Blue Cross Blue Shield of Michigan Community Blue PPO

Glossary Of Terms

Approved Amount - The BCBSM Blue Shield of Michigan maximum payment level or the provider's billed charge for the covered service, whichever is lower. Deductibles and copays are deducted form the approved amount. For prescription drugs, the approved amount is the lower of the billed charge or the sum of the drug cost plus the dispensing fee (and incentive fee, if applicable) for a covered drug or service. The drug cost and the dispensing fee are set according to our contracts with the pharmacy. The approved amount is not reduced by rebates or other credits received directly or indirectly from the drug manufacturer. Copays that may be required of you are subtracted from the approved amount before we make our payment.

Blue Cross and Blue Shield Association (BCBSA) - An Association of independent Blue Cross and Blue Shield Plans that licenses individual Plans to offer health benefits under the Blue Cross and Blue Shield name and logo. The Association establishes uniform financial standards but does not guarantee an individual Plan's financial obligations.

Blue Cross and Blue Shield of Michigan (BCBSM) - A non-profit, independent company, one of many individual Plans located throughout the United States committed to providing affordable healthcare. It is managed and controlled by a board of directors comprised of a majority of community based public and subscriber members.

Benefit - Coverage for healthcare services available in accordance with the terms of your healthcare coverage.

Coordination of Benefits (COB) - A program that coordinates your health benefits when you have coverage under more than one group health plan.

Copayment - The designated portion of the approved amount you are required to pay for covered services. This can be either a fixed dollar or percentage amount.

Covered Services - Services, treatments or supplies identified as payable in your certificate and riders. Covered services must be medically necessary to be payable, unless otherwise specified.

Deductible - A specified amount that you pay during each benefit period for services before your plan begins to pay.

Illustrative Rate - The monthly premium, based upon the group's experience and benefit design for single, two person, and family coverage.

Maximum - The annual total required for in-network and out-of-network expenses paid out-of-pocket.

Member - Any person eligible for healthcare services under your plan. This includes you as the subscriber and any of your eligible dependents listed in Blue Cross Blue Shield of Michigan membership records.

Network Pharmacies - Pharmacies that have been selected for participation and have signed agreements to provide covered drugs through the Preferred Rx network (in Michigan ) or Medco Health Solutions network (outside Michigan ). Network pharmacies have agreed to accept the approved amount as payment in full for covered drugs or services provided to covered members.

Network Providers - Hospitals, physicians and other licensed facilities or healthcare professionals who have contracted with Blue Cross Blue Shield to provide services to members enrolled in a BCBSM Preferred Provider Organization (PPO) or Point of Service (POS) healthcare plan. Network providers have agreed to accept our approved amount as payment in full for covered services provided under these plans.

Non-Network Pharmacies - Pharmacies that are not part of the Preferred Rx (in Michigan ) or Medco Health Solutions (outside Michigan ) networks. Non-network pharmacies have not agreed to accept the approved amount as payment in full for covered drugs or services provided to covered members.

Non-Participating Providers - Providers that have not signed participation agreements with Blue Cross Blue Shield of Michigan agreeing to accept Blue Cross Blue Shield of Michigan payment as payment in full. However, non-participating professional (non-facility) providers may agree to accept the Blue Cross Blue Shield of Michigan approved amount as payment in full on a per claim basis.

Out-of-Network Service - Under BCBSM's PPO plans, an out-of-network service is a service not performed or referred by a PPO network provider. Under BCBSM's Point of Service (POS) plans, an out-of-network service is a service not performed or authorized by the member's primary care physician. This may also include services performed by another POS network provider, if authorization was not provided by the member's primary care physician.

Participating Providers - Providers that have signed agreements with Blue Cross and Blue Shield to accept the Blue Cross Blue Shield of Michigan-approved amount for covered services as payment in full.

Patient - The subscriber or eligible dependent (member) who is awaiting or receiving medical care and treatment.

Per Claim - A provider's acceptance of the Blue Cross Blue Shield-approved amount as payment in full for a specific claim or procedure.

Provider - A person (such as a physician) or a facility (such as a hospital) that provides services or supplies related to medical care.

Routine Service - Procedures or tests that are ordered for a patient without direct relationship to the diagnosis or treatment of a specific disease or injury.

Subscriber - The person who signed and submitted the application for Blue Cross Blue Shield of Michigan coverage.

Custom Drug Formulary

Blue Cross Blue Shield of Michigan's custom formulary is a list of FDA-approved prescription medications reviewed by the Blue Cross Blue Shield of Michigan Pharmacy and Therapeutics Committee. This formulary is to be used by members with a three tier copay benefit design.

Tiers within the Formulary are categorized as follows:

Generic (Tier 1)

Tier one drugs are generic drugs made with the same active ingredients, available in the same strengths and dosage forms and administered in the same way as equivalent brand-name drugs. Generic drugs have a proven record of effectiveness. They also require the lowest copayment, making them the most cost-effective option for the treatment.

Formulary Brand (Tier 2)

Tier two drugs are brand-name drugs included in the Custom formulary. Formulary options are also safe and effective, but require a higher copayment.

Non-Formulary Brand (Tier 3)

Tier three drugs are brand-name drugs not included in the Custom Formulary. You will pay the highest copayment for these drugs. However, generic equivalents are similar drugs with generic equivalents or formulary brand-name alternatives are available for many of these drugs.

Benefits Office
06/02/06