type of medication that is manufactured by a specific company and is protected by a patent, which can be more expensive than generic or alternative medications. Related terms: generic medication, alternative medication, patent protection.
Budget impact analysis #
a method of analyzing the financial impact of a particular policy or program, such as a pharmacy benefit management program, which can help decision-makers understand the costs and benefits of different options. Related terms: cost analysis, budgeting, financial planning.
CAHPS #
Consumer Assessment of Healthcare Providers and Systems, a survey that measures patient satisfaction with healthcare services, including pharmacy services, which can be used to evaluate the quality of care provided by health plans and pharmacy benefit management companies. Related terms: patient satisfaction, quality of care, health plan performance.
Cap itation #
a method of paying providers a fixed amount per patient per month, regardless of the number or type of services provided, which can be used to manage costs and improve quality of care. Related terms: payment methods, capitation, risk sharing.
Care coordination #
the process of coordinating care among different providers and settings, which can improve quality of care and reduce costs, and can be facilitated through pharmacy benefit management programs. Related terms: care management, coordination of care, transitions of care.
Care management #
a process of managing care to improve quality and reduce costs, which can include pharmacy benefit management, case management, and disease management. Related terms: utilization management, care coordination, cost management.
Case management #
a process of managing care for individual patients with complex or high-cost conditions, which can include pharmacy benefit management, coordination of care, and patient education. Related terms: care management, disease management, patient education.
CBER #
Center for Biologics Evaluation and Research, a division of the FDA that regulates biologic medications, including vaccines and blood products, which can affect pharmacy benefit management programs. Related terms: biologics, regulation, FDA approval.
CDC #
Centers for Disease Control and Prevention, a government agency that works to protect public health and safety, including issues related to pharmacy benefit management, such as medication errors and adverse events. Related terms: public health, safety, prevention.
CDER #
Center for Drug Evaluation and Research, a division of the FDA that regulates drug products, including prescription and over-the-counter medications, which can affect pharmacy benefit management programs. Related terms: drugs, regulation, FDA approval.
Centers for Medicare and Medicaid Services #
a government agency that administers Medicare and Medicaid programs, including pharmacy benefit management programs, which can affect coverage and reimbursement for medications. Related terms: Medicare, Medicaid, government programs.
Certification #
the process of verifying that a pharmacy or pharmacist meets certain standards or requirements, such as certification in pharmacy benefit management, which can demonstrate expertise in a particular area of pharmacy practice. Related terms: credentialing, certification, licensure.
Channeling #
the process of directing patients to specific pharmacies or providers for care, which can be used to manage costs and improve quality of care, and can be facilitated through pharmacy benefit management programs. Related terms: network management, provider management, care coordination.
Chemotherapy #
a type of cancer treatment that uses medications to kill cancer cells, which can be managed through pharmacy benefit management programs, such as medication therapy management. Related terms: cancer treatment, oncology, medication therapy management.
CHPA #
Consumer Healthcare Products Association, a trade association that represents the interests of companies that manufacture and distribute over-the-counter medications and other healthcare products, which can affect pharmacy benefit management programs. Related terms: over-the-counter medications, healthcare products, trade association.
Chronic care #
ongoing care for conditions that are long-term or permanent, such as diabetes or heart disease, which can be managed through pharmacy benefit management programs, such as medication therapy management. Related terms: disease management, case management, care coordination.
Claim #
a request for reimbursement for a medication or service that has been provided to a patient, which can be processed through a pharmacy benefit management system. Related terms: claims processing, reimbursement, payment.
Claims processing #
the process of reviewing and processing claims for reimbursement, which can be automated through pharmacy benefit management systems or manual through customer service representatives. Related terms: adjudication, reimbursement, payment.