CVS Caremark Corporate

Acute: Refers to intense, short-term symptoms or illnesses that either resolve or evolve into long-lasting, chronic disease manifestations.

Beneficiary: An individual who is either using or eligible to use health insurance benefits under an insurance contract.

Brand Name Drug: A trademarked name of the drug that appears on the package label.

Caremark Mail Service: Caremark's Mail Services Pharmacy. Visit Members' Services to learn more about ordering your prescriptions through the mail.

Capitation: A reimbursement system in which healthcare providers receive a fixed fee for every patient served, regardless of how many or few services the patient uses. For example, an insurer negotiates to pay a Physician $100.00 a month to care for each of its subscribers, regardless of the amount of services each subscriber uses.

Claim: A formal demand for reimbursement of expenses covered by an insurance policy. Insured individuals may submit claims to health plans for reimbursement.

Clinical: Refers to physical signs and symptoms directly observable in the human body.

Coinsurance: After a deductible is paid, this provision requires the patient to pay for a certain percentage of any remaining medical bills, usually 20 percent.

Compliance: Adherence by a patient to a specific drug dosage or treatment instruction.

Cost Containment: The process by which companies implement new programs or modify existing programs to continuously monitor costs so as to better manage the costs to their business. In the case of pharmacy benefits, this usually refers to providing similar acting drugs at lower costs. For example, switching to Allegra® from Claritin®.

Copay: The copay or copayment is the amount that the insured member must pay for a prescription. The copay amount may be different for a brand drug versus a generic drug.

Drug Benefit: A benefit normally included with a medical plan that allows prescription medicine to be obtained using a benefit card. The member normally pays only a small copayment or coinsurance amount for each prescription obtained.

Diagnosis: The identification of a disease or condition through analysis and examination by a physician.

Drug Interactions: Incidents that occur in the body when a medication is affected by another medication.

Drug Regimen: The approved directions for when and how to take a specific medication.

Eligibility Period: Describes the time during which potential members of a health insurance plan can enroll. Also can be a period under a major medical policy when reimbursable expenses can be accrued. Eligibility requirements are guidelines outlined by insurance companies to determine which individuals can be covered under a group insurance plan.

Enrollment: The number of members in a Health Maintenance Organization (HMO). Also the process by which an HMO signs up individuals or groups as subscribers.

FMP (CVS Caremark Formulary Management Program): FMP is an information system that manages pharmaceutical utilization at retail and mail pharmacies through facilitating clinical communications between the patient, physician, and pharmacist.

Fee-For-Service: The traditional method for financing healthcare in which a provider is paid for each service rendered. Fee-for-service is the system of payment used by conventional indemnity health plans.

Formulary: A specific set of drugs chosen by hospitals, managed care organizations, insurers or state Medicaid programs as those routinely available to patients under a specific program.

Generic Drug: A commonly used term to identify non-brand name drugs that are sold. Typically, generic drugs are sold at a lower cost than brand name drugs. A generic drug is a pharmaceutical equivalent to another drug and has identical strength, dosage form, and concentration.

HMO: A Health Maintenance Organization is a health plan that receives a discount from hospitals, physicians, and other providers based upon the volume of patients each provides. The HMO's members receive comprehensive preventative, hospital, and medical care from specific medical providers who have agreed upon pre-set rates. Members select a Primary Care Physician or medical group from the HMO's list of affiliated doctors and generally have no deductibles or claim forms. Members make a small co-payment, usually between $3 and $20. Some HMO's have capitated contracts with providers and some pay providers on a single discounted fee-for-service basis.

Maintenance Drug: Any prescription drug that requires more than a 34-day supply. Most are used on a steady, year-round basis for a long-term illness.

Member: A person receiving the benefit coverage to whom the ID card is issued. A member can also be referred to as "insured", "covered member", or "plan member".

Member ID: This number is assigned to serve as the identification number for the member. This number is usually indicated on your prescription ID card.

Networks: Organizations that are linked through contractual or ownership relationships. Many health plans consider themselves "network developers" because they contract with physicians and hospitals on behalf of their customers, employers, and carriers.

OTC: Over the Counter indicates pharmaceutical products or drugs that do not require a prescription.

Out-of-Pocket Costs: The portion of payments for health services that must be paid by the enrollee, including co-payments, co-insurance, or deductibles.

Payer: The party or group an individual contracts with to cover healthcare services, unless the patient is paying out-of-pocket. This is sometimes referred to as a "third party payer".

PBM (Prescription Benefit Manager): PBM's are companies that administer and manage the prescription benefit for health plan sponsors. CVS Caremark is a PBM.

Pharmacy Network: This term refers to all of the pharmacies that participate in a particular network. To utilize their prescription coverage, a member must have their prescriptions filled at a network pharmacy.

Plan Sponsor: The company or organization that assumes financial responsibility for an insured group. CVS Caremark's customers are Plan Sponsors.

Prescribed Drug: A drug which has been prescribed by an authorized physician for a patient. A licensed pharmacist must fill the prescription at a pharmacy.

Renewal: The term used when a prescription has exhausted all of its refills and requires the physician to write a new prescription. This is considered renewing a prescription.

Self-Insurance: A type of insurance in which employers, usually with 100 employees or more, decide to retain the cost risk component of providing health insurance to their own employees rather than contract with an insurance company. Usually, these employers hire a third-party administrator to set up and administer the program.

Side Effects: Any unwanted physical or mental state caused as a result of using a drug; also called an "adverse effect"

Utilization Review: Process in which either an internal or external agency reviews patterns of utilization against norms or policies established by the organization or set by health plans.