In the pharmacy we notice that people become very confused when it comes to the language health care providers use when discussing payment. Hopefully this post will help clear up some confusion…
Co-Pay: A co-pay is the price that you (the patient) is responsible for paying at the pharmacy in order to pick up your medication. This is not set by the pharmacy. The pharmacy bills your insurance through the internet (over secured lines) and the insurance tells the pharmacy the amount you owe as a co-pay.
Deductible: Deductibles can be confusing because some plans have them and others don’t. The pharmacy deductible is just like your car insurance or home insurance deductible; it is the amount you need to pay up front before the insurance kicks in and pays the rest.
Premium: The premium can be explained again by using the home insurance scenario; think of it as your monthly mortgage or rent payment. The premium is the monthly amount that you must pay in order to have the insurance. This is often automatically deducted from payroll.
Prior Authorizations: A term used by insurance companies stating that before the insurance company will allow a medication (or procedure in some cases) to be filled, the insurance company must be provided with information such as diagnosis ( ICD-10 codes), other medications that have been tried and failed, directions for use, etc. The questions will vary based on the medication. Which medications will require a prior authorization (or PA as we say in the pharmacy) will be found in the formulary or by contacting your insurance’s customer service. Neither the pharmacy nor the doctor know up front if medication will require a PA and the PA only medications vary per plan. Only through trial and error do medical/pharmacy staff become familiar with the products that require PA on the various insurance plans.
Formulary: A formulary is a list of all the medications covered by your insurance plan. You may request a copy of the formulary by contacting your plan’s customer service number (usually located on the back of the card). The formulary will explain which medications are covered and the co-pay amount often based on a tiered system. Each plan has medications that are preferred; these are usually less expensive generics. Non-preferred meds may have higher co-pays or simply just not be covered at all. I would suggest always taking a copy of the formulary to your appointments. Neither the pharmacies nor the doctors have copies of formularies. Call the 1-800 customer service number on your insurance card to request a copy of the formulary. You may also look online at your insurance’s website to see if the list has online access.
**The formulary can be a source of aggravation especially regarding food allergies. The insurance may prefer one epinephrine auto injector but YOU may prefer another. Certain products (as designated by NDC numbers) may be covered while others may not. However, if you happen to be allergic to the inactive ingredients of the preferred product there may be lots of hoops to jump through to get your safe/allergy free medication covered; probably a PA (prior authorization) will be required.
Preferred Pharmacies and Mail-Order Pharmacies: Another trend in the insurance world involves using preferred pharmacies or mail-order pharmacies. Pharmacies contract deals with insurance companies in order to provide service to their patients. If an agreement is not made, the insurance company will not pay for medications filled at the pharmacy ( a good example of this was Walgreens-Express scripts fall out of 2012.). Additionally, insurance companies may only allow a one month supply to be filled at a time or they may only allow a certain number of months (often 3) of fills at a retail location before mandating that the patient use their approved mail order facility.
A lot of companies that also have pharmacies as part of their business plans do this . Wal-Mart, CVS and Kroger both want their employees to use the pharmacies located in their stores. What this means is that the patients MUST use the preferred pharmacies located in the preferred store for the best pricing and terms.
**A mail order pharmacy could be problematic while dealing with food allergies. They can be hard to contact and there is no face to face meeting options to discuss allergens or request package inserts.