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  • Pharmacy Services > Pharmacy Benefit Designs

    We offer several pharmacy benefit designs, which determine coverage of certain drugs as well as copay amounts for our members. Each pharmacy benefit plan is subject to regulations, state and federal laws, clinical guidelines, a prior approval process and quantity limitations, unless otherwise specified. Covered pharmacy services must be listed on the Commercial or Medicare formularies, unless the member's benefit includes nonformulary/nonpreferred drugs. (The drug formularies may describe drugs as either "formulary" or "preferred" or "nonformulary" or "nonpreferred.")

    Generic Versus Brand Medications

    Our prescription benefit design is formatted into three categories of prescription medications. Due to the number of drugs on the market, the continuous introduction of new drugs, new applications of existing drugs and new information regarding safety, the design is continually revised.

    Tier 1 - Preferred Generic Drugs

    Generic drugs (tier 1) are chemically identical to brand drugs, but are priced at a fraction of the cost and offer an excellent value to the member. To gain FDA approval, a generic drug must:

    • Contain the same active ingredients as the branded drug (inactive ingredients may vary).
    • Be identical to the brand drug in strength, dosage form, safety and route of administration.
    • Be of the same quality, performance characteristics and use indications.
    • Be manufactured under the same strict standards of the FDA's good manufacturing practice regulations required for branded products.

    If a generic is chosen, the practitioner must leave blank the "DAW" (Dispense As Written) box. This way, the pharmacist will fill the prescription with the generic drug.

    Tier 2 - Preferred Brand Drugs

    We have identified a listing of formulary brand drugs (tier 2) available at a lower copay than drugs in the nonpreferred drug category. This generally happens when there are several equally effective, FDA-approved brand name drugs by different manufacturers for treatment of a particular condition. (Some plans also include single source generics in Tier 2.)

    Tier 3 - Nonpreferred Brand and Generic Drugs

    Drugs in the nonpreferred category (tier 3) generally have a similar, more cost effective drug available in either the preferred generic drug category (tier 1) or the preferred brand drug category (tier 2).

    Most new FDA-approved drugs are initially placed in tier 3 for about excluded from coverage for up to six months until the P&T Committee reviews them for safety, efficacy and clinical comparisons.

    Copay Designs

    The following table outlines the more common benefit structures with regards to copayment.

    Copay Designs
    Benefit Levels Benefit Structure

    Single Tier Copay (with or without a deductible)

    • The same copay for covered generic, preferred brand and nonpreferred brand or generic drugs

    Two-Tier Copay (with or without a deductible)

    • A lower copay for covered generic drugs
    • A higher copay for covered preferred brand and nonpreferred brand or generic drugs

    Three-Tier Copay (with or without a deductible)

    • A lower copay for covered generic drugs
    • A middle copay for covered preferred brand drugs
    • A higher copay for covered nonpreferred brand or generic drugs

    Percentage Coinsurance (with or without a deductible)

    • Coinsurance is based on a defined or set percentage of the actual cost for covered generic, preferred brand and nonpreferred brand or generic drugs

    Members must pay a copay and/or deductible (as specified on their ID card) for each supply of medicine received at a participating pharmacy or through an affiliated mail order pharmacy.

    Note: EmblemHealth Medicaid members cannot be denied health care services based on their inability to pay the copay at the time of service. However, providers may bill these members or take other action to collect the owed copay amount.

    Prior approval and/or quantity limits apply to certain medications. Please read the Nonpreferred Drugs section of this chapter for more details.

    Depending on the specifics of a member's pharmacy plan, a 90-day supply mail order prescription drug service may be available. Please read the Home Delivery Pharmacy Program section in this chapter for more information.

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    Glossary terms found on this page:

    An activity of EmblemHealth or its subcontractor that results in:

    • Denial or limited authorization of a service authorization request, including the type or level of service
    • Reduction, suspension or termination of a previously authorized service
    • Denial, in whole or in part, of payment for a service
    • Failure to provide services in a timely manner
    • Failure of EmblemHealth to act within the time frames for resolution and notification of determinations regarding complaints, action appeals and complaint appeals

    A health insurance product offered by a health plan company that is defined by the benefit contract and represents a set of covered services. Also called a health benefit plan.

    A prescription drug that has been patented and is only available through one manufacturer.

    A percentage of the allowed charge that is payable by the member, not EmblemHealth, for covered services rendered by an out-of-network provider. After the member has met his or her deductible, EmblemHealth will pay a percentage of the allowed charge for those covered services in accordance with the member's benefit program. The member is responsible to pay the remaining percentage of the allowed charge. This remaining percentage is the coinsurance charge.

    The fixed dollar amount members must pay for certain covered services. It is generally paid to a network provider at the time the service is rendered.

    The fixed dollar amount members must pay for certain covered services. It is generally paid to a network provider at the time the service is rendered.

    A portion of eligible expenses that an individual or family must pay during a calendar year before EmblemHealth will begin to pay benefits for covered services.

    A list of preferred pharmaceutical products that health plans, working with pharmacists and physicians, have developed to encourage greater efficiency in the dispensing of prescription drugs without sacrificing quality. Also called a drug formulary.

    A drug that is the pharmaceutical equivalent to one or more brand name drugs. Such generic drugs have been approved by the Food and Drug Administration as meeting the same standards of safety, purity, strength and effectiveness as the brand name drug.

    A card which allows the subscriber to identify himself or his covered dependents to a provider for health care services.

    An organization comprised of individual physicians or physicians in group practices that contracts with the managed care organization on behalf of its member physicians to provide health care services. Also called an Independent Practice Association.

    Specific circumstances or services listed in the contract for which benefits will be limited.

    Acronym for Medicare Advantage. An alternative to the traditional Medicare program in which private plans run by health insurance companies provide health care benefits that eligible beneficiaries would otherwise receive directly from the Medicare program.

    A jointly funded federal and state program that provides hospital and medical coverage to the low-income population and certain aged and disabled individuals.

    A nationwide insurance program for the disabled and people age 65 and over, created by the 1965 amendments to the Social Security Act and operated under the provisions of the Act. It consists of two separate but coordinated programs, Part A and Part B.

    An individual and each of his or her eligible dependents, including Medicare beneficiaries who are enrolled or participate in a benefit program and who are entitled to receive covered services from the practitioner pursuant to such benefit program and the terms of the practitioner's agreement.

    A written order or refill notice issued by a licensed medical professional for drugs available only through a pharmacy.

    The process of obtaining advanced approval of coverage for a health care service or medication. The request for services is reviewed to assess medical necessity and appropriateness of elective hospital admissions and non-emergency outpatient services before the services are provided. Also called pre-authorization or pre-certification or pre-determination.

    A medical practitioner or covered facility recognized by EmblemHealth for reimbursement purposes. A provider may be any of the following, subject to the conditions listed in this paragraph:

    • Doctor of medicine
    • Doctor of osteopathy
    • Dentist
    • Chiropractor
    • Doctor of podiatric medicine
    • Physical therapist
    • Nurse midwife
    • Certified and registered psychologist
    • Certified and qualified social worker
    • Optometrist
    • Nurse anesthetist
    • Speech-language pathologist
    • Audiologist
    • Clinical laboratory
    • Screening center
    • General hospital
    • Any other type of practitioner or facility specifically listed in the member's Certificate of Insurance as a practitioner or facility recognized by EmblemHealth for reimbursement purposes

    A provider must be licensed or certified to render the covered service. The covered service must be within the scope of the Provider's license or certification.


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