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Below are definitions of some general terms used to reference pharmacy benefits. Please login to Navi-Gate for Members for your specific plan information.

Benefit Maximum:
The total amount the plan sponsor or employer will pay on the pharmacy benefit. It is usually within a given timeframe. For example, a plan sponsor or employer may pay up to $10,000 per member over one year for prescription drugs. If the cost of the prescription drugs reaches $10,000 within a year, the member is responsible for 100% of the cost of all prescriptions for the rest of the year.

Coinsurance:
A fixed percentage of the cost of each prescription that the member needs to pay. Coinsurance can be applied to all drugs or certain types of drugs. For example, a member pays 30% of the cost of a brand drug.

Copayment:
A fixed dollar amount for each prescription that is paid by the member. The copayment may vary according to the type of drug. For example, $10 brand/$6 generic copayments.

Deductible:
The member pays the whole cost of each prescription, up to a specified dollar amount. Once that dollar amount is reached, the prescription drug benefit takes effect. For example, a member may be required to pay 100% of all prescription costs up to $1,000. After that, the member only pays a coinsurance of 25% when he or she fills a prescription.

Drug Formulary or Preferred Drug List:
Covered drugs that are covered by the pharmacy benefit plan.

Drug Utilization Review:
A process done by Navitus where a member’s prescription drug use is looked at to find situations where we can improve the member's health and drug costs.

Excluded Product:
This is a drug that is not listed on the formulary. The drug is not available at a reduced copayment or coinsurance amount under normal conditions.

Grievance Process:
The process by which members may appeal coverage decisions.

Mail Order Pharmacy Services:
A service that allows members to obtain maintenance drugs without physically visiting a pharmacy. Mail order often allows members to get more than a one-month supply of medication at one time. Navitus uses an outside vendor for mail services. Please login to Navi-Gate for Members for more information about your mail order service.

Mandatory Generic Substitution:
This is a program where members have to use generic drug products when available. Members who choose to use the brand product rather than the generic drug product have to pay a higher copayment, a greater coinsurance amount, or the full price of the drug.

Multi-Tier Benefit Plan:
The amount a member must pay for a drug product is determined by what “tier” the medication has been placed into. Multi-tier benefit plans generally have between two and five tiers.

Out-of-Pocket Maximum:
A fixed dollar limit on a member’s out-of-pocket expenses. After reaching the limit, drugs can be filled at a lower cost or at zero cost to the member. The amount owed depends on the member’s benefit structure. All drugs or only certain types of prescriptions a member receives may go toward the out-of-pocket maximum. For example, all copayments/coinsurance may be applied to an out-of-pocket maximum of $200 for an individual and $400 for a family. Once the person or family pays a total of $200 or $400 for prescriptions, all new prescriptions are dispensed at zero cost to the member.

Pharmacy Benefit Manager (PBM):
A pharmacy benefit manager (PBM) is an administrator of a prescription drug program. A PBM is primarily responsible for processing and paying prescription drug claims. Technically, PBMs are private firms that contract with employers, insurers and public and private plan sponsors, but HMOs, managed care organizations, state governments, etc. also can function as PBMs.

Pharmacy Benefit Plan:
Benefit plan or design determines what drugs the plan does and does not cover, in what quantities, from what pharmacies and other drug sources, and at what out-of-pocket cost to members.

Pharmacy Network:
A group of pharmacies with which a PBM contracts to provide pharmacy services to its members.

Prior Authorization:
The process where specified drugs on the formulary require extra review by clinical staff before they are covered by the benefit plan.

Specialty Pharmacy Services:
Pharmacy services associated with the delivery of high-cost prescription drugs to treat specific conditions. These drugs often require special handling such as refrigeration. These services may be provided by a vendor that contracts with Navitus. Please login to Navi-Gate for Members for more information about your specialty pharmacy service.