Managed Care Glossary of Terms

Formulary
An approved list of prescription drugs; a list of selected pharmaceuticals and their appropriate dosages felt to be the most useful and cost effective for patient care. Organizations often develop a formulary under the aegis of a pharmacy and therapeutics committee. In HMOs, physicians are often required to prescribe from the formulary. See also Drug Formulary.

Fraud
Intentional misrepresentations which can result in criminal prosecution, civil liability and administrative sanctions.

Freedom of Choice
A principle of Medicaid which allows a recipient the freedom to choose among participating Medicaid providers.

Funding Level
Amount of revenue required to finance a medical care program.

Funding Method
System for employers to pay for a health benefit plan. Most common methods are prospective and / or retrospective premium payment, shared risk arrangement, self-funded, or refunding products. See also Self-insured, Risk and Premium.