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Pharmaceutical Benefits

Under State Medical


Assistance Programs

2002

Published by the
National Pharmaceutical Council, Inc.
1894 Preston White Drive
Reston, VA 20191-5433

©2003 by the National Pharmaceutical Council


This compilation of data on State Medical Assistance Programs (Title XIX)
presents a general overview of the characteristics of State programs, together
with detailed information on the pharmaceutical benefits provided. The data
collection effort covers all States with Medicaid programs and the District of
Columbia.

Information for this compilation was acquired from multiple sources, including a
survey of Medicaid prescription drug programs administered for the National
Pharmaceutical Council by Muse & Associates, Washington, DC with assistance
from Compensation Solutions, LLC and StateScape. While we have checked all
secondary data in the book for consistency relative to the original source, we
have not validated the original data reported by the Centers for Medicare and
Medicaid Services (CMS) and other organizations.

The data were compiled and the book prepared for publication by Donald Muse,
Ph.D., David Goldenberg, Ph.D., Anne Marie Hummel, Steven Heath, M.P.A.,
Stanley Weintraub, C.P.A, Daniel B. Gurley, M.P.A., Errica Philpott, Liz Segall,
and Tiffany Crawford of Muse & Associates. Paul Gavejian and Philip Farber
of Compensation Solutions prepared and conducted the 2001 survey. James
Elliott at StateScape supervised the compilation of information on State officials,
State professional associations, and expanded drug programs for elderly and
disabled beneficiaries. Gary Persinger and Kimberly Dietrich of the National
Pharmaceutical Council provided valuable input and support, including the
conceptualization of the methodology used in Section 1.
Pharmaceutical Benefits 2002

INTRODUCTION

The year 2002 edition of Pharmaceutical Benefits under State Medical


Assistance Programs marks the 37th year that the National Pharmaceutical
Council (NPC) has published this unique source of information on pharmacy
programs within the State Medical Assistance Programs (Title XIX). Over the
years, this “Medicaid Compilation” of statistics has become a standard reference
in government offices, research libraries, consultancies, the pharmaceutical
industry, and numerous businesses.

The data used to create each edition of the Compilation are assembled from
many sources. The “Medicaid Compilation” incorporates information on each
State pharmacy program from an annual NPC survey of State Medicaid program
administrators and pharmacy consultants, statistics from the Centers for
Medicare and Medicaid Services (CMS), and information from other Federal
agencies and other organizations. Each year, finding and compiling current,
relevant information for inclusion in the Compilation presents a challenge.
Updating the data for the 2002 Compilation was no exception.

For example, in previous versions of the Compilation, a main data source was
the HCFA-2082, an annual report providing State-reported data on Medicaid
population characteristics, service utilization, and expenditures during a Federal
fiscal year. Historically, States summarized and reported data processed through
their Medicaid claims processing and payment operations unless they opted to
participate in the Medicaid Statistical Information System (MSIS) project. Prior
to Federal fiscal year 1999, MSIS was a voluntary program where States
participating in the MSIS project provided data tapes from their claims
processing systems to CMS in lieu of the HCFA-2082 tables. In accordance with
the Balanced Budget Act of 1997, all claims processed on or after January 1,
1999, had to be submitted electronically in the MSIS format and the HCFA-2082
ceased to be a Federal reporting requirement.

This new requirement resulted in major difficulties in the submission of data to


CMS by some States and in the preparation of summary tables for FY 1999 and
later by CMS. At press time, CMS has released MSIS data for 2000, which are
included in this year’s Compilation. However, CMS has only released MSIS
data for 2001 for a subset of states, and partial data are included in Appendix B
as appropriate.

The U.S. Bureau of the Census has also lagged behind its normal schedule for
release of annual population and demographic data due to data processing
problems. Although a few tables showing total population counts by State for
2001 are available, the bulk of the more detailed data for 2001 have yet to be
released. Discussions with Census Bureau staff indicate that the additional 2001
data will not become available until sometime during 2003, at the same time that
data for 2002 are scheduled for release.

Data availability and the challenges of compiling relevant information have led
us to examine all available data sources and to select, from among the
alternatives, those data that, in our opinion, best represent the current snapshot of

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Pharmaceutical Benefits 2002

State characteristics, especially their Medicaid programs. For example, on


occasion, we have substituted more recent data from the CMS-64 Report for
older MSIS data. However, the payment information presented in the MSIS and
CMS-64 Reports differ slightly due to differences in the data captured. The
primary differences result from the fact that disproportionate share hospital
(DSH) payments and Medicare premium payments are reported in the CMS-64
Reports but do not appear in the MSIS data. Thus, differences in national
aggregate and individual State data will occur between the two sources.
However, this has resulted in some mixing and matching of data from differens
sources and/or years. To assist users of the Compilation, the data sources used
in each table have been carefully footnoted.

In order to structure the material in a more logical manner, the reader will note
there has been some reorganization of the sequence of topics from previous
versions of the Compilation. For example, in order to provide a more complete
introduction of the Medicaid program to the reader, the overview of the
Medicaid program has been moved from Section 4 to Section 2. Also, since the
expanded drug programs are in addition to the standard Medicaid benefit
provided by each state, this information now appears as Section 6, located after
the profiles.

In order to give a better understanding of the content of the “Medicaid


Compilation,” the information contained in this version of the book is
summarized below by section:

• Section 1: Reports on a methodology for identification of Medicaid chronic


illness propulations for case and disease management programs.

• Section 2: Contains an overview of the Medicaid program, details about


Medicaid managed care enrollment, including a breakdown by plan type and
enrollment by plan type and a synopsis of 1915(b) waivers and 1115
demonstrations.

• Section 3: Consists of sociodemographic statistics, by age, race, insurance,


income, and employment, for the fifty States and the District of Columbia
for calendar year 2001. Additionally, a description of the Medicaid certified
facilities in each State, including the number of hospitals, skilled nursing
facilities, and intermediate care facilities for the mentally retarded (ICFs-
MR), home health agencies, and rural health clinics are presented.

• Section 4: Provides Medicaid pharmacy program characteristics, drawn


largely from the 2002 NPC annual survey of State pharmacy program
administrators. In addition, this section provides Medicaid eligibility
statistics from CMS for fiscal year 2000 and program expenditure data for
fiscal years 2000 and 2001. Medicaid pharmacy programs are characterized
by estimates of total expenditures, drug payments, drug benefit design, and
pharmacy payment and patient cost sharing.

• Section 5: Contains detailed profiles of the States’ Medicaid pharmacy


programs. This section contains a description of medical assistance benefits
and eligibles, drug payments and recipients, benefit design, pharmacy
payment and patient cost sharing, use of managed care, and State contacts.

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• Section 6: Profiles the “expanded” drug programs in States that are


providing pharmaceutical coverage or discounts to the elderly and/or
disabled persons.

The book also contains a series of appendices. Appendix A features a list of


State contacts, CMS regional offices and Medicaid program personnel.
Appendix B provides a national level summary on total Medicaid program
recipients by type of service for FY 1999 and FY 2000 and data on total number
of drug recipients for each State and the nation as a whole for the period 1996-
2000. Appendix C provides the current Medicaid drug rebate law. Appendix D
contains the list of CMS upper limits on multiple source products. Appendix E
is a glossary and list of acronyms.

NPC gratefully acknowledges the cooperation and assistance of the many State
and Federal program officials and their staffs. With their cooperation, we were
able to achieve an 82 percent response rate to the 2002 Survey. Unfortunately,
not all States were able to submit revised/updated information. In such
instances, we have incorporated the most recently available data from other
sources. However, for these States, much of the information may reflect data
that have been presented in previous versions of the Compilation.

We would also like to thank Muse & Associates and their subcontractors,
Compensation Solutions and StateScape, for administering the survey, compiling
the information, and analyzing the data. We hope you continue to find the
information contained in this compilation useful and, as always, we welcome
your suggestions and comments.

Gary Persinger
Vice President, Health Care Systems
National Pharmaceutical Council

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SECTION 1:
IDENTIFYING MEDICAID
CHRONIC ILLNESS
POPULATIONS FOR CASE AND
DISEASE MANAGEMENT
PROGRAMS

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BACKGROUND AND PURPOSE

Medicaid is the largest single health insurance program in the U.S. Total Medicaid spending was $202.4
billion in Federal Fiscal Year (FFY) 2000, which accounted for more than 15% of national health care
expenditures.1 Medicaid covered 44.3 million low-income children, their families, elderly people and
individuals with disabilities – approximately 15% of the U.S. population. The Medicaid program is
currently a major contributor to the fiscal crisis that many states are experiencing. It is second only to
education as a percentage of state budgets. Managing these very large programs and their budgets
requires an understanding of the forces that influence trends in Medicaid program spending. The purpose
of this section is to illustrate ways in which policy makers can identify high impact Medicaid groups as
the focus for case and disease management cost containment programs. High impact groups are groups
that are likely to show program savings when placed in case or disease management programs. We
believe that this method represents a significant tool for policy makers in their attempt to reduce program
costs without adversely affecting the Medicaid population’s access to quality care.

The analysis begins at the most aggregate level by an examination of overall Medicaid trends with
emphasis on the role of chronic illness in the growth of the program. This section builds on Section 1
from last year’s compendium in which Medicaid expenditures and the importance of chronic illness was
examined. We use the most recent data (2000) available from the Centers for Medicare and Medicaid
Services (CMS) for both expenditures and beneficiaries. We focus on one “typical” state, which allows
us to conduct the necessary in depth analysis.

SPENDING TRENDS

Overall, Medicaid expenditures have almost doubled in the last decade, from $108.2 billion in 1992 to
$202.4 billion in 2000; however, the spending growth rate has been affected by program changes during
this time period.2 As seen in Figure 1-1, the rate of growth dropped throughout most of the decade but
then started to rise in 1998. During the early to mid 1990’s, welfare reform, moderate growth of the
aged and disabled population, and an improved economy led to a reduction in spending growth; indeed,
all these led to changes in population size and mix effects. Also, increased use of managed care affected
utilization incentives and the supply of providers. More recently, just as in the private sector, Medicaid
expenditures have risen more rapidly. Among the most important factors explaining spending increases
is the increasing cost of providing care to elderly and disabled individuals.

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Figure 1-1: Total Medicaid Expenditures and Growth Rates 3

$250 0.3

$202
$186 0.25
$200
$171
$160
$152 0.2

Growth Rate %
$144
$150 16.0% $134
Billions

$122
0.15
$100
$108 12.4% 7.4% 8.6% 8.8% 0.1
10.0% 7.7% 5.6%
$50 4.8%
0.05

$0 0
1992 1993 1994 1995 1996 1997 1998 1999 2000

POPULATION SIZE, DEMOGRAPHICS, AND GROWTH RATE

Medicaid is the largest financier of health care in the United States in terms of number of beneficiaries.
In 2000, there were 44.3 million Medicaid beneficiaries.4 This represents an increase of about 66 percent
in the number of Medicaid recipients since 1991, when there were 28.3 million recipients.5 In the past, it
was automatically assumed that a person who was on welfare would qualify for the Medicaid program.
Besides the working poor and those on assistance, Medicaid coverage can be extended to low income
people who are elderly, blind, or disabled. In 2000, the majority of Medicaid funds, 69.7 percent of
expenditures, were spent on aged, blind, and disabled beneficiaries (who constitute only 24.8 percent of
persons served).6 In contrast, children made up 46.1 percent of the total beneficiaries in 2000, yet only
15.9 percent of all Medicaid expenditures went toward children.7 Figure 1-2 below shows the
disproportionate share of spending by the aged and disabled.

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Figure 1-2: Population vs. Expenditures* 8

44.3 $168.3
100%
11.8
90%
Million
$117.2
80% Billion
70%
60%
32.5
50% Million
40%
30%
$51.1
20%
Billion
10%
0%
Beneficiaries Payments

Women, Children and Others Aged or Disabled

* Figure 1-2 shows the 44.3 million Medicaid patients who received assistance, and the $168.3 billion in
expenditures, reflects the total Medicaid program costs when the expenses for items such as administration and
disproportionate share hospitals (DSH) are removed.

Because of the increasing burden of care for the elderly and disabled, long-term care services represent
the largest portion of Medicaid expenditures (Figure 1-3). These services include nursing facility
services, mental retardation facilities, and mental health institutions. Nursing facility services, the
largest component of the long-term care category, grew approximately 5.6 between FFY 1999 and FFY
2000.9 Spending for hospital and physician services rose only slightly and larger increases in spending
occurred for prescription drugs.

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Figure 1-3: Distribution of Medicaid Spending* by Type of Service10

$60
1997
$50
44.2 44.3 45.6 1998
42.3
1999
$40
2000
Billions

$30
23.1 21.5 22.2 24.3 22.1 23.4
21.3 20.0
19.5
$20 16.6
12.0 13.5
$10

$0
Long Term Care^ Hospital - Physician† Prescription Drugs
Inpatient‡

* Excludes managed care payments; only major categories of spending are included
^ LTC (long-term care) = nursing facilities, mental health, and mental retardation facilities
‡ Direct payments for services
† Physician, dental, other practitioner, lab, clinic, EPSDT, outpatient hospital

PRESCRIPTION DRUG USE IN THE MEDICAID POPULATION

Table 1-1 shows the total expenditures for prescription drugs for all Medicaid recipients in State X,
broken down by eligibility group. Again, it is the blind, disabled, and aged that consume the vast
majority of dollars in this category; 84.8 percent of the total when added together.

TABLE 1-1: Prescription Drug Therapy


State X – 2000-2001 Prescription Drug
Expenditures
Fee-for-Service in Millions of Dollars

Group Dollars Percent


Aged $ 291 34.1%
Blind/Disabled $ 434 50.7%
Children $ 92 10.7%
Other Adults $ 38 4.5%
Total $ 855

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As Figure 1-4 demonstrates, the use of specific types of prescription drugs varies greatly among the
specific groups of beneficiaries. In Figure 1-4 “Antinfectives” include antibiotics,
“Antinfectives/Miscellaneous” include anti-parasitics, anti-virals (HIV/AIDS), fungicides, antiseptics,
etc.

Figure 1-4: Share of Rx Expenditures, by Eligibility Basis

aged blind/disabled adult child

30%
25%
20%
15%
10%
5%
0%
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The next part of this section provides an analysis of chronic conditions that play a large role in
contributing to these increases in expenditures.

CHRONIC DISEASES IN THE MEDICAID FEE-FOR-SERVICE POPULATION

The purpose of this section is to focus on Medicaid Statistical Information System (MSIS) fee-for-
service data from one “typical” State and examine the importance of chronic diseases in Medicaid
spending. The diseases that were used for analysis were asthma, diabetes, hypertension, and depression
(ICD-9 codes were used to define the three medical conditions. Asthma = 490 - 496, diabetes = 250,
hypertension = 401- 405, and depression =296, 298.0, 300.4, 301.12, and 311). These diseases were
selected based on their incidence in the Medicaid population and their amenability to case and disease
management programs. The focus of our analysis is total Medicaid program costs for recipients with
these medical conditions.

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DATA AND METHODOLOGY

The analysis utilizes MSIS data from one State we believe is a “typical” Medicaid State. The data cover
FFY 2000 & FFY 2001. MSIS data consists of four claims files and an eligibility file. The claims files
are inpatient, long-term care, prescription drug, and the “other” file. These files contain all claims paid
during each fiscal quarter. Obtaining the data required that a strict confidentiality agreement be signed
with the State. Hence, we will refer to “State X” as we show the results of the data analysis. A copy of
the data dictionary and a detailed overview of the MSIS files can be found at
http://cms.hhs.gov/medicaid/datasources.asp.

The Selection of State X


We selected State X based on a comparison of the percentage of eligibles and expenditures, the
Medicaid population age distribution, and the percentage of money spent on types of service for the State
compared to national data. Table 1-2 shows how similar the numbers for State X are to the National
numbers.

Table 1-2: State X Compared to National Program

Comparison of National and State X Medicaid Programs


National State X
Percentage of Eligibles
Disabled/Blind/Aged 26.6% 26.8%
Children/Adults/Other 72.4% 75.8%
Percentage of Expenditures
Disabled/Blind/Aged 69.4% 76.8%
Children/Adults Other 30.3% 23.2%
Inpatient Hospital 14.4% 13.8%
Nursing Facilities 20.5% 39.5%
Physicians 4.0% 4.5%
Prescription Drugs 11.9% 15.7%

Based on the similarity of the State X and national distributions, we believe that State X is a reasonably
good proxy for what could be considered a “typical” Medicaid State. Although we cannot quantify the
analysis, we also looked at the eligibility, coverage and reimbursement policies of State X, including
their use of waivers. This analysis revealed no particularly unusual policies.

Analytic File Development


All primary diagnosis fields in the inpatient, long-term care, and “other” files were queried for the most
frequent diagnoses. The prescription drug file was not searched because prescription drug claims do not
contain diagnosis codes. All claims with any one of the three diagnoses were extracted and placed in a
temporary file. Beneficiary identification numbers, which are unique to each individual, were extracted
from each record and unduplicated. This produced a list of all beneficiaries with one or more of the
diagnoses. The final step was to extract all claims for this unduplicated list of recipients from the four
claims files and the eligibility file. This resulted in a record that contained all Medicaid expenditures for
those beneficiaries with one or more of the selected diagnoses.

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Limitations of the Data


There are three major limitations to the MSIS data sets. First, with few exceptions, Medicaid
reimbursement does not depend on the accuracy of ICD-9 coding. Hence, the accuracy of the diagnosis
data can be questioned, just as many researchers have questioned the accuracy of similar Medicare data.
Second, the MSIS system theoretically requires States to submit “encounter” records for recipients
enrolled in managed care. The States have had difficulty complying with this relatively recent
requirement. We found few encounter records for the managed care population. As a result, this study
is limited to an analysis of the fee-for-service population. The final data limitation is that a significant
percentage of primary diagnosis codes were missing in the long term care and “other” claims files.

ANALYSIS

In an earlier section, we looked at some of the major trends in the Medicaid program. This section
outlines a methodology for examining the prevalence of chronic disease in the Medicaid fee-for-service
population and their total Medicaid program expenditures. To help assess the importance of chronic
illness in Medicaid growth and its potential for case and disease management programs, we asked the
following questions:

1. How many recipients had the chronic medical conditions of interest in State X?

2. What are the groups with these chronic diseases that appear to be most amenable to case and
disease management?

3. Can we identify particular groups that have high total and/or per capita expenditures where case
and disease management might have a high impact on expenditures?

The third part of the analysis involves our making particular judgments regarding who might be good
candidates for such programs. The methodology we propose makes these judgments based on our own
analytic experience and a considerable number of conversations with experts in the programmatic and
research areas. However, there may be many other methods – we propose just one method that identifies
recipients that suggest a closer look.

A METHODOLOGY FOR IDENTIFING HIGH IMPACT MEDICAID RECIPIENT GROUPS


POTENTIALLY AMENABLE TO CASE AND DISEASE MANAGEMENT PROGRAMS

We start with the entire Medicaid population in State X and sequentially apply a series of screens that
remove Medicaid patients that may be less amenable to case and disease management than others. Once
we have limited the population due to those we feel are high impact recipients, we examine the potential
for one policy initiative in this final group. The process is summarized in Figure 1-5.

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Figure 1-5: Flow Chart Depicting One Method of Identifying Beneficiaries with a Potential for
Disease Management in State X

MCO enrollees
88,712
$229 M
Cost/patient/yr: $1,611
Total Medicaid < 1 year eligibility
Population 203,901
$590 M
767,668 FFS enrollees Cost/patient/yr: $4,268
$5.7 B 678,956
Cost/patient/year: $5.5 B Medicare w/o full Medicaid
$5,113 Cost/patient/yr: $5,624 6,942
$10 M
Cost/patient/yr: $475

> 1 year eligibility


457,055 Dual eligibles
$4.9 B 81,860
Cost/patient/yr: $5,849 $2.6 B
Cost/patient/yr: $16,836
Not amenable to C & DM:
Not amenable to C & DM: 75+,LTC, MR
75+,LTC, MR
Medicaid only 45,457, $2.1 B
7,887, $525 M 386,253
$2.3 B Amenable to C&DM efforts (w/ waiver):
Cost/patient/yr: $3,465
< 75 years, not in LTC, not mentally retarded
36,403, $500 M, Cost/patient/yr: $7,187
Amenable to C&DM efforts:
< 75 years, not in LTC, not mentally retarded Patients with 9+ Rx in 180 Days
378,366, $1.8 B, Cost/patient/yr: $2,730 42,632,Cost/patient/yr: $9,956
See Table 1-4

Patients with Selected Patients with 20+ Rx in 180 Days


Chronic Diseases 8,914, Cost/patient/yr: $20,093
95,794 See Table 1-3 See Table 1-5

We started with the total Medicaid Population in State X, and sequentially eliminate populations. Each
of the steps is outlined below:

Step 1: Removed all Medicaid recipients enrolled in managed care.


Rationale: The care of Medicaid managed care patients is provided under a contract between the
State and the managed care organization. The risk and responsibility for their care by and large rests
with the managed care organization. Enrolling managed care Medicaid recipients into State run case
and disease management programs confuses responsibility for their care and makes little policy
sense.

Step 2: Removed Medicaid recipients with less than a full year of Medicaid eligibility.
Rationale: Most policy options, in particular case and disease management programs, require that a
person be enrolled in them for at least six months, if not a full year. Enrolling persons with records

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that show they migrate on and off the program would not be optimal for achieving the desired effects
and savings.
Step 3: We split the populations into those dually enrolled in Medicare and Medicaid and those with
Medicaid-only eligibility.
Rationale: Dual eligibles have high per capita spending. Although both populations have significant
expenditures, dual eligibles represent one of the most important potential high impact groups. The
MSIS data do not capture all claims for dual eligibles since Medicare is responsible for paying many
of their costs. Disease or case management efforts undertaken by Medicaid for this population
would likely benefit Medicare and cost Medicaid, so a waiver would need to be implemented to
make the undertaking mutually beneficial.

Step 4: Removal of patients over 75 years old, those in long term care facilities, and facilities for the
mentally retarded.
Rationale: Aged patients are more likely to become sick simply because of their advancing age.
Similarly, persons in institutions are very ill by definition and are covered by elaborate plan of care
requirements based on the Medicaid statute. In theory, the plan of care for each Medicaid recipient
would include a case or disease management program if that were deemed appropriate.

Step 5: The application of the screens resulted in 49.3 percent of total patient count being identified as
potential pool of patients for high impact cost savings. These patients had an average cost per patient per
year in Medicaid expenditures of $2,730. Table 1-3 shows the characteristics of the resultant group.
Another potential high impact groups that overlaps with this pool is the dually eligible recipients. The
method outlines here can also be used to identify this pool of patients.

The results in Table 1-3 show the high cost of chronic illness when four of the most prevalent diseases in
the Medicaid population in State X are examined through the filters shown in Figure 1-5.

Table 1-3: FFY 2000-2001 Summary of Primary Diagnosis Data for Selected Conditions in the
Medicaid Population of State X, and the Average Amount Spent on Each Patient Per Year

Disease
(Patients may have Number of Patients Medicaid $/patient/Year*
more than one disease)
Asthma/COPD 61,439 $ 5,506
Depression 33,589 $ 8,159
Hypertension 17,896 $ 12,033
Diabetes 10,623 $ 12,698
Unduplicated Total 95,794 $ 6,063
*Costs represent total for patients who have these diseases, not disease-specific costs

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Table 1-4 shows the characteristics of recipients with chronic diseases who had nine or more unique
prescription drugs in 180 days and their costs. Unique prescriptions are defined as prescriptions for
unique compounds excluding refills, changes in strength, and generic equivalents.

Table 1-4: Patients with Nine or More Prescription Drugs in 180 Days

Disease
(Patients may have Number of Patients Medicaid $/patient/Year*
more than one disease)
Asthma/COPD 27,170 $ 9,737
Depression 16,921 $ 11,759
Hypertension 13,409 $ 14,231
Diabetes 8,639 $ 14,449
Total 42,632 $ 9,956
*Costs represent total for patients who have these diseases, not disease-specific costs

Of the beneficiaries who received nine or more prescriptions in 180 days, 39 percent were blind or
disabled, 40 percent were children, 20 percent were adults, and 1 percent aged with an average per
patient/per year cost of $8,742.

Table 1-5 repeats the analysis for Medicaid recipients who, in this case, received twenty or more unique
prescription drugs in 180 days. This group has much higher costs per patient per year than the
population with less prescription drug use.

Table 1-5: Patients with Twenty or More Prescription Drugs in 180 Days

Disease
(Patients may have Number of Patients Medicaid $/patient/Year*
more than one disease)
Asthma/COPD 5,985 $ 20,909
Depression 4,714 $ 19,437
Hypertension 5,111 $ 21,552
Diabetes 3,688 $ 21,443
Total 8,914 $ 20,093
*Costs represent total for patients who have these diseases, not disease-specific costs

Of the beneficiaries who received twenty or more prescriptions in 180 days, 76 percent were blind or
disabled, 6 percent were children, 15 percent were adults, and 3 percent were aged with an average per
patient / per year cost of $20,093.

States, such as Florida, which have focused on this population, have documented that case management
of these individuals identifies unnecessary utilization and that costs can be reduced.11

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CONCLUSION
Against the backdrop of significant Medicaid growth over the last decade, this analysis indicates that a
large proportion of Medicaid expenditures are made for a small group of recipients who are chronically
ill, many of whom are amenable to case and disease management. We have demonstrated one way to
identify this high impact population. Clearly, other approaches exist. We believe that one way for
States to reduce potential overutilization and the resulting unnecessary expenditures in such groups is to
identify them using the methodology we have demonstrated and then explore different policy options
oriented toward case and disease management.

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REFERENCES

1
Department of Health and Human Services. Centers for Medicare and Medicaid Services. Historical
National Health Expenditures Tables, by Type of Service and Source of Funds: Calendar Years
1960-2001. available from http://www.cms.hhs.gov/statistics/nhe/historical/nhe01.zip; Internet.
2
Ibid.

3
Ibid.

4
Department of Health and Human Services. Centers for Medicare and Medicaid Services. Medicaid
Statistics, Table 4. Medicaid Beneficiaries, 2000. available from
http://cms.hhs.gov/medicaid/msis/00total.pdf; Internet.

5
Department of Health and Human Services. Centers for Medicare and Medicaid Services. Medicaid
Statistics, Table 1. Program Statistics, 1991, available from
http://cms.hhs.gov/medicaid/msis/mstats.asp; Internet.
6
Department of Health and Human Services. Centers for Medicare and Medicaid Services. Medicaid
Statistics, Tables 3 and 4. Medicaid Expenditures, and Medicaid Beneficiaries, 2000.
http://cms.hhs.gov/medicaid/msis/00total.pdf.
7
op. cit.: 1

8
Ibid.

9
Department of Health and Human Services. Centers for Medicare and Medicaid Services. Medicaid
Statistics, Table 5. Medicaid Expenditures by Type of Service for Maintenance Assistance Status and Basis
of Eligibility All States, 1999 & 2000. available from http://cms.hhs.gov/medicaid/msis/99total.pdf and
http://cms.hhs.gov/medicaid/msis/00total.pdf; Internet.
10
Department of Health and Human Services. Centers for Medicare and Medicaid Services. Medicaid
Statistics, Table 3. Medicaid Expenditures by Type of Service, 1999 and 2000 available from
http://cms.hhs.gov/medicaid/msis/99total.pdf and http://cms.hhs.gov/medicaid/msis/00total.pdf; and
Department of Health and Human Services. Centers for Medicare and Medicaid Services. Medicaid
Statistics, Table 10, Medicaid Medical Vendor Payments by Type of Service,1997 and 1998.
available from http://www.cms.gov/medicaid/msis/MCD97T10.pdf and
http://www.cms.gov/medicaid/msis/MCD98T10.pdf; Internet.
11
Medicaid Prescription Drug Spending Control Program Annual Report, State of Florida, Agency for
Health Care Administration, Jan. 2002, p. 23.

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Section 2:
The Medicaid Program

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MEDICAID PROGRAM OVERVIEW

Medicaid (Title XIX of the Federal Social Security Act) is a Federal-State


funded program of national health assistance that provides health care coverage
to certain individuals and families with low-incomes and resources. The 50
States, the District of Columbia, and Puerto Rico, Guam, Virgin Islands,
American Samoa, and Northern Mariana Islands each operate medical assistance
programs according to State or territorial rules and criteria that vary within a
broad framework of Federal guidelines.
MEDICAID ELIGIBILITY

Medicaid Eligibility: Medicaid is a “means tested program for low income


individuals.” To qualify, a Medicaid recipient must not have “income” or
“resources” that exceed the applicable limits prescribed in the law and
regulations.

Every State, in order to receive Federal funding under Title XIX, must provide
Medicaid benefits to certain “categorically needy” persons. These are the
“mandatory” categorically needy. In addition, the State has the option of
providing Medicaid benefits to certain additional categories of persons. These
are the “optional” categorically needy. An additional category of Medicaid
recipients that a State may choose to include in its program is the “medically
needy.”

Mandatory Categorically Needy: There are numerous and detailed categories


under which the “categorically needy” may qualify for Medicaid benefits. The
principal categories of the mandatory categorically needy are:

• Low-income families with children;

• Recipients of Supplemental Security Income (SSI) for the Aged, Blind, and
Disabled (this includes disabled children);

• Individuals qualified for adoption assistance agreements or foster care


maintenance payments under Title IV-E of the Social Security Act;

• Qualified pregnant women;

• Newborn children of Medicaid-eligible women;

• Various categories of low-income children; and

• Certain low-income Medicare beneficiaries.

Optional Categorically Needy: These are groups of individuals who meet the
characteristics of the mandatory groups, but the eligibility criteria are somewhat
more liberally defined. For example, in determining their incomes and
resources, they are allowed to exclude certain kinds of income. The “optional
categorically needy” include individuals who are aged, blind, disabled, caretaker
relatives, and pregnant women who meet the SSI income and resources
requirements but are not receiving SSI cash payments.

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Medically Needy: The “medically needy” are those individuals who meet the
definitional requirements described above, except that their income or resources
exceed the limitations applicable to the categorically needy. These individuals
can “spend down” to qualify. That is, they can deduct their medical bills from
their income and resources until they meet the applicable income and resources
requirements. Their Medicaid benefits can then begin.

Special Categories: The Medicaid statute also authorizes limited Medicaid


benefits to special categories of individuals. In general, these are individuals
whose income and resources would otherwise be too high to qualify for full
Medicaid benefits under the regular provisions.

For example, a “Qualified Medicare Beneficiary” (QMB) is an individual who


qualifies for Medicare Part A, whose income does not exceed 100 percent of the
Federally poverty level, and whose resources do not exceed twice the SSI
resource-eligibility standard. Medicaid coverage of QMBs is limited to payment
of their Medicare cost-sharing charges, such as the Medicare premiums,
coinsurance, and co-payment amounts.

Non-Eligibles: A State can include in its Medicaid program individuals who do


not meet the statutory eligibility criteria. However, the State must pay the full
costs for these individuals. There are no Federal matching payments.

MEDICAID SERVICES

Title XIX lists the many types of medical care that a State may select for
inclusion into its Medicaid State Plan, thus qualifying for Federal matching
payments. However, the law requires that certain basic benefits must be
available to all “categorically needy” recipients. These services include:

• Inpatient and outpatient hospital services;


• Physician services;
• Medical and surgical dental services;
• Laboratory and X-ray services;
• Nursing facility services (for persons 21 years of age or older);
• Early and periodic screening, diagnostic, and treatment (EPSDT) services for
children under age 21;
• Family planning services and supplies;
• Home health services for persons eligible for nursing facility services;
• Rural health clinic services and any other ambulatory services offered by a
rural health clinic that are otherwise covered under the State Plan;
• Nurse-midwife services (to the extent authorized under State law);
• Pediatric and family nurse practitioners services; and
• Federally-qualified health center services and any other ambulatory services
offered by a Federally-qualified health center that are otherwise covered
under the State plan.

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If a State chooses to include the “medically needy” population, the State Plan
must provide, as a minimum, the following services:

• Prenatal care and delivery services for pregnant women;


• Ambulatory services to individuals under age 18 and individuals entitled to
institutional services;
• Home health services to individuals entitled to nursing facility services; and
• If the State Plan includes services either in institutions for mental diseases or
in intermediate care facilities for the mentally retarded (ICFs/MR), it must
offer medically needy groups certain specified services provided to the
categorically needy.
States may also receive Federal funding if they elect to provide other
optional services. The most commonly covered optional services under the
Medicaid program include:

• Clinic services;
• Services of ICFs/MR;
• Nursing facility services (children under 21 years old);
• Prescribed drugs;
• Optometrist services and eyeglasses;
• TB-related services for TB infected persons;
• Prosthetic devices; and
• Dental services.
States may provide home and community-based care waiver services to certain
individuals who are eligible for Medicaid. The services to be provided to these
persons may include case management, personal care services, respite care
services, adult day health services, homemaker/home health aide, habilitation,
and other services requested by the State and approved by CMS.

CHARACTERISTICS OF BENEFITS PROVIDED

Inpatient Hospital Services

Inpatient hospital services are those ordinarily furnished in a hospital for the care
and treatment of inpatients. The facility is one maintained primarily for the care
and treatment of patients with disorders other than mental diseases. There are
several general Federal limitations on inpatient hospital services that apply to all
States with Medicaid programs (42 CFR 440.10):

• The facility must be licensed or formally approved as a hospital by an


officially designated authority for State standard setting;
• The facility must meet the requirements for participation in Medicare as a
hospital;
• The care and treatment of inpatients must be under the direction of a
physician or dentist; and

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• The facility must have in effect an approved utilization review plan,


applicable to all Medicaid patients, unless a waiver has been granted by the
Secretary of Health and Human Services because the State’s own utilization
review procedures are adequate.
• A peer review organization (PRO) may satisfy these requirements.
In addition to the Federal limitations, each State may impose further limitations
on inpatient hospital services.

Outpatient Hospital Services

Outpatient hospital services refer to preventive, diagnostic, therapeutic,


rehabilitative, or palliative services provided to an outpatient. Three Federal
limitations are imposed on these services, though States are free to specify other
limits on outpatient hospital services and many have chosen to do so.

• The services must be provided under the direction of a physician or dentist;


• The facility must be licensed or formally approved as a hospital by an
officially designated authority for State standard setting; and
• The facility must meet the requirements for participation in Medicare as a
hospital.

Rural Health Clinic Services

Rural health clinic (RHC) services are a mandatory service for the categorically
needy. Each RHC is required to have a nurse practitioner (NP) or physician’s
assistant (PA) on its staff. Therefore, a clinic can be certified to participate in
the Medicaid program only if State law permits the delivery of primary care by
an NP or PA.

Services in RHCs must be provided by a physician or by a PA, NP, nurse-


midwife, or other specialized nurse practitioner. Services and supplies are
furnished as an incident to the professional services of such a practitioner are
also covered. Part-time or intermittent visiting nurse services and related
medical supplies are provided if the RHC is located in an area which HHS has
determined has a shortage of home health agencies, the services are furnished by
nurses employed by the RHC, and the services are furnished to a homebound
recipient under a written plan of treatment.

Other Laboratory and X-Ray Services

Other laboratory and X-ray services are professional and technical laboratory
and radiological services. These services must be:

• Ordered and provided by or under the direction of a physician or other


licensed practitioner of the healing arts within the scope of his or her
practice, as defined by State law, or ordered and billed by a physician but
provided by an independent laboratory;
• Provided in an office or similar facility other than a hospital inpatient or
outpatient department or clinic; and

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• Provided by a laboratory that meets the requirements for participation in


Medicare.
• In addition, the States can place limitations on “other laboratory and X-ray
services.”

Nursing Facility Services

Nursing facility (NF) services are provided to individuals age 21 or older. They
do not include services provided in institutions for mental diseases. These
services must be needed on a daily basis and must be provided in an inpatient
facility. Federal regulations require that the services be:

• Provided by a facility or a distinct part of a facility that is certified to meet


the requirements for participation in the Medicaid program as a NF; and
• Ordered by and furnished under the direction of a physician.

Early and Periodic Screening, Diagnosis and Treatment

Early and periodic screening, diagnosis and treatment (EPSDT) refers to


screening and diagnostic services to determine physical or mental defects in
recipients under age 21, as well as health care, treatment and other measures to
correct or ameliorate any defects and chronic conditions discovered (42 CFR
440.40(b)). Certain basic screening and treatment services must be provided by
each State as a minimum (42 CFR 441.56). These services include:

Screening:
• Comprehensive health and developmental history screening;
• Comprehensive unclothed physical examination;
• Appropriate vision testing;
• Appropriate hearing testing;
• Appropriate laboratory tests;
• Dental screening services furnished by direct referral to a dentist for children
beginning at 3 years of age.
Diagnosis and Treatment:
In addition to any diagnostic and treatment services included in the State
Medicaid Plan, the State must provide to eligible EPSDT recipients the
following services, the need for which is indicated by screening, even if the
services are not included in the Plan:
• Diagnosis of and treatment for defects in vision and hearing, including
eyeglasses and hearing aids;
• Dental care, at as early an age as necessary, needed for relief of pain and
infections, restoration of teeth and maintenance of dental health; and
• Appropriate immunizations. (If it is determined at the time of screening that
immunization is needed and appropriate to administer at the time of
screening, then immunization treatment must be provided at that time.)

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The State Medicaid agency may provide for any other medical or remedial care
specified as a Medicaid service even if the agency does not otherwise provide for
these services to other recipients or provides for them in a lesser amount,
duration, or scope. This is an exception to the general rule that the amount,
duration, and scope of benefits must be the same for all categorically eligible
recipients, and reflects the importance attached to EPSDT services.

Family Planning Services

Federal Requirements: States are required to provide family planning services


and supplies to individuals of childbearing age (including minors who can be
considered to be sexually active) who are eligible under the State Medicaid Plan
and who desire such services and supplies. Specifically, family planning
services must be made available to categorically needy Medicaid recipients, and
the State has the option of furnishing these services to the medically needy.

Defined: The term “family planning services” is not defined in the law or in
regulations. However, the Senate Report accompanying the law stresses
Congress’ intent of placing emphasis on the provision of services to “aid those
who voluntarily choose not to risk an initial pregnancy,” as well as those families
with children who desire to control family size. In keeping with Congressional
intent, the State may choose to include in its definition of Medicaid family
planning services only those services which either prevent or delay pregnancy,
or the State may more broadly define the term to include services for the
treatment of infertility. However, the Medicaid definition must be consistent
with overall State policy and regulation regarding the provision of family
planning services.

The State is free to determine the specific services and supplies that will be
covered as Medicaid family planning services as long as those services are
sufficient in amount, duration, and scope to reasonably achieve their purpose. It
must also establish procedures for identifying individuals who are sexually
active and eligible for family planning services.

Federal Matching Payments: Federal Financial Participation (FFP) is available


at the “enhanced” rate of 90 percent for the cost of family planning services.
These include counseling services and patient education, examination and
treatment by medical professionals in accordance with applicable State
requirements, laboratory examinations and tests, medically approved methods,
procedures, pharmaceutical supplies and devices to prevent conception, and
infertility services, including sterilization reversals.

FFP at the enhanced rate of 90 percent is also available for the cost of a
sterilization if a properly completed sterilization informed consent form, in
accordance with the requirements of 42 CFR Part 441, Subpart F, is submitted to
the State prior to payment of the claim.

FFP at the 90 percent rate is not available for the cost of a hysterectomy nor for
the costs related to other procedures performed for medical reasons, such as
removal of an intrauterine device due to infection. Only items and procedures
clearly provided or performed for family planning purposes may be matched at
the 90 percent rate. Transportation to a family planning service is not eligible
for the 90 percent match. Transportation must be claimed as either an

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administrative cost or a State Plan service, in accordance with the State’s


approved Medicaid State Plan.

Abortions: Abortions may not be claimed as a family planning service. For


more than 20 years, Congressional restrictions have been placed on appropriated
funds for HHS programs that fund abortions. FFP is available only in
expenditures for an abortion when a physician has found, and so certified in
writing to the Medicaid agency, that on the basis of his/her professional
judgment, the life of the mother would be endangered if the fetus were carried to
term. The certification must contain the name and address of the patient.
Congress has prohibited the use of Federal funds for victims of rape or incest.

Voluntary Sterilizations: FFP is available in expenditures for the sterilization of


an individual only if she is at least age 21, has voluntarily given informed
consent in accordance with Medicaid regulations, and is not a mentally
incompetent individual.

Physicians’ Services

Physicians’ services are covered, whether provided in the office, the patient’s
home, a hospital, a nursing facility, or elsewhere. Such services must be within
the physicians’ scope of practice of medicine or osteopathy as defined by State
law, and by or under the personal supervision of an individual licensed under
State law to practice medicine or osteopathy.

Prescribed Drugs

Prescribed drugs are simple or compound substances or mixtures of substances


prescribed for the cure, mitigation, or prevention of disease, or for health
maintenance, which are prescribed by a physician or other licensed practitioner
of the healing arts within the scope of their professional practice, as defined and
limited by Federal and State law (42 CFR 440.120). The drugs must be
dispensed by licensed authorized practitioners on a written prescription that is
recorded and maintained in the pharmacist’s or the practitioner’s records.

Home Health Services

Home health services are provided to a recipient at his or her place of residence.
This does not include a hospital, nursing facility, or (ordinarily) an ICF/MR.
Services provided must be on physicians’ orders as part of a written plan of care
that is reviewed by the physician every 60 days. Home health services include
three mandatory services (part-time nursing, home health aide, medical supplies
and equipment) and four optional services (physical therapy, occupational
therapy, speech pathology, and audiology services) (42 CFR 440.70). These
services are defined as follows:

• Part-Time Nursing: Nursing that is provided on a part-time or intermittent


basis by a home health agency. If there is no home health agency in the area,
services may be provided by a registered nurse who is currently licensed to
practice in the State, receives written orders from the patient’s physician,
documents the care and services provided, and has had orientation to

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acceptable clinical and administrative record keeping from a health


department nurse.
• Home Health Aide: Home health aide services provided by a home health
agency.
• Medical Supplies and Equipment: Medical supplies, equipment, and
appliances that are suitable for use in the home.
• Physical Therapy (PT), Occupational Therapy (OT), Speech Pathology and
Audiology Services: PT, OT, speech and hearing services provided by a
home health agency or a facility licensed by the State to provide medical
rehabilitation.
• Home health services are provided to categorically needy recipients age 21
and over and to those under 21 only if the State Plan provides SNF services
for them.

Personal Support Services

Personal support services consist of a variety of services including personal care,


targeted case management, home and community-based care for functionally
disabled elderly, rehabilitative services, hospice services, and nurse-midwife,
nurse practitioner, and private duty nursing. Details of some of these services
are provided below:

1. Personal Care Services: Services provided to an individual who is not an


inpatient or resident of a hospital, nursing facility, intermediate care
facility for the mentally retarded, or institution for mental disease.
Services are authorized by a physician in accordance with a treatment
plan, are provided by a qualified individual who is not a member of the
recipient’s family, and are furnished in a home or (at the State’s option)
in another location.
2. Rehabilitative Services: These services include any medical or remedial
service recommended by a physician or other licensed practitioner of the
healing arts within the scope of State law. Services are for the maximum
reduction of physical or mental disability and restoration of a recipient to
their best possible functional level.
3. Hospice Services: Hospice services can be received in a hospice facility
or elsewhere. Services are provided to terminally ill individuals by an
authorized hospice program under a written plan established and
reviewed by the attending physician, medical director or physician
designee of the program, and an interdisciplinary group.

Nurse-Midwife Services

Nurse-midwife services are those concerned with management of the care of


mothers and newborns throughout the maternity cycle. The Omnibus Budget
Reconciliation Act of 1980 required that payment be made providing for nurse-
midwife services to categorically needy recipients (42 CFR 440.165). These
provisions require States to provide coverage for nurse-midwife services to the
extent that the nurse-midwife is authorized to practice under State law or
regulation. The statute also requires that States offer direct reimbursement to

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nurse-midwives as one of the payment options. Nurse-midwives must be


registered nurses who are either certified by an organization recognized by the
Secretary of HHS or who have completed a program of study and clinical
experience that has been approved by the Secretary.

Pediatric Nurse Practitioner and Family Nurse Practitioner


Services

The Omnibus Budget Reconciliation Act of 1989 provides for the availability
and accessibility of services furnished by a certified pediatric nurse practitioner
(CPNP) or a certified family nurse practitioner (CFNP) to Medicaid recipients.
These provisions require that services be covered to the extent that the CPNPs or
CFNPs are authorized to practice under State law or regulation, regardless of
whether they are supervised by or associated with a physician or other health
care provider. States are required to offer direct payment to CPNPs and CFNPs
as one of their payment options.

CPNP and CFNP certification requirements include a current license to practice


as a registered nurse in the State, meet the applicable state requirements for
qualification of pediatric nurse practitioners or family nurse practitioners, and be
currently certified by the American Nurses’ Association as a pediatric nurse
practitioner or a family nurse practitioner.

Federally Qualified Health Center and other Ambulatory


Services

Medicaid programs must offer Federally Qualified Health Center (FQHC)


services and other ambulatory services offered by an FQHC under the provisions
of the Omnibus Budget Reconciliation Act of 1989. The definition of FQHC
services is the same as that of the services provided by rural health clinics
(RHC). FQHC services include physician services, services provided by
physician assistants, nurse practitioners, clinical psychologists, clinical social
workers, and services and supplies incident to services normally covered if
furnished by a physician or if incident to a physician’s services.

FQHCs are facilities or programs more commonly known as Community Health


Centers, Migrant Health Centers, and Health Care for the Homeless. These
centers may qualify as providers of service under Medicaid, under the following
conditions:

• The facility receives a grant under sections 329, 330, or 340 of the Public
Health Service Act;
• The Health Resources and Services Administration recommends, and the
HHS Secretary determines, that the facility meets the requirements of the
grant; or
• The Secretary determines that a facility may qualify through waivers of the
requirements. Such a waiver cannot exceed two years.

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AMOUNT AND DURATION OF SERVICES

Within broad Federal guidelines and certain limitations, States may determine
the amount and duration of services offered under their Medicaid programs.
Federal regulations require that the amount and/or duration of each type of
medical and remedial care and services furnished under a State’s program must
be specified in the State Plan, and that these types of care and services must be
sufficient in amount, duration, and scope to “reasonably achieve” their purpose.
States are required to provide Medicaid coverage for comparable amounts,
duration, and scope of service to all “categorically needy” and categorically-
related eligible persons.

Each State Plan must include a description of the methods that will be used to
assure that the medical and remedial care and services delivered are of high
quality, as well as a description of the standards established by the State to
assure high quality care. The regulations also require that the fee structures
developed must result in participation of a sufficient number of providers so that
eligible persons can receive the medical care and services included in the Plan, at
least to the extent that these are available to the general population. The law
further requires that services provided under the Plan be available throughout the
State. Recipients are to have freedom of choice with regard to where they
receive their care, including an option to obtain their care through organizations
that provide services or arrange for their availability on a prepayment basis, such
as health maintenance organizations.

MEDICAID PAYMENT FOR SERVICES

The Medicaid program operates on the basis of a division of responsibilities


between the Federal government and the States with the Federal government
paying States for a portion of State medical expenditures and administrative
costs. Funding for the program is shared between the two bodies, with the
Federal government matching State health care provider reimbursements at an
authorized rate of between 50% and 76.62%, depending on the State’s per capita
income (see the Federal Medical Assistance Percentage (FMAP) table, page 2-
17).

The FMAP is based upon the State’s per capita income; if a State’s per capita
income is equal to or greater than the national average, the Federal share is 50%.
If a State’s per capita income is below the national average, the Federal share is
increased, up to a maximum of 76.62%.

The percentages apply to State expenditures for assistance payments and medical
services. Federal statute provides separate Federal matching amounts for
administrative costs. Cost sharing for administrative expenditures vary with the
services, i.e., 75% for training, 90% for designing, developing or installing
mechanized claims processing and information retrieval, etc. (Federal Medicaid
Law (Section 1903(a)(2) et seq.)).

In 2000, the Medicaid program enrolled 44.3 million eligible individuals with
vendor payments for medical care services totaling $168.3 billion. The vendor
payments reported in the 2000 MSIS Report do not include Disproportionate
Share Hospital (DSH), Medicare premium payments made by State Medicaid
programs, and other Medicaid program expenditures. The CMS-64 Report,

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which does include such expenditures, shows total net expenditures for 2000 of
$195.2 billion. When administrative costs are added to total net expenditures,
total Medicaid program expenditures in 2000 were $205.7 billion.

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Total Medicaid Eligibles by Basis of Eligibility, 20001, 2


Age 65 Blind/ Foster Care/ BOE
State Total Eligibles And Older Disabled Children Adults Children Unknown
National Total 44,297,288 4,294,963 7,474,797 20,996,425 10,669,787 859,992 1,324
Alabama 665,767 86,218 177,114 346,609 50,401 5,425 -
Alaska 109,457 6,186 10,681 65,496 25,532 1,562 -
Arizona 683,224 33,097 94,815 383,101 164,311 7,900 -
Arkansas 504,297 54,050 100,939 233,833 109,878 5,584 13
California 8,063,644 592,107 925,316 3,042,220 3,358,935 145,061 5
Colorado 377,670 45,866 65,460 180,978 68,175 17,111 80
Connecticut 417,682 55,492 56,931 225,166 70,835 9,258 -
Delaware 124,327 9,098 15,899 56,116 41,199 2,015 -
District of Columbia 150,802 9,993 30,501 71,351 34,595 4,327 35
Florida 2,237,610 226,094 460,214 1,071,794 440,410 39,084 14
Georgia 1,238,794 110,369 224,319 679,595 205,832 18,674 5
Hawaii* 202,912 18,824 21,616 85,074 73,338 4,060 -
Idaho 150,817 11,583 23,873 90,382 22,989 1,990 -
Illinois 1,736,185 118,108 290,194 880,812 363,330 83,740 1
Indiana 756,195 76,488 106,594 439,316 122,596 11,201 -
Iowa 316,425 41,030 55,488 147,659 62,984 9,264 -
Kansas 267,812 32,794 51,079 135,869 37,028 11,042 -
Kentucky 724,478 71,436 199,503 347,296 97,873 8,370 -
Louisiana 827,413 99,146 172,986 444,597 100,787 9,897 -
Maine 214,093 24,532 48,780 93,499 43,976 3,306 -
Maryland 721,762 54,898 114,793 382,719 153,321 16,031 -
Massachusetts 1,103,724 111,412 226,612 452,178 312,804 718 -
Michigan 1,360,726 100,013 282,072 697,249 240,198 41,081 113
Minnesota 596,726 64,047 83,529 298,386 141,413 9,351 -
Mississippi 595,824 69,571 152,132 306,810 63,944 3,356 11
Missouri 991,428 100,617 136,500 519,167 213,518 21,626 -
Montana 97,136 9,922 17,340 46,546 19,348 3,978 2
Nebraska 238,054 23,051 29,019 131,100 44,695 9,468 721
Nevada 158,526 17,122 28,598 77,203 30,445 5,158 -
New Hampshire 110,155 12,985 13,836 64,644 16,074 2,616 -
New Jersey 855,745 107,341 163,608 430,674 135,381 18,741 -
New Mexico 398,498 22,148 49,028 252,392 71,518 3,412 -
New York 3,401,448 386,897 673,989 1,416,361 839,958 84,243 -
North Carolina 1,228,105 176,471 219,068 608,976 208,630 14,960 -
North Dakota 62,235 9,740 9,291 29,389 12,114 1,701 -
Ohio 1,420,386 146,410 262,415 730,648 241,620 39,137 156
Oklahoma 584,620 63,136 73,801 354,566 85,532 7,585 -
Oregon 560,734 41,711 61,569 224,236 219,202 13,981 35
Pennsylvania 1,767,817 204,871 391,401 739,868 386,071 45,606 -
Rhode Island 182,149 18,650 34,028 78,806 45,412 5,253 -
South Carolina 775,428 78,018 117,345 391,606 181,293 7,134 32
South Dakota 98,740 10,047 15,793 55,826 15,350 1,724 -
Tennessee 1,535,121 89,078 318,868 653,469 460,933 12,733 40
Texas 2,706,974 360,971 346,479 1,520,123 450,755 28,646 -
Utah 203,751 11,653 25,260 113,620 46,742 6,476 -
Vermont 147,817 18,604 18,223 63,494 45,178 2,260 58
Virginia 681,292 95,398 131,535 348,706 91,992 13,660 1
Washington 916,838 69,054 121,662 520,323 191,871 13,927 1
West Virginia 354,326 31,872 84,511 171,119 60,629 6,195 -
Wisconsin 619,129 61,834 131,980 267,639 138,847 18,828 1
Wyoming 52,470 4,910 8,210 27,819 9,995 1,536 -

1. Eligibles are defined as individuals who were on the Medicaid rolls at least one month during the year.
2. FY 2001 data have not been released for all states. Partial data are available in Appendix B.
*Hawaii did not report for FY 2000. Their FY 1999 data are used in this table.
Source: CMS, MSIS Report, FY 2000.

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Total Medicaid Eligibles


Per 1000 Population, 20001
Total State Total Eligibles per
State Population Eligibles* 1000 Populations
National Total 281,421,906 44,297,288 157.4
Alabama 4,447,100 665,767 149.7
Alaska 626,932 109,457 174.6
Arizona 5,130,632 683,224 133.2
Arkansas 2,673,400 504,297 188.6
California 33,871,648 8,063,644 238.1
Colorado 4,301,261 377,670 87.8
Connecticut 3,405,565 417,682 122.6
Delaware 783,600 124,327 158.7
District of Columbia 572,059 150,802 263.6
Florida 15,982,378 2,237,610 140.0
Georgia 8,186,453 1,238,794 151.3
Hawaii 1,211,537 202,912 167.5
Idaho 1,293,953 150,817 116.6
Illinois 12,419,293 1,736,185 139.8
Indiana 6,080,485 756,195 124.4
Iowa 2,926,324 316,425 108.1
Kansas 2,688,418 267,812 99.6
Kentucky 4,041,769 724,478 179.2
Louisiana 4,468,976 827,413 185.1
Maine 1,274,923 214,093 167.9
Maryland 5,296,486 721,762 136.3
Massachusetts 6,349,097 1,103,724 173.8
Michigan 9,938,444 1,360,726 136.9
Minnesota 4,919,479 596,726 121.3
Mississippi 2,844,658 595,824 209.5
Missouri 5,595,211 991,428 177.2
Montana 902,195 97,136 107.7
Nebraska 1,711,263 238,054 139.1
Nevada 1,998,257 158,526 79.3
New Hampshire 1,235,786 110,155 89.1
New Jersey 8,414,350 855,745 101.7
New Mexico 1,819,046 398,498 219.1
New York 18,976,457 3,401,448 179.2
North Carolina 8,049,313 1,228,105 152.6
North Dakota 642,200 62,235 96.9
Ohio 11,353,140 1,420,386 125.1
Oklahoma 3,450,654 584,620 169.4
Oregon 3,421,399 560,734 163.9
Pennsylvania 12,281,054 1,767,817 143.9
Rhode Island 1,048,319 182,149 173.8
South Carolina 4,012,012 775,428 193.3
South Dakota 754,844 98,740 130.8
Tennessee 5,689,283 1,535,121 269.8
Texas 20,851,820 2,706,974 129.8
Utah 2,233,169 203,751 91.2
Vermont 608,827 147,817 242.8
Virginia 7,078,515 681,292 96.2
Washington 5,894,121 916,838 155.6
West Virginia 1,808,344 354,326 195.9
Wisconsin 5,363,675 619,129 115.4
Wyoming 493,782 52,470 106.3

1. FY 2001 data have not been released for all states. Partial data are available in Appendix B.
*Hawaii did not report Medicaid eligibles for FY 2000. Their FY 1999 Medicaid eligibility data are used in this table.
Source: U.S. Department of Commerce, Bureau of the Census, Census 2000; CMS, MSIS, FY 2000.

2-16 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Total Net U.S. Medical Assistance Expenditures


by Type of Service

Percent Percent Percent


Service FY 2001 of Total FY 2000 of Total Change
Nursing Facility $43,317,811,704 20.1% $39,607,169,035 20.3% +9.4%
Inpatient Acute Care Hospital $39,586,413,122 18.3% $36,650,532,554 18.8% +8.0%
Pharmaceuticals $24,656,812,921 11.4% $20,551,215,451 10.5% +20.0%
HCBS Waivers $14,864,788,473 6.9% $12,628,550,113 6.5% +17.7%
ICF-Mentally Retarded $10,686,809,919 5.0% $10,184,590,576 5.2% +4.9%
Hospital Outpatient $7,709,540,429 3.6% $7,055,207,899 3.6% +9.3%
Inpatient Mental Health Hospital $6,862,423,184 3.2% $7,331,896,067 3.8% -6.4%
Clinic* $6,689,968,278 3.1% $5,863,580,557 3.0% +14.1%
Physicians $6,670,379,109 3.1% $5,892,807,109 3.0% +13.2%
Personal Care Services $5,251,140,806 2.4% $4,566,864,434 2.3% +15.0%
Home Health Care $2,613,356,673 1.2% $2,311,780,853 1.2% +13.0%
Dental $2,193,475,415 1.0% $1,795,228,321 0.9% +22.2%
Other Practitioners $1,141,272,064 0.5% $1,030,135,204 0.5% +10.8%
EPSDT $935,836,328 0.4% $829,205,382 0.4% +12.9%
Lab/X-ray $660,398,684 0.3% $612,378,794 0.3% +7.8%
Other** $41,969,472,522 19.4% $38,245,755,438 19.6% +9.7%
Total Expenditures $215,809,899,631 100.0%‡ $195,156,897,787 100%‡ +10.6%
‡ Values may not add to 100% due to rounding. American Samoa, Guam, N. Mariana Islands, Puerto Rico, and Virgin Islands excluded.
* Clinic includes clinics, FQHCs, and rural health clinics.
** Other includes hospice, other care services, payments to managed care organizations, etc..
Source: CMS, HCFA-64 Report, FY 2001 and FY 2000

National Pharmaceutical Council 2-17


Pharmaceutical Benefits 2002

Federal Medical Assistance Percentage (FMAP), FY 2002 and FY 2003


State 2002 FMAP 2003 FMAP 2003 FMAP (Q3&Q4)* 2003 Enhanced FMAP**
Alabama 70.45% 70.60% 73.55% 79.42%
Alaska 57.38% 58.27% 61.22% 70.79%
Arizona 64.98% 67.25% 70.20% 77.08%
Arkansas 72.64% 74.28% 77.23% 82.00%
California 51.40% 50.00% 54.35% 65.00%
Colorado 50.00% 50.00% 52.95% 65.00%
Connecticut 50.00% 50.00% 52.95% 65.00%
Delaware 50.00% 50.00% 52.95% 65.00%
District of Columbia** 70.00% 70.00% 72.95% 79.00%
Florida 56.43% 58.83% 61.78% 71.18%
Georgia 59.00% 59.60% 62.55% 71.72%
Hawaii 56.34% 58.77% 61.72% 71.14%
Idaho 71.02% 70.96% 73.97% 79.67%
Illinois 50.00% 50.00% 52.95% 65.00%
Indiana 62.04% 61.97% 64.99% 73.38%
Iowa 62.86% 63.50% 66.45% 74.45%
Kansas 60.20% 60.15% 63.15% 72.11%
Kentucky 69.94% 69.89% 72.89% 78.92%
Louisiana 70.30% 71.28% 74.23% 79.90%
Maine 66.58% 66.22% 69.53% 76.35%
Maryland 50.00% 50.00% 52.95% 65.00%
Massachusetts 50.00% 50.00% 52.95% 65.00%
Michigan 56.36% 55.42% 59.31% 68.79%
Minnesota 50.00% 50.00% 52.95% 65.00%
Mississippi 76.09% 76.62% 79.57% 83.63%
Missouri 61.06% 61.23% 64.18% 72.86%
Montana 72.83% 72.96% 75.91% 81.07%
Nebraska 59.55% 59.52% 62.50% 71.66%
Nevada 50.00% 52.39% 55.34% 66.67%
New Hampshire 50.00% 50.00% 52.95% 65.00%
New Jersey 50.00% 50.00% 52.95% 65.00%
New Mexico 73.04% 74.56% 77.51% 82.19%
New York 50.00% 50.00% 52.95% 65.00%
North Carolina 61.46% 62.56% 65.51% 73.79%
North Dakota 69.87% 68.36% 72.82% 77.85%
Ohio 58.78% 58.83% 61.78% 71.18%
Oklahoma 70.43% 70.56% 73.51% 79.39%
Oregon 59.20% 60.16% 63.11% 72.11%
Pennsylvania 54.65% 54.69% 57.64% 68.28%
Rhode Island 52.45% 55.40% 58.35% 68.78%
South Carolina 69.34% 69.81% 72.76% 78.87%
South Dakota 65.93% 65.29% 68.88% 75.70%
Tennessee 63.64% 64.59% 67.54% 75.21%
Texas 60.17% 59.99% 63.12% 71.99%
Utah 70.00% 71.24% 74.19% 79.87%
Vermont 63.06% 62.41% 66.01% 73.69%
Virginia 51.45% 50.53% 54.40% 65.37%
Washington 50.37% 50.00% 53.32% 65.00%
West Virginia 75.27% 75.04% 78.22% 82.53%
Wisconsin 58.57% 58.43% 61.52% 70.90%
Wyoming 61.97% 61.32% 64.92% 72.92%
* The Tax Relief and Reconciliation Act of 2003 (May 28, 2003) provides for a temporary increase in the FMAP with regard to certain expenditures.
This increase is only available for the last two quarters of FY 2003 and the first three quarters of FY 2004. More information is available at:
http://cms.hhs.gov/states/letters/smd61303.pdf.
** The “Enhanced Federal Medical Assistance Percentages” are for use in State Children’s Health Insurance Program under Title XXI, and for some or
all of children’s medical assistance under Medicaid sections 1905(u)(2) and 1905(u)(3).
*** The values for the District of Columbia were set for the State Plan under Titles XIX and XXI and for capitation payments and DSH allotments under
those titles. For other purposes, including programs remaining in Title IV of the Act, the percentage for the District of Columbia is 50.00%.
Source: Federal Register, November 17, 2000, Vol. 65, No. 223, pages 69560-69561 and Federal Register, November 30, 2001, Vol. 66, No. 231, pages
59790-59793.

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Pharmaceutical Benefits 2002

Medicaid Total Net Expenditures and Eligibles, 20001


Total Net Medical Total Average
State Assistance Expenditures Eligibles Per Eligible
National Total $195,156,897,787 44,297,288 $4,406
Alabama $2,696,375,751 665,767 $4,050
Alaska $481,281,298 109,457 $4,397
Arizona $2,225,044,559 683,224 $3,257
Arkansas $1,579,670,038 504,297 $3,132
California $21,150,591,241 8,063,644 $2,623
Colorado $1,944,315,136 377,670 $5,148
Connecticut $3,141,982,373 417,682 $7,522
Delaware $523,748,320 124,327 $4,213
District of Columbia $827,804,186 150,802 $5,489
Florida $7,525,260,503 2,237,610 $3,363
Georgia $4,321,247,201 1,238,794 $3,488
Hawaii $641,774,557 202,912 $3,163
Idaho $577,303,622 150,817 $3,828
Illinois $7,487,650,546 1,736,185 $4,313
Indiana $3,469,954,218 756,195 $4,589
Iowa $1,637,949,106 316,425 $5,176
Kansas $1,410,784,891 267,812 $5,268
Kentucky $3,034,651,254 724,478 $4,189
Louisiana $3,443,268,554 827,413 $4,161
Maine $1,184,602,684 214,093 $5,533
Maryland $3,029,230,799 721,762 $4,197
Massachusetts $6,345,106,895 1,103,724 $5,749
Michigan $6,740,820,182 1,360,726 $4,954
Minnesota $3,322,271,106 596,726 $5,567
Mississippi $1,978,270,095 595,824 $3,320
Missouri $3,939,465,005 991,428 $3,974
Montana $450,228,083 97,136 $4,635
Nebraska $1,046,569,334 238,054 $4,396
Nevada $598,188,701 158,526 $3,773
New Hampshire $791,841,232 110,155 $7,188
New Jersey $6,069,845,736 855,745 $7,093
New Mexico $1,222,368,395 398,498 $3,067
New York $30,186,294,675 3,401,448 $8,875
North Carolina $5,464,863,059 1,228,105 $4,450
North Dakota $428,657,394 62,235 $6,888
Ohio $7,479,847,366 1,420,386 $5,266
Oklahoma $1,613,315,267 584,620 $2,760
Oregon $2,110,836,095 560,734 $3,764
Pennsylvania $10,387,923,145 1,767,817 $5,876
Rhode Island $1,151,540,265 182,149 $6,322
South Carolina $2,664,608,648 775,428 $3,436
South Dakota $395,665,682 98,740 $4,007
Tennessee $4,941,572,835 1,535,121 $3,219
Texas $10,609,803,586 2,706,974 $3,919
Utah $810,160,698 203,751 $3,976
Vermont $516,874,481 147,817 $3,497
Virginia $2,728,848,408 681,292 $4,005
Washington $3,962,522,212 916,838 $4,322
West Virginia $1,378,345,915 354,326 $3,890
Wisconsin $3,266,901,080 619,129 $5,277
Wyoming $218,851,375 52,470 $4,171
1. FY 2001 data have not been released for all states. Partial data are available in Appendix B.
Source: CMS, CMS-64 Report, FY 2000 and CMS-MSIS Report, 2000.

National Pharmaceutical Council 2-19


Pharmaceutical Benefits 2002

Total Medicaid Program Expenditures, 2001


Total Net Medical Administrative Total Program
State Assistance Expenditures Expenditures Expenditures
National Total $215,809,899,631 $11,818,203,540 $227,628,103,171
Alabama $2,875,372,953 $112,293,202 $2,987,666,155
Alaska $576,586,201 $47,263,457 $623,849,658
Arizona $2,665,261,328 $158,520,658 $2,823,781,986
Arkansas $1,852,176,546 $95,198,228 $1,947,374,774
California $23,870,521,004 $1,912,661,153 $25,783,182,157
Colorado $2,142,029,851 $104,816,374 $2,246,846,225
Connecticut $3,213,848,086 $165,604,760 $3,379,452,846
Delaware $591,974,246 $42,653,471 $634,627,717
District of Columbia $979,941,105 $39,166,567 $1,019,107,672
Florida $8,557,796,303 $488,243,434 $9,046,039,737
Georgia $5,037,084,881 $277,430,878 $5,314,515,759
Hawaii $634,781,970 $40,605,543 $675,387,513
Idaho $693,205,598 $52,649,649 $745,855,247
Illinois $7,764,611,352 $656,516,988 $8,421,128,340
Indiana $4,008,812,857 $191,085,097 $4,199,897,954
Iowa $1,666,923,701 $83,710,399 $1,750,634,100
Kansas $1,686,410,544 $88,495,234 $1,774,905,778
Kentucky $3,304,053,663 $94,086,870 $3,398,140,533
Louisiana $4,201,982,590 $107,688,302 $4,309,670,892
Maine $1,315,523,163 $71,766,795 $1,387,289,958
Maryland $3,256,576,882 $237,787,627 $3,494,364,509
Massachusetts $6,619,524,971 $315,960,095 $6,935,485,066
Michigan $7,218,697,113 $672,727,945 $7,891,425,058
Minnesota $3,835,870,579 $241,026,517 $4,076,897,096
Mississippi $2,438,979,981 $77,574,664 $2,516,554,645
Missouri $4,744,963,426 $218,348,725 $4,963,312,151
Montana $482,357,404 $39,904,721 $522,262,125
Nebraska $1,187,237,577 $65,002,223 $1,252,239,800
Nevada $674,337,888 $41,319,522 $715,657,410
New Hampshire $873,248,831 $49,011,939 $922,260,770
New Jersey $7,123,653,988 $237,787,125 $7,361,441,113
New Mexico $1,467,417,736 $77,150,962 $1,544,568,698
New York $31,367,464,639 $1,100,100,703 $32,467,565,342
North Carolina $6,150,681,587 $278,725,379 $6,429,406,966
North Dakota $406,418,593 $23,266,231 $429,684,824
Ohio $8,433,412,161 $423,705,111 $8,857,117,272
Oklahoma $2,021,033,069 $149,559,238 $2,170,592,307
Oregon $2,658,358,391 $219,388,229 $2,877,746,620
Pennsylvania $10,908,343,146 $477,769,414 $11,386,112,560
Rhode Island $1,187,880,819 $67,375,176 $1,255,255,995
South Carolina $3,019,387,228 $100,847,623 $3,120,234,851
South Dakota $464,455,469 $12,790,635 $477,246,104
Tennessee $5,501,312,153 $164,842,053 $5,666,154,206
Texas $11,583,679,558 $656,595,682 $12,240,275,240
Utah $833,720,115 $71,485,808 $905,205,923
Vermont $601,467,093 $46,209,258 $647,676,351
Virginia $3,036,846,387 $164,701,821 $3,201,548,208
Washington $4,305,724,247 $464,013,447 $4,769,737,694
West Virginia $1,548,398,817 $69,489,949 $1,617,888,766
Wisconsin $3,976,142,914 $202,500,424 $4,178,643,338
Wyoming $243,408,927 $20,778,235 $264,187,162

Source: CMS, CMS-64 Report, 2001.

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Pharmaceutical Benefits 2002

Total SCHIP Expenditures, 2001


Non-Medicaid SCHIP
State Medicaid SCHIP Expenditures Expenditures Total SCHIP Expenditures
National Total $1,085,406,288 $2,672,702,239 $3,758,108,527
Alabama $11,028,787 $41,697,345 $52,726,132
Alaska $30,027,779 $2,675,767 $32,703,546
Arizona $0 $63,107,549 $63,107,549
Arkansas $2,737,113 $304,124 $3,041,237
California $21,573,132 $451,152,166 $472,725,298
Colorado $0 $32,219,993 $32,219,993
Connecticut $6,956,126 $13,320,314 $20,276,440
Delaware $0 $3,522,910 $3,522,910
District of Columbia $5,820,809 $858,195 $6,679,004
Florida $51,638,344 $228,785,527 $280,423,871
Georgia $0 $107,394,549 $107,394,549
Hawaii $4,486,857 $7,517 $4,494,374
Idaho $14,696,691 $1,632,965 $16,329,656
Illinois $41,901,864 $18,270,672 $60,172,536
Indiana $66,317,732 $15,344,243 $81,661,975
Iowa $16,183,842 $17,447,153 $33,630,995
Kansas $0 $34,226,716 $34,226,716
Kentucky $60,436,382 $25,525,110 $85,961,492
Louisiana $46,890,889 $3,127,086 $50,017,975
Maine $11,719,012 $6,814,999 $18,534,011
Maryland $132,783,049 $10,109,047 $142,892,096
Massachusetts $59,140,780 $18,785,086 $77,925,866
Michigan $29,599,152 $24,540,168 $54,139,320
Minnesota $0 $1,050,703 $1,050,703
Mississippi $11,272,829 $47,218,839 $58,491,668
Missouri $70,016,456 $1,912,781 $71,929,237
Montana $0 $17,078,586 $17,078,586
Nebraska $11,522,522 $1,624,650 $13,147,172
Nevada $0 $22,193,839 $22,193,839
New Hampshire $159,278 $4,390,136 $4,549,414
New Jersey $39,019,153 $159,261,877 $198,281,030
New Mexico $9,650,244 $175,626 $9,825,870
New York $7,936,900 $520,915,181 $528,852,081
North Carolina $0 $96,119,888 $96,119,888
North Dakota $108,421 $3,030,901 $3,139,322
Ohio $138,236,701 $2,193,823 $140,430,524
Oklahoma $30,734,515 $1,696,218 $32,430,733
Oregon $0 $20,545,897 $20,545,897
Pennsylvania $0 $134,241,636 $134,241,636
Rhode Island $15,246,059 $11,869,131 $27,115,190
South Carolina $55,068,762 $6,118,751 $61,187,513
South Dakota $5,279,030 $1,441,298 $6,720,328
Tennessee $18,061,561 $1,279,818 $19,341,379
Texas $20,960,055 $343,705,290 $364,665,345
Utah $0 $28,195,260 $28,195,260
Vermont $0 $3,175,394 $3,175,394
Virginia $0 $43,630,115 $43,630,115
Washington $0 $8,447,279 $8,447,279
West Virginia $218,084 $26,609,420 $26,827,504
Wisconsin $37,977,378 $39,774,153 $77,751,531
Wyoming $0 $3,936,548 $3,936,548

Source: CMS, CMS-21 (SCHIP) Report, 2001.

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Pharmaceutical Benefits 2002

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Pharmaceutical Benefits 2002

MEDICAID MANAGED CARE ENROLLMENT

Since 1981, when Congress authorized States to implement Section


1915(b) and Section 1115 Medicaid waivers to increase access to
managed care and test innovative health care financing and delivery
options, enrollment in Medicaid managed care has grown considerably,
although the trend appears to be leveling off. Over the past nine years,
managed care enrollment as a percentage of total Medicaid enrollment
has increased by 300 percent (i.e., from 14.4% to 57.6%). In 2001, more
than half of all Medicaid beneficiaries were enrolled in some type of
managed care program. As of June 30, 2002, all but three States (Alaska,
Mississippi, and Wyoming) were enrolling Medicaid beneficiaries in
some type of managed care plan.

Figure 2-1: Managed Care Enrollment as a Percentage of Total Medicaid Enrollment

100%

80% 46.4% 44.4% 44.2% 43.2% 42.4%


52.2%
59.9%
76.8% 70.6%
60% 85.6%

40%
53.6% 55.6% 55.8% 56.8% 57.6%
47.8%
20% 29.4%
40.1%
23.2%
14.4%
0%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Managed Care Fee for Service

Source: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2002. DHHS, CMS, Center for
Medicaid & State Operations. *Approximated numbers for 1995. Total Medicaid population was provided by the
Office of the Actuary, which used CMS 2082 data to calculate average Medicaid enrollees over 1995. The managed
care population differs from the 11,619,929 reported in the 1995 report as the number represented enrollment of some
beneficiaries in more than one plan.

TYPES OF MEDICAID MANAGED CARE PLANS

Medicaid managed care beneficiaries can be enrolled in one of five basic


Medicaid managed care plans:

• Health Insuring Organization (HIO): an entity that provides for or


arranges for the provision of care and contracts on a prepaid capitated
risk basis to provide a comprehensive set of services.

National Pharmaceutical Council 2-23


Pharmaceutical Benefits 2002

• Commercial Managed Care Organization (Com-MCO): a Com-


MCO is a health maintenance organization with a contract under §1876
or a Medicare+Choice organization, a provider sponsored organization
or any other private or public organization, which meets the
requirements of §1902(w). They provide comprehensive services to
commercial and/or Medicare enrollees, as well as Medicaid enrollees.

• Medicaid-only Managed Care Organization (Mcaid-MCO): a MCO


that provides comprehensive services to Medicaid beneficiaries, but not
commercial or Medicare enrollees.

• Prepaid Health Plan (PHP): an entity that provides less than


comprehensive services on an at-risk basis or one that provides any
benefit package on a non-risk basis.

• Primary Care Case Management (PCCM): a provider (usually a


physician, physician group practice, or an entity employing or having
other arrangements with such physicians, but sometimes also including
nurse practitioners, nurse-midwives, or physician assistants) who
contracts to locate, coordinate, and monitor covered primary care (and
sometimes additional services). This category includes those PHPs that
act as PCCMs.

• “Other” Managed Care Arrangement: An entity where the plan is not


considered a PCCM, PHP, Comprehensive MCO, Medicaid-only MCO,
or HIO.

The most utilized of these plans are Comprehensive MCOs and Prepaid
Health Plans.

Table 2-1: Medicaid Managed Care Plans

Number of Plans Number of Enrollees


Health Insuring Organization (HIO) 5 511,353
Commercial Managed Care Organization (COM-MCO) 188 9,734,395
Medicaid-only Managed Care Organization (Mcaid-MCO) 120 5,722,554
Primary Care Case Management (PCCM) 38 5,614,541
Prepaid Health Plan (PHP) 159 10,166,056
Other 25 199,299
Total 535 31,948,198*

* Total number of enrollees includes 8,830,530 individuals enrolled in more than one managed care plan type. It also
includes individuals enrolled in State healthcare reform programs that expand eligibility beyond traditional Medicaid
eligibility standards.
Source: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2002. DHHS, CMS, Center for
Medicaid & State Operations.

The following tables provide an overview of Medicaid managed care enrollment at the State
level.

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Pharmaceutical Benefits 2002

Medicaid Managed Care Enrollment, As of June 30, 2002


Rank Based on
Medicaid Medicaid Managed Percent in Percent in
State Enrollment Care Enrollment Managed Care Managed Care
National Total 40,147,539 23,117,668 57.58%
Alabama 730,619 405,090 55.44% 35
Alaska 90,841 0 0.00% 50
Arizona 738,556 697,171 94.40% 5
Arkansas 507,969 336,111 66.17% 25
California 6,074,019 3,191,168 52.54% 38
Colorado 299,207 278,095 92.94% 6
Connecticut 375,768 280,106 74.54% 16
Delaware 113,480 87,465 77.08% 15
District of Columbia 127,059 80,300 63.20% 33
Florida 1,986,652 1,267,998 63.83% 32
Georgia 1,447,398 1,043,154 72.07% 17
Hawaii 168,616 132,787 78.75% 13
Idaho 147,202 58,284 39.59% 41
Illinois 1,475,137 130,988 8.88% 48
Indiana 687,603 484,116 70.41% 20
Iowa 261,923 227,495 86.86% 8
Kansas 227,392 130,162 57.24% 34
Kentucky 594,594 500,987 84.26% 10
Louisiana 814,134 206,992 25.42% 45
Maine 205,474 110,922 53.98% 37
Maryland 655,940 451,307 68.80% 21
Massachusetts 982,979 628,832 63.97% 31
Michigan 1,208,803 1,208,803 100.00% 1
Minnesota 536,722 368,186 68.60% 22
Mississippi 709,260 0 0.00% 50
Missouri 905,683 413,361 45.64% 40
Montana 78,195 52,209 66.77% 24
Nebraska 210,487 163,772 77.81% 14
Nevada 156,585 60,823 38.84% 42
New Hampshire 90,800 9,206 10.14% 47
New Jersey 805,056 523,904 65.08% 28
New Mexico 371,353 243,069 65.45% 26
New York 3,129,731 1,099,900 35.14% 44
North Carolina 1,023,601 722,089 70.54% 18
North Dakota 47,788 30,808 64.47% 29
Ohio 1,490,097 378,476 25.40% 46
Oklahoma 480,373 338,819 70.53% 19
Oregon 436,645 378,739 86.74% 9
Pennsylvania 1,431,442 1,140,211 79.65% 12
Puerto Rico 1,036,168 865,285 83.51% 11
Rhode Island 171,673 117,024 68.17% 23
South Carolina 744,808 64,272 8.63% 49
South Dakota 90,040 85,868 95.37% 4
Tennessee 1,430,966 1,430,966 100.00% 1
Texas 2,209,031 839,798 38.02% 43
Utah 154,784 154,784 100.00% 1
Vermont 128,303 82,261 64.11% 30
Virgin Islands 17,039 0 0.00% 50
Virginia 496,555 323,863 65.22% 27
Washington 919,487 829,625 90.23% 7
West Virginia 286,123 144,911 50.65% 39
Wisconsin 585,305 317,106 54.18% 36
Wyoming 52,074 0 0.00% 50
State Medicaid enrollment includes individuals enrolled in State health care reform programs that expand eligibility beyond traditional Medicaid eligibility standards.
This table provides unduplicated figures for Medicaid Enrollment and Managed Care Enrollment by State for a single point in time. These values differ significantly
(i.e., are lower than) unduplicated annual counts of enrollees over the entire year.
Source: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2002. DHHS, CMS, Center for Medicaid & State Operations.

National Pharmaceutical Council 2-25


Pharmaceutical Benefits 2002

Pharmaceutical Benefits Under Managed Care Plans


Where do managed care recipients receive Special requirements
pharmacy benefits? for pharmacy benefits
State (State, Managed Care Plan, Both) in managed care?
Alabama N/A N/A
Alaska - -
Arizona* - -
Arkansas State None
California Both Statutes, regulations, contractual
Colorado Managed Care Plan Contractual
Connecticut Managed Care Plan Statutes, regulations, contractual
Delaware State N/A
District of Columbia Both None
Florida Managed Care Plan Contractual
Georgia N/A N/A
Hawaii Both Guidelines
Idaho N/A N/A
Illinois Managed Care Plan Contractual
Indiana Managed Care Plan None
Iowa State None
Kansas Managed Care Plan Guidelines, contractual
Kentucky Both Contractual
Louisiana State N/A
Maine State None
Maryland Both Regulations
Massachusetts Managed Care Plan Contractual
Michigan Both Contractual
Minnesota Managed Care Plan Contractual
Mississippi - -
Missouri Managed Care Plan Contractual
Montana State None
Nebraska State None
Nevada Managed Care Plan None
New Hampshire State None
New Jersey Managed Care Plan Guidelines
New Mexico Managed Care Plan Regulations, contractual
New York State Statutes, FFS program
North Carolina State None
North Dakota State None
Ohio Managed Care Plan Statutes
Oklahoma Both Contractual
Oregon Both Contractual
Pennsylvania Managed Care Plan Contractual
Rhode Island Managed Care Plan Regulations
South Carolina Managed Care Plan Contractual
South Dakota N/A N/A
Tennessee* Managed Care Plan -
Texas State N/A
Utah State N/A
Vermont State None
Virginia Managed Care Plan Contractual
Washington Both Contractual
West Virginia State N/A
Wisconsin Both Contractual
Wyoming - -

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug decisions.
“-” indicates Not Applicable, “N/A” indicates “No Answer” was received on the Survey.
Sources: As reported by State drug program administrators in the 2002 NPC Survey.

2-26 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Medicaid Managed Care Enrollment Trends, 1998-2002


State 1998 1999 2000 2001 2002
National Total 16,573,996 17,756,603 18,786,137 20,773,813 23,117,668
Alabama 362,272 377,952 325,059 350,485 405,090
Alaska 0 0 0 0 0
Arizona 368,344 363,662 442,254 527,674 697,171
Arkansas 186,215 232,123 222,261 257,662 336,111
California 2,246,406 2,540,902 2,525,406 2,870,514 3,191,168
Colorado 215,936 216,357 254,232 247,181 278,095
Connecticut 220,803 230,217 229,995 239,829 280,106
Delaware 62,010 68,869 75,535 83,422 87,465
District of 51,022 75,499 78,864 79,673
Columbia 80,300
Florida 915,554 912,045 1,016,641 1,184,506 1,267,998
Georgia 673,528 638,082 806,009 878,140 1,043,154
Hawaii 131,761 120,246 121,581 127,779 132,787
Idaho 30,866 31,184 32,338 37,913 58,284
Illinois 175,649 158,888 137,622 136,497 130,988
Indiana 233,065 331,363 376,066 433,014 484,116
Iowa 190,692 176,487 182,251 206,751 227,495
Kansas 84,437 95,868 108,093 118,209 130,162
Kentucky 325,233 324,447 464,191 489,711 500,987
Louisiana 40,729 44,741 48,802 56,542 206,992
Maine 16,295 23,720 57,151 96,051 110,922
Maryland 306,474 347,937 385,687 421,355 451,307
Massachusetts 532,971 575,186 583,324 616,241 628,832
Michigan 752,568 1,130,608 1,063,557 1,023,264 1,208,803
Minnesota 225,498 268,360 291,365 322,640 368,186
Mississippi* 153,562 200,347 218,431 297,916 0
Missouri 252,097 276,628 304,499 378,771 413,361
Montana 66,331 69,738 42,312 46,995 52,209
Nebraska 110,606 122,006 140,199 150,840 163,772
Nevada 35,089 36,945 37,945 47,518 60,823
New Hampshire 7,368 5,812 4,432 6,200 9,206
New Jersey 376,839 356,956 371,641 459,087 523,904
New Mexico 193,818 208,528 199,297 212,456 243,069
New York 634,233 659,569 691,422 728,709 1,099,900
North Carolina 559,035 689,104 598,852 674,133 722,089
North Dakota 22,045 23,886 23,962 25,540 30,808
Ohio 292,819 244,888 239,460 277,617 378,476
Oklahoma 154,270 193,902 279,205 299,272 338,819
Oregon 299,826 308,798 312,064 360,926 378,739
Pennsylvania 904,701 1,004,601 975,211 1,037,374 1,140,211
Puerto Rico 813,791 764,068 828,021 898,171 865,285
Rhode Island 74,446 85,900 104,041 111,624 117,024
South Carolina 15,823 23,149 32,149 41,716 64,272
South Dakota 43,834 50,220 67,835 79,641 85,868
Tennessee 1,268,769 1,312,969 1,323,319 1,426,622 1,430,966
Texas 437,898 352,062 606,238 753,613 839,798
Utah 112,803 118,601 119,200 128,898 154,784
Vermont 52,153 65,692 55,605 78,181 82,261
Virgin Islands 0 0 0 0 0
Virginia 299,266 292,214 280,978 291,767 323,863
Washington 718,023 706,202 800,481 766,366 829,625
West Virginia 131,349 111,532 90,631 122,230 144,911
Wisconsin 194,874 187,543 210,423 266,577 317,106
Wyoming 0 0 0 0 0

State Medicaid enrollment includes individuals enrolled in State health care reform programs that expand eligibility beyond traditional Medicaid eligibility
standards.
*As of 2002, HealthMacs no longer participates in the Medicaid program in Mississippi.
Sources: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 1998; 1999; 2000; 2001 and 2002. DHHS, CMS, Center for Medicaid
& State Operations.

National Pharmaceutical Council 2-27


Pharmaceutical Benefits 2002

Medicaid Managed Care Plan Type, As of June 30, 2002


Commercial Medicaid-only
State HIO MCO MCO PCCM PHP Other
National Total 5 189 120 39 159 25
Alabama 0 0 0 2 1 0
Alaska - - - - - -
Arizona 0 2 26 0 1 0
Arkansas 0 0 0 1 1 0
California 5 24 0 2 14 5
Colorado 0 5 1 1 7 0
Connecticut 0 3 1 0 0 0
Delaware 0 2 0 0 0 0
District of Columbia 0 0 4 0 1 0
Florida 0 12 2 1 2 1
Georgia 0 0 0 1 2 0
Hawaii 0 4 1 0 2 1
Idaho 0 0 0 1 0 0
Illinois 0 4 1 0 0 0
Indiana 0 0 3 1 0 0
Iowa 0 3 0 1 1 0
Kansas 0 1 0 1 0 0
Kentucky 0 0 1 1 1 0
Louisiana 0 0 0 1 0 0
Maine 0 0 0 1 0 0
Maryland 0 0 6 0 0 0
Massachusetts 0 2 2 1 1 0
Michigan 0 10 11 0 48 0
Minnesota 0 6 2 0 0 1
Mississippi 0 0 0 0 0 0
Missouri 0 4 4 0 0 0
Montana 0 0 0 1 0 0
Nebraska 0 1 0 1 0 1
Nevada 0 2 0 0 0 0
New Hampshire 0 1 0 0 0 0
New Jersey 0 1 4 0 0 0
New Mexico 0 3 0 0 0 0
New York 0 13 15 6 1 16
North Carolina 0 2 0 2 0 0
North Dakota 0 1 0 1 0 0
Ohio 0 5 2 0 0 0
Oklahoma 0 1 3 1 0 0
Oregon 0 5 9 1 18 0
Pennsylvania 0 2 9 1 25 0
Puerto Rico 0 4 0 0 3 0
Rhode Island 0 3 0 0 0 0
South Carolina 0 0 1 1 0 0
South Dakota 0 0 0 1 1 0
Tennessee 0 6 3 0 2 0
Texas 0 11 2 2 1 0
Utah 0 3 2 1 10 0
Vermont 0 0 0 1 0 0
Virgin Islands 0 0 0 0 0 0
Virginia 0 6 1 1 0 0
Washington 0 6 2 1 14 0
West Virginia 0 2 0 1 0 0
Wisconsin 0 29 2 0 2 0
Wyoming - - - - - -

HIO=Health Insuring Organization; Commercial MCO=Commercial Managed Care Organization; Medicaid-only MCO=Medicaid-only Managed Care
Organization; PCCM=Primary Care Case Management; PHP=Prepaid Health Plan.
Source: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2002. DHHS, CMS, Center for Medicaid & State Operations.

2-28 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Medicaid Managed Care Enrollment by Plan Type,


As of June 30, 2002
Commercial
State HIO MCO Medicaid-only MCO PCCM PHP Other
National Total 511,353 9,734,395 5,722,554 5,614,541 10,166,056 199,299
Alabama - - - 387,947 392,196 -
Alaska - - - - - -
Arizona - 60,540 636,631 - 50,305 -
Arkansas - - - 292,712 336,111 -
California 511,353 2,640,578 - 26,775 296,189 3,509
Colorado - 66,057 81,238 56,163 258,194 -
Connecticut - 231,467 48,639 - - -
Delaware - 87,465 - - - -
District of Columbia - - 80,300 - 2,662 -
Florida - 454,528 181,116 638,090 86,809 18,052
Georgia - - - 1,043,154 998,269 -
Hawaii - 113,019 28,996 - 1,113 1,672
Idaho - - - 58,284 - -
Illinois - 115,604 15,384 - - -
Indiana - - 204,578 279,538 - -
Iowa - 57,431 - 67,014 227,495 -
Kansas - 61,167 - 68,995 - -
Kentucky - - 122,972 293,560 500,987 -
Louisiana - - - 206,992 - -
Maine - - - 110,922 - -
Maryland - - 451,307 - - -
Massachusetts - 122,812 115,121 390,899 411,477 -
Michigan - 465,549 318,867 - 1,208,803 -
Minnesota - 356,975 15,288 - - 777
Mississippi - - - - - -
Missouri - 151,266 262,095 - - -
Montana - - - 52,209 - -
Nebraska - 32,426 - 37,379 - 163,772
Nevada - 60,823 - - - -
New Hampshire - 9,206 - - - -
New Jersey - 40,790 483,114 - - -
New Mexico - 243,069 - - - -
New York - 585,915 475,082 20,156 7,230 11,517
North Carolina - 20,738 - 701,351 - -
North Dakota - 594 - 30,214 - -
Ohio - 170,188 208,288 - - -
Oklahoma - 22,640 160,863 155,316 - -
Oregon - 71,207 194,626 13,812 728,352 -
Pennsylvania - 227,305 775,544 129,901 930,249 -
Puerto Rico - 865,285 0 0 865,285 -
Rhode Island - 117,024 0 0 0 -
South Carolina - 0 45,401 18,871 0 -
South Dakota - 0 0 68,649 85,868 -
Tennessee - 988,919 442,047 0 1,430,966 -
Texas - 320,664 210,206 197,544 217,693 -
Utah - 67,049 23,749 13,068 299,686 -
Vermont - - - 82,261 - -
Virgin Islands - - - - - -
Virginia - 179,367 58,395 71,897 - -
Washington - 363,024 81,608 4,146 829,625 -
West Virginia - 48,189 - 96,722 - -
Wisconsin - 315,515 1,099 - 492 -
Wyoming - - - - - -

* This table provides duplicated figures that include enrollees receiving comprehensive and limited benefits. Total number
of enrollees includes those who were enrolled in more than one managed care plan. Figures also include individuals
enrolled in State health care reform programs that expand eligibility beyond traditional Medicaid eligibility standards.
Source: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2002. DHHS, CMS, Center for Medicaid & State Operations.

National Pharmaceutical Council 2-29


Pharmaceutical Benefits 2002

Medicaid Managed Care Enrollment by Payment Arrangement,


As of June 30, 2002
State Fee-For-Service (FFS) Fully Capitated (FUL) Partially Capitated (PAR)
National Total 5,595,064 26,127,344 211,970
Alabama 387,947 392,196 -
Alaska - - -
Arizona - 747,476 -
Arkansas 292,712 336,111 -
California 26,775 3,451,629 -
Colorado 56,163 405,489 -
Connecticut - 280,106 -
Delaware - 87,465 -
District of Columbia - 80,300 2,662
Florida 656,142 722,453 -
Georgia 1,043,154 998,269 -
Hawaii - 144,800 -
Idaho 58,284 - -
Illinois - 130,988 -
Indiana 279,538 204,578 -
Iowa 67,014 284,926 -
Kansas 68,995 61,167 -
Kentucky 293,560 623,959 -
Louisiana 206,992 - -
Maine 110,922 - -
Maryland - 451,307 -
Massachusetts 390,899 649,410 -
Michigan - 1,993,219 -
Minnesota 777 372,263 -
Mississippi - - -
Missouri - 413,361 -
Montana 52,209 - -
Nebraska 201,151 32,426 -
Nevada - 60,823 -
New Hampshire - 9,206 -
New Jersey - 523,904 -
New Mexico - 243,069 -
New York 6,077 1,072,514 21,309
North Carolina 701,351 20,738 -
North Dakota 30,214 594 -
Ohio - 378,476 -
Oklahoma - 183,503 155,316
Oregon - 994,185 13,812
Pennsylvania 129,901 1,933,098 -
Puerto Rico - 1,730,570 -
Rhode Island - 117,024 -
South Carolina - 45,401 18,871
South Dakota 68,649 85,868 -
Tennessee - 2,861,932 -
Texas 197,544 748,563 -
Utah 13,068 390,484 -
Vermont 82,261 - -
Virgin Islands - - -
Virginia 71,897 237,762 -
Washington 4,146 1,274,257 -
West Virginia 96,722 48,189 -
Wisconsin - 317,106 -
Wyoming - - -

Individual State totals will not sum to total managed care enrollment (page 2-5) because State totals include individuals enrolled in more than one plan type
including dental, mental, and long-term care.
Source: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2002. DHHS, CMS, Center for Medicaid & State Operations.

2-30 National Pharmaceutical Council


Pharmaceutical Benefits 2002

MEDICAID MANAGED CARE WAIVERS

In 1981, Congress authorized States to implement Section 1915(b) and Section


1115 Medicaid waivers to increase access to managed care and test innovative
health care financing and delivery options. The U.S. Department of Health and
Human Services (DHHS) granted these waivers to allow States to “waive”
certain Medicaid requirements in Sections 1902 and 1903 of the Social Security
Act and “mandate” enrollment of Medicaid eligibles in managed care programs.

SECTION 1915(b) “FREEDOM OF CHOICE” WAIVERS

Section 1915(b) waivers are granted to give States the authority to conduct
Medicaid programs outside of the scope of the Medicaid statute, allowing them
to waive freedom of choice, statewide access to care, and comparability
requirements under Section 1902 of the Social Security Act. With a 1915(b)
waiver, a State can require mandatory enrollment of Medicaid recipients in
managed care plans. Section 1915(b) waivers cannot negatively impact
beneficiary access or quality of care of services, and must be cost-effective (i.e.,
cost must be less than the Medicaid program would cost without the waiver).
Section 1915(b) waivers are typically limited to a targeted geographical area or
population, are approved for an initial period of two years, and can be renewed
in two-year increments if the State reapplies.

Four options for 1915(b) waivers exist; each is governed by a different


subsection(s) of Section 1915(b);

• Paragraph (b) (1) - Case Management: States are allowed to implement case
management systems which can be as simple as requiring each beneficiary to
choose a primary care provider or as comprehensive as mandating enrollment in
a prepaid health plan.
• Paragraph (b) (2) - Central Broker: Localities are allowed to act as a central
broker in assisting Medicaid eligibles in selecting among competing health care
plans, if such a restriction does not substantially impair access to medically
necessary services of adequate quality.
• Paragraph (b) (3) - Shared Cost Saving: States are allowed to share (through
provision of additional services) cost savings (resulting from use by the recipient
of more cost-effective medical care) with recipients of medical assistance under
the State Plan.
• Paragraph (b) (4) - Restrict Providers: States can limit the number of providers
of certain services. These waivers are sometimes referred to as selective
contracting waivers and are gaining in popularity. Recently approved 1915(b)(4)
waivers included programs to restrict the number of providers of transportation
services, organ transplants, and inpatient obstetrical care.
Refer to the table on page 2-13 for a listing of 1915(b) waivers.

Although Section 1915(b) waivers allow States to increase access to managed


care plans, States are still limited under Federal regulations and cannot use them
to serve beneficiaries beyond Medicaid State Plan Eligibility or change their

National Pharmaceutical Council 2-31


Pharmaceutical Benefits 2002

benefits package. In order to expand their Medicaid programs even further than
under Section 1915(b) waivers, States apply for Section 1115 research and
demonstration waivers.

SECTION 1115 RESEARCH AND DEMONSTRATION WAIVERS

Section 1115 research and demonstration waivers release States from standard
Medicaid requirements, allowing them the flexibility to test substantially new
ideas of policy merit. Along with Section 1915(b) waivers, Section 1115 waivers
allowed States to waive freedom of choice, statewide access to care, and
comparability requirements. However, a Section 1115 waiver also allow States to
provide new and additional services, test new payment methods, offer benefits to
new and expanded populations, and contract with managed care organizations that
did not meet the necessary criteria of Section 1903 of the Social Security Act.

To receive approval of a Section 1115 waiver, States submit a proposal to CMS


for discussion and review. Once operational, States allow formal evaluations of
the research and public policy value of the programs and to demonstrate that their
programs do not exceed costs, which would have otherwise occurred under
traditional Medicaid programs (i.e., States must demonstrate budget neutrality).
Section 1115 waivers are usually granted for a five-year period and each State
must submit a request for continuation. For example, Arizona has operated its
program under a Section 1115 waiver for over 20 years. The Benefits
Improvement and Protection Act (BIPA) streamlined the process for States to
submit requests for and receive extensions of Section 1115 demonstration
waivers.

Currently, there are 17 Medicaid programs with Section 1115 waiver approvals:
Arizona, Arkansas, California, Delaware, Hawaii, Kentucky, Maryland,
Massachusetts, Minnesota, Missouri, New York, Oklahoma, Oregon, Rhode
Island, Tennessee, Vermont and Wisconsin. Refer to the table on page 2-34 for a
listing of implemented Section 1115 waivers.

2-32 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Section 1915(b) Waivers, As of June 30, 2002

1915(b) Statutes
State Program(s) Approved Utilized Implemented Expiration
st
Alabama Patient 1 1, 3, 4 01/1/97 12/26/02
Alaska None -- -- --
Arizona None -- -- --
Non-Emergency Transportation 1, 4 3/1/98 8/22/03
Arkansas
Primary Care Physician 1 11/1/96 12/17/04
CALOPTIMA 1, 4 10/1/95 7/29/03
Central Coast Alliance for Health 1, 4 1/1/96 6/2/03
Health Plan of San Mateo 1, 4 11/30/87 8/26/04
Hudman 4 4/24/92 7/15/03
Managed Care Network 1, 2, 4 3/1/97 5/18/03
Medi-Cal Mental Health Care Field Test 4 4/1/95 7/29/03
Medi-Cal Specialty Mental Health Services Consolidation 4 3/15/95 11/19/02
California
Partnership Health Plan of California 1, 4 5/1/94 2/10/03
Primary Care Case Management Program 1, 4 8/1/84 2/4/04
Sacramento Geographic Managed Care 1, 2, 4 4/1/94 11/10/02
San Diego Geographic Managed Care 1, 2, 4 10/17/98 10/10/03
Santa Barbara Health Initiative 1, 4 9/1/83 1/11/03
Selective Provider Contracting Program 4 9/21/82 10/31/02
Two-Plan Model Program 1, 2, 4 1/23/96 11/8/03
Managed Care Program 1, 2 5/1/83 4/14/03
Colorado
Mental Health Capitation Program 1, 3, 4 7/1/95 4/9/03
Connecticut HUSKY A 1, 4 10/1/95 5/30/04
Delaware None -- -- --
District of Columbia DC Medicaid Managed Care Program 1, 2, 4 4/1/94 9/23/03
Managed Health Care 1, 2, 4 10/1/92 9/26/04
Florida Prepaid Mental Health Plan 1, 4 3/1/96 6/30/03
Statewide Inpatient Psychiatric Program 4 4/1/99 12/31/03
Georgia Better Health Care 1 10/1/93 3/14/03
Georgia Non-Emergency Transportation Broker Program 4 10/1/97 9/7/03
Preadmission Screening and Annual Resident Review
(PASARR) 1, 4 11/1/94 4/8/03
Hawaii None -- -- --
Idaho Healthy Connections 1, 2 10/1/93 9/21/04
Illinois None -- -- --
Indiana Hoosier Healthwise 1 7/1/94 4/23/03
Iowa Iowa Plan for Behavioral Health 1, 3, 4 1/1/99 2/28/03
KMMC: HealthConnect Kansas 1, 2, 4 1/1/84 10/4/02
Kansas
KMMC: HealthWave 19 1, 2, 4 12/1/95 10/4/02
Kentucky Human Service Transportation 1, 4 6/1/98 3/7/03
Louisiana Community Care 1 6/1/92 3/25/03
Maine None -- -- --
Maryland None -- -- --
Massachusetts None -- -- --
Michigan Comprehensive Health Care 1, 2, 4 7/1/97 9/24/04

National Pharmaceutical Council 2-33


Pharmaceutical Benefits 2002

1915(b) Statutes
State Program(s) Approved Utilized Implemented Expiration
Specialty Community Mental Health Services Programs 1, 4 10/1/98 3/13/03
Minnesota Consolidated Chemical Dependency Treatment Fund 1, 4 1/1/88 3/23/03
Mississippi None -- -- --
Missouri MC+ Managed Care/1915(b) 1, 2, 4 9/1/95 3/14/04
Montana Passport to Health 1, 2 1/1/94 4/24/04
Nebraska Nebraska Health Connection Combined Waiver Program 1, 2, 3, 4 7/1/95 10/31/02
Nevada None -- -- --
New Hampshire None -- -- --
New Jersey New Jersey Care 2000+ 1915(b) 1, 2 10/1/00 9/30/02
New Mexico SALUD! 1,4 7/1/97 10/21/02
New York Non-Emergency Transportation 1, 4 7/1/96 11/14/02
ACCESS II /III1915(b) 1 7/1/98 11/08/02
North Carolina Carolina Access 1915(b) 1 4/1/91 11/08/02
Health Care Connection 1915(b) 1 7/1/96 11/08/02
North Dakota None -- -- --
Ohio PremierCare 1, 2, 4 7/1/01 6/30/03
Oklahoma None -- -- --
Oregon Transportation Program 4 9/1/94 7/25/03
Family Care Network 1 2/1/94 6/16/04
Pennsylvania
HealthChoices 1, 2, 3, 4 2/1/97 6/16/04
Puerto Rico None -- -- --
Rhode Island None -- -- --
South Carolina None -- -- --
South Dakota Prime 1 9/1/93 9/28/02
Tennessee None -- -- --
Lonestar Select I 4 9/1/94 9/3/04
Lonestar Select II 4 3/10/95 3/4/04
Texas NorthSTAR 1, 2, 4 11/5/03
11/1/99
STAR 1, 2, 3, 4 8/1/93 8/31/03
STAR Plus 1, 2, 3, 4 1/1/98 8/31/04
Choice of Health Care Delivery 1, 2, 4 7/1/82 7/23/03
Utah Non-Emergency Transportation 1, 4 7/1/01 9/18/04
Prepaid Mental Health Program 4 7/1/91 12/26/03
Vermont None -- -- --
Medallion 1, 2 3/1/92 3/24/04
Virginia
Medallion II 1, 4 1/1/96 12/26/02
Healthy Options 1, 4 10/1/93 2/24/03
Washington
The Integrated Mental Health Services 1, 4 7/1/93 11/4/04
Mountain Health Trust 1, 4 9/1/96 12/22/04
West Virginia
Physician Assured Access System 1 6/1/92 4/27/04
Wisconsin None -- -- --
Wyoming None -- -- --
Source: 2002 National Summary of State Medicaid Managed Care Programs. Program Descriptions as of June 30, 2002. Centers for
Medicare and Medicaid Services, Center for Medicaid & State Operations.

2-34 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Section 1115 Research and Demonstration Waivers


As of June 30, 2002
State Program Implemented Expiration
Arizona Health Care Cost Containment System
Arizona 10/1/82 9/30/06
(AHCCCS)
Arkansas ARKids First 9/1/97 9/30/05
Altamed Health Senior Buencare 11/01/98 11/24/02
Center For Elders Independence 4/1/95 11/24/02
California On Lok Senior Health Services 11/1/83 11/24/02
Senior Care Action Network 1/1/85 7/31/03
Sutter Senior Care 5/1/94 11/24/02
Delaware Diamond State Health Plan 1/1/96 3/15/04
Hawaii Hawaii QUEST 8/1/94 3/31/03
Kentucky Kentucky Health Care Partnership Program 11/1/97 11/1/02
Maryland HealthChoice 6/2/97 5/31/05
Massachusetts Mass Health 7/1/97 6/30/05
MinnesotaCare Program for Families and Children 7/1/95 6/30/05
Minnesota
Prepaid Medical Assistance Program 7/1/85 6/30/05
Missouri MC+ Managed Care/1115 9/1/98 3/1/04
Partnership Plan – Family Health Plus 9/04/01 3/31/03
New York
Partnership Plan Medicaid Managed Care Program 10/1/97 3/31/03
Oklahoma SoonerCare 1/1/96 12/31/03
Oregon Oregon Health Plan 2/1/94 1/31/05
Rhode Island Rite Care 8/1/94 7/31/05
Tennessee TennCare 1/1/94 6/30/07
Vermont Vermont Health Access 1/1/96 12/31/03
BadgerCare (SCHIP) 7/01/99 3/31/04
Wisconsin
Wisconsin Partnership Program 1/1/96 12/31/02
Source: 2002 National Summary of State Medicaid Managed Care Programs. Program Descriptions as of June 30, 2002. Centers for
Medicare and Medicaid Services, Center for Medicare & State Operations.

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Section 3:
State Characteristics

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STATE CHARACTERISTICS

Presented in Section 3 of the Compilation is State-by-State information on


several topics. The Section begins with a series of tables showing select State
demographic characteristics including age composition and racial/Hispanic
status. Next, income, employment, and insurance coverage data for each State
are presented. The final group of tables show select components of each State’s
health care system including Medicare and Medicaid certified facilities
(hospitals, SNFs, ICFs/MR, home health agencies, and rural health clinics),
licensed pharmacies, and health manpower (physicians, Registered Nurses, and
pharmacists).

The data in Section 3 have been compiled from a myriad of sources. These
include:

• CMS
• The U.S. Bureau of the Census
• The Bureau of Labor Statistics (BLS)
• The Health Resources and Services Administration (HRSA)
• The National Association of Boards of Pharmacy.

Because of the unevenness with which the various government agencies and
other organizations have released updated information, we have carefully
reviewed all possible information sources and made judgments on which data to
present. In the final analysis, we have included those data that, in our opinion,
best reflect the factors and characteristics on which we have reported. However,
certain limitations in the different sources have resulted in some inconsistencies
among the tables. The following examples illustrate this problem.

The table showing the age distribution of the population is derived from the 2001
Current Population Survey conducted by the U.S. Bureau of the Census. It is the
only 2001 age breakout on a State-by-State basis that the Bureau had released
while data collection for the 2002 Compilation was ongoing. Unfortunately, the
approximately 5 million individuals residing in “group quarters” were not
included. Hence, the total population figure (and the corresponding figures for
each State) presented in this table is lower than the population total in the table
showing insurance status.

The data on insurance status was compiled from the March Supplement to the
Current Population Survey, a collaborative effort by the Census Bureau and
BLS. Hence, the estimates on the number of Medicare and Medicaid
beneficiaries differ slightly from those published by CMS.

HRSA’s Bureau of Health Professions, Division of Nursing is responsible for


conducting the National Sample Survey of Registered Nurses. This survey is the
Nation’s most extensive and comprehensive source of nursing statistics. The
most recent survey, which is conducted every four years, is the 2000 version.
Nothing more current is available from any other source that we examined.
Hence, the nursing information included in 2002 Compilation is a repeat of the
data presented in last year’s version.

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Despite the limitations confronted while compiling these statistics, we believe


that the data presented in Section 3 provide a useful and meaningful picture of
State characteristics. Users of the Compilation are urged to carefully read the
source information and notes at the bottom of each table in order to understand
the limitations of the data contained therein.

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Age Demographics, 2001*


Percent Ages Percent Percent Percent
State Total Population 19 and under Ages 20-44 Ages 45-64 Ages 65+
National Total 277,017,622 28.5% 36.5% 23.0% 12.0%
Alabama 4,349,601 28.4% 35.1% 23.8% 12.7%
Alaska 615,531 34.0% 37.2% 23.4% 5.0%
Arizona 5,197,474 30.9% 35.0% 21.0% 13.0%
Arkansas 2,618,137 21.9% 34.4% 23.3% 13.5%
California 33,681,509 31.3% 37.5% 20.8% 10.3%
Colorado 4,314,724 29.0% 38.7% 23.0% 9.3%
Connecticut 3,317,131 26.6% 35.4% 24.8% 13.2%
Delaware 771,580 27.7% 36.5% 23.1% 12.7%
District of Columbia 536,260 22.3% 42.6% 23.3% 11.8%
Florida 16,007,098 26.1% 33.6% 23.2% 17.1%
Georgia 8,150,008 30.1% 38.8% 21.9% 9.2%
Hawaii 1,188,615 27.8% 35.1% 23.8% 13.3%
Idaho 1,289,492 32.2% 34.4% 22.4% 11.0%
Illinois 12,160,474 28.2% 37.4% 22.9% 11.5%
Indiana 5,936,550 27.5% 37.0% 23.7% 11.8%
Iowa 2,818,957 21.3% 34.4% 23.7% 14.1%
Kansas 2,612,636 27.9% 36.6% 23.0% 12.6%
Kentucky 3,950,704 27.6% 36.3% 24.0% 12.1%
Louisiana 4,329,436 31.2% 35.3% 22.4% 11.2%
Maine 1,251,745 24.2% 35.0% 26.9% 13.9%
Maryland 5,241,087 28.8% 36.4% 23.7% 11.0%
Massachusetts 6,159,307 25.0% 37.9% 24.1% 13.0%
Michigan 9,740,127 27.6% 36.6% 23.9% 11.9%
Minnesota 4,836,367 27.3% 37.8% 23.6% 11.3%
Mississippi 2,762,576 40.6% 35.1% 22.4% 11.7%
Missouri 5,467,596 28.4% 35.2% 23.6% 12.8%
Montana 879,639 27.6% 33.6% 25.9% 12.9%
Nebraska 1,662,378 29.0% 35.4% 22.8% 12.9%
Nevada 2,072,391 29.3% 36.4% 23.2% 11.1%
New Hampshire 1,223,636 26.1% 37.0% 25.6% 11.4%
New Jersey 8,289,599 25.5% 37.5% 24.3% 12.7%
New Mexico 1,792,823 30.9% 34.4% 23.2% 11.5%
New York 18,433,370 27.1% 37.0% 23.5% 12.5%
North Carolina 7,932,350 13.5% 37.2% 23.0% 11.7%
North Dakota 610,793 25.5% 36.2% 24.3% 14.0%
Ohio 11,074,368 27.0% 36.0% 24.2% 12.7%
Oklahoma 3,347,660 28.9% 34.7% 23.5% 12.9%
Oregon 3,395,357 27.7% 35.2% 24.6% 12.4%
Pennsylvania 11,853,829 25.8% 34.7% 24.6% 15.0%
Rhode Island 1,020,102 25.8% 36.7% 23.7% 13.8%
South Carolina 3,927,982 28.3% 35.8% 24.0% 11.9%
South Dakota 727,968 27.9% 35.1% 23.4% 13.6%
Tennessee 5,592,019 27.5% 36.3% 24.2% 8.4%
Texas 20,764,441 32.1% 37.3% 20.9% 9.6%
Utah 2,229,295 35.6% 38.4% 17.6% 8.4%
Vermont 592,321 25.0% 35.5% 27.1% 12.4%
Virginia 6,956,276 28.0% 37.3% 23.7% 11.0%
Washington 5,849,311 28.5% 36.9% 23.7% 10.9%
West Virginia 1,758,747 24.8% 33.8% 26.5% 14.9%
Wisconsin 5,245,913 27.1% 36.6% 24.0% 12.4%
Wyoming 480,332 28.5% 34.3% 25.8% 11.4%
This information was taken from the 2001 Supplementary Survey Profile conducted by the U.S. Census Bureau. The information provided
is limited to the household population and excludes the population living in institutions, college dormitories, and other group quarters,
which is less than 5 million people. This accounts for the difference in the estimates of the U.S. population from this source compared to
other estimates presented by the Bureau of the Census. The data are based on a sample and are subject to sampling variability.
*Sum of percentages may not equal 100 percent due to rounding.
Source: U.S. Department of Commerce, Bureau of the Census, 2001 Supplementary Survey.

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Race Demographics, 2001*


Percent
Total State Percent Percent Percent Indicated 2 or
State Population White Black Other** More Races
National Total 277,017,622 76.52% 11.97% 9.22% 2.29%
Alabama 4,349,601 71.33% 25.80% 1.69% 1.18%
Alaska 615,531 69.37% 3.36% 19.41% 7.86%
Arizona 5,197,474 76.19% 2.97% 17.94% 2.90%
Arkansas 2,618,137 80.78% 15.47% 2.14% 1.61%
California 33,681,509 66.28% 6.21% 23.68% 3.83%
Colorado 4,314,724 85.18% 3.65% 8.34% 2.83%
Connecticut 3,317,131 83.17% 8.73% 6.28% 1.82%
Delaware 771,580 75.82% 18.62% 4.16% 1.40%
District of Columbia 536,260 29.29% 60.29% 7.55% 2.87%
Florida 16,007,098 78.59% 14.77% 4.76% 1.88%
Georgia 8,150,008 66.18% 27.99% 4.41% 1.43%
Hawaii 1,188,615 24.67% 1.44% 50.22% 23.67%
Idaho 1,289,492 92.11% 0.48% 5.59% 1.81%
Illinois 12,160,474 74.68% 14.56% 8.98% 1.77%
Indiana 5,936,550 87.86% 7.95% 2.67% 1.51%
Iowa 2,818,957 93.89% 2.07% 2.83% 1.21%
Kansas 2,612,636 86.49% 6.02% 5.01% 2.48%
Kentucky 3,950,704 89.99% 6.90% 1.62% 1.48%
Louisiana 4,329,436 63.98% 32.12% 2.60% 1.31%
Maine 1,251,745 96.93% 0.40% 1.25% 1.42%
Maryland 5,241,087 63.55% 26.85% 6.86% 2.74%
Massachusetts 6,159,307 85.62% 5.51% 7.33% 1.54%
Michigan 9,740,127 80.49% 13.73% 3.77% 2.01%
Minnesota 4,836,367 89.45% 3.41% 5.62% 1.52%
Mississippi 2,762,576 61.40% 36.37% 1.34% 0.89%
Missouri 5,467,596 84.90% 11.13% 2.17% 1.80%
Montana 879,639 90.34% 0.13% 7.61% 1.93%
Nebraska 1,662,378 90.14% 3.98% 4.34% 1.54%
Nevada 2,072,391 79.18% 6.50% 10.91% 3.40%
New Hampshire 1,223,636 96.14% 0.72% 2.03% 1.11%
New Jersey 8,289,599 74.12% 13.29% 10.83% 1.77%
New Mexico 1,792,823 66.49% 1.73% 27.23% 4.55%
New York 18,433,370 69.43% 15.46% 13.27% 1.84%
North Carolina 7,932,350 72.48% 20.97% 4.95% 1.60%
North Dakota 610,793 92.19% 0.47% 6.01% 1.34%
Ohio 11,074,368 85.36% 11.17% 2.08% 1.38%
Oklahoma 3,347,660 75.95% 6.54% 10.20% 7.31%
Oregon 3,395,357 87.86% 1.62% 7.02% 3.50%
Pennsylvania 11,853,829 85.71% 9.68% 3.34% 1.28%
Rhode Island 1,020,102 85.67% 4.51% 8.20% 1.62%
South Carolina 3,927,982 67.17% 29.61% 1.64% 1.58%
South Dakota 727,968 93.08% 0.77% 4.22% 1.92%
Tennessee 5,592,019 80.55% 16.08% 2.16% 1.21%
Texas 20,764,441 71.96% 10.96% 14.96% 2.13%
Utah 2,229,295 90.86% 0.44% 5.65% 3.06%
Vermont 592,321 96.95% 0.38% 1.33% 1.34%
Virginia 6,956,276 73.02% 19.39% 5.80% 1.79%
Washington 5,849,311 81.35% 3.02% 11.15% 4.48%
West Virginia 1,758,747 95.46% 2.74% 0.76% 1.03%
Wisconsin 5,245,913 89.04% 5.50% 3.90% 1.56%
Wyoming 480,332 92.69% 0.76% 4.26% 2.30%
This information was taken from the 2001 Supplementary Survey Profile conducted by the U.S. Census Bureau. The information provided is limited to the household population and
excludes the population living in institutions, college dormitories, and other group quarters, which is less than 5 million people. This accounts for the difference in the estimates of
the U.S. population from this source compared to other estimates presented by the Bureau of the Census. The data are based on a sample and are subject to sampling variability.
*Sum of percentages may not equal 100 percent due to rounding.
** Percent other includes American Indian and Alaska Native, Asian, Native Hawaiian and other Pacific Islander, and other.
Source: U.S. Department of Commerce, Bureau of the Census, 2001 Supplementary Survey Profile.

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Hispanic Demographics, 2001


Total State Percent
State Population Hispanic Population Hispanic
National Total 277,017,622 36,200,781 13.07%
Alabama 4,349,601 70,025 1.61%
Alaska 615,531 25,870 4.20%
Arizona 5,197,474 1,363,226 26.23%
Arkansas 2,618,137 87,579 3.35%
California 33,681,509 11,334,407 33.65%
Colorado 4,314,724 760,078 17.62%
Connecticut 3,317,131 319,796 9.64%
Delaware 771,580 38,207 4.95%
District of Columbia 536,260 47,397 8.84%
Florida 16,007,098 2,815,847 17.59%
Georgia 8,150,008 440,915 5.41%
Hawaii 1,188,615 84,236 7.09%
Idaho 1,289,492 105,802 8.20%
Illinois 12,160,474 1,573,733 12.94%
Indiana 5,936,550 213,412 3.59%
Iowa 2,818,957 81,958 2.91%
Kansas 2,612,636 172,339 6.60%
Kentucky 3,950,704 55,611 1.41%
Louisiana 4,329,436 103,771 2.40%
Maine 1,251,745 8,976 0.72%
Maryland 5,241,087 235,511 4.49%
Massachusetts 6,159,307 424,203 6.89%
Michigan 9,740,127 318,727 3.27%
Minnesota 4,836,367 140,825 2.91%
Mississippi 2,762,576 36,572 1.32%
Missouri 5,467,596 113,203 2.07%
Montana 879,639 16,168 1.84%
Nebraska 1,662,378 94,904 5.71%
Nevada 2,072,391 425,077 20.51%
New Hampshire 1,223,636 19,597 1.60%
New Jersey 8,289,599 1,140,886 13.76%
New Mexico 1,792,823 765,015 42.67%
New York 18,433,370 2,895,976 15.71%
North Carolina 7,932,350 375,913 4.74%
North Dakota 610,793 6,687 1.09%
Ohio 11,074,368 216,561 1.96%
Oklahoma 3,347,660 178,525 5.33%
Oregon 3,395,357 283,882 8.36%
Pennsylvania 11,853,829 384,586 3.24%
Rhode Island 1,020,102 91,935 9.01%
South Carolina 3,927,982 80,044 2.04%
South Dakota 727,968 11,361 1.56%
Tennessee 5,592,019 120,199 2.15%
Texas 20,764,441 6,882,466 33.15%
Utah 2,229,295 204,245 9.16%
Vermont 592,321 5,061 0.85%
Virginia 6,956,276 337,887 4.86%
Washington 5,849,311 455,874 7.79%
West Virginia 1,758,747 12,272 0.70%
Wisconsin 5,245,913 191,829 3.66%
Wyoming 480,332 31,605 6.58%
This information was taken from the 2001 Supplementary Survey Profile conducted by the U.S. Census Bureau. The information provided
is limited to the household population and excludes the population living in institutions, college dormitories, and other group quarters,
which is less than 5 million people. This accounts for the difference in the estimates of the U.S. population from this source compared to
other estimates presented by the Bureau of the Census. The data are based on a sample and are subject to sampling variability.

Source: U.S. Department of Commerce, Bureau of the Census, 2001 Supplementary Survey Profile.

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Insurance Status-Populations, 2001*

Total State Medicaid Medicare Privately Military


State
Population Population Population Insured Insurance Not Insured
National Total 282,082 31,601 38,043 199,860 9,552 41,207
Alabama 4,388 581 677 3,090 189 573
Alaska 634 84 49 419 95 100
Arizona 5,316 553 679 3,552 287 950
Arkansas 2,657 390 466 1,689 133 428
California 34,488 4,810 3,530 21,943 987 6,718
Colorado 4,410 258 481 3,256 225 687
Connecticut 3,392 245 514 2,679 71 346
Delaware 791 60 117 630 30 73
District of Columbia 554 97 65 377 12 70
Florida 16,348 1,779 2,896 10,740 661 2,856
Georgia 8,289 855 868 5,710 350 1,376
Hawaii 1,213 140 175 888 121 117
Idaho 1,315 161 164 931 57 210
Illinois 12,331 1,129 1,650 9,069 169 1,676
Indiana 6,036 364 925 4,726 116 714
Iowa 2,861 224 429 2,435 56 216
Kansas 2,642 212 447 1,998 165 301
Kentucky 3,996 515 618 2,812 276 492
Louisiana 4,390 532 566 2,753 262 845
Maine 1,279 169 242 914 58 132
Maryland 5,326 323 679 4,213 166 653
Massachusetts 6,322 839 865 4,706 135 520
Michigan 9,892 1,001 1,389 7,733 117 1,028
Minnesota 4,922 376 501 4,121 81 392
Mississippi 2,799 617 362 1,694 131 459
Missouri 5,525 645 746 4,226 167 565
Montana 892 91 148 630 58 121
Nebraska 1,683 151 222 1,313 109 160
Nevada 2,135 133 252 1,555 87 344
New Hampshire 1,258 75 193 1,018 43 119
New Jersey 8,470 675 1,363 6,390 105 1,109
New Mexico 1,804 316 290 1,023 75 373
New York 18,827 2,900 2,634 12,557 332 2,916
North Carolina 8,098 937 1,176 5,547 515 1,167
North Dakota 621 55 91 471 49 60
Ohio 11,191 1,060 1,624 8,611 184 1,248
Oklahoma 3,382 378 477 2,226 180 620
Oregon 3,462 440 431 2,520 91 443
Pennsylvania 12,102 1,240 1,838 9,582 216 1,119
Rhode Island 1,043 139 175 795 26 80
South Carolina 4,009 509 654 2,904 196 493
South Dakota 739 55 117 590 51 69
Tennessee 5,682 1,047 737 3,894 250 640
Texas 21,065 2,165 2,258 13,260 605 4,960
Utah 2,262 182 189 1,708 47 335
Vermont 607 102 78 446 12 58
Virginia 7,105 501 958 5,280 754 774
Washington 5,930 685 800 4,395 276 780
West Virginia 1,772 272 357 1,157 56 234
Wisconsin 5,336 487 817 4,342 89 409
Wyoming 488 46 68 342 33 78
*The sum of rows may be greater than the total State population because individuals may have dual coverage and appear in more than one
category. Data provided in thousands.
Source: Bureau of the Census & Bureau of Labor Statistics, Annual Demographic Survey, March Supplement 2002

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Pharmaceutical Benefits 2002

Insurance Status - Percentages, 2001*


% Covered by % Covered by
Total State % Covered by % Covered by Private Military
State Population Medicaid Medicare Insurance Insurance % Not Insured
National Total 282,082 11.2% 13.5% 70.9% 3.4% 14.6%
Alabama 4,388 13.2% 15.4% 70.4% 4.3% 13.1%
Alaska 634 13.2% 7.7% 66.1% 15.0% 15.8%
Arizona 5,316 10.4% 12.8% 66.8% 5.4% 17.9%
Arkansas 2,657 14.7% 17.5% 63.6% 5.0% 16.1%
California 34,488 13.9% 10.2% 63.6% 2.9% 19.5%
Colorado 4,410 5.9% 10.9% 73.8% 5.1% 15.6%
Connecticut 3,392 7.2% 15.2% 79.0% 2.1% 10.2%
Delaware 791 7.6% 14.8% 79.6% 3.8% 9.2%
District of Columbia 554 17.5% 11.7% 68.1% 2.2% 12.6%
Florida 16,348 10.9% 17.7% 65.7% 4.0% 17.5%
Georgia 8,289 10.3% 10.5% 68.9% 4.2% 16.6%
Hawaii 1,213 11.5% 14.4% 73.2% 10.0% 9.6%
Idaho 1,315 12.2% 12.5% 70.8% 4.3% 16.0%
Illinois 12,331 9.2% 13.4% 73.5% 1.4% 13.6%
Indiana 6,036 6.0% 15.3% 78.3% 1.9% 11.8%
Iowa 2,861 7.8% 15.0% 85.1% 2.0% 7.5%
Kansas 2,642 8.0% 16.9% 75.6% 6.2% 11.4%
Kentucky 3,996 12.9% 15.5% 70.4% 6.9% 12.3%
Louisiana 4,390 12.1% 12.9% 62.7% 6.0% 19.2%
Maine 1,279 13.2% 18.9% 71.5% 4.5% 10.3%
Maryland 5,326 6.1% 12.7% 79.1% 3.1% 12.3%
Massachusetts 6,322 13.3% 13.7% 74.4% 2.1% 8.2%
Michigan 9,892 10.1% 14.0% 78.2% 1.2% 10.4%
Minnesota 4,922 7.6% 10.2% 83.7% 1.6% 8.0%
Mississippi 2,799 22.0% 12.9% 60.5% 4.7% 16.4%
Missouri 5,525 11.7% 13.5% 76.5% 3.0% 10.2%
Montana 892 10.2% 16.6% 70.6% 6.5% 13.6%
Nebraska 1,683 9.0% 13.2% 78.0% 6.5% 9.5%
Nevada 2,135 6.2% 11.8% 72.8% 4.1% 16.1%
New Hampshire 1,258 6.0% 15.3% 80.9% 3.4% 9.5%
New Jersey 8,470 8.0% 16.1% 75.4% 1.2% 13.1%
New Mexico 1,804 17.5% 16.1% 56.7% 4.2% 20.7%
New York 18,827 15.4% 14.0% 66.7% 1.8% 15.5%
North Carolina 8,098 11.6% 14.5% 68.5% 6.4% 14.4%
North Dakota 621 8.9% 14.7% 75.8% 7.9% 9.7%
Ohio 11,191 9.5% 14.5% 76.9% 1.6% 11.2%
Oklahoma 3,382 11.2% 14.1% 65.8% 5.3% 18.3%
Oregon 3,462 12.7% 12.4% 72.8% 2.6% 12.8%
Pennsylvania 12,102 10.2% 15.2% 79.2% 1.8% 9.2%
Rhode Island 1,043 13.3% 16.8% 76.2% 2.5% 7.7%
South Carolina 4,009 12.7% 16.3% 72.4% 4.9% 12.3%
South Dakota 739 7.4% 15.8% 79.8% 6.9% 9.3%
Tennessee 5,682 18.4% 13.0% 68.5% 4.4% 11.3%
Texas 21,065 10.3% 10.7% 62.9% 2.9% 23.5%
Utah 2,262 8.0% 8.4% 75.5% 2.1% 14.8%
Vermont 607 16.8% 12.9% 73.5% 2.0% 9.6%
Virginia 7,105 7.1% 13.5% 74.3% 10.6% 10.9%
Washington 5,930 11.6% 13.5% 74.1% 4.7% 13.2%
West Virginia 1,772 15.3% 20.1% 65.3% 3.2% 13.2%
Wisconsin 5,336 9.1% 15.3% 81.4% 1.7% 7.7%
Wyoming 488 9.4% 13.9% 70.1% 6.8% 16.0%
*Sum of percentages may be greater than 100 because individuals may have dual coverage and appear in more than one category. Data
provided in thousands.
Source: Bureau of the Census & Bureau of Labor Statistics, Annual Demographic Survey, March Supplement 2002.

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Pharmaceutical Benefits 2002

Income and Employment, 2001


Total State Percent Below 100% Percent
State Population Poverty Level Unemployed
National Total 277,017,622 11.5% 6.0%
Alabama 4,349,601 14.6% 5.3%
Alaska 615,531 8.1% 6.3%
Arizona 5,197,474 13.2% 4.7%
Arkansas 2,618,137 17.1% 5.1%
California 33,681,509 12.6% 5.3%
Colorado 4,314,724 9.2% 3.7%
Connecticut 3,317,131 7.5% 3.3%
Delaware 771,580 7.6% 3.5%
District of Columbia 536,260 16.7% 6.5%
Florida 16,007,098 11.9% 4.8%
Georgia 8,150,008 12.5% 4.0%
Hawaii 1,188,615 10.2% 4.6%
Idaho 1,289,492 12.0% 5.0%
Illinois 12,160,474 10.4% 5.4%
Indiana 5,936,550 8.5% 4.4%
Iowa 2,818,957 7.8% 3.3%
Kansas 2,612,636 9.1% 4.3%
Kentucky 3,950,704 12.6% 5.5%
Louisiana 4,329,436 16.7% 6.0%
Maine 1,251,745 10.2% 4.0%
Maryland 5,241,087 7.3% 4.1%
Massachusetts 6,159,307 9.4% 3.7%
Michigan 9,740,127 9.6% 5.3%
Minnesota 4,836,367 6.5% 3.7%
Mississippi 2,762,576 17.1% 5.5%
Missouri 5,467,596 9.4% 4.7%
Montana 879,639 13.7% 4.6%
Nebraska 1,662,378 9.0% 3.1%
Nevada 2,072,391 7.9% 5.3%
New Hampshire 1,223,636 5.5% 3.5%
New Jersey 8,289,599 7.7% 4.2%
New Mexico 1,792,823 17.7% 4.8%
New York 18,433,370 14.0% 4.9%
North Carolina 7,932,350 12.5% 5.5%
North Dakota 610,793 12.1% 2.8%
Ohio 11,074,368 10.3% 4.3%
Oklahoma 3,347,660 15.0% 3.8%
Oregon 3,395,357 11.3% 6.3%
Pennsylvania 11,853,829 9.1% 4.7%
Rhode Island 1,020,102 9.9% 4.7%
South Carolina 3,927,982 13.1% 5.4%
South Dakota 727,968 9.6% 3.3%
Tennessee 5,592,019 13.8% 4.5%
Texas 20,764,441 15.2% 4.9%
Utah 2,229,295 9.1% 4.4%
Vermont 592,321 9.9% 3.6%
Virginia 6,956,276 8.1% 3.5%
Washington 5,849,311 10.8% 6.4%
West Virginia 1,758,747 15.6% 4.9%
Wisconsin 5,245,913 8.6% 4.6%
Wyoming 480,332 9.7% 3.9%
Source: U.S. Department of Commerce, Bureau of the Census, 2001 Supplementary Survey Profile and Current Population Survey; U.S.
Department of Labor, Bureau of Labor Statistics, Current Population Survey.

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Medicaid/Medicare Certified Facilities, 2002


Skilled Nursing ICFs-MR Home Health Rural Health
State Hospitals Facilities Facilities Agencies Clinics
National Total* 6,017 14,840 6,689 7,007 3,319
Alabama 121 224 8 141 58
Alaska 24 15 0 16 6
Arizona 84 133 13 63 7
Arkansas 103 191 41 176 76
California 447 1,263 1,084 555 245
Colorado 83 199 3 126 42
Connecticut 46 244 8 82 0
Delaware 11 37 2 13 0
District of Columbia 14 20 131 12 0
Florida 229 695 107 375 136
Georgia 176 332 13 94 108
Hawaii 27 41 20 14 0
Idaho 45 79 65 48 43
Illinois 216 676 315 281 189
Indiana 152 499 573 161 52
Iowa 120 337 128 183 124
Kansas 17 256 38 131 157
Kentucky 116 303 14 110 89
Louisiana 193 266 473 236 50
Maine 42 121 0 34 50
Maryland 67 233 5 54 0
Massachusetts 116 482 16 121 0
Michigan 175 388 1 204 160
Minnesota 148 404 240 229 62
Mississippi 106 154 13 62 129
Missouri 138 464 19 160 212
Montana 65 101 2 48 38
Nebraska 95 175 4 63 73
Nevada 42 42 19 38 6
New Hampshire 30 68 15 35 19
New Jersey 252 360 9 53 0
New Mexico 54 71 44 62 10
New York 106 672 738 207 9
North Carolina 134 413 331 167 115
North Dakota 50 84 66 30 73
Ohio 211 916 468 342 19
Oklahoma 146 238 59 191 51
Oregon 62 122 1 61 32
Pennsylvania 249 739 205 302 48
Rhode Island 15 97 0 23 1
South Carolina 76 176 136 72 89
South Dakota 66 90 1 47 53
Tennessee 148 301 83 139 35
Texas 486 978 904 893 334
Utah 49 79 14 41 15
Vermont 16 43 1 13 20
Virginia 115 241 21 158 56
Washington 100 256 15 61 89
West Virginia 66 119 62 70 60
Wisconsin 142 361 39 122 60
Wyoming 28 33 2 38 19
*National total does not include certified facilities in Puerto Rico and U.S. territories.
Source: OSCAR Report 10. Facility Counts: Active Providers. CMS, Center for Medicaid and State Operations. January 6, 2003.

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Licensed Pharmacies (As of June 30, 2002)*


Non-Independent
Hospital/ Community Out-of-State or
Total Institutional Independent Pharmacies Non-Resident
State Pharmacies Pharmacies Pharmacies (Four or More) Pharmacies
National Total 74,950 8,328 20,000 15,035 9,852
Alabama 1,771 176 734 559 302
Alaska 127 (a) 14 (b) - - 156
Arizona 974 111 160 676 135
Arkansas 746 150 420 326 158
California 6,028 519 - - 187
Colorado 821 - - - 252
Connecticut 582 (c) 45 (c) 165 (c) 417 (c) 235 (c)
Delaware 159 11 37 120 239
District of Columbia 123 13 27 61 0
Florida 6,567 2,097 4098 (d) (d) 341
Georgia 3,538 204 (e) (e) -
Hawaii 213 - - - 131
Idaho 573 54 251 (d,f) - 196
Illinois 2,451 342 2,183 (d) (d) 296
Indiana 1,350 197 - - 293
Iowa 1,198 130 (g) 786 (d,g) (d) 265
Kansas 807 171 637 (d) - 302
Kentucky 1,438 125 466 671 176
Louisiana 1,771 192 576 535 313
Maine 290 42 - - 187
Maryland 1,384 (h) 70 250 698 263
Massachusetts 1,100 (i) 158 346 740 0
Michigan 2,505 - - - 125
Minnesota 1,409 137 521 526 229
Mississippi 962 130 - - 220
Missouri 1,570 (j) 160 516 569 274
Montana 317 99 - - 153
Nebraska 455 N/A - - 235 (k)
Nevada 702 47 - - 252
New Hampshire 259 32 40 167 208
New Jersey 2,489 - - - -
New Mexico 612 61 298 (d) - 283
New York 4,424 485 1,938 1,987 N/A (l)
North Carolina 2024 (g) 156 551 961 229
North Dakota 486 45 150 29 262
Ohio 2875 (m) 224 483 1,471 275
Oklahoma 1,311 89 (c) 893 (d) (d) 308
Oregon 1,061 120 300 413 232
Pennsylvania 3,166 293 - - 0
Rhode Island 191 20 41 150 227
South Carolina - - - - -
South Dakota 462 43 125 74 220
Tennessee 1,807 403 443 865 96
Texas 5676 (n) 587 1,654(d) 2,310(d) 252
Utah 734 107 415 (d) (d) 235
Vermont 155 17 138 - 0
Virginia 1,513 - - - 378
Washington 1,502 222 (o) 358 710 214
West Virginia 826 (i) - - - 270
Wisconsin 1,286 - - 0 -
Wyoming 128 (g) 30 - - 248
*Figures reported reflect number of pharmacies licensed by state boards of pharmacy. Individual columns will not sum to total. Total
includes other Pharmacies not specified in the four practice settings. Blanks (-) indicate that information was not available.
Source: 2002-2003 National Association of Boards of Pharmacy, Survey of Pharmacy Law.

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LEGEND

a – Includes nine wholesalers drug distributors.


b – Drug rooms.
c – Approximately.
d – Chains included in independent community pharmacies figure.
e – 2,123 (2,085 independent and chain pharmacies, 12 nuclear pharmacies, 20 prison pharmacies, 4 clinic pharmacies, and
two pharmacy schools).
f – Plus 20 limited service and 52 parenteral admixture pharmacies.
g – In-state.
h – Total includes other areas not listed: clinic, correctional, HMO, nursing home, IV nuclear, research, and other. 89
Pharmacies have waiver (specialty) permits. Board issued 582 distributor permits.
i – Total also includes home IV and mail order pharmacies.
j – Includes the following pharmacy categories: 27 long-term care, 11 home health, 7 radiopharmaceuticals, 2 renal dialysis, 2
sterile pharmaceuticals.
k – Nebraska “registers” out-of-state pharmacies.
l – 14 Nuclear pharmacies
m – Includes 263 nuclear, clinic, fluid therapy, mail order, specialty, and pharmacies serving nursing homes only.
n – Also licenses 873 nuclear, public health, clinic, ambulatory surgical center, and HMO pharmacy.
o – Includes 107 hospital, 17 nursing home, 25 home infusion, six nuclear, 42 HMO, and 19 other pharmacies.

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Physicians, 2001
Physicians Office Based Percent Primary Care Percent
State Physicians Per 1,000 Pop. Physicians Office Based Physicians* Primary Care
National Total 727,573 2.6 484,184 66.55% 229,277 31.51%
Alabama 9,127 2.1 6,565 71.93% 3,092 33.88%
Alaska 1,273 2.1 924 72.58% 469 36.84%
Arizona 10,479 2.0 7,558 72.13% 3,198 30.52%
Arkansas 5,164 2.0 3,759 72.79% 1,868 36.17%
California 86,395 2.6 60,311 69.81% 27,535 31.87%
Colorado 10,434 2.4 7,581 72.66% 3,316 31.78%
Connecticut 12,150 3.7 7,672 63.14% 3,612 29.73%
Delaware 1,894 2.5 1,298 68.53% 585 30.89%
District of Columbia 4,222 7.9 1,989 47.11% 1,033 24.47%
Florida 38,785 2.4 29,026 74.84% 11,621 29.96%
Georgia 17,798 2.2 12,428 69.83% 5,545 31.16%
Hawaii 3,461 2.9 2,443 70.59% 1,093 31.58%
Idaho 2,069 1.6 1,706 82.46% 713 34.46%
Illinois 33,211 2.7 21,072 63.45% 11,231 33.82%
Indiana 12,242 2.1 8,878 72.52% 4,159 33.97%
Iowa 5,197 1.8 3,614 69.54% 1,819 35.00%
Kansas 5,741 2.2 4,015 69.94% 2,020 35.19%
Kentucky 8,656 2.2 6,314 72.94% 2,852 32.95%
Louisiana 11,386 2.6 7,607 66.81% 3,344 29.37%
Maine 3,140 2.5 2,288 72.87% 1,084 34.52%
Maryland 21,656 4.1 12,242 56.53% 5,889 27.19%
Massachusetts 26,916 4.4 15,074 56.00% 7,625 28.33%
Michigan 23,034 2.4 14,595 63.36% 7,359 31.95%
Minnesota 12,917 2.7 8,780 67.97% 4,731 36.63%
Mississippi 4,931 1.8 3,580 72.60% 1,580 32.04%
Missouri 13,120 2.4 8,412 64.12% 3,898 29.71%
Montana 1,878 2.1 1,550 82.53% 632 33.65%
Nebraska 3,893 2.3 2,667 68.51% 1,430 36.73%
Nevada 3,603 1.7 2,823 78.35% 1,124 31.20%
New Hampshire 3,011 2.5 2,163 71.84% 985 32.71%
New Jersey 25,410 3.1 16,903 66.52% 8,050 31.68%
New Mexico 4,059 2.3 2,689 66.25% 1,328 32.72%
New York 73,115 4.0 40,675 55.63% 22,101 30.23%
North Carolina 19,177 2.4 13,082 68.22% 6,000 31.29%
North Dakota 1,464 2.4 1,061 72.47% 561 38.32%
Ohio 27,579 2.5 18,246 66.16% 8,963 32.50%
Oklahoma 5,854 1.7 4,180 71.40% 1,964 33.55%
Oregon 8,027 2.4 6,000 74.75% 2,707 33.72%
Pennsylvania 36,150 3.0 22,952 63.49% 10,883 30.11%
Rhode Island 3,515 3.4 2,114 60.14% 1,108 31.52%
South Carolina 8,851 2.3 6,243 70.53% 2,869 32.41%
South Dakota 1,530 2.1 1,170 76.47% 560 36.60%
Tennessee 14,185 2.5 9,964 70.24% 4,502 31.74%
Texas 43,548 2.1 29,928 68.72% 13,144 30.18%
Utah 4,556 2.0 3,199 70.22% 1,399 30.71%
Vermont 2,032 3.4 1,271 62.55% 724 35.63%
Virginia 18,487 2.7 12,393 67.04% 5,847 31.63%
Washington 14,656 2.5 10,533 71.87% 4,926 33.61%
West Virginia 4,067 2.3 2,715 66.76% 1,403 34.50%
Wisconsin 12,645 2.4 9,234 73.02% 4,463 35.29%
Wyoming 883 1.8 698 79.05% 333 37.71%
*Primary care physicians include General Practice, General Family Practice, General Internal Medicine, and General Pediatrics

Source: USDHHS, HRSA, Bureau of Health Professions, National Center for Health Workforce Information & Analysis, Area Resource File, February 2002.

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Other Providers
Registered Nurses* Pharmacists** Pharmacists**
State Registered Nurses* per 1,000 (Licensed by State) per 1,000
National Total 2,021,813 7.8 352,727 1.3
Alabama 34,073 7.7 6,879 1.6
Alaska 4,914 7.8 577 0.9
Arizona 32,222 6.3 7,687 1.5
Arkansas 18,752 7 3,506 1.3
California 184,329 5.4 30,845 0.9
Colorado 31,695 7.4 5,317 1.2
Connecticut 32,073 9.4 4,393 1.3
Delaware 7,337 9.4 1,314 1.7
District of Columbia 9,583 16.8 1,564 2.9
Florida 125,439 7.8 20,052 1.3
Georgia 55,881 6.8 10,534 1.3
Hawaii 8,518 7 1,449 1.2
Idaho 8,230 6.4 1,530 1.2
Illinois 101,660 8.2 13,151 1.1
Indiana 46,244 7.6 8,597 1.4
Iowa 31,020 10.6 4,993 1.8
Kansas 23,779 8.8 3,494 1.3
Kentucky 33,655 8.3 4,746 1.2
Louisiana 37,275 8.3 5,839 1.3
Maine 13,072 10.3 1,267 1.0
Maryland 45,323 8.6 6,937 1.3
Massachusetts 75,795 11.9 9,940 1.6
Michigan 79,353 8 11,322 1.2
Minnesota 47,102 9.6 5,853 1.2
Mississippi 21,338 7.5 3,483 1.3
Missouri 53,730 9.6 7,123 1.3
Montana 7,327 8.1 1,463 1.7
Nebraska 16,399 9.6 2,555 1.5
Nevada 10,384 5.2 8,012 3.9
New Hampshire 11,321 9.2 1,886 1.5
New Jersey 67,280 8 16,245 2.0
New Mexico 11,932 6.6 2,434 1.4
New York 160,009 8.4 18,448 1.0
North Carolina 69,057 8.6 9,397 1.2
North Dakota 7,039 11 2,089 3.4
Ohio 100,144 8.8 14,250 1.3
Oklahoma 21,905 6.3 4,713 1.4
Oregon 27,121 7.9 4,079 1.2
Pennsylvania 123,997 10.1 17,439 1.5
Rhode Island 11,542 11 1,788 1.8
South Carolina 29,226 7.3 5,052 1.3
South Dakota 8,511 11.3 1,401 1.9
Tennessee 49,626 8.7 7,388 1.3
Texas 126,436 6.1 20,803 1.0
Utah 13,229 5.9 1,546 0.7
Vermont 5,829 9.6 830 1.4
Virginia 50,359 7.1 8,438 1.2
Washington 43,482 7.4 6,718 1.1
West Virginia 15,523 8.6 2,975 1.7
Wisconsin 47,895 8.9 5,737 1.1
Wyoming 3,849 7.8 1005 2.1
*As of March 2000. ** As of June 30, 2002.
Source: U.S. Department of Health and Human Services, Health Resources and Services Administration, Bureau of Health Professions,
Division of Nursing, February 2001 and 2002-2003 National Association of Boards of Pharmacy, Survey of Pharmacy Law.

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Section 4:
Pharmacy Program
Characteristics

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THE MEDICAID DRUG PROGRAM


The Medicaid program defines prescribed drugs as simple or compound
substances or mixtures of substances prescribed for the cure, mitigation, or
prevention of disease, or for health maintenance, which are prescribed by a
physician or other licensed practitioner of the healing arts within the scope of
their professional practice (42 CFR 440.120). The drugs must be dispensed by
licensed authorized practitioners on a written prescription that is recorded and
maintained in the pharmacist’s or the practitioner’s records.

MEDICAID PRESCRIPTION DRUG REIMBURSEMENT

On July 31, 1987, CMS published a notice of the final rule for limits on
payments for drugs in the Medicaid program. The regulations adopted in the rule
became effective October 29, 1987 (52 FR 28648). In this final rule, CMS
attempted to (1) respond to public comments on the NPRM (51 FR 2956); (2)
provide maximum flexibility to the States in their administration of the Medicaid
program; (3) provide responsible but not burdensome Federal oversight of the
Medicaid program; and (4) take advantage of savings in the marketplace for
multiple-source drugs.

To accomplish this, CMS adopted a Federal upper limit standard for certain
multiple-source drugs, based on application of a specific formula. The upper
limit for other drugs is similar, in that it retains the estimated acquisition cost
(EAC) as the upper limit standard that State agencies must meet. However, this
standard is applied on an aggregate basis rather than on a prescription-specific
basis. State agencies are therefore encouraged to exercise maximum flexibility in
establishing their own payment methods (see the Federal Register, Vol. 52, No.
147, Friday, July 31, 1987, page 28648).

Multiple-Source Drugs

A multiple-source drug is one that is marketed or sold by two or more


manufacturers or labelers, or a drug marketed or sold by the same manufacturer
or labeler under two or more different proprietary names or under a proprietary
name and without such a name.

A specific upper limit for a multiple-source drug may be established if the


following requirements are met:

• All of the formulations of the drug approved by the Food and Drug
Administration (FDA) have been evaluated as therapeutically equivalent in
the current edition of the publication, Approved Drug Products with
Therapeutically Equivalent Evaluations; and
• At least three suppliers list the drug (which is classified by the FDA as
Category A in its publication) in the current editions of published compendia
of cost information for drugs available for sale nationally.
The upper limit for a multi-source drug for which a specific limit has been
established does not apply if a physician certifies in his or her own handwriting
that a specific brand is “medically necessary” for a particular recipient.

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The handwritten phrase “brand necessary,” “medically necessary,” or “brand
medically necessary” must appear on the face of the prescription. The rule
specifically states that a check-off box on a prescription form is not acceptable,
but it does not address the use of two-line prescription forms.

The formula to be used in calculating the aggregate upper limit of payment for
certain multiple-source drugs will be 150% of the least costly therapeutic
equivalent that can be purchased by pharmacists in quantities of 100 tablets or
capsules (or if the drug is not commonly available in quantities of 100, the
package size commonly listed), or in the case of liquids, the commonly listed
size, plus a reasonable dispensing fee.

Other Drugs

A drug described as an “other drug” is (1) a brand name drug certified as


medically necessary by the physician, (2) a multiple-source drug not subject to
the 150% formula; or (3) a single-source drug. Payments for these drugs must
not exceed, in the aggregate, payment levels determined by applying the lower
of:

• Estimated acquisition cost (EAC) plus reasonable dispensing fees; or


• The provider’s usual and customary charges to the general public.
States may continue to use their existing EAC program, or adopt another method,
as long as their aggregate expenditures do not exceed what would have been paid
under EAC principles.

Other Requirements

The rule requires States to submit a State plan that describes their payment
methods for prescribed drugs. The rule does not prescribe a preferred payment
method, as long as the State’s aggregate spending in each category is equal to or
below the upper limit requirements. States are also required to submit assurances
to CMS that the requirements are met.

The rule does not prescribe a preferred payment method for the States, but gives
States the flexibility to determine how they will pay for prescription drugs under
Medicaid. As long as the State’s aggregate spending is at or below the amount
derived from the formula, the State is free to maintain its current payment
program or adopt other methods. States can alter payment rates for individual
drugs, balancing payment increases for certain products with payment decreases
for other drugs so that, in the aggregate, the program does not exceed the
established limit. With the establishment of upper limit payment maximums,
some States may alter their current payment methods to comply with the
established limits.

State programs vary, depending upon whether or not State maximum allowable
cost (MAC) programs cover the same drugs listed by CMS. States with
established MAC programs may be unaffected if their MAC rates are already
low, or they may have to make certain adjustments in their MAC levels to meet
the Federal aggregate expenditure limits. States without MAC programs may
develop a new payment method to increase the use of lower cost generic drug
products in order to stay within the upper payment limits, or may simply adopt
CMS’ formula for listed drug products.

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DRUG RECIPIENTS

Drug recipients are defined as individuals who received drugs, not as everyone
eligible to receive drugs. Today, all 50 States and the District of Columbia cover
drugs under the Medicaid program.

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Drug Expenditures Trends1


State 2000 2001 % Change 2000-2001
National Total $20,551,215,451 $24,656,812,921 20.0%
Alabama $333,069,288 $386,876,131 16.2%
Alaska $44,910,326 $55,754,050 24.1%
Arizona $1,627,485 $2,573,205 58.1%
Arkansas $206,168,873 $241,558,369 17.2%
California $2,472,137,448 $2,984,162,770 20.7%
Colorado $143,925,427 $166,000,664 15.3%
Connecticut $265,685,933 $304,780,286 14.7%
Delaware $66,226,440 $81,156,928 22.5%
District of Columbia $55,739,551 $63,504,500 13.9%
Florida $1,359,073,656 $1,475,766,739 8.6%
Georgia $578,085,759 $735,944,558 27.3%
Hawaii $61,762,044 $74,869,859 21.2%
Idaho $82,041,976 $102,975,196 25.5%
Illinois $805,790,014 $884,018,166 9.7%
Indiana $462,862,435 $561,642,082 21.3%
Iowa $197,279,041 $234,716,795 19.0%
Kansas $165,290,804 $185,017,060 11.9%
Kentucky $463,275,891 $592,096,755 27.8%
Louisiana $508,229,794 $585,388,809 15.2%
Maine $170,901,428 $191,785,942 12.2%
Maryland $204,698,146 $244,203,084 19.3%
Massachusetts $698,428,250 $797,859,072 14.2%
Michigan $396,533,784 $584,670,445 47.4%
Minnesota $231,735,404 $265,726,228 14.7%
Mississippi $368,769,294 $493,177,297 33.7%
Missouri $596,733,995 $675,647,147 13.2%
Montana $60,174,213 $72,577,455 20.6%
Nebraska $143,192,600 $170,897,014 19.3%
Nevada $50,370,705 $61,500,721 22.1%
New Hampshire $81,721,512 $91,703,067 12.2%
New Jersey $598,193,627 $651,442,945 8.9%
New Mexico $48,486,325 $57,995,801 19.6%
New York $2,540,602,423 $2,986,292,455 17.5%
North Carolina $803,739,171 $984,653,306 22.5%
North Dakota $39,031,804 $44,067,986 12.9%
Ohio $879,595,616 $1,099,697,768 25.0%
Oklahoma $164,022,317 $171,188,873 4.4%
Oregon $168,325,265 $228,670,426 35.8%
Pennsylvania $594,222,924 $692,665,382 16.6%
Rhode Island $89,490,129 $102,708,476 14.8%
South Carolina $350,270,353 $438,897,100 25.3%
South Dakota $44,180,275 $51,748,770 17.1%
Tennessee $273,537,047 $681,454,847 149.1%
Texas $1,121,832,241 $1,325,987,804 18.2%
Utah $100,910,520 $117,170,006 16.1%
Vermont $85,889,049 $104,250,880 21.4%
Virginia $387,722,448 $417,689,526 7.7%
Washington $394,782,642 $458,332,414 16.1%
West Virginia $215,222,053 $259,638,952 20.6%
Wisconsin $347,245,591 $382,272,975 10.1%
Wyoming $27,472,115 $31,435,835 14.4%

Source: CMS, CMS-64 Report, FY 2000 and FY 2001.

1
Rebates have not been subtracted from these figures.

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Ranking Based on Drug Expenditures1


% of 2001 National
2001 2001 Medicaid Drug 2000 2000
State Payments Ranking Expenditures Payments Ranking
National Total $24,656,812,921 $20,551,215,451
New York $2,986,292,455 12.1% 1 $2,540,602,423 1
California $2,984,162,770 12.1% 2 $2,472,137,448 2
Florida $1,475,766,739 6.0% 3 $1,359,073,656 3
Texas $1,325,987,804 5.4% 4 $1,121,832,241 4
Ohio $1,099,697,768 4.5% 5 $879,595,616 5
Illinois $984,653,306 4.0% 6 $803,739,171 7
North Carolina $884,018,166 3.6% 7 $805,790,014 6
Massachusetts $797,859,072 3.2% 8 $698,428,250 8
New Jersey $735,944,558 3.0% 9 $578,085,759 12
Missouri $692,665,382 2.8% 10 $594,222,924 11
Pennsylvania $681,454,847 2.8% 11 $273,537,047 23
Georgia $675,647,147 2.7% 12 $596,733,995 10
Louisiana $651,442,945 2.6% 13 $598,193,627 9
Kentucky $592,096,755 2.4% 14 $463,275,891 14
Indiana $585,388,809 2.4% 15 $508,229,794 13
Michigan $584,670,445 2.4% 16 $396,533,784 16
Washington $561,642,082 2.3% 17 $462,862,435 15
Virginia $493,177,297 2.0% 18 $368,769,294 19
Mississippi $458,332,414 1.9% 19 $394,782,642 17
South Carolina $438,897,100 1.8% 20 $350,270,353 20
Wisconsin $417,689,526 1.7% 21 $387,722,448 18
Alabama $386,876,131 1.6% 22 $333,069,288 22
Tennessee $382,272,975 1.6% 23 $347,245,591 21
Connecticut $304,780,286 1.2% 24 $265,685,933 24
Minnesota $265,726,228 1.1% 25 $231,735,404 25
West Virginia $259,638,952 1.1% 26 $215,222,053 26
Arkansas $244,203,084 1.0% 27 $204,698,146 28
Maryland $241,558,369 1.0% 28 $206,168,873 27
Iowa $234,716,795 1.0% 29 $197,279,041 29
Maine $228,670,426 0.9% 30 $168,325,265 31
Oregon $191,785,942 0.8% 31 $170,901,428 30
Kansas $185,017,060 0.8% 32 $165,290,804 32
Oklahoma $171,188,873 0.7% 33 $164,022,317 33
Colorado $170,897,014 0.7% 34 $143,192,600 35
Nebraska $166,000,664 0.7% 35 $143,925,427 34
Utah $117,170,006 0.5% 36 $100,910,520 36
Rhode Island $104,250,880 0.4% 37 $85,889,049 38
Vermont $102,975,196 0.4% 38 $82,041,976 39
Idaho $102,708,476 0.4% 39 $89,490,129 37
New Hampshire $91,703,067 0.4% 40 $81,721,512 40
Delaware $81,156,928 0.3% 41 $66,226,440 41
Hawaii $74,869,859 0.3% 42 $61,762,044 42
Montana $72,577,455 0.3% 43 $60,174,213 43
Dist. of Columbia $63,504,500 0.3% 44 $55,739,551 44
Nevada $61,500,721 0.2% 45 $50,370,705 45
New Mexico $57,995,801 0.2% 46 $48,486,325 46
Alaska $55,754,050 0.2% 47 $44,910,326 47
South Dakota $51,748,770 0.2% 48 $44,180,275 48
North Dakota $44,067,986 0.2% 49 $39,031,804 49
Wyoming $31,435,835 0.1% 50 $27,472,115 50
Arizona $2,573,205 0.0% 51 $1,627,485 51

Source: CMS, HCFA-64 Report, FY 1999 and FY 2000.

1
Rebates have not been subtracted from these figures.

4-8 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Drugs as a Percentage of Total Net Expenditures, 2001


Total Medicaid
Net Medical Assistance Total Drug % of Total
State Expenditures Expenditures1 Net Expenditures
National Total $ 215,809,899,631.00 $ 24,656,812,912.00 11.4%
Alabama $ 2,875,372,953.00 $ 386,876,131.00 13.5%
Alaska $ 576,586,201.00 $ 55,754,050.00 9.7%
Arizona $ 2,665,261,328.00 $ 2,573,205.00 0.1%
Arkansas $ 1,852,176,546.00 $ 241,558,369.00 13.0%
California $ 23,870,521,004.00 $ 2,984,162,770.00 12.5%
Colorado $ 2,142,029,851.00 $ 166,000,664.00 7.7%
Connecticut $ 3,213,848,086.00 $ 304,780,286.00 9.5%
Delaware $ 591,974,246.00 $ 81,156,928.00 13.7%
District of Columbia $ 979,941,105.00 $ 63,504,500.00 6.5%
Florida $ 8,557,796,303.00 $ 1,475,766,739.00 17.2%
Georgia $ 5,037,084,881.00 $ 735,944,558.00 14.6%
Hawaii $ 634,781,970.00 $ 74,869,859.00 11.8%
Idaho $ 693,205,598.00 $ 102,975,196.00 14.9%
Illinois $ 7,764,611,352.00 $ 884,018,166.00 11.4%
Indiana $ 4,008,812,857.00 $ 561,642,082.00 14.0%
Iowa $ 1,666,923,701.00 $ 234,716,795.00 14.1%
Kansas $ 1,686,410,544.00 $ 185,017,060.00 11.0%
Kentucky $ 3,304,053,663.00 $ 592,096,755.00 17.9%
Louisiana $ 4,201,982,590.00 $ 585,388,809.00 13.9%
Maine $ 1,315,523,163.00 $ 191,785,942.00 14.6%
Maryland $ 3,256,576,882.00 $ 244,203,084.00 7.5%
Massachusetts $ 6,619,524,971.00 $ 797,859,072.00 12.1%
Michigan $ 7,218,697,113.00 $ 584,670,445.00 8.1%
Minnesota $ 3,835,870,579.00 $ 265,726,228.00 6.9%
Mississippi $ 2,438,979,981.00 $ 493,177,297.00 20.2%
Missouri $ 4,744,963,426.00 $ 675,647,147.00 14.2%
Montana $ 482,357,404.00 $ 72,577,455.00 15.0%
Nebraska $ 1,187,237,577.00 $ 170,897,014.00 14.4%
Nevada $ 674,337,888.00 $ 61,500,721.00 9.1%
New Hampshire $ 873,248,831.00 $ 91,703,067.00 10.5%
New Jersey $ 7,123,653,988.00 $ 651,442,945.00 9.1%
New Mexico $ 1,467,417,736.00 $ 57,995,801.00 4.0%
New York $ 31,367,464,639.00 $ 2,986,292,455.00 9.5%
North Carolina $ 6,150,681,587.00 $ 984,653,306.00 16.0%
North Dakota $ 406,418,593.00 $ 44,067,986.00 10.8%
Ohio $ 8,433,412,161.00 $ 1,099,697,768.00 13.0%
Oklahoma $ 2,021,033,069.00 $ 171,188,873.00 8.5%
Oregon $ 2,658,358,391.00 $ 228,670,426.00 8.6%
Pennsylvania $ 10,908,343,146.00 $ 692,665,382.00 6.3%
Rhode Island $ 1,187,880,819.00 $ 102,708,476.00 8.6%
South Carolina $ 3,019,387,228.00 $ 438,897,100.00 14.5%
South Dakota $ 464,455,469.00 $ 51,748,770.00 11.1%
Tennessee $ 5,501,312,153.00 $ 681,454,847.00 12.4%
Texas $ 11,583,679,558.00 $ 1,325,987,804.00 11.4%
Utah $ 833,720,115.00 $ 117,170,006.00 14.1%
Vermont $ 601,467,093.00 $ 104,250,880.00 17.3%
Virginia $ 3,036,846,387.00 $ 417,689,526.00 13.8%
Washington $ 4,305,724,247.00 $ 458,332,414.00 10.6%
West Virginia $ 1,548,398,817.00 $ 259,638,952.00 16.8%
Wisconsin $ 3,976,142,914.00 $ 382,272,975.00 9.6%
Wyoming $ 243,408,927.00 $ 31,435,835.00 12.9%

Source: CMS, CMS-64 Report, FY 2001.

1
Rebates have not been subtracted from these figures.

National Pharmaceutical Council 4-9


Pharmaceutical Benefits 2002

Drugs as a Percentage of Total Net Expenditures, 1999-20011


State 1999 2000 2001
National Total 9.5% 10.5% 11.4%
Alabama 11.3% 12.4% 13.5%
Alaska 9.8% 9.3% 9.7%
Arizona 0.6% 0.1% 0.1%
Arkansas 12.1% 13.1% 13.0%
California 10.0% 11.7% 12.5%
Colorado 6.8% 7.4% 7.7%
Connecticut 7.5% 8.5% 9.5%
Delaware 11.7% 12.6% 13.7%
District of Columbia 4.6% 6.7% 6.5%
Florida 15.9% 18.1% 17.2%
Georgia 12.7% 13.4% 14.6%
Hawaii 7.9% 9.6% 11.8%
Idaho 13.3% 14.2% 14.9%
Illinois 10.3% 10.8% 11.4%
Indiana 12.8% 13.3% 14.0%
Iowa 12.3% 12.0% 14.1%
Kansas 11.3% 11.7% 11.0%
Kentucky 13.5% 15.3% 17.9%
Louisiana 13.0% 14.8% 13.9%
Maine 12.6% 14.4% 14.6%
Maryland 6.0% 6.8% 7.5%
Massachusetts 10.4% 11.0% 12.1%
Michigan 5.2% 5.9% 8.1%
Minnesota 6.3% 7.0% 6.9%
Mississippi 15.2% 18.6% 20.2%
Missouri 13.3% 15.1% 14.2%
Montana 14.0% 13.4% 15.0%
Nebraska 12.2% 13.7% 14.4%
Nevada 7.2% 8.4% 9.1%
New Hampshire 8.4% 10.3% 10.5%
New Jersey 8.7% 9.9% 9.1%
New Mexico 3.5% 4.0% 4.0%
New York 7.3% 8.4% 9.5%
North Carolina 12.7% 14.7% 16.0%
North Dakota 9.6% 9.1% 10.8%
Ohio 11.0% 11.8% 13.0%
Oklahoma 12.1% 10.2% 8.5%
Oregon 6.5% 8.0% 8.6%
Pennsylvania 7.3% 5.7% 6.3%
Rhode Island 7.4% 7.8% 8.6%
South Carolina 11.8% 13.1% 14.5%
South Dakota 9.8% 11.2% 11.1%
Tennessee 3.8% 5.5% 12.4%
Texas 9.2% 10.6% 11.4%
Utah 11.3% 12.5% 14.1%
Vermont 12.6% 16.6% 17.3%
Virginia 13.4% 14.2% 13.8%
Washington 8.5% 10.0% 10.6%
West Virginia 14.6% 15.6% 16.8%
Wisconsin 10.0% 10.6% 9.6%
Wyoming 11.0% 12.6% 12.9%

Source: CMS, HCFA-64 Report, FY 1999 - FY 2001.

1
Percentages are based on figures that have not had rebates subtracted from them.

4-10 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Share of Drug Expenditures by Category, 2001


Hormones and
Central Nervous Cardiovascular Anti-Infective Gastrointestinal Synthetic
State System Drugs Drugs Agents Drugs Substitutes
National Total $9,514,948,483 $2,952,096,328 $2,698,567,898 $2,058,242,780 $2,230,229,244
Alabama $132,895,568 $52,054,951 $45,647,355 $24,777,125 $40,134,277
Alaska $32,697,128 $5,824,661 $7,951,147 $6,633,685 $4,666,987
Arizona* $0 $0 $0 $0 $0
Arkansas $91,320,873 $27,987,398 $28,570,099 $19,642,545 $22,366,320
California $1,114,726,219 $450,481,867 $297,332,016 $258,742,020 $376,033,460
Colorado $72,594,684 $17,046,678 $13,299,350 $17,481,965 $13,628,214
Connecticut $136,185,638 $36,739,808 $27,998,828 $25,870,137 $21,695,506
Delaware $28,803,247 $7,741,026 $12,368,037 $6,515,028 $6,611,821
District of Columbia $15,290,824 $8,906,001 $14,742,214 $2,107,315 $4,504,249
Florida $478,798,514 $164,233,638 $249,629,123 $113,519,527 $113,619,439
Georgia $245,155,701 $84,006,382 $99,414,562 $56,192,428 $64,040,377
Hawaii $25,557,359 $10,495,425 $5,760,593 $2,338,731 $6,511,096
Idaho $44,517,638 $6,929,074 $8,593,027 $8,907,402 $8,057,335
Illinois $343,056,415 $106,160,070 $106,602,927 $80,600,315 $87,188,574
Indiana $236,006,313 $52,249,052 $48,811,840 $54,594,975 $45,490,320
Iowa $111,783,642 $24,064,353 $19,518,455 $13,971,139 $20,732,932
Kansas $86,087,451 $18,937,231 $14,140,224 $15,714,096 $16,008,376
Kentucky $215,554,449 $76,124,966 $56,223,047 $74,013,544 $55,005,743
Louisiana $175,472,416 $68,428,238 $77,434,222 $43,551,542 $49,093,324
Maine $86,310,263 $26,663,339 $13,422,750 $16,130,293 $20,008,404
Maryland $125,160,620 $27,807,351 $19,774,232 $17,678,026 $15,022,687
Massachusetts $382,101,446 $83,570,990 $80,792,886 $61,029,647 $61,368,868
Michigan $300,072,871 $69,663,532 $35,493,519 $40,343,017 $44,269,106
Minnesota $139,461,653 $19,993,226 $17,979,015 $22,880,340 $19,726,097
Mississippi $148,433,265 $66,370,724 $51,309,046 $45,579,479 $44,433,198
Missouri $286,839,181 $76,965,642 $59,696,878 $42,055,819 $59,655,556
Montana $32,521,534 $5,960,448 $5,212,804 $7,240,601 $6,037,697
Nebraska $72,970,087 $14,845,491 $15,209,955 $16,376,455 $14,167,802
Nevada $28,253,982 $7,407,670 $9,293,140 $5,389,733 $5,051,915
New Hampshire $35,341,373 $5,051,453 $5,237,290 $5,591,034 $5,057,574
New Jersey $219,820,579 $82,186,345 $79,028,779 $55,933,118 $43,559,759
New Mexico $22,467,684 $7,590,665 $4,511,289 $6,700,427 $7,347,690
New York $935,185,449 $348,673,928 $481,909,973 $214,612,139 $276,237,933
North Carolina $347,701,239 $127,345,226 $100,901,732 $111,673,437 $86,508,399
North Dakota $20,478,174 $4,430,900 $3,018,788 $3,759,997 $3,694,059
Ohio $470,607,371 $118,686,711 $98,831,231 $115,808,039 $94,820,577
Oklahoma $86,275,249 $28,560,545 $21,485,242 $14,016,924 $19,257,204
Oregon $145,915,907 $17,548,697 $14,325,469 $10,612,940 $16,276,764
Pennsylvania $278,076,953 $79,233,042 $61,947,950 $64,007,414 $54,758,587
Rhode Island $46,325,891 $13,499,708 $8,542,443 $10,730,457 $8,077,900
South Carolina $147,662,272 $59,254,441 $48,943,519 $38,489,200 $42,684,621
South Dakota $21,555,113 $4,604,028 $5,130,144 $4,777,056 $4,370,147
Tennessee $373,043,097 $104,020,370 $30,595,170 $55,131,204 $52,880,861
Texas $455,439,034 $153,447,350 $156,657,650 $95,992,450 $127,445,216
Utah $55,241,258 $7,948,732 $9,996,920 $9,605,499 $8,762,196
Vermont** $0 $0 $0 $0 $0
Virginia $154,069,807 $51,353,050 $36,846,701 $46,355,944 $32,195,004
Washington $212,026,836 $46,794,457 $36,046,008 $44,997,617 $41,580,448
West Virginia $97,610,517 $32,293,807 $25,030,002 $13,798,635 $25,130,891
Wisconsin $187,695,044 $39,701,174 $24,606,426 $32,727,523 $31,895,273
Wyoming $13,780,655 $2,212,470 $2,753,883 $3,044,795 $2,558,459
*Data not reported for Arizona. Arizona has an 1115 waiver for which special rules apply.
**Due to inconsistencies, Vermont data are not included in this table.

National Pharmaceutical Council 4-11


Pharmaceutical Benefits 2002

Source: CMS, State Drug Utilization Data, FY 2001

Share of Drug Expenditures by Category, 2001 (con't.)


Unclassified
Therapeutic Autonomic Blood Formation
State Agents Drugs and Coagulation Other Total
National Average $1,063,152,822 $1,028,952,289 $785,918,834 $2,943,352,187 $25,275,460,864
Alabama $16,955,251 $18,650,460 $12,004,092 $58,823,365 $401,942,443
Alaska $2,566,881 $2,902,600 $6,261,887 $5,702,252 $75,207,226
Arizona* $0 $0 $0 $0 $0
Arkansas $11,144,000 $11,115,606 $10,883,361 $28,938,742 $251,968,943
California $124,581,157 $91,334,228 $93,422,560 $291,956,950 $3,098,610,478
Colorado $8,795,844 $7,967,549 $3,432,932 $17,562,417 $171,809,633
Connecticut $11,732,148 $10,879,820 $8,794,472 $29,014,156 $308,910,514
Delaware $3,811,685 $3,637,319 $2,088,704 $10,285,623 $81,862,490
District of Columbia $1,899,260 $1,579,699 $2,413,817 $7,671,551 $59,114,928
Florida $69,968,728 $64,556,228 $61,211,843 $196,661,367 $1,512,198,408
Georgia $27,495,435 $39,039,132 $22,520,980 $104,097,938 $741,962,934
Hawaii $3,575,178 $2,269,442 $2,510,057 $5,655,938 $64,673,820
Idaho $4,420,179 $3,563,999 $3,327,150 $9,703,966 $98,019,769
Illinois $45,881,686 $40,522,287 $37,814,229 $118,096,377 $965,922,880
Indiana $24,101,346 $28,790,598 $28,689,170 $77,289,403 $596,023,018
Iowa $11,938,064 $11,652,048 $6,029,279 $24,769,010 $244,458,923
Kansas $7,754,377 $9,117,381 $3,139,768 $21,010,491 $191,909,396
Kentucky $26,118,631 $38,811,640 $15,480,779 $76,943,751 $634,276,549
Louisiana $21,435,938 $29,783,501 $20,051,806 $97,083,682 $582,334,668
Maine $9,196,068 $10,005,325 $5,694,133 $17,957,255 $205,387,830
Maryland $8,426,414 $6,764,305 $10,229,180 $21,540,807 $252,403,623
Massachusetts $30,253,249 $28,374,659 $23,341,885 $76,527,259 $827,360,889
Michigan $29,248,137 $22,325,625 $23,231,954 $61,639,188 $626,286,949
Minnesota $11,188,028 $10,116,255 $7,419,684 $24,268,247 $273,032,546
Mississippi $21,004,683 $21,685,206 $9,715,898 $61,393,881 $469,925,380
Missouri $29,339,094 $31,631,025 $23,614,163 $84,533,793 $694,331,151
Montana $4,525,672 $3,473,799 $2,276,660 $7,280,917 $74,530,133
Nebraska $6,599,038 $8,008,770 $2,547,222 $24,075,547 $174,800,367
Nevada $3,734,490 $2,808,787 $935,663 $6,768,659 $69,644,039
New Hampshire $2,194,717 $2,322,457 $1,147,658 $6,365,592 $68,309,149
New Jersey $28,740,083 $26,279,953 $31,722,908 $77,173,351 $644,444,873
New Mexico $3,462,038 $2,487,371 $916,146 $7,318,548 $62,801,857
New York $121,792,676 $106,996,809 $99,695,534 $343,225,967 $2,928,330,409
North Carolina $40,762,884 $43,077,183 $25,335,051 $134,831,755 $1,018,136,904
North Dakota $1,682,824 $1,816,397 $931,188 $5,147,701 $44,960,030
Ohio $47,450,121 $54,970,871 $28,847,394 $142,559,328 $1,172,581,643
Oklahoma $11,474,788 $11,711,703 $7,396,109 $26,641,391 $226,819,155
Oregon $8,736,837 $8,408,534 $2,833,445 $13,936,790 $238,595,384
Pennsylvania $32,089,921 $32,256,288 $25,035,011 $77,314,971 $704,720,136
Rhode Island $3,758,453 $3,689,513 $1,550,919 $9,987,786 $106,163,069
South Carolina $17,234,250 $18,093,111 $9,472,932 $60,874,605 $442,708,952
South Dakota $2,400,726 $2,329,163 $1,921,158 $6,338,991 $53,426,526
Tennessee $29,336,208 $24,234,955 $8,995,605 $50,680,851 $728,918,321
Texas $58,170,851 $57,364,635 $44,675,444 $229,571,576 $1,378,764,205
Utah $4,687,680 $4,222,931 $1,365,372 $12,725,157 $114,555,745
Vermont** $0 $0 $0 $0 $0
Virginia $18,028,216 $18,158,465 $22,019,067 $52,648,431 $431,674,685
Washington $21,919,193 $17,980,786 $11,868,778 $45,476,265 $478,690,387
West Virginia $11,270,651 $12,926,285 $3,253,119 $29,224,384 $250,538,289
Wisconsin $18,803,432 $16,759,088 $6,710,399 $40,317,421 $399,215,780
Wyoming $1,465,610 $1,498,497 $1,142,270 $3,738,798 $32,195,437
*Data not reported for Arizona. Arizona has an 1115 waiver for which special rules apply.
**Due to inconsistencies, Vermont data are not included in this table.
Source: CMS, State Drug Utilization Data, FY 2001.

4-12 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Share of Prescriptions Processed, 2001


Hormones and
Central Nervous Cardiovascular Anti-Infective Gastrointestinal Synthetic
State System Drugs Drugs Agents Drugs Substitutes
National Average 148,167,600 67,270,627 42,384,053 30,370,710 46,662,619
Alabama 2,632,226 1,408,395 993,108 492,874 958,805
Alaska 453,523 152,789 110,488 79,207 121,884
Arizona* - - - - -
Arkansas 1,450,177 750,509 613,197 267,050 517,083
California 14,554,053 7,410,590 4,348,940 3,147,638 5,213,101
Colorado 1,204,503 475,725 290,296 227,051 413,954
Connecticut 1,895,984 817,501 257,975 321,045 499,868
Delaware 469,345 167,099 160,147 86,040 148,078
District of Columbia 242,505 199,486 82,466 33,560 91,687
Florida 7,442,614 4,090,249 2,518,170 1,495,157 2,466,850
Georgia 4,318,071 2,198,459 2,072,793 827,868 1,614,395
Hawaii 351,270 229,396 65,234 90,018 132,760
Idaho 614,312 169,098 196,281 86,441 203,689
Illinois 6,124,209 2,720,869 2,000,972 1,670,596 2,052,430
Indiana 3,814,605 1,261,932 1,033,367 930,189 1,028,003
Iowa 1,881,724 648,913 482,333 259,348 542,404
Kansas 1,290,455 507,373 319,855 233,290 420,273
Kentucky 3,653,845 1,831,237 1,296,449 1,113,897 1,257,708
Louisiana 3,209,586 1,661,232 1,439,107 577,116 1,123,467
Maine 1,489,910 752,023 305,474 243,713 529,111
Maryland 1,757,023 661,232 213,705 235,234 371,823
Massachusetts 5,938,419 2,136,144 1,178,007 759,682 1,589,273
Michigan 5,008,103 1,941,774 731,144 836,357 1,195,286
Minnesota 1,817,445 492,449 314,469 433,494 431,029
Mississippi 2,093,166 1,245,034 961,894 439,534 815,924
Missouri 4,392,199 1,873,816 1,012,439 864,704 1,373,516
Montana 513,916 151,908 125,557 96,752 157,029
Nebraska 1,222,641 410,815 389,365 336,796 357,671
Nevada 392,067 172,954 96,066 62,397 127,389
New Hampshire 490,677 117,405 91,567 74,680 108,083
New Jersey 3,103,346 1,777,576 636,290 645,683 912,684
New Mexico 402,425 196,242 95,465 97,354 212,470
New York 13,225,789 7,392,757 4,298,800 3,221,996 4,531,650
North Carolina 5,228,542 2,864,808 1,773,774 1,141,952 1,938,819
North Dakota 321,364 132,232 81,905 48,889 109,144
Ohio 7,969,504 3,142,743 2,051,384 2,084,279 2,358,177
Oklahoma 1,257,616 645,483 441,135 233,985 439,807
Oregon 2,180,700 474,284 256,106 228,998 444,925
Pennsylvania 4,333,444 2,082,914 958,089 943,992 1,372,792
Rhode Island 674,816 310,815 95,133 138,083 186,287
South Carolina 2,062,985 1,089,842 893,095 361,262 850,306
South Dakota 320,058 127,537 126,004 58,525 109,858
Tennessee 7,199,034 2,776,996 604,399 1,024,828 1,459,814
Texas 7,434,516 2,901,484 3,673,574 1,412,480 2,251,273
Utah 921,707 194,613 249,320 167,138 236,902
Vermont** - - - - -
Virginia 2,608,563 1,198,943 645,687 729,560 755,656
Washington 3,311,877 1,231,455 661,271 716,726 1,088,681
West Virginia 1,838,082 819,540 610,913 285,159 610,719
Wisconsin 2,851,448 1,197,956 460,372 471,724 872,195
Wyoming 203,213 56,002 70,473 36,371 57,888

*Data not reported for Arizona. Arizona has an 1115 waiver for which special rules apply.
**Due to inconsistencies, Vermont data are not included in this table.
Source: CMS, State Drug Utilization Data, FY 2001.

National Pharmaceutical Council 4-13


Pharmaceutical Benefits 2002

Share of Prescriptions Processed, 2001 (con't)


Unclassified
Therapeutic Autonomic Blood Formation
State Agents Drugs and Coagulation Other Total
National Average 9,917,396 25,741,156 8,136,530 99,891,784 478,542,474
Alabama 191,742 530,461 166,928 2,318,536 9,693,075
Alaska 26,058 76,971 17,089 178,750 1,216,759
Arizona* - - - - -
Arkansas 121,857 264,170 74,655 1,036,079 5,094,777
California 976,543 2,296,093 891,786 9,481,535 48,320,279
Colorado 81,578 223,436 74,831 652,533 3,643,905
Connecticut 99,336 266,004 106,776 877,124 5,141,613
Delaware 31,246 101,286 16,286 324,440 1,503,966
District of Columbia 19,752 43,818 15,107 217,864 946,245
Florida 632,459 1,402,794 421,062 4,949,789 25,419,144
Georgia 316,776 989,002 265,004 3,771,466 16,373,834
Hawaii 44,036 59,866 17,445 225,391 1,215,415
Idaho 37,054 92,026 22,103 311,888 1,732,892
Illinois 398,773 1,208,120 461,794 5,059,230 21,696,993
Indiana 217,574 644,373 216,161 2,699,698 11,845,902
Iowa 101,556 281,134 100,327 962,104 5,259,841
Kansas 79,012 217,311 82,409 742,540 3,892,518
Kentucky 293,621 801,522 220,875 2,991,744 13,460,898
Louisiana 230,800 689,634 221,023 3,134,634 12,286,599
Maine 96,919 264,768 66,380 643,933 4,392,231
Maryland 85,999 212,833 108,911 721,481 4,368,241
Massachusetts 292,673 861,056 222,362 2,420,483 15,398,099
Michigan 279,808 610,323 232,766 2,199,365 13,034,926
Minnesota 83,265 251,948 74,558 846,570 4,745,227
Mississippi 191,469 386,967 128,591 1,795,641 8,058,220
Missouri 269,135 743,357 268,052 2,774,395 13,571,611
Montana 32,260 93,235 18,254 251,324 1,440,235
Nebraska 71,717 195,686 63,797 949,245 3,997,733
Nevada 32,197 71,892 16,750 196,077 1,167,789
New Hampshire 22,183 67,581 9,447 194,805 1,176,425
New Jersey 259,058 535,696 188,043 2,195,522 10,253,898
New Mexico 29,154 67,329 27,006 322,854 1,450,299
New York 1,076,289 2,831,094 687,149 10,852,411 48,117,935
North Carolina 423,271 955,967 260,845 3,915,902 18,503,880
North Dakota 19,149 46,993 18,841 194,413 972,930
Ohio 481,387 1,477,682 466,644 5,889,439 25,921,239
Oklahoma 110,683 254,644 53,030 786,995 4,223,378
Oregon 76,869 227,387 57,419 627,768 4,574,456
Pennsylvania 343,823 730,039 408,395 2,636,945 13,810,433
Rhode Island 39,481 99,538 34,007 361,642 1,939,800
South Carolina 148,234 378,344 92,151 1,619,436 7,495,655
South Dakota 21,611 57,884 18,956 220,763 1,061,196
Tennessee 292,887 730,064 269,138 2,599,610 16,956,770
Texas 498,005 1,516,512 389,366 8,008,730 28,085,940
Utah 55,822 123,853 27,327 448,977 2,425,659
Vermont** - - - - -
Virginia 184,245 436,572 157,540 1,863,368 8,580,134
Washington 186,442 532,888 153,136 1,772,643 9,655,119
West Virginia 122,510 324,130 68,745 1,045,287 5,725,085
Wisconsin 178,312 432,181 147,306 1,476,859 8,088,353
Wyoming 12,768 34,694 9,959 123,558 604,925

*Data not reported for Arizona. Arizona has an 1115 waiver for which special rules apply.
**Due to inconsistencies, Vermont data are not included in this table.
Source: CMS, State Drug Utilization Data, FY 2001.

4-14 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Medicaid Average Cost Per Prescription, 2001


Drug Prescriptions Average
State Payments Processed Prescription Cost
National Average $25,275,460,864 478,542,474 $52.82
Alabama $401,942,443 9,693,075 $41.47
Alaska $75,207,226 1,216,759 $61.81
Arizona* - - -
Arkansas $251,968,943 5,094,777 $49.46
California $3,098,610,478 48,320,279 $64.13
Colorado $171,809,633 3,643,905 $47.15
Connecticut $308,910,514 5,141,613 $60.08
Delaware $81,862,490 1,503,966 $54.43
District of Columbia $59,114,928 946,245 $62.47
Florida $1,512,198,408 25,419,144 $59.49
Georgia $741,962,934 16,373,834 $45.31
Hawaii $64,673,820 1,215,415 $53.21
Idaho $98,019,769 1,732,892 $56.56
Illinois $965,922,880 21,696,993 $44.52
Indiana $596,023,018 11,845,902 $50.31
Iowa $244,458,923 5,259,841 $46.48
Kansas $191,909,396 3,892,518 $49.30
Kentucky $634,276,549 13,460,898 $47.12
Louisiana $582,334,668 12,286,599 $47.40
Maine $205,387,830 4,392,231 $46.76
Maryland $252,403,623 4,368,241 $57.78
Massachusetts $827,360,889 15,398,099 $53.73
Michigan $626,286,949 13,034,926 $48.05
Minnesota $273,032,546 4,745,227 $57.54
Mississippi $469,925,380 8,058,220 $58.32
Missouri $694,331,151 13,571,611 $51.16
Montana $74,530,133 1,440,235 $51.75
Nebraska $174,800,367 3,997,733 $43.72
Nevada $69,644,039 1,167,789 $59.64
New Hampshire $68,309,149 1,176,425 $58.07
New Jersey $644,444,873 10,253,898 $62.85
New Mexico $62,801,857 1,450,299 $43.30
New York $2,928,330,409 48,117,935 $60.86
North Carolina $1,018,136,904 18,503,880 $55.02
North Dakota $44,960,030 972,930 $46.21
Ohio $1,172,581,643 25,921,239 $45.24
Oklahoma $226,819,155 4,223,378 $53.71
Oregon $238,595,384 4,574,456 $52.16
Pennsylvania $704,720,136 13,810,433 $51.03
Rhode Island $106,163,069 1,939,800 $54.73
South Carolina $442,708,952 7,495,655 $59.06
South Dakota $53,426,526 1,061,196 $50.35
Tennessee $728,918,321 16,956,770 $42.99
Texas $1,378,764,205 28,085,940 $49.09
Utah $114,555,745 2,425,659 $47.23
Vermont** - - -
Virginia $431,674,685 8,580,134 $50.31
Washington $478,690,387 9,655,119 $49.58
West Virginia $250,538,289 5,725,085 $43.76
Wisconsin $399,215,780 8,088,353 $49.36
Wyoming $32,195,437 604,925 $53.22

*Data not reported for Arizona. Arizona has an 1115 waiver for which special rules apply.
**Due to inconsistencies, Vermont data are not included in this table.
Source: CMS, State Drug Utilization Data, FY 2000.

National Pharmaceutical Council 4-15


Pharmaceutical Benefits 2002

4-16 National Pharmaceutical Council


Pharmaceutical Benefits 2002

MEDICAID DRUG REBATES


In 1990, Congress considered a number of proposals designed to reduce and
control Federal and State expenditures for prescription drug products provided to
Medicaid patients (S.2605, the Pharmaceutical Access and Prudent Purchasing
Act; S.3029, the Medicaid Anti-Discriminatory Drug Act, sponsored by Senator
David Pryor; and H.R.5589, the Medicaid Prescription Drug Fair Access and
Pricing Act, sponsored by Representatives Ron Wyden and Jim Cooper). A
vigorous Congressional debate ensued over which of these approaches to pursue.
Several pharmaceutical manufacturers voluntarily offered rebates to the States in
exchange for open access for their products, while the Pharmaceutical
Manufacturers Association proposed a set rebate amount in exchange for open
formularies. Numerous public interest groups offered opinions on the proposals
and in some cases proposals of their own.

The Congressional debate ended in both the House and Senate offering
somewhat similar proposals. During the ensuing Conference between the House
and Senate, the Office of Management and Budget (OMB) argued for the
inclusion of several proposals into the provisions in budget bill, the Omnibus
Budget Reconciliation Act of 1990 (OBRA ’90). The resulting Public Law 101-
508, enacted November 5, 1990, required a drug manufacturer to enter into and
have in effect a national rebate agreement with the Secretary of the Department
of Health and Human Services (HHS) for States to receive Federal funding for
outpatient drugs dispensed to Medicaid patients. (For a detailed account of the
debate and genesis of various provisions see Robert Betz’s analysis of the
Medicaid Best Price Law and its effect on pharmaceutical manufacturers’ pricing
policies.*)

The requirement for rebate agreements does not apply to the dispensing of a
single-source or innovator multiple-source drug if the State has determined that
the drug is essential, rated 1-A by the FDA, and prior authorization is obtained
for the exception. Existing rebate agreements qualify under the law if the State
agrees to report all rebates to HHS and the agreement provides for a minimum
aggregate rebate of 10% of the State’s expenditures for the manufacturer’s
products.

OBRA ‘90 was amended by the Veterans Health Care Act of 1992 which also
required a drug manufacturer to enter into discount pricing agreements with the
Department of Veterans Affairs and with covered entities funded by the Public
Health Service in order to have its drugs covered by Medicaid. The Medicaid
rebate law, as amended, is included as Appendix C.

The drug rebate program is administered by CMS’ Center for Medicaid and State
Operations (CMSO). Currently, the rebate for covered outpatient drugs is as
follows:

• For all innovator products, reimbursement requires: (1) a rebate that is the
greater of 15.1 percent of the average manufacturer’s price (AMP) or the
difference between the AMP and the manufacturer’s “best price,” and (2) an
additional rebate for any price increase for a product that exceeds the
increase in the Consumer Price Index (CPI-U) for all items since the fall of
1990. AMP is the average price paid by wholesalers for products distributed
to the retail class of trade. The best price is the lowest price offered to any
other customer, excluding Federal Supply Schedule prices, prices to State

National Pharmaceutical Council 4-17


Pharmaceutical Benefits 2002
pharmaceutical assistance programs, and prices that are nominal in amount,
and includes all discounts and rebates.
• For generic drugs (non-innovator drugs), reimbursement requires: a rebate of
11 percent of each product’s AMP.

* Robert Betz, “The Medicaid Best Price Law and Its Effect on Pharmaceutical Manufacturer’s Pricing Policies and Behavior for Name
Brand, Outpatient Pharmaceutical Products,” unpubl. Ph.D. dissertation, The George Washington University, May 21, 2000.

4-18 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Medicaid Drug Rebates, 2001


Allocation of
State Drug Rebate Monies1 Total Rebates2 Federal Share2
National Total $4,948,222,331 $2,852,290,258
Alabama Medicaid Drug Budget $76,624,463 $53,711,251
Alaska General Fund $11,337,883 $6,817,468
Arizona* - - -
Arkansas Medicaid General $45,744,406 $33,463,178
California Medicaid Drug Budget $786,113,991 $405,347,024
Colorado General Fund $34,264,574 $17,334,298
Connecticut Medicaid Drug Budget $61,916,192 $30,997,965
Delaware Medicaid General $17,042,045 $8,613,851
District of Columbia Medicaid General $10,446,499 $7,312,880
Florida Medicaid Drug Budget $297,362,792 $169,183,635
Georgia Medicaid General $110,087,285 $65,735,246
Hawaii General Fund, Medicaid Drug Budget $14,363,603 $7,734,801
Idaho Medicaid General $18,841,154 $13,332,002
Illinois Medicaid Drug Budget $170,733,612 $85,686,875
Indiana General Fund $103,148,144 $63,993,109
Iowa General Fund $42,602,101 $26,784,295
Kansas Medicaid General $39,731,568 $23,842,174
Kentucky General Fund $104,759,238 $73,815,957
Louisiana Medicaid Drug Budget $115,254,842 $81,440,444
Maine Medicaid Drug Budget $41,847,632 $27,707,958
Maryland Medicaid General $34,263,429 $23,731,558
Massachusetts Medicaid General $180,517,139 $90,866,756
Michigan Medicaid Drug Budget $111,716,756 $62,886,976
Minnesota General Fund $54,548,714 $27,879,847
Mississippi Medicaid General $88,481,567 $68,095,766
Missouri Medicaid General $133,927,028 $82,365,392
Montana General Fund $13,359,968 $9,792,644
Nebraska Medicaid Drug Budget $30,219,685 $18,481,621
Nevada General Fund $16,330,579 $8,278,764
New Hampshire General Fund $13,934,765 $7,001,525
New Jersey Medicaid Drug Budget $124,127,231 $62,188,060
New Mexico General Fund $12,110,896 $8,937,842
New York General Fund $543,984,948 $271,992,475
North Carolina Medicaid General $207,551,841 $129,996,009
North Dakota Medicaid Drug Budget $8,780,182 $6,156,520
Ohio General Fund $217,702,350 $128,509,697
Oklahoma Medicaid Drug Budget $40,177,945 $28,622,768
Oregon General Fund $34,991,037 $21,217,459
Pennsylvania Outpatient Appropriation $129,265,110 $69,520,225
Rhode Island General Fund $21,467,002 $11,547,100
South Carolina Medicaid Drug Budget $95,438,155 $67,719,218
South Dakota Medicaid Drug Budget $9,405,933 $6,462,840
Tennessee Medicaid General $102,644,077 $65,476,656
Texas Medicaid Drug Budget $268,557,241 $163,037,466
Utah General Fund $21,949,963 $15,701,560
Vermont Medicaid General $22,045,277 $13,823,428
Virginia Medicaid General, Medicaid Drug Budget $79,484,868 $42,334,830
Washington General Fund $91,250,830 $46,412,894
West Virginia Medicaid General $52,402,218 $39,479,831
Wisconsin Medicaid General $79,554,207 $47,158,148
Wyoming Medicaid General $5,809,366 $3,759,972

*Does not apply for Arizona. Arizona has an 1115 waiver for which special rules apply.
Sources: 1As reported by State drug program administrators in the 2002 NPC Survey. 2
CMS, CMS-64 Report, FY 2001.

National Pharmaceutical Council 4-19


Pharmaceutical Benefits 2002

Medicaid Drug Rebate Trends, 1997-2001


State 1997 1998 1999 2000 2001
National Total $2,212,579,458 $2,469,136,949 $3,338,497,983 $3,980,646,518 $4,948,222,331
Alabama $47,135,670 $36,537,095 $49,785,076 $60,984,826 $76,624,463
Alaska $4,900,641 $5,026,624 $7,050,981 $8,594,014 $11,337,883
Arizona* - - - - -
Arkansas $24,514,373 $22,518,230 $37,931,853 $40,814,931 $45,744,406
California $307,645,326 $362,808,597 $539,928,783 $600,895,711 $786,113,991
Colorado $16,950,071 $20,424,896 $25,151,080 $28,832,989 $34,264,574
Connecticut $27,318,565 $32,128,587 $38,656,394 $49,164,014 $61,916,192
Delaware $5,851,285 $7,096,836 $9,787,444 $13,780,359 $17,042,045
District of Columbia $6,668,493 $7,100,983 $8,379,982 $9,215,651 $10,446,499
Florida $128,466,755 $150,733,077 $195,512,719 $248,637,014 $297,362,792
Georgia $59,756,017 $64,320,077 $95,237,778 $91,886,605 $110,087,285
Hawaii $4,654,126 $5,992,722 $8,378,292 $10,947,632 $14,363,603
Idaho $8,369,523 $8,614,444 $11,901,778 $13,984,004 $18,841,154
Illinois $85,128,380 $100,811,862 $121,540,781 $143,590,170 $170,733,612
Indiana $43,645,256 $50,710,861 $62,691,135 $84,453,135 $103,148,144
Iowa $21,755,142 $25,265,390 $32,369,409 $36,040,216 $42,602,101
Kansas $11,797,675 $19,852,439 $26,878,486 $31,022,023 $39,731,568
Kentucky $59,890,925 $57,082,387 $72,676,810 $93,688,165 $104,759,238
Louisiana $54,650,344 $65,994,910 $76,147,317 $84,800,897 $115,254,842
Maine $18,246,061 $19,650,719 $30,032,364 $31,598,262 $41,847,632
Maryland $34,567,082 $25,017,660 $32,311,299 $42,081,781 $34,263,429
Massachusetts $73,047,452 $89,011,664 $140,102,747 $146,225,538 $180,517,139
Michigan $74,116,928 $72,526,027 $75,674,128 $75,687,945 $111,716,756
Minnesota $31,873,349 $31,058,740 $37,389,033 $43,228,324 $54,548,714
Mississippi $37,108,638 $39,983,265 $49,332,307 $61,260,326 $88,481,567
Missouri $54,614,194 $66,460,159 $84,620,799 $110,025,619 $133,927,028
Montana $6,775,176 $7,378,206 $9,290,653 $10,985,923 $13,359,968
Nebraska $14,931,313 $16,545,572 $21,609,490 $31,004,940 $30,219,685
Nevada $5,391,025 $5,143,136 $7,727,267 $4,863,879 $16,330,579
New Hampshire $8,788,296 $9,676,461 $12,956,727 $15,073,211 $13,934,765
New Jersey $66,748,605 $70,992,525 $90,472,488 $105,535,091 $124,127,231
New Mexico $13,367,028 $10,670,766 $7,972,600 $8,901,456 $12,110,896
New York $200,157,978 $251,273,382 $356,088,488 $470,317,992 $543,984,948
North Carolina $68,332,867 $81,211,796 $111,326,116 $140,047,825 $207,551,841
North Dakota $4,651,348 $4,990,065 $5,954,387 $6,503,601 $8,780,182
Ohio $84,238,194 $110,484,575 $148,477,399 $171,685,793 $217,702,350
Oklahoma $20,776,998 $23,329,251 $31,992,100 $37,135,809 $40,177,945
Oregon $13,852,833 $14,433,179 $21,360,688 $32,056,386 $34,991,037
Pennsylvania $115,510,606 $95,692,149 $119,340,064 $118,989,849 $129,265,110
Rhode Island $10,121,820 $11,041,552 $14,440,971 $19,223,034 $21,467,002
South Carolina $34,643,502 $39,156,574 $55,971,288 $73,052,676 $95,438,155
South Dakota $4,940,121 $5,070,643 $5,971,015 $7,198,848 $9,405,933
Tennessee** - $840 $22,434,760 $41,302,450 $102,644,077
Texas $130,576,891 $145,635,499 $185,695,267 $222,314,531 $268,557,241
Utah $8,374,299 $9,988,037 $15,145,126 $21,889,639 $21,949,963
Vermont $8,255,707 $8,868,263 $10,579,999 $17,869,053 $22,045,277
Virginia $45,240,474 $51,079,391 $67,715,512 $75,630,717 $79,484,868
Washington $38,326,646 $39,191,376 $54,331,249 $69,782,396 $91,250,830
West Virginia $26,079,819 $26,753,285 $35,941,495 $46,762,149 $52,402,218
Wisconsin $37,146,544 $40,776,543 $51,869,264 $66,358,433 $79,554,207
Wyoming $2,679,097 $3,025,632 $4,364,795 $4,720,686 $5,809,366

*Does not apply for Arizona. Arizona has an 1115 waiver for which special rules apply.
**Tennessee did not report data for 1997.
Source: CMS, HCFA-64 Report, FY 1997-FY 2001.

4-20 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Medicaid Drug Rebate Trends


Annual Percent Change, 1996-2001
% Change % Change % Change % Change % Change
State 96-97 97-98 98-99 99-00 00-01
National Total 12.8% 11.6% 35.2% 19.2% 24.3%
Alabama 31.9% -22.5% 36.3% 22.5% 25.6%
Alaska 34.9% 2.6% 40.3% 21.9% 31.9%
Arizona* - - - - -
Arkansas 22.9% -8.1% 68.4% 7.6% 12.1%
California 18.5% 17.9% 48.8% 11.3% 30.8%
Colorado -2.3% 20.5% 23.1% 14.6% 18.8%
Connecticut -11.2% 17.6% 20.3% 27.2% 25.9%
Delaware 32.2% 21.3% 37.9% 40.8% 23.7%
District of Columbia 17.6% 6.5% 18.0% 10.0% 13.4%
Florida 16.5% 17.3% 29.7% 27.2% 19.6%
Georgia 5.0% 7.6% 48.1% -3.5% 19.8%
Hawaii 25.1% 28.8% 39.8% 30.7% 31.2%
Idaho 28.1% 2.9% 38.2% 17.5% 34.7%
Illinois 0.0% 18.4% 20.6% 18.1% 18.9%
Indiana -4.8% 16.2% 23.6% 34.7% 22.1%
Iowa 15.9% 16.1% 28.1% 11.3% 18.2%
Kansas 29.3% 68.3% 35.4% 15.4% 28.1%
Kentucky 38.8% -4.7% 27.3% 28.9% 11.8%
Louisiana -1.9% 20.8% 15.4% 11.4% 35.9%
Maine 13.1% 7.7% 52.8% 5.2% 32.4%
Maryland 21.3% -27.6% 29.2% 30.2% -18.6%
Massachusetts 12.3% 21.9% 57.4% 4.4% 23.5%
Michigan 9.0% -2.1% 4.3% 0.0% 47.6%
Minnesota 355.8% -2.6% 20.4% 15.6% 26.2%
Mississippi 15.3% 7.7% 23.4% 24.2% 44.4%
Missouri 6.0% 21.7% 27.3% 30.0% 21.7%
Montana 12.3% 8.9% 25.9% 18.2% 21.6%
Nebraska 21.1% 10.8% 30.6% 43.5% -2.5%
Nevada 22.5% -4.6% 50.2% -37.1% 235.8%
New Hampshire 11.1% 10.1% 33.9% 16.3% -7.6%
New Jersey 2.1% 6.4% 27.4% 16.6% 17.6%
New Mexico 16.1% -20.2% -25.3% 11.7% 36.1%
New York 33.0% 25.5% 41.7% 32.1% 15.7%
North Carolina 19.7% 18.8% 37.1% 25.8% 48.2%
North Dakota 24.6% 7.3% 19.3% 9.2% 35.0%
Ohio -18.6% 31.2% 34.4% 15.6% 26.8%
Oklahoma 5.5% 12.3% 37.1% 16.1% 8.2%
Oregon -29.6% 4.2% 48.0% 50.1% 9.2%
Pennsylvania 16.4% -17.2% 24.7% -0.3% 8.6%
Rhode Island 8.4% 9.1% 30.8% 33.1% 11.7%
South Carolina 13.6% 13.0% 42.9% 30.5% 30.6%
South Dakota 52.1% 2.6% 17.8% 20.6% 30.7%
Tennessee** - - - 84.1% 148.5%
Texas 14.1% 11.5% 27.5% 19.7% 20.8%
Utah -8.4% 19.3% 51.6% 44.5% 0.3%
Vermont 21.5% 7.4% 19.3% 68.9% 23.4%
Virginia 10.2% 12.9% 32.6% 11.7% 5.1%
Washington 14.1% 2.3% 38.6% 28.4% 30.8%
West Virginia -4.4% 2.6% 34.3% 30.1% 12.1%
Wisconsin 7.7% 9.8% 27.2% 27.9% 19.9%
Wyoming 2.1% 12.9% 44.3% 8.2% 23.1%

*Does not apply to Arizona. Arizona has an 1115 waiver for which special rules apply.
**Tennessee did not report data for 1997.
Source: CMS, CMS-64 Report, FY 1996 – FY 2001.

National Pharmaceutical Council 4-21


Pharmaceutical Benefits 2002

Rebates as Percent Drug Expenditures, 2001


Rebates as % Drug
State Drug Expenditures Rebates Expenditure
National Total $24,656,812,921 $4,948,222,331 20.1%
Alabama $386,876,131 $76,624,463 19.8%
Alaska $55,754,050 $11,337,883 20.3%
Arizona* $2,573,205 - -
Arkansas $241,558,369 $45,744,406 18.9%
California $2,984,162,770 $786,113,991 26.3%
Colorado $166,000,664 $34,264,574 20.6%
Connecticut $304,780,286 $61,916,192 20.3%
Delaware $81,156,928 $17,042,045 21.0%
District of Columbia $63,504,500 $10,446,499 16.5%
Florida $1,475,766,739 $297,362,792 20.1%
Georgia $735,944,558 $110,087,285 15.0%
Hawaii $74,869,859 $14,363,603 19.2%
Idaho $102,975,196 $18,841,154 18.3%
Illinois $884,018,166 $170,733,612 19.3%
Indiana $561,642,082 $103,148,144 18.4%
Iowa $234,716,795 $42,602,101 18.2%
Kansas $185,017,060 $39,731,568 21.5%
Kentucky $592,096,755 $104,759,238 17.7%
Louisiana $585,388,809 $115,254,842 19.7%
Maine $191,785,942 $41,847,632 21.8%
Maryland $244,203,084 $34,263,429 14.0%
Massachusetts $797,859,072 $180,517,139 22.6%
Michigan $584,670,445 $111,716,756 19.1%
Minnesota $265,726,228 $54,548,714 20.5%
Mississippi $493,177,297 $88,481,567 17.9%
Missouri $675,647,147 $133,927,028 19.8%
Montana $72,577,455 $13,359,968 18.4%
Nebraska $170,897,014 $30,219,685 17.8%
Nevada $61,500,721 $16,330,579 26.6%
New Hampshire $91,703,067 $13,934,765 15.2%
New Jersey $651,442,945 $124,127,231 19.1%
New Mexico $57,995,801 $12,110,896 20.9%
New York $2,986,292,455 $543,984,948 18.2%
North Carolina $984,653,306 $207,551,841 21.1%
North Dakota $44,067,986 $8,780,182 19.9%
Ohio $1,099,697,768 $217,702,350 19.8%
Oklahoma $171,188,873 $40,177,945 23.5%
Oregon $228,670,426 $34,991,037 15.3%
Pennsylvania $692,665,382 $129,265,110 18.7%
Rhode Island $102,708,476 $21,467,002 20.9%
South Carolina $438,897,100 $95,438,155 21.7%
South Dakota $51,748,770 $9,405,933 18.2%
Tennessee $681,454,847 $102,644,077 15.1%
Texas $1,325,987,804 $268,557,241 20.3%
Utah $117,170,006 $21,949,963 18.7%
Vermont $104,250,880 $22,045,277 21.1%
Virginia $417,689,526 $79,484,868 19.0%
Washington $458,332,414 $91,250,830 19.9%
West Virginia $259,638,952 $52,402,218 20.2%
Wisconsin $382,272,975 $79,554,207 20.8%
Wyoming $31,435,835 $5,809,366 18.5%

*Does not apply to Arizona. Arizona has an 1115 waiver for which special rules apply.
Source: CMS, CMS-64 Report, FY 2001

4-22 National Pharmaceutical Council


Pharmaceutical Benefits 2002

MEDICAID DRUG COVERAGE


In general, all prescription products sold by a manufacturer that has signed a drug
rebate agreement are covered outpatient drugs reimbursable by Medicaid. A
State Medicaid program may require prior approval before dispensing of any
drug product and may design and implement a formulary intended to limit
coverage for specific drugs. Drug formularies and prior authorization programs
must meet specific requirements established in Medicaid law.

A State Medicaid program can restrict coverage for a drug product through a
formulary, if based on official labeling or information in designated official
medical compendia, “the excluded drug does not have a significant, clinically
meaningful therapeutic advantage in terms of safety, effectiveness or clinical
outcome of such treatment” over other drug products, and there is a written
explanation (available to the public) of the basis for the exclusion. However,
drug products excluded from the formulary under these conditions, nevertheless,
must be available through prior authorization.

Drugs in certain specific classes may be restricted or excluded from coverage


without regard to the formulary conditions and need not be available through
prior authorization. These classes include:

• Drugs used for anorexia, weight gain, fertility, hair growth, cosmetic effect,
symptomatic relief of cough or colds, or for cessation of smoking.
• Vitamins and minerals (except prenatal prescription vitamins and fluoride
preparations) or non-prescription drugs.
• Drugs that require tests or monitoring services to be purchased exclusively
from the manufacturer or his designee.
• Barbiturates or benzodiazepines.

PRIOR AUTHORIZATION

Whether or not a drug product is on a formulary, States may require physicians to


request and receive official permission before a particular product can be
dispensed. This procedure is called Prior Authorization or Prior Approval.

States may not operate prior authorization plans unless the State provides for a
response within 24 hours of a request and provides for a 72-hour emergency
supply of the medication.

The Congressional intent for the prior authorization provision was not to
encourage the use of such programs, but rather to make them available to the
States for the purpose of controlling utilization of products that have very narrow
indications or high abuse potential.

The majority of States report the establishment of prior authorization programs


and have plans to apply prior authorization to a select number of drugs. Some
States will do so only after their Drug Utilization Review (DUR) program has
identified areas of therapeutic concern.

National Pharmaceutical Council 4-23


Pharmaceutical Benefits 2002

DRUG UTILIZATION REVIEW

DUR Program. Each State must establish a Drug Utilization Review (DUR)
Program in order to assure that prescriptions are appropriate, medically
necessary, and not likely to result in adverse medical results. A DUR Program
consists of prospective and retrospective components as well as components to
educate physicians and pharmacists on common drug therapy problems.

Specifically, the program educates physicians and pharmacists how to identify


and reduce fraud, abuse, gross overuse, or inappropriate or medically
unnecessary care; potential and actual severe adverse reactions to drugs,
including education on therapeutic appropriateness, overutilization and
underutilization, appropriate use of generic products, therapeutic duplication,
drug-disease contraindications, drug-drug interactions, incorrect drug dosage or
duration of drug treatment, drug-allergy interactions, and clinical abuse or
misuse.

The two primary objectives of DUR systems are (1) to improve quality of care;
and (2) to assist in containing health care costs. While there is a general belief
that DUR is cost beneficial, it is difficult to isolate concrete evidence that
supports this view. The primary issue facing Medicaid DUR programs is
whether or not the systems currently in place (or envisioned) meet the two
objectives outlined above.

Prospective DUR. Prospective DUR is to be conducted at the point of sale (POS)


before delivery of a medication by the pharmacist to the Medicaid recipient or
caregiver. The State is to establish standards for counseling patients and will
require the pharmacist to offer to discuss matters, which, in the exercise of the
pharmacist’s professional judgement are deemed significant, including the
following:

• Name and description of the medication;


• The route of administration, dosage form, dosage, and duration of therapy;
• Special directions and precautions for preparation, administration and use by
the patient;
• Common severe side or adverse effects or interactions and therapeutic
contraindications that may be encountered, including their avoidance, and the
action required if they occur;
• Techniques for self-monitoring prescription therapy;
• Proper storage;
• Prescription refill information; and
• Action to be taken in the event of a missed dose.
State law must also require pharmacists to make a reasonable effort to obtain,
record, and maintain at least the following information for each Medicaid
recipient:

• Name, address, telephone number, date of birth (or age) and gender;
• Individual history where significant, including a disease state or states,
known allergies and drug reactions, and a comprehensive list of medications
and relevant devices; and

4-24 National Pharmaceutical Council


Pharmaceutical Benefits 2002

• Pharmacist comments relevant to the individual’s pharmaceutical therapy.


Retrospective DUR. This activity continuously assesses data on drug use against
established standards, preferably using automated claims processing and
information retrieval techniques to monitor for therapeutic appropriateness,
overutilization and underutilization, appropriate use of generic products,
therapeutic duplication, drug-disease contraindications, drug-drug interactions,
incorrect drug dosage or duration of drug treatment, clinical abuse/misuse and, as
necessary, introduce remedial strategies in order to improve the quality of care
and to conserve program funds or personal expenditures. This activity is also
intended to identify patterns of fraud, abuse, gross overuse, or inappropriate of
medically unnecessary care among physicians, pharmacists, and recipients, or
with respect to specific drugs or groups of drugs.

State Drug Use Review Board. Each State must provide for the establishment of
a DUR board of health practitioners (one-third to one-half physicians and at least
one-third pharmacists) to help implement the DUR program. Each State must
require its DUR board to make annual reports to DHHS on its activities and on
cost savings resulting from the DUR program.

National Pharmaceutical Council 4-25


Pharmaceutical Benefits 2002

4-26 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Pharmacy Advisory Committees


State Pharmacy Advisory Committee Meetings Preferred Product Introduction Process
Alabama Pharmacy & Therapeutic Committee Quarterly Introductory letter
Alaska None - Introductory letter
Arizona* - - Inform health plans directly
Arkansas None - Introductory letter
California Medical Contract Drug Advisory Committee Ad Hoc Petition with specific content requirements
Colorado DUR Board advises Semiannually Introductory letter
Connecticut Pharmacy Review Panel Quarterly Introductory letter
Delaware DUR Board advises Bi-Monthly Introductory letter
District of Columbia N/A - Introductory letter
Florida None - Introductory letter
Georgia Yes Quarterly Introductory letter
Hawaii DUR Board advises Quarterly Package insert, Formulary kit
Idaho None - Introductory letter, Product information
Illinois None - Contact First DataBank
Indiana DUR Board advises Monthly Introductory letter
Iowa DUR Board advises Monthly Introductory letter
Kansas DUR Board advises Bi-Monthly Introductory letter
Kentucky Pharmacy and Therapeutic Advisory Board Bi-Monthly Introductory letter, Package insert
Louisiana Pharmaceutical and Therapeutic Committee Semiannually Introductory letter
Maine Pharmacy Advisory Group Quarterly Introductory letter
Maryland None - Introductory letter
Massachusetts DUR Committee Quarterly Introductory letter
Michigan Pharmacy and Therapeutics Committee Semiannually State form
Minnesota Drug Formulary Committee Quarterly Introductory letter
Mississippi Pharmacy and Therapeutics Committee Monthly E-mail to Pharmacy Committee
Missouri Pharmacy Subcommittee Quarterly Introductory letter
Montana DUR Board advises Monthly Introductory letter
Nebraska None - Introductory letter
Nevada DUR Board - Introductory letter
New Hampshire None - Introductory letter
New Jersey None - Introductory letter
New Mexico None - Introductory letter
New York Pharmacy Advisory Committee Quarterly Introductory letter
North Carolina Medical Care Advisory Committee - Introductory letter, Package insert
North Dakota DUR Board advises Bi-Monthly Manufacturer’s preference
Ohio Pharmacy & Therapeutic Committee Quarterly Introductory letter
Oklahoma DUR Board Monthly E-mail
Oregon DUR Board Quarterly Contact First DataBank
Pennsylvania Medical Assistance Advisory Committee Monthly Introductory letter
Rhode Island None - Introductory letter
South Carolina None - Formulary packet
South Dakota None - Introductory letter
Tennessee* TennCare Advisory Board Bi-Monthly Introductory letter
Texas None - State form
Utah None - Introductory letter
Vermont DUR Committee Bi-Monthly Introductory letter
Virginia Pharmacy Liaison Committee Bi-Monthly Introductory letter
Washington Drug Utilization and Education Council Bi-Monthly AMCP format dossier
West Virginia Medical Services Fund Advisory Council Quarterly Introductory product packet
Wisconsin None - Introductory letter
Wyoming DUR Board Bi-Monthly Introductory letter

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
Source: As reported by State drug program administrators in the 2002 NPC Survey.

National Pharmaceutical Council 4-27


Pharmaceutical Benefits 2002

Pharmacy Benefit Design - Coverage


State Cosmetics Fertility Drugs Experimental Drugs
Alabama Not Covered Not Covered Not Covered
Alaska Covered with Restrictions Not Covered Not Covered
Arizona* - - -
Arkansas Not Covered Not Covered Not Covered
California Not Covered Not Covered Not Covered
Colorado Not Covered Not Covered Not Covered
Connecticut Not Covered Not Covered Not Covered
Delaware Not Covered Not Covered Not Covered
District of Columbia N/A N/A N/A
Florida Not Covered Not Covered Not Covered
Georgia Not Covered Not Covered Not Covered
Hawaii Not Covered Not Covered Not Covered
Idaho Not Covered Not Covered Not Covered
Illinois Not Covered Not Covered Not Covered
Indiana Not Covered Not Covered Not Covered
Iowa Not Covered Not Covered Not Covered
Kansas Not Covered Not Covered Not Covered
Kentucky Not Covered Not Covered Not Covered
Louisiana Not Covered Not Covered Not Covered
Maine Not Covered Not Covered Not Covered
Maryland Not Covered Not Covered Not Covered
Massachusetts Not Covered Not Covered Not Covered
Michigan Not Covered Not Covered Not Covered
Minnesota Not Covered Not Covered Not Covered
Mississippi Not Covered Not Covered Not Covered
Missouri Not Covered Not Covered Not Covered
Montana Not Covered Not Covered Not Covered
Nebraska Not Covered Not Covered Not Covered
Nevada Not Covered Not Covered Not Covered
New Hampshire Not Covered Not Covered Not Covered
New Jersey Not Covered Not Covered Not Covered
New Mexico Not Covered Not Covered Not Covered
New York Not Covered Not Covered Not Covered
North Carolina Not Covered Not Covered Not Covered
North Dakota Not Covered Not Covered Not Covered
Ohio Not Covered Not Covered Not Covered
Oklahoma Not Covered Not Covered Not Covered
Oregon PA Required Not Covered Not Covered
Pennsylvania Not Covered Not Covered Not Covered
Rhode Island Not Covered Not Covered Not Covered
South Carolina Not Covered Not Covered Not Covered
South Dakota Not Covered Not Covered Not Covered
Tennessee* - - -
Texas Not Covered Not Covered Not Covered
Utah Not Covered Not Covered Not Covered
Vermont Not Covered Not Covered Not Covered
Virginia Not Covered Not Covered Not Covered
Washington Not Covered Not Covered Not Covered
West Virginia Not Covered Not Covered Not Covered
Wisconsin Not Covered Not Covered Not Covered
Wyoming Not Covered Not Covered Not Covered

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
PA = Prior Authorization, DME = Durable Medical Equipment
Source: As reported by State drug program administrators in the 2002 NPC Survey.

4-28 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Pharmacy Benefit Design - Coverage (con’t)


Disposable Needles for Syringe Combinations Blood Glucose Test
State Prescribed Insulin Insulin Use for Insulin Use Strips
Alabama Covered Covered Covered Covered as DME
Alaska Covered Covered Covered Covered
Arizona* - - - -
Arkansas Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
California Covered Covered Covered Covered
Colorado Covered DME DME DME
Connecticut Covered Covered Covered Covered
Delaware Covered Covered Covered Covered
District of Columbia Covered Covered Covered N/A
Florida Covered Covered Covered Covered
Georgia Covered Covered Covered Covered with Restrictions
Hawaii Covered Covered Covered Covered
Idaho Covered Covered Covered DME
Illinois Covered Covered Covered with Restrictions Covered
Indiana Covered Covered Covered Covered
Iowa Covered Not Covered Not Covered Not Covered
Kansas Covered Covered as DME Covered as DME Covered as DME
Kentucky Covered Not Covered Covered Not Covered
Louisiana Covered Covered Covered Covered
Maine Covered Covered Covered Covered with Restrictions
Maryland Covered Covered Not Covered Not Covered
Massachusetts Covered Covered Covered Covered
Michigan Covered Covered Covered Covered
Minnesota Covered Covered Covered Covered
Mississippi Covered Covered Covered Covered
Missouri Covered Covered Covered Covered as DME
Montana Covered Not Covered Not Covered Not Covered
Nebraska Covered Covered in Supplier Program Covered (med. necess.) Covered (med. necess.)
Nevada Covered Covered Covered Covered
New Hampshire Covered Covered Covered Covered
New Jersey Covered Covered Covered Covered
New Mexico Covered Covered Covered Covered
New York Covered Covered Covered Covered
North Carolina Covered Covered as DME Covered as DME Covered as DME
North Dakota Covered Covered Covered Covered
Ohio Covered Covered as DME Covered as DME Covered as DME
Oklahoma Covered Covered as DME Covered as DME Covered as DME
Oregon Covered Covered as DME Covered Covered as DME
Pennsylvania Covered Covered Covered Covered
Rhode Island Covered Covered Covered Covered as DME
South Carolina Covered Covered Covered Covered as DME
South Dakota Covered Covered Covered Covered
Tennessee* - - - -
Texas Covered Covered Covered Not Covered
Utah Covered Covered Covered with Restrictions Covered
Vermont Covered Covered Covered Covered
Virginia Covered Covered Covered Covered with Restrictions
Washington Covered Covered Covered Covered
West Virginia Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Wisconsin Covered Covered Covered Covered
Wyoming Covered Covered Covered Covered

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
PA = Prior Authorization, DME = Durable Medical Equipment
Source: As reported by State drug program administrators in the 2002 NPC Survey.

National Pharmaceutical Council 4-29


Pharmaceutical Benefits 2002

Pharmacy Benefit Design - Coverage (con’t)


Urine Ketone Total Interdialytic Parenteral
State Test Strips Parenteral Nutrition Nutrition
Alabama Covered as DME Covered as DME Covered as DME
Alaska Covered Covered Not Covered
Arizona* - - -
Arkansas Not Covered Not Covered Not Covered
California Covered PA Required Not Covered
Colorado DME PA Required Not Covered
Connecticut Covered Covered Covered
Delaware Covered Covered Not Covered
District of Columbia N/A N/A N/A
Florida Covered with Restrictions Covered Not Covered
Georgia Covered with Restrictions Covered with Restrictions Covered with Restrictions
Hawaii Covered Covered, PA Required Covered, PA Required
Idaho DME DME Not Covered
Illinois Covered Covered with Restrictions Covered with Restrictions
Indiana Covered Covered Covered
Iowa Not Covered Not Covered Not Covered
Kansas Covered as DME Covered as DME Not Covered
Kentucky Not Covered Covered with Restrictions Covered with Restrictions
Louisiana Covered Covered as DME Covered as DME
Maine Covered Not Covered Not Covered
Maryland Not Covered Covered Covered
Massachusetts Covered Covered with Restrictions Not Covered
Michigan Covered Covered as DME Covered as DME
Minnesota Covered Covered Covered
Mississippi Covered Covered with Restrictions Covered with Restrictions
Missouri Covered as DME Covered as DME Covered as DME
Montana Not Covered Not Covered Covered in Supplier Program
Nebraska Covered in Supplier Program Covered in Supplier Program Not Covered
Nevada Covered Covered as DME Covered as DME
New Hampshire Covered Covered Covered
New Jersey Covered Covered Covered
New Mexico Covered Covered Covered with Restrictions
New York Covered Covered Covered
North Carolina Covered as DME Covered Covered
North Dakota Covered Covered Not Covered
Ohio Covered as DME Not Covered Not Covered
Oklahoma Covered as DME Covered with Restrictions N/A
Oregon Covered as DME PA Required PA Required
Pennsylvania Covered Covered Covered
Rhode Island Covered Covered as DME, PA required Covered as DME, PA Required
South Carolina Covered as DME Covered as DME Covered as DME
South Dakota Covered Not Covered Not Covered
Tennessee* - - -
Texas Not Covered Not Covered Not Covered
Utah Covered Covered as DME Covered as DME
Vermont Covered Covered Covered
Virginia Covered as DME Covered Not Covered
Washington Covered Covered Covered
West Virginia Covered with Restrictions Covered as DME Not Covered
Wisconsin Covered Covered Covered
Wyoming Covered Covered as DME Covered as DME

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
PA= Prior Authorization, DME = Durable Medical Equipment
Source: As reported by State drug program administrators in the 2002 NPC Survey.

4-30 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Coverage of Injectables
Reimbursement for Non Self-Administered Medicines via
the Prescription Drug Program (PDP) or Physician Payment (PP)

State Physicians Office Home Health Care Extended Care Facility


Alabama PDP PDP PDP
Alaska PDP and PP - -
Arizona* - - -
Arkansas PP PDP PDP
California PP PDP PDP
Colorado PP PDP PDP
Connecticut PP PP PP
Delaware PDP and PP PDP PDP
District of Columbia N/A N/A N/A
Florida PP PDP PDP
Georgia PP PDP PDP
Hawaii PDP PDP PDP
Idaho PP PDP PDP
Illinois PDP and PP PDP PDP
Indiana PDP and PP PDP and PP PDP and PP
Iowa PDP and PP - -
Kansas PP PDP PDP
Kentucky PDP and PP PDP PDP
Louisiana PDP and PP PDP PDP
Maine PP PDP PDP
Maryland PDP and PP PDP N/A
Massachusetts PDP and PP PDP PDP
Michigan PP PDP PDP
Minnesota PP PDP PDP
Mississippi PP - PDP
Missouri PDP PDP PDP
Montana PP PDP PDP
Nebraska PP PDP PDP
Nevada PP PDP PDP
New Hampshire PP PDP PDP
New Jersey PP PDP PDP
New Mexico PDP and PP PDP and PP PDP and PP
New York PP PDP PDP
North Carolina PDP and PP PDP PDP
North Dakota PDP and PP PDP and PP PDP and PP
Ohio PDP and PP PDP PDP
Oklahoma PP PDP PDP
Oregon PP PP PP
Pennsylvania PDP PDP PDP
Rhode Island PP PDP PDP
South Carolina PP PDP PDP
South Dakota PP PP PP
Tennessee* - - -
Texas PP PDP PDP and PP
Utah PP PP -
Vermont PP PP PP
Virginia PP PDP PDP
Washington PP PDP PDP
West Virginia PDP and PP PDP PDP
Wisconsin PP - -
Wyoming PP PP PP

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
Source: As reported by State drug program administrators in the 2002 NPC Survey.

National Pharmaceutical Council 4-31


Pharmaceutical Benefits 2002

Coverage of Vaccines and Unit Dose


State Method for Vaccine Reimbursement ^ Reimbursement for Unit Dose
Alabama EPSDT, VCP Yes
Alaska EPSDT, VCP Yes
Arizona* - -
Arkansas VCP Yes
California VCP Yes
Colorado EPSDT No
Connecticut CHIP No
Delaware VCP, CHIP No
District of Columbia EPSDT No
Florida VCP Yes
Georgia EPSDT, VCP Yes
Hawaii EPSDT, CHIP, VCP Yes
Idaho ESPDT, CHIP, VCP Yes
Illinois VCP No
Indiana EPSDT, CHIP, VCP Yes
Iowa EPSDT, VCP Yes
Kansas CHIP, VCP No
Kentucky EPSDT, CHIP, VCP, Pharmacy Services Yes
Louisiana EPSDT, VCP Yes
Maine EPSDT, CHIP No
Maryland VCP No
Massachusetts EPSDT, Department of Public Health No
Michigan EPSDT, CHIP Yes
Minnesota EPSDT, CHIP, VCP Yes
Mississippi EPSDT, CHIP No
Missouri EPSDT, CHIP, VCP Yes
Montana EPSDT, CHIP, VCP Yes
Nebraska EPSDT, CHIP, VCP No
Nevada EPSDT Yes
New Hampshire EPSDT, CHIP, VCP Yes
New Jersey EPSDT, VCP Yes, LTC
New Mexico Admin. only reimbursable, Vaccines free through Health Dept. No
New York EPSDT, CHIP, VCP No
North Carolina EPSDT, VCP No
North Dakota EPSDT No
Ohio VCP No
Oklahoma ESPDT, VCP Yes
Oregon VCP Yes
Pennsylvania EPSDT, CHIP, VCP, Pharmacy Services No
Rhode Island VCP No
South Carolina VCP Yes
South Dakota VCP Yes
Tennessee* - -
Texas EPSDT, CHIP, VCP Yes
Utah VCP No
Vermont EPSDT Yes
Virginia VCP Yes
Washington EPSDT Yes
West Virginia CHIP, VCP Yes
Wisconsin VCP Yes
Wyoming EPSDT, CHIP, VCP No

^ Early and Periodic Screening, Diagnostic and Treatment (EPSDT), Children Health Insurance Program (CHIP), Vaccines for Children
Program (VCP), or other.
LTC = Long Term Care
*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
Source: As reported by State drug program administrators in the 2002 NPC Survey.

4-32 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Coverage of Over-the-Counter Medications


Allergy, Asthma,
State and Sinus Analgesics Cough and Cold Smoking Deterrents
Alabama Covered Covered Covered Not Covered
Alaska Not Covered Not Covered Not Covered Not Covered
Arizona* - - - -
Arkansas Limited Coverage Limited Coverage Limited Coverage Covered with Restrictions
California Limited Coverage Limited Coverage Limited Coverage Covered with Restrictions
Colorado Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Connecticut Not Covered Not Covered Covered Not Covered
Delaware Covered Covered Covered Covered
District of Columbia N/A N/A N/A N/A
Florida Not Covered Covered with Restrictions Not Covered Covered
Georgia Not Covered Covered with Restrictions Covered with Restrictions Not Covered
Hawaii Limited Coverage Limited Coverage Limited Coverage Not Covered
Idaho Not Covered Not Covered Not Covered Not Covered
Illinois PA Required Covered Not Covered Covered
Indiana Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Iowa Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
Kansas Not Covered Covered Limited Coverage Limited Coverage
Kentucky Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
Louisiana Not Covered Not Covered Not Covered Not Covered
Maine Covered Covered Covered with Restrictions Covered
Maryland Not Covered Not Covered Not Covered Not Covered
Massachusetts Limited Coverage Limited Coverage Limited Coverage Not Covered
Michigan Limited Coverage Limited Coverage Not Covered Limited Coverage
Minnesota Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Mississippi Limited Coverage Limited Coverage Limited Coverage Covered
Missouri Covered Covered Covered Not Covered
Montana Not Covered Limited Coverage Not Covered Covered with Restrictions
Nebraska Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
Nevada Covered Covered Covered Covered
New Hampshire Covered Covered Covered Covered
New Jersey Limited Coverage Limited Coverage Limited Coverage Limited Coverage
New Mexico Covered Covered Covered Covered
New York Limited Coverage Limited Coverage Limited Coverage Limited Coverage
North Carolina Not Covered Not Covered Not Covered Not Covered
North Dakota Not Covered Covered Not Covered Covered with Restrictions
Ohio Selective Coverage Selective Coverage Selective Coverage Selective Coverage
Oklahoma Limited Coverage Not Covered Not Covered Not Covered
Oregon Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Pennsylvania Covered with Restrictions Covered Covered with Restrictions Covered
Rhode Island Not Covered Covered with Restrictions Covered with Restrictions Not Covered
South Carolina Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
South Dakota Not Covered Not Covered Not Covered Not Covered
Tennessee* - - - -
Texas Covered Covered Covered Covered
Utah Limited Coverage Covered Covered Not Covered
Vermont PA Required PA Required PA Required PA Required
Virginia Covered with Restrictions Covered Covered with Restrictions Not Covered
Washington Limited Coverage Limited Coverage Limited Coverage Not Covered
West Virginia Limited Coverage Limited Coverage Limited Coverage PA Required
Wisconsin Covered Covered Covered Not Covered
Wyoming Covered Covered Covered Not Covered

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
PA= Prior Authorization
Source: As reported by State drug program administrators in the 2002 NPC Survey.

National Pharmaceutical Council 4-33


Pharmaceutical Benefits 2002

Coverage of Over-the-Counter Medications (Con’t)


Digestive Products
State (no H2 antagonists) H2 Antagonists Feminine Products Topical Products
Alabama Covered Covered Not Covered Covered with Restrictions
Alaska Not Covered Not Covered Limited Coverage Limited Coverage
Arizona* - - - -
Arkansas Limited Coverage Covered Limited Coverage Limited Coverage
California Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Colorado Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Connecticut Covered with Restrictions Covered with Restrictions Not Covered Covered
Delaware Covered Covered Limited Coverage Limited Coverage
District of Columbia N/A N/A N/A N/A
Florida Not Covered Not Covered Covered with Restrictions Not Covered
Georgia Not Covered Not Covered Not Covered Not Covered
Hawaii Limited Coverage Limited Coverage N/A Limited Coverage
Idaho Not Covered Not Covered Not Covered Not Covered
Illinois PA Required Not Covered Not Covered PA Required
Indiana Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Iowa Not Covered Not Covered Not Covered Covered with Restrictions
Kansas Not Covered Covered Not Covered Not Covered
Kentucky Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Louisiana Not Covered Not Covered Not Covered Not Covered
Maine Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Maryland Not Covered Not Covered Limited Coverage Not Covered
Massachusetts Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Michigan Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Minnesota Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Mississippi Limited Coverage Covered with Restrictions Limited Coverage Limited Coverage
Missouri Covered Covered Not Covered Not Covered
Montana Covered with Restrictions Covered with Restrictions Not Covered Not Covered
Nebraska Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Nevada Covered Covered Not Covered Covered with Restrictions
New Hampshire Covered Covered Covered Covered
New Jersey Not Covered Not Covered Not Covered Limited Coverage
New Mexico Covered Covered Not Covered Covered with Restrictions
New York Limited Coverage Not Covered Limited Coverage Limited Coverage
North Carolina Not Covered Not Covered Not Covered Not Covered
North Dakota Covered Covered Not Covered Not Covered
Ohio Selective Coverage Selective Coverage Selective Coverage Selective Coverage
Oklahoma Not Covered Not Covered Not Covered Not Covered
Oregon Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Pennsylvania Not covered Covered with Restrictions Covered Covered
Rhode Island Covered Not Covered Covered with Restrictions Covered with Restrictions
South Carolina Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
South Dakota Not Covered Not Covered Not Covered Not Covered
Tennessee* - - - -
Texas Covered Covered Covered Covered
Utah Not Covered Limited Coverage Covered with Restrictions Limited Coverage
Vermont PA Required PA Required PA Required PA Required
Virginia Covered Covered Covered with Restrictions Covered with Restrictions
Washington Covered Not Covered Limited Coverage Limited Coverage
West Virginia Limited Coverage Not Covered Limited Coverage Limited Coverage
Wisconsin Covered Not Covered Not Covered Not Covered
Wyoming Not Covered Covered Covered Covered with Restrictions

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
PA= Prior Authorization
Source: As reported by State drug program administrators in the 2002 NPC Survey.

4-34 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Prior Authorization Process and Procedures


State PA Procedure Prior Authorization Committee Members Meetings
Alabama Yes Pharmacy & Therapeutics 9 Quarterly
Alaska Yes No - -
Arizona* - - - -
Arkansas Yes DUR Board 8 Quarterly
California Yes No - -
Colorado Yes No - -
Connecticut No - - -
Delaware Yes No - -
District of Columbia Yes N/A N/A N/A
Florida Yes No - -
Georgia Yes N/A N/A N/A
Hawaii Yes DUR Board 9 Quarterly
Idaho Yes Pharmacists on staff and Medical Director 5 104/year
Illinois Yes Committee on Drugs and Therapeutics Varies Quarterly
Indiana Yes No - -
Iowa Yes DUR Board 10 Monthly
Kansas Yes No - -
Kentucky Yes Pharmacy and Therapeutics Advisory Committee 14 Bimonthly
Louisiana Yes Pharmaceutical and Therapeutics Committee 21 Quarterly
Maine Yes No - -
Maryland Yes No - -
Massachusetts Yes No - -
Michigan Yes No - -
Minnesota Yes Drug Formulary Committee 9 Quarterly
Mississippi Yes Pharmacy and Therapeutics Committee 12 Monthly
Missouri Yes Prior Authorization Committee 7 Quarterly
Montana Yes Yes 5 Monthly
Nebraska Yes No - -
Nevada Yes No - -
New Hampshire Yes Pharmacy and Therapeutics Advisory Committee 12 Quarterly
New Jersey Yes No - -
New Mexico Yes No - -
New York Yes Pharmacy and Therapeutics Committee 11 Quarterly
North Carolina Yes No - -
North Dakota No No - -
Ohio Yes No - -
Oklahoma Yes DUR Board 10 Monthly
Oregon Yes DUR Board 12 Quarterly
Pennsylvania Yes No - -
Rhode Island Yes No - -
South Carolina Yes No - -
South Dakota Yes No - -
Tennessee* - - - -
Texas Yes No - -
Utah Yes DUR Board 12 Monthly
Vermont Yes No - -
Virginia Yes No - -
Washington Yes Drug Utilization Review Team 16 Daily
West Virginia Yes Pharmaceutical and Therapeutics Committee 11 Quarterly
Wisconsin Yes No - -
Wyoming Yes DUR Board 12 Bimonthly

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
Source: As reported by State drug program administrators in the 2002 NPC Survey.

National Pharmaceutical Council 4-35


Pharmaceutical Benefits 2002

Prior Authorization Process and Procedures (Con’t)


State Initiated By: Annual Requests % Approved
Alabama M.D., R.Ph. N/A N/A
Alaska M.D., R.Ph. 1,200 85%
Arizona* - - -
Arkansas M.D., R.Ph. 136,750 65%
California M.D., R.Ph. 2,060,000 88%
Colorado M.D. 166,000 80%
Connecticut N/A N/A N/A
Delaware M.D., R.Ph. 200 90%
District of Columbia N/A N/A N/A
Florida M.D. 40,000 78%
Georgia M.D., R.Ph. 104,000 92%
Hawaii M.D., R.Ph. N/A N/A
Idaho M.D., R.Ph. N/A N/A
Illinois M.D., R.Ph. 500,000 20%
Indiana M.D., R.Ph. N/A N/A
Iowa M.D., R.Ph. 56,000 93%
Kansas M.D., R.Ph. N/A N/A
Kentucky M.D., R.Ph. 623,000 50%
Louisiana M.D. 70,000 95%
Maine M.D. 44,000 91%
Maryland M.D., R.Ph 5,300 95%
Massachusetts M.D 29,000 40%
Michigan M.D. 18,000 82%
Minnesota R.Ph. 6,000 N/A
Mississippi M.D. 255,000 87%
Missouri M.D. 35,000 N/A
Montana M.D., R.Ph., Pharm. Tech. 25,000 79%
Nebraska M.D., R.Ph. 24,000 40%
Nevada M.D. - -
New Hampshire M.D. 7,500 75%
New Jersey R.Ph., DME Supplier 351,000 97%
New Mexico M.D. 400 98%
New York Ordering Provider N/A N/A
North Carolina M.D. N/A N/A
North Dakota M.D., R.Ph. 600 90%
Ohio M.D. 31,000 99%
Oklahoma R.Ph. 99,000 68%
Oregon M.D. 31,750 80%
Pennsylvania M.D., Other Licensed Prescriber N/A N/A
Rhode Island M.D. N/A 85%
South Carolina M.D. 37,700 60%
South Dakota M.D., R.Ph. 28 100%
Tennessee* - - -
Texas M.D., R.Ph. 2,000 75%
Utah M.D., R.Ph. N/A N/A
Vermont M.D. N/A 99%
Virginia M.D. 416 30%
Washington M.D., R.Ph., Pharm. Tech. 1,618,000 80%
West Virginia M.D., R.Ph. 160,000 78%
Wisconsin R.Ph. 50,000 95%
Wyoming M.D., R.Ph., Pharm. Tech. 18,000 90%

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
Source: As reported by State drug program administrators in the 2002 NPC Survey.

4-36 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Prior Authorization Process and Procedures (Con’t)


State Reviewer Review Time Response Vehicle
Alabama R.N., M.D., R.Ph. 24 hours Phone, fax, mail, e-mail
Alaska R.N., R.Ph., Pharm. Tech. 24 hours Phone, fax
Arizona* - - -
Arkansas Voice Response 1-3 minutes Voice Response System
California R.Ph. <24 hours Fax or telephone inquiry system
Colorado Pharm. Tech. 24 hours Phone, fax, mail
Connecticut N/A N/A N/A
Delaware R.N., M.D., R.Ph. 1 working day Fax
District of Columbia N/A N/A N/A
Florida R.Ph., Pharm. Tech. 3 minutes Verbal, at time of request
Georgia PBM 24 hours or less Phone, mail
Hawaii R.N., R.Ph., Pharm. Tech. 24 hours Fax
Idaho M.D., R.Ph. 24 hours Fax
Illinois M.D., R.Ph. 4-8 hours Automated phone
Indiana N/A N/A N/A
Iowa R.Ph. 24 hours or less Phone, fax
Kansas R.N., R.Ph. 24 hours or less Phone, mail
Kentucky R.Ph. 24 hours Phone, fax
Louisiana R.Ph. 3-5 minutes Fax, e-mail
Maine R.Ph., Pharm. Tech. 2-4 hours Fax, mail
Maryland M.D., R.Ph. 24 hours or less Phone, fax
Massachusetts R.Ph. 24 hours Phone, mail
Michigan Health Care Analysts 24 hours or less Phone
Minnesota R.N. 24 hours or less Phone, mail
Mississippi M.D., R.N., R.Ph., Pharm. Tech. 2.5 hours Phone, fax, mail
Missouri R.N., Medicaid Tech. Within 24 hours Phone, fax, mail
Montana M.D., R.Ph., Pharm. Tech. 24 hours or less Phone, fax, mail
Nebraska M.D., R.Ph., Pharm, Tech. 24 hours Phone, fax, mail
Nevada R.Ph., Pharm. Tech. 24 hours Phone
New Hampshire R.Ph., Pharm. Tech. 24 hours Phone, fax with written follow-up of denials
New Jersey R.N., R.Ph., First Health Minutes Phone
New Mexico R.Ph. 24 hours Phone, Requestor notified if PA is denied
New York Voice interactive system Processed during call PA issued to prescriber by phone
North Carolina ACS (PBM) 24 hours Phone, fax, e-mail
North Dakota R.Ph. 1 business day E-mail
Ohio R.Ph., Pharm. Tech. Immediate Phone
Oklahoma R.Ph., Pharm. Interns 24 hours Fax
Oregon R.Ph. 3-4 minutes Phone, fax
Pennsylvania R.N., M.D. Immediately to 24 hours Phone
Rhode Island M.D., R.Ph. Within 24 hours Online adjudication or verbally
South Carolina R.Ph., First Health Per OBRA ‘90 guidelines Phone, fax
South Dakota R.Ph. 24 hours Phone, fax, mail, e-mail
Tennessee* - - -
Texas R.Ph. 72 hours Phone, fax
Utah Nurse 48 hours Mail
Vermont R.N. 24 hours Phone, mail
Virginia M.D. 15 minutes Phone, fax, mail
Washington Drug Utilization Review Team** <24 hours Phone, fax; denial through mail
West Virginia R.Ph. 3 minutes to 2 hours Phone, fax
Wisconsin Done electronically Immediate Online
Wyoming ACS Clinical Supervisor 24 hours Phone, fax, mail, e-mail

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
**Reviewer also includes Medical Claims Examiner.
Source: As reported by State drug program administrators in the 2002 NPC Survey.

National Pharmaceutical Council 4-37


Pharmaceutical Benefits 2002

Prior Authorization
Analgesics,
State Anabolic Steroids Antipyretics, NSAIDs Anorectics
Alabama Covered Covered, PA Required Covered
Alaska Covered Covered, PA Required Not Covered
Arizona* - - -
Arkansas Covered Partial Coverage, PA Required Not Covered
California Partial Coverage, PA Required Partial Coverage, PA Required Partial Coverage, PA Required
Colorado Covered, PA Required Covered, PA Required Not Covered
Connecticut Covered Covered Not Covered
Delaware Covered Covered Not Covered
District of Columbia N/A N/A N/A
Florida Covered Covered Partial Coverage
Georgia Covered, PA Required Covered, PA Required Not covered
Hawaii Covered, PA Required Partial Coverage, PA Required Partial Coverage, PA Required
Idaho Covered, PA Required Covered, PA Required Not Covered
Illinois N/A Covered Not Covered
Indiana** N/A N/A N/A
Iowa Covered Covered, PA Required Not Covered
Kansas Covered Covered Partial Coverage, PA Required
Kentucky Covered, PA Required Covered, PA Required Covered, PA Required
Louisiana Covered Covered, PA Required Partial Coverage
Maine Covered Covered, PA Required Covered, PA Required
Maryland Covered Covered Not Covered
Massachusetts Covered Partial Coverage, PA Required Not Covered
Michigan Not Covered Covered Not Covered
Minnesota Covered Covered, PA Required Not Covered
Mississippi Covered Covered, PA Required Not Covered
Missouri Covered Covered Not Covered
Montana Covered Partial Coverage, PA Required Partial Coverage, PA Required
Nebraska Covered Partial Coverage, PA Required Not Covered
Nevada Partial Coverage Covered Not Covered
New Hampshire Covered Covered Covered, PA Required
New Jersey Partial Coverage Covered PA for ADD Diagnosis
New Mexico Covered Covered Covered, PA Required
New York Covered Covered Not Covered
North Carolina Covered Covered Covered
North Dakota Covered Covered Partial Coverage, PA Required
Ohio Partial Coverage, PA Required Partial Coverage, PA Required Not Covered
Oklahoma Not Covered Covered, PA Required Not Covered
Oregon Covered Covered Covered
Pennsylvania Covered Covered Not Covered
Rhode Island Covered Covered Covered, PA Required
South Carolina Covered Covered Covered
South Dakota Covered Covered Covered
Tennessee* - - -
Texas Covered Covered Not Covered
Utah Partial Coverage, PA Required Covered Covered, PA Required
Vermont Covered Covered Covered
Virginia Not Covered Partial Coverage Partial Coverage, PA Required
Washington Partial Coverage, PA Required Partial Coverage, PA Required Partial Coverage, PA Required
West Virginia Covered Partial Coverage, PA Required Not Covered
Wisconsin Covered Covered, PA Required Covered
Wyoming Not Covered Covered, Some require PA Not Covered

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
** All coverage in accordance with OBRA'90 and OBRA'93.
PA = Prior Authorization
Source: As reported by State drug program administrators in the 2002 NPC Survey.

4-38 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Prior Authorization (Con’t)


Anxiolytics, Prescribed
State Antihistamines Sedatives, and Hypnotics Cold Medications
Alabama Covered, PA Required Covered Partial Coverage
Alaska Covered Covered Partial Coverage
Arizona* - - -
Arkansas Partial Coverage, PA Required Covered Partial Coverage
California Partial Coverage, PA Required Partial Coverage, PA Required Partial Coverage, PA Required
Colorado Covered, PA Required Covered Covered, PA Required
Connecticut Covered Covered Covered
Delaware Covered Covered Covered
District of Columbia N/A N/A N/A
Florida Covered Covered Partial Coverage
Georgia Covered Covered, PA Required Partial Coverage
Hawaii Covered, PA Required Covered Covered, PA Required
Idaho Covered, PA Required Covered Covered
Illinois Partial Coverage Partial Coverage Not Covered
Indiana** N/A N/A N/A
Iowa Covered, PA Required Covered Covered
Kansas Covered Partial Coverage, PA Required Partial Coverage
Kentucky Covered, PA Required Covered, PA Required Covered, PA Required
Louisiana Covered, PA Required Covered Partial Coverage
Maine Covered, PA Required Covered, PA Required Covered, PA Required
Maryland Covered Covered Covered
Massachusetts Partial Coverage Covered Not Covered
Michigan Covered Covered Not Covered
Minnesota Covered, PA Required Covered Partial Coverage
Mississippi Partial Coverage, PA Required Covered Covered
Missouri Covered Partial Coverage, PA Required Covered
Montana Partial Coverage Partial Coverage, PA Required Partial Coverage
Nebraska Covered, PA Required Partial Coverage Covered
Nevada Covered Covered Covered
New Hampshire Covered Covered Covered
New Jersey Covered Covered Covered
New Mexico Covered Covered Covered
New York Covered Covered Partial Coverage
North Carolina Covered Covered Covered
North Dakota Covered Covered Not Covered
Ohio Partial Coverage, PA Required Covered Covered
Oklahoma Partial Coverage, PA Required Covered, PA Required Not Covered
Oregon Covered, PA Required Covered Covered
Pennsylvania Covered Covered Covered
Rhode Island Covered Covered Covered
South Carolina Covered Covered Covered
South Dakota Covered Covered Covered
Tennessee* - - -
Texas Covered Covered Covered
Utah Covered, PA Required Partial Coverage Covered
Vermont Covered Covered Covered
Virginia Partial Coverage Covered Partial Coverage
Washington Covered, PA Required Covered, PA Required Covered
West Virginia Covered Partial Coverage Partial Coverage
Wisconsin Covered Covered Partial Coverage
Wyoming Covered Covered Covered

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
**All coverage in accordance with OBRA ’90 and OBRA ’93.
PA = Prior Authorization
Source: As reported by State drug program administrators in the 2002 NPC Survey.

National Pharmaceutical Council 4-39


Pharmaceutical Benefits 2002

Prior Authorization (Con’t)


Miscellaneous Prescribed
State Growth Hormones GI Products Smoking Deterrents
Alabama Covered, PA Required Covered Not Covered
Alaska Covered, PA Required Covered Partial Coverage
Arizona* N/A N/A N/A
Arkansas Covered Covered, PA Required Partial Coverage, PA Required
California Partial Coverage, PA Required Partial Coverage, PA Required Partial Coverage, PA Required
Colorado Covered, PA Required Covered, PA Required Covered, PA Required
Connecticut Covered Covered Not Covered
Delaware Covered, PA Required Covered Covered
District of Columbia N/A N/A N/A
Florida Covered, PA Required Covered Covered
Georgia Covered, PA Required Covered Not Covered
Hawaii Covered, PA Required Covered Not Covered
Idaho Covered Covered, PA Required Not Covered
Illinois Covered Covered Covered
Indiana** N/A N/A N/A
Iowa Covered, PA Required Covered, PA Required Not Covered
Kansas Partial Coverage, PA Required Covered Partial Coverage
Kentucky Covered, PA Required Covered, PA Required Not Covered
Louisiana Covered, PA Required Covered, PA Required Covered
Maine Covered, PA Required Covered, PA Required Covered, PA Required
Maryland Covered, PA Required Covered Covered
Massachusetts Covered, PA Required Partial Coverage, PA Required Not Covered
Michigan Covered, PA Required Covered Covered, PA Required
Minnesota Covered Covered Covered
Mississippi Partial Coverage, PA Required Partial Coverage, PA Required Covered
Missouri Not Covered Covered Not Covered
Montana Partial Coverage, PA Required Covered Partial Coverage, PA Required
Nebraska Covered, PA Required Covered, PA Covered Not Covered
Nevada Partial Coverage, PA Required Covered Covered
New Hampshire Covered Covered, PA Required Covered
New Jersey Partial Coverage Covered Partial Coverage
New Mexico Covered Covered Covered
New York Covered, PA Required Partial Coverage Covered
North Carolina Covered, PA Required Covered Covered, PA Required
North Dakota Covered Covered Partial Coverage, PA Required
Ohio Partial Coverage, PA Required Partial Coverage, PA Required Partial Coverage, PA Required
Oklahoma Covered, PA Required Covered, PA Required Partial Coverage, PA Required
Oregon Covered, PA Required Covered Covered
Pennsylvania Covered Covered Covered
Rhode Island Partial Coverage Covered, PA Required Not Covered
South Carolina Covered Covered Not Covered
South Dakota Covered, PA Required Covered Not Covered
Tennessee* - - -
Texas Covered, PA Required Covered Covered
Utah Partial Coverage, PA Required Covered Not Covered
Vermont Covered Covered Covered
Virginia Covered, PA Required Covered Covered
Washington Covered, PA Required Covered, PA Required Not Covered
West Virginia Partial Coverage, PA Required Partial Coverage, PA Required Partial Coverage, PA Required
Wisconsin Covered PA Required Covered Covered
Wyoming Covered Covered, PA Required on PPIs Not Covered

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
**All coverage in accordance with OBRA ’90 and OBRA ’93.
PA = Prior Authorization
Source: As reported by State drug program administrators in the 2002 NPC Survey.

4-40 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Drug Utilization Review


PRODUR
State State Contact Telephone In-House or Contracted Implemented
Alabama Louise Jones 334-242-5039 Contracted Jul-96
Alaska Dave Campana, R.Ph. 907-334-2425 Contracted Jun-95
Arizona* - - - -
Arkansas Pamela Ford, P. D. 501-683-4120 Contracted Mar-97
California Vic Walker, R.Ph., B.C.P.P. 916-657-0785 In-House Aug-95
Colorado Dima Ahram, Pharm.D. 303-866-2468 In-House Dec-98
Connecticut James Zakszewski, R.Ph. 860-424-5150 Contracted Sep-96
Delaware Cynthia Denemark 302-453-8453 Contracted Feb-94
District of Columbia Donna Bovell 202-442-5988 In-House Sep-96
Florida Jerry F. Wells 850-487-4441 Contracted Jul-93
Georgia Jean Cox, R.Ph. 404-657-7241 In-House Oct-00
Hawaii Kathleen Kang-Kaulupali 808-692-8065 In-House 1997
Idaho Tamara Eide, Pharm.D. 208-364-1821 Contracted Jan-98
Illinois Marvin Hazelwood 217-524-5565 In-House Jan-93
Indiana Karen Clifton 317-232-4391 Contracted Mar-96
Iowa Julie Kuhle, R.Ph. 515-270-0713 Contracted Jul-97
Kansas Mary H. Obley 785-296-8406 Contracted Nov-96
Kentucky Debra Bahr, R.Ph. 502-564-7940 In-House 1987
Louisiana Mary Terrebonne, P.D. 225-342-9768 Contracted Apr-66
Maine Director of Pharmacy 207-287-4018 Contracted Dec-95
Maryland Judith Geisler, P.D. 410-767-1455 Contracted Jan-93
Massachusetts Paul L. Jeffrey 617-210-5319 Contracted Oct-95
Michigan Mary Sandusky 517-335-5280 Contracted Jul-00
Minnesota Mary Beth Reinke, Pharm.D. 651-215-1239 In-House Feb-96
Mississippi Rickey Mallory 601-359-6296 Contracted Oct-93
Missouri Jayne Zemmer 573-751-6963 Contracted Feb-93
Montana Mark Eichler, R.Ph. 406-443-4020 Contracted Sep-94
Nebraska Beth Wilson 402-420-1500 Contracted Apr-95
Nevada Dionne Coston, R.N. 702-684-3775 Contracted 2003
New Hampshire Lisè Farrand 603-271-4419 Contracted Jul-95
New Jersey Edward Vaccaro, R.Ph. 609-588-2726 In-House Oct-96
New Mexico Neal Solomon, M.P.H., R.Ph. 505-827-3174 Both Oct-93
New York Michael Zegarelli 518-474-6866 In-House Mar-95
North Carolina Sharman Leinwand 919-857-4034 Contracted Oct-96
North Dakota Brendan K. Joyce, Pharm.D. 701-328-4023 In-House Jul-96
Ohio Jan Lawson 614-466-9698 In-House Feb-00
Oklahoma Ronald Graham, Pharm.D. 405-271-6614 Contracted 2000
Oregon Mariellen Rich 503-391-1980 Contracted Mar-94
Pennsylvania N/A - Contracted Jun-93
Rhode Island Paula Avarista, R.Ph. 401-4642-6390 Contracted Dec-94
South Carolina Caroline Sojourner, R.Ph. 803-898-2876 Contracted Nov-00
South Dakota Michael Jockheck, R.Ph. 605-773-6439 In-House 1996
Tennessee* Jeffrey G. Stockard, D.Ph. - Contracted Jul-01
Texas Curtis Burch, R.Ph. 512-338-6922 In-House Feb-95
Utah Duane Parke 801-538-6452 In-House 1994
Vermont Gloria Jacobs 802-241-2763 Contracted Nov-93
Virginia MariAnne McNeil, R.Ph. 804-783-2196 In-House Jul-94
Washington Nicole Nguyen, Pharm.D. 360-725-1757 In-House Mar-96
West Virginia Vicki M. Cunningham, R.Ph. 304-588-1700 Contracted Mar-95
Wisconsin Michael Mergener, R.Ph., Ph.D. 608-258-3348 Contracted 2001
Wyoming Debra Devereuax, R.Ph. 307-766-6750 Contracted Oct-95

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
PRODUR = Prospective Drug Utilization Review System
Source: As reported by State drug program administrators in the 2002 NPC Survey.

National Pharmaceutical Council 4-41


Pharmaceutical Benefits 2002

Prescribing/Dispensing Limits
Limits on
State Rx Limits on Number, Quantity, and Refills of Prescriptions
Alabama Yes 5 refills per Rx, 30 day supply per Rx
Alaska Yes 30 day supply per Rx, maximum number units for 50 classes and 40 narcotics
Arizona* - -
Arkansas Yes 31 day supply per Rx; 3 Rx per month (extension to 6); 5 refills per Rx within 6 months
California Yes 6 Rx per month, maximum 100 day supply for most medications
Colorado Yes 30 day quantity supply per Rx; 100 day supply for maint. meds. Other limits for stadol & oxycontin
Connecticut Yes 240 units or 30 day supply, 5 refills per RX except 12 month limit on oral contraceptives
Delaware Yes 34 day supply or 100 unit doses per Rx (whichever is greater)
District of Columbia Yes 30 day supply per Rx, 3 refills per Rx within 4 mths. Max/min quantities for certain meds
Florida Yes 4 brand name Rxs per month (with exceptions)
Georgia Yes 31 day supply per Rx; 5 (adult)/6 (child) Rx per month; Per Rx limit: $2999.99 (potential override)
Hawaii Yes 30 day supply or 100 unit doses/50# gms per Rx
Idaho Yes 34 day supply per Rx (with exceptions); 3 cycles of birth control
Illinois Yes Medically appropriate monthly quantity
Indiana Yes 34 day supply for maintenance drugs
Iowa No Maximum 30 day supply except select maintenance drugs (90 days)
Kansas Yes 31 day supply per Rx, 5 Rx per month, other limitations specific to certain medications
Kentucky Yes 30 day supply, max. 5 refills in 6 months; one dispensing fee per month for maintenance medication
Louisiana Yes 30 day supply or 100 unit doses (whichever is greater); 5 refills per Rx within 6 mos., max. 8 scripts per
recipient per month
Maine Yes 34 day supply (brand), 90 day supply (generic); Maximum 11 refills per prescription
Maryland Yes 34 day supply per Rx; 2 refills per Rx
Massachusetts Yes Maximum 5 refills per prescription
Michigan Yes 100 day supply, No refills for Schedule II drugs; Schedule III & V, 5 refills per 180 days
Minnesota Yes Max 3 month supply
Mississippi Yes 34 day supply or 100 unit doses (whichever is greater); 5 Rx per month; 5 refills maximum
Missouri Yes 34 day supply or 100 unit doses; up to 90 day per Rx maximum
Montana Yes 34 day supply or 100 unit doses per Rx (whichever is greater)
Nebraska Yes 90 day/100 unit doses, 5 refills per Rx 6 mos. for controlled substances, 31 days for injectibles
Nevada Yes 34 day supply per Rx; 100 day supply for maintenance medications.
New Hampshire Yes 30 day supply, 90 day supply on maintenance medications
New Jersey Yes 34 day supply or 100 unit doses per Rx, 5 refills within 6 months
New Mexico No 34 day supply, except contraceptives (100 days)
New York Yes 5 refills per Rx; annual limit on number of Rx and OTC drugs avail. (potential override)
North Carolina Yes 34 day supply per Rx, with exceptions; 6 Rx per month
North Dakota Yes 34 day supply per Rx; max 12 refills per script; one refill on PPIs
Ohio Yes 34 day supply (acute) and 102 unit doses (chronic)
Oklahoma Yes 3 Rx per month (21+; under 21 unlimited), 34 day supply or 100 unit doses per Rx
Oregon Yes 15 day supply for initial Rx for chronic conditions
Pennsylvania Yes 34 day supply or 100 unit doses per Rx (whichever is greater); 5 refills within 6 mos., 6 Rx per month
Rhode Island Yes 30 day supply per Rx (non-maintenance); 5 refills per Rx
South Carolina Yes 34 day supply w/ unlimited Rx (children); 4 Rx per month (adult), (potential override)
South Dakota No -
Tennessee* - -
Texas Yes 3 Rx per month (unlimited Rxs for nursing home recipients or those < 21), max 5 refills
Utah Yes 31 day supply per Rx, max 5 refills, cumulative limit on specific drugs
Vermont Yes 60 day supply for maintenance medications, 5 refills per Rx
Virginia No 34 day supply per Rx
Washington Yes 34 day supply per Rx; usually 2 refills per month; 4 refills for antibiotics or scheduled drugs
West Virginia Yes 34 day supply; 5 refills per Rx with quantity limits on some drugs
Wisconsin Yes 34 day supply per Rx with exceptions, maximum 11 refills during 12-month period
Wyoming No Quantity limits on some medications as deemed clinically appropriate.

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.
Source: As reported by State drug program administrators in the 2002 NPC Survey.

4-42 National Pharmaceutical Council


Pharmaceutical Benefits 2002

PHARMACY PAYMENT AND PATIENT COST SHARING


Medicaid Payment for Outpatient Prescription Drugs. Federal Medicaid
regulations prescribe the principles that apply to State Medicaid programs when
they pay a pharmacy for outpatient drugs. These regulations don’t just indicate
the FFP cannot be based on amounts that exceed drug costs as determined under
the federal formula; they indicate the actual method for paying for prescription
drugs.

Medicaid Managed Care Organizations (MCOs). If the recipient is enrolled in a


Medicaid managed care organization, payment is made to the MCO in
accordance with its contract with the State Medicaid agency to the extent the
contract covers outpatient prescribed drugs.

Medicaid Payment to Pharmacies. Each State’s Medicaid State Plan must


comprehensively describe its payment for prescription drugs. Its aggregate
Medicaid expenditures for “multiple source drugs” must not exceed the Federal
Upper Limits published by CMS (see Appendix D) and its payment level for
other drugs must not exceed, in the aggregate, the lower of (1) EAC plus a
reasonable dispensing fee, or (2) providers’ charges to the general public.

PATIENT COST SHARING

States are permitted to require certain recipients to share some of the costs of
Medicaid by imposing on them such payments as enrollment fees, premiums,
deductibles, coinsurance, copayments, or similar cost-sharing charges (42 CFR
447.50). For States that impose cost-sharing payments, the regulations specify
the standards and conditions under which States may impose cost-sharing, set
forth minimum amounts and the methods for determining maximum amounts,
and describe limitations on availability that relate to cost-sharing requirements.

With the passage of the Social Security Amendments of 1972, States were
empowered to impose “nominal” cost-sharing requirements on optional Medicaid
services for cash assistance recipients, and on any services for the medically
needy. Section 131 of the Tax Equity and Fiscal Responsibility Act (TEFRA) of
1982 introduced major changes to Medicaid cost-sharing requirements. Under
this act, States may impose a nominal deductible, coinsurance, copayment, or
similar charge on both categorically needy and medically needy persons for any
service offered under the State Plan. Public Law 97-248, TEFRA, has been in
effect since October 1982; it prohibits imposition of cost-sharing on the
following:

• Services furnished to individuals under 18 years of age (or up to 21 at State


option);
• Pregnancy-related services (or, at State option, any service provided to
pregnant women);
• Services provided to certain institutionalized individuals, who are required to
spend all of their income for medical care except for a personal needs
allowance;
• Emergency services;
• Family planning services and supplies;

National Pharmaceutical Council 4-43


Pharmaceutical Benefits 2002

• Services furnished to categorically needy HMO enrollees (or, at State option,


services provided to both categorically needy and medically needy HMO
enrollees).
In addition, the law prohibits imposing more than one type of charge on any
service.

While emergency services are excluded from cost sharing, States may apply for
waivers of nominal amounts for non-emergency services furnished in hospital
emergency rooms. Such a waiver allows States to impose a copayment amount
up to twice the current maximum for such services. Approval of a waiver request
by CMS is based partly on the State’s assurance that recipients will have access
to alternative sources of care.

4-44 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Pharmacy Payment and Patient Cost Sharing


State Dispensing Fee Ingredient Reimbursement Basis Copayment
Alabama $5.40 AWP- 10%; WAC+9.2% $0.50 - $3.00
Alaska $3.45 minimum AWP-5% $2.00
Arizona* - - -
Arkansas $5.51 AWP-10.5% $0.50 - $5.00
California $4.05 AWP-10% $1.00
Colorado $4.00; $1.89 for Institutions AWP-13.5% or WAC+18%, whichever is G: $0.75, B: $3.00
lowest; AWP-35% (for generics)
Connecticut $3.85 AWP-12% None
Delaware $3.65 AWP-12.9% None
DC $3.75 AWP-10% $1.00
Florida $4.23-$4.73 (LTC) AWP-13.25%; WAC+7% None
Georgia $4.63 + $0.50 (for generics) AWP-10% G/P: $0.50, B/NP: $0.50 - $3.00
Hawaii $4.67 AWP-10.5% None
Idaho $4.94 ($5.54 for unit dose) AWP-12% None
Illinois G: $5.10, B: $4.00 B: AWP-11%, G: AWP-20% $1.00
Indiana $4.90 B: AWP-13.5%, G: AWP-20% $0.50 - $3.00
Iowa $5.17 AWP-10% $1.00
Kansas $3.40 B: AWP-15%, G: AWP-27% IV AWP-50%, $3.00
blood AWP-30%
Kentucky $4.51 AWP-12% $1.00
Louisiana $5.77 AWP-13.5% (AWP-15% for chains) $0.50 - $3.00
Maine $3.35 (+extra fees for compounding) AWP-13% $0.50 - $3.00
Maryland $4.21 Lowest of :WAC+10%, direct+10%, AWP-10% $1.00
Massachusetts B: $3.50 G: $5.00 WAC+5% $2.00
Michigan $3.72 AWP-13.5% (1-4 stores), AWP-15.1% $1.00
(5+stores)
Minnesota $3.65 AWP-9% None
Mississippi $3.91 AWP-12% $1.00 - $3.00
Missouri $4.09 AWP-10.43%, WAC+10% $0.50 - $2.00, $5.00 for some
1115 waiver pop.
Montana $2.00 - $4.70 AWP-15%, direct price for some labelers $1.00 - $5.00
Nebraska $3.27 - $5.00 AWP-11% $2.00
Nevada $4.76 AWP-15% None
New Hampshire $2.50 AWP-12% G: $0.50, B: $1.00
New Jersey $3.73 - $4.07 AWP-10%, WAC+30%, AAC for injectables None
New Mexico $3.65 AWP-12.5% None (except CHIP and
working disabled)
New York B: $3.50 G: $4.50 AWP-10% G: $0.50, B: $2.00
North Carolina B: $4.00 G: $5.60 AWP-10% G: $1.00, B: $3.00
North Dakota $5.10 AWP-10% $3.00 (Brand)
Ohio $3.70 WAC + 9% None
Oklahoma $4.15 AWP-12.0% $1.00 - $2.00
Oregon Retail: $3.50 Inst./NF: $3.80 AWP-13% None
Pennsylvania $4.00 ($5.00 for compounds) AWP-10% $1.00 ($2.00 for Gas)
Rhode Island OP: $3.40, LTC: $2.85 WAC+5% None
South Carolina $4.05 AWP-10% $3.00
South Dakota $4.75 ($5.55 for unit dose) AWP-10.5% $2.00
Tennessee* - - -
Texas (EAC+$5.27)/0.98 & delivery fee AWP-15% or WAC+12%, whichever is lowest None
Utah $3.90-$4.40 (based on area) AWP-15% $3.00 - $5.00/mo.
Vermont $4.25 AWP-11.9% $1.00 - $2.00
Virginia $4.25 AWP-10.25% G: $1.00, B: $2.00
Washington $4.20-$5.20 (based on annual # of Rx) AWP-14% None
West Virginia $3.90 (+ extra $1.00 for compounding) AWP-12% $0.50 - $2.00
Wisconsin $4.88 (to a maximum $40.11) AWP-11.25% $1.00, max $5/recip/pharm/mo
Wyoming $5.00 AWP-11% $2.00
WAC = Wholesalers Acquisition Cost; AWP = Average Wholesale Price; EAC = Estimated Acquisition Cost; AAC= Actual Acquisition Cost;
G = Generic; B = Brand Name; OP = Outpatient; LTC = Long Term Care; P = Preferred; NP = Non-Preferred.
*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug decisions.
Source: As reported by State drug program administrators in the 2002 NPC Survey.

National Pharmaceutical Council 4-45


Pharmaceutical Benefits 2002

Maximum Allowable Cost (MAC) Programs


Federal Upper State-Specific
State Limits Upper Limits MAC Override Provisions
Alabama Yes Yes Dispense as written, brand medically necessary
Alaska Yes No Brand medically necessary and reason for medical necessity
Arizona* - - -
Arkansas Yes Yes Brand medically necessary, prior authorization
California Yes Yes Medically necessary and other products unavailable at MAC rate
Colorado Yes Yes Brand medically necessary
Connecticut Yes No Brand medically necessary
Delaware Yes Yes Brand medically necessary
District of Columbia Yes No Brand medically necessary plus an explanation
Florida Yes Yes If drug is on Florida Negative Formulary
Georgia Yes Yes Prior authorization
Hawaii Yes No brand Medically necessary
Idaho Yes Yes Prior authorization
Illinois Yes Yes Prior authorization request by M.D. or R.Ph.
Indiana Yes Yes Brand medically necessary, prior authorization
Iowa Yes Yes Brand medically necessary, Med Watch form and prior authorization
Kansas Yes Yes N/A
Kentucky Yes No Brand necessary, brand medically necessary, PA on some drugs
Louisiana Yes Yes Brand necessary, brand medically necessary
Maine Yes Yes Medically necessary, brand Medically necessary PA on some drugs
Maryland Yes Yes Brand medically necessary and reason for medical necessity
Massachusetts Yes Yes Dispense as written, brand medically necessary, prior authorization
Michigan Yes Yes Dispense as written and prior authorization
Minnesota Yes Yes Brand medically necessary or dispense as written. Brand medically
necessary must be handwritten on the prescription by the prescriber, no
pre-printed DAW allowed.
Mississippi Yes No Prior authorization for brand multi-source
Missouri Yes Yes Prior authorization
Montana Yes No Brand necessary, prior authorization
Nebraska Yes Yes Medically necessary
Nevada No No Brand medically necessary
New Hampshire Yes Yes Brand medically necessary, MedWatch form for PA
New Jersey Yes No Brand medically necessary
New Mexico Yes Yes Medically necessary, Brand necessary
New York Yes No Dispense as written, brand necessary, or brand medically necessary
North Carolina Yes Yes Brand medically necessary
North Dakota Yes Yes Dispense as written
Ohio Yes Yes Prior authorization
Oklahoma Yes Yes Brand medically necessary
Oregon Yes No Dispense as written, brand medically necessary
Pennsylvania Yes Yes Brand necessary, brand medically necessary, or prior authorization
Rhode Island Yes No Brand medically necessary with medical justification
South Carolina Yes Yes Brand medically necessary w/cert. by prescriber and P.A.
South Dakota Yes Yes Brand medically necessary
Tennessee* - - -
Texas Yes Yes Brand necessary, brand medically necessary
Utah Yes Yes Brand medically necessary plus prior approval
Vermont Yes Yes Dispense as written
Virginia Yes Yes Brand necessary
Washington No Yes Brand medically necessary
West Virginia Yes No Brand medically necessary (hand written by prescriber)
Wisconsin No Yes Brand medically necessary
Wyoming Yes Yes Brand medically necessary
*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.

Source: As reported by State drug program administrators in the 2002 NPC Survey.

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Pharmaceutical Benefits 2002

Mandatory Substitution
Incentive Fee for Dispensing of Generic Dispensing of Lowest Cost
State Generic Substitution Multi-Source Required Multi-Source Required
Alabama No No No
Alaska No Yes No
Arizona* - - -
Arkansas No Yes No
California No No Yes
Colorado No No No
Connecticut $0.50 No No
Delaware No - -
District of Columbia No No Yes
Florida No Yes No
Georgia $0.50 Yes (brand PA required) No
Hawaii No Yes (if AB rated & not against State law/regs) No
Idaho No Yes No
Illinois No No Yes
Indiana No Yes Yes
Iowa No Yes Yes
Kansas No No No
Kentucky No Yes Yes
Louisiana No No No
Maine No Yes No
Maryland No Yes Yes
Massachusetts No Yes No
Michigan No No No
Minnesota No Yes No
Mississippi No Yes No
Missouri No No No
Montana No Yes No
Nebraska No No No
Nevada No Yes No
New Hampshire No Yes No
New Jersey No Yes No
New Mexico No No Yes
New York $1.00 Yes No
North Carolina No Yes Yes
North Dakota No No No
Ohio No No No
Oklahoma No Yes No
Oregon No Yes No
Pennsylvania No Yes No
Rhode Island No Yes No
South Carolina No Yes No
South Dakota $10.00 No No
Tennessee* - - -
Texas No Yes No
Utah No Yes No
Vermont No Yes No
Virginia No Yes No
Washington No Yes No
West Virginia No Yes No
Wisconsin No Yes No
Wyoming No Yes No

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.

Source: As reported by State drug program administrators in the 2002 NPC Survey.

National Pharmaceutical Council 4-47


Pharmaceutical Benefits 2002

Counseling Requirements and Payment for Cognitive Services


Medicaid Payment
State Patient Counseling Required1 for Cognitive Services2
Alabama All Yes, Clozaril case management
Alaska All No
Arizona All -
Arkansas All No
California All No
Colorado Medicaid Only No
Connecticut Medicaid Only No
Delaware All No
District of Columbia Medicaid Only, Pending for others No
Florida All No
Georgia All No
Hawaii Medicaid Only No
Idaho All No
Illinois All No
Indiana All No
Iowa All No
Kansas All No
Kentucky All No
Louisiana All No
Maine All No
Maryland Medicaid Only No
Massachusetts All No
Michigan All No
Minnesota All No
Mississippi All Yes
Missouri All Yes (diabetes education)
Montana All No
Nebraska All No
Nevada All No
New Hampshire All No
New Jersey All Yes
New Mexico All No
New York All No
North Carolina All No
North Dakota All No
Ohio All No
Oklahoma All No
Oregon All No
Pennsylvania All No
Rhode Island All No
South Carolina Medicaid Only No
South Dakota All No
Tennessee All -
Texas All No
Utah All No
Vermont All No
Virginia All No
Washington All Yes (emergency contraceptive counseling)
West Virginia All No
Wisconsin All Yes
Wyoming All No

Source: 12001-2002 National Association of Boards of Pharmacy Law, Survey of Pharmacy Law; 2 As reported by State drug program
administrators in the 2002 NPC Survey.

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Pharmaceutical Benefits 2002

Prescription Price Updating


State Contact Telephone Updated
Alabama Beverly Churchwell 334-242-5034 Biweekly
Alaska Dave Campana 907-334-2425 Weekly
Arizona* - - -
Arkansas First DataBank 650-588-5454 Weekly
California EDS Federal Corp. 916-636-1000 Monthly
Colorado First DataBank 650-588-5454 Weekly
Connecticut Electronic Data Systems 800-832-5858 Monthly
Delaware Cynthia Denemark 302-453-8453 Biweekly
District of Columbia First DataBank 650-588-5454 Monthly
Florida First DataBank 650-588-5454 Weekly
Georgia Express Scripts 952-837-5326 Weekly
Hawaii First DataBank 800-633-3453 Weekly
Idaho Kaydeen Burkett, R.Ph. 208-364-1826 Biweekly
Illinois First DataBank 650-588-5454 Weekly
Indiana First DataBank 650-588-5454 Weekly
Iowa Sherry Swanson 515-327-0950 Weekly
Kansas Mary H. Obley 785-296-8406 Weekly
Kentucky Unisys Provider Services 502-226-1140 Weekly
Louisiana Maggie Vick, Unisys Corp. 225-237-3251 Weekly
Maine Medispan - Weekly
Maryland First DataBank 650-588-5454 Weekly
Massachusetts First DataBank 650-588-5454 Weekly
Michigan First DataBank 650-588-5454 Weekly
Minnesota First DataBank 650-588-5454 Weekly
Mississippi Rickey Mallory 601-359-6296 Weekly
Missouri First DataBank 650-588-5454 Weekly
Montana First DataBank 650-588-5454 Weekly
Nebraska First DataBank 650-588-5454 Weekly
Nevada First DataBank 650-588-5454 Monthly
New Hampshire First Health Services Corp. 603-224-2083 Weekly
New Jersey First DataBank 650-588-5454 Weekly
New Mexico Neil Solomon, M.P.H., R.Ph. 505-874-3174 Weekly
New York Carl Cioppa, Pharm.D.. 518-486-3209 Monthly
North Carolina Sharon Greeson, R.Ph.. 919-816-4475 Weekly
North Dakota Brendan K. Joyce, Pharm.D., R.Ph. 701-328-4023 Biweekly
Ohio First DataBank 650-588-5454 Monthly
Oklahoma First DataBank 800-633-3453 Weekly
Oregon Kathy Franklin, First DataBank 650-588-5454 Biweekly
Pennsylvania First DataBank 800-633-3453 Monthly
Rhode Island Paula Avarista, R.Ph. 401-462-6390 Biweekly
South Carolina First DataBank 650-588-5454 Weekly
South Dakota Mark Petersen, R.Ph. 605-773-3495 Biweekly
Tennessee* - - -
Texas Martha McNeill, R.Ph. 512-338-6965 Continuously
Utah RaeDell Ashley, R.Ph. 801-538-6495 Biweekly
Vermont Christine Dapkiewicz 802-879-4450 Biweekly
Virginia David Shepherd, R.Ph. 804-786-8056 Weekly
Washington Tom Zuchlewski 360-725-1837 Bimonthly
West Virginia Becky Garrigan 770-352-8592 Weekly
Wisconsin First DataBank 800-633-3453 Bimonthly
Wyoming First DataBank 800-633-3453 Weekly

*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug
decisions.

Source: As reported by State drug program administrators in the 2002# NPC Survey.

National Pharmaceutical Council 4-49


Pharmaceutical Benefits 2002

4-50 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Section 5:
State Pharmacy Program
Profiles

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Pharmaceutical Benefits 2002

5-2 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Profiles of State Medicaid Drug Programs


In the following State profiles, we present a general overview of the
characteristics of State programs together with detailed information on the
pharmaceutical benefits provided. Specifically, the following information is
provided for each State:
A. Benefits Provided and Groups Eligible
B. Expenditures for Drugs
C. Administration
D. Provisions Relating to Drugs, including:
• Drug Benefit Product Coverage
• Over-the-Counter Product Coverage
• Therapeutic Category Coverage
• Coverage of Injectables, Vaccines, and Unit Dosing
• Formulary/Prior Authorization
• Prescribing or Dispensing Limitations
• Drug Utilization Review
• Dispensing Fee
• Ingredient Reimbursement Basis
• Prescription Charge Formula
• Maximum Allowable Cost
• Incentive Fee
• Patient Cost Sharing
• Cognitive Services
E. Use of Managed Care
F. State Contacts

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Pharmaceutical Benefits 2002

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Pharmaceutical Benefits 2002

Section 6:
State Pharmacy
Assistance Programs

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Pharmaceutical Benefits 2002

6-2 National Pharmaceutical Council


Pharmaceutical Benefits 2002

State Pharmacy Assistance Programs


As of June 2003, at least 35 States had authorized some type of program to provide
pharmaceutical coverage or assistance. Historically these programs have focused
primarily on the low-income elderly and/or persons with disabilities who do not
qualify for Medicaid, but some recent programs have been open to all seniors or
even to all state residents. These programs range from providing access to State-
negotiated discounts to State subsidies and tax credits for prescription drug
expenditures.

Authorized State Pharmacy Assistance Programs

State Program Name Law Enacted


Prescription Medication Coverage Pilot Program 2001†
Arizona
Arizona Prescription Discount Program 2003
ARx Senior Program (formerly Prescription Drug
Arkansas 2001†
Access Improvement Act)
Discount Prescription Medication Program 1999
California
Golden Bear State Pharmacy Assistance Program 2001†
Connecticut Pharmaceutical Assistance Contract to the
Connecticut 1985
Elderly and Disabled (ConnPACE)
Nemours Health Clinic Pharmaceutical Assistance
1981
Program
Delaware
Delaware Prescription Drug Assistance Program
1999
(DPAP)
Silver SaveRx (formerly Pharmaceutical Expense
Assistance Program for Seniors and Ron Silver Senior 2002
Florida
Drug Program)
Medicare Prescription Discount Program 2000
Hawaii Rx 2002†
Hawaii
Medicaid Prescription Drug Expansion Program 2002†
Pharmaceutical Assistance Program, “Circuitbreaker” 1985
Illinois Rx SeniorCare 2001
Illinois
Senior Citizens and Disabled Persons Prescription
2003†
Drug Discount Program
Indiana Indiana Prescription Drug Program, “HoosierRx” 2000
Iowa Iowa Priority Prescription Savings Program 2001
Kansas Senior Pharmacy Assistance Program 2000
Maine Rx 2000*
Maine Rx Plus 2004*
Maine Healthy Maine Prescription Drug Program 2001
Low Cost Drugs for the Elderly and Disabled Program
1975
(DEL)
Maryland Pharmacy Assistance Program 1979
Maryland Short-Term Prescription Drug Subsidy Plan 2000
Maryland Pharmacy Discount Program 2001†
Massachusetts Prescription Advantage 2000+
Michigan Elder Prescription Insurance Coverage Program 2001
Minnesota Prescription Drug Program 1999
Missouri SeniorRx Program 2001
Montana Prescription Drug Expansion Program 2003†
Nevada Senior Rx 2000

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Pharmaceutical Benefits 2002

New
Senior Prescription Drug Discount Program 2000
Hampshire
Pharmaceutical Assistance to the Aged and Disabled
1975
New Jersey (PAAD)
Senior Gold Prescription Discount Program 2001
Senior Prescription Drug Program 2002†
New Mexico
Prescription Drug Waiver Program 2003†
Elderly Pharmaceutical Insurance Coverage (EPIC)
New York 1987
Program
Prescription Drug Assistance Program 1999
North Carolina
Senior Care (formerly Carolina CaRxes) 2001
Ohio Golden Buckeye Prescription Drug Program 2002†
Oregon Senior Prescription Drug Assistance Program 2001†
Pharmaceutical Assistance Contract for the Elderly
1984
Pennsylvania (PACE)
PACE Needs Enhancement Tier (PACENET) 1996
Rhode Island Pharmaceutical Assistance to the Elderly
Rhode Island 1985
(RIPAE)
South Carolina SilveRxCard Senior Prescription Drug Program 2000
South Dakota Senior Citizen Prescription Drug Program 2003
Texas State Prescription Drug Program 2001†
VSCRIPT 1989
VSCRIPT Expanded 1999
Vermont
Vermont Health Access Plan (VHAP) 1996
Healthy Vermonters Program 2002†
West Virginia Gold Mountaineer Discount Card Program 2000
Wisconsin SeniorCare Prescription Drug Assistance
Wisconsin 2001
Program
Wyoming Prescription Drug Assistance Program 2002

†Program not yet operational.


*MaineRx is expected to be abandoned and replaced with MaineRx Plus.
+Program enrollment closed due to budget restrictions.

The following pages provide profiles of the State pharmacy assistance programs.
Details were provided by State contacts on program characteristics, including
eligibility criteria, funding and reimbursement information, and drug coverage.
Supplemental information was obtained from special surveys of State programs in
addition to the National Conference of State Legislatures (NCSL) website,
http://www.ncsl.org/programs/health/drugaid.htm, a good source for the most up-to-
date information.

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Pharmaceutical Benefits 2002

Arizona
Prescription Medication Coverage Pilot Program
Program Type: Discount
Law Enacted: 2001∗
Projected Number of Recipients: Not Available

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): 200% of FPL Eligible Income Level (Married): 200% of FPL
Other Eligibility Notes: Participants must be either residents of a county that does not have a
Medicare HMO or residents of a county that has a Medicare HMO that
does not provide prescription medication coverage.

FUNDING AND REIMBURSEMENT

Funding Source: Tobacco Settlement Fund


Budget (FY 02-03): None
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: Not Available
Enrollment Fee: Not Available
Deductible Amount: $500 for incomes 100-149% of FPL and $1,000 for incomes 150-
200% of FPL.
Copayment Amount: None
Dispensing Fee: Not Available
Notes: Program covers 50% of pharmaceutical costs after deductible has been
paid.

DRUGS COVERAGE

Formulary: None
Drugs Covered: All FDA-approved drugs purchased within the U.S.
Drug Coverage Restrictions: Only FDA-approved drugs purchased within the U.S.

PROGRAM CONTACT

Del Swan Containment System


Arizona Health Care Cost Phone: 602/417-4726
801 E. Jefferson St.
Phoenix, AZ 85034


This program has not been implemented because funding for the program was repealed in a special budget session. The law
creating the program is set to expire on October 1, 2003.

National Pharmaceutical Council 6-5


Pharmaceutical Benefits 2002

Arizona
Arizona Prescription Discount Program
Program Type: Discount
Year Operational: 2003
Projected Number of Recipients: 600,000

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): see notes


Eligible Income Level (Single): All Eligible Income Level (Married): All
Other Eligibility Notes: Discounts available to Medicare enrollees, 65+ or disabled

FUNDING AND REIMBURSEMENT

Funding Source: Not Available


Budget (FY 02-03): None
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: Not Available
Enrollment Fee: $9.95 annually
Deductible Amount: Not Available
Copayment Amount: None
Dispensing Fee: Not Available
Notes:

DRUGS COVERAGE

Formulary: Not Available


Drugs Covered: Not Available
Drug Coverage Restrictions: Not Available

PROGRAM CONTACT

Del Swan Containment System


Arizona Health Care Cost Phone: 602/417-4726
801 E. Jefferson St.
Phoenix, AZ 85034

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Pharmaceutical Benefits 2002

Arkansas
ARx Senior Program
(Formerly Prescription Drug Access Improvement Act)
Program Type: Direct Assistance (1115 Waiver)
Law Enacted: 2001∗
Projected Number of Recipients: Not Available

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): 90% of FPL Eligible Income Level (Married): 90% of FPL
Other Eligibility Notes: Program provides prescription drug coverage to Qualified Medicare
Beneficiary (QMB) seniors lacking prescription drug coverage. After
June 30, 2003, the upper income eligibility limit increases to 100% of
FPL.

FUNDING AND REIMBURSEMENT

Funding Source: State General Revenue Fund and Federal matching funds
Budget: Not Available
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: Not Available
Enrollment Fee: $25.00 per year
Deductible Amount: None
Copayment Amount: $10.00 for generic drugs and $20.00 for brand-name drugs
Dispensing Fee: Not Available

DRUGS COVERAGE

Formulary: Not Available


Drugs Covered: Legend drugs and controlled substances
Drug Coverage Restrictions: Enrollees are limited to 2 prescriptions per month.

PROGRAM CONTACT

Suzette Bridges Phone: 501/683-4120


Arkansas Department of Human Services Fax: 501/683-4124
Division of Medical Services, Slot 415 E-mail: suzette.bridges@medicaid.state.ar.us
P.O. Box 1437
Little Rock, AR 72203-1437


Program implementation is contingent upon CMS approval of 1115 waiver application. As of December 2002, no
communications from CMS had been received. As a result, no projected implementation date for this program was available at the
time of publication.

National Pharmaceutical Council 6-7


Pharmaceutical Benefits 2002

California
Discount Prescription Medication Program
Program Type: State-Negotiated Discounts
Year Operational: 2000
Estimated Eligibles (November 2002): 1.3 million

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): See notes Eligibility Age (Disabled): See notes
Eligible Income Level (Single): All income levels Eligible Income Level (Married): All income levels
Other Eligibility Notes: Program covers pharmaceuticals not covered by a private insurer. Anyone who
has a Medicare card is eligible.

FUNDING AND REIMBURSEMENT

Funding Source: State General Revenue Fund


Budget (FY 2002-03): $380,000
Cost per Participant: Not Available
# of Rx’s Per Participant: 850,000 price inquiries per month∗
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP – 10%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: None
Dispensing Fee: $4:05 per prescription (-50 cents to help balance the FY 02-03 State
budget, + 15 cents for switching costs)
Notes: Pharmacies that participate in the Medi-Cal (Medicaid) program must
also allow Medicare recipients to purchase drugs for the same price
paid by Medi-Cal. Pharmacies must participate in this program in order
to participate in the Medi-Cal program.

DRUGS COVERAGE

Formulary: No formulary
Drugs Covered: All prescription drugs
Drug Coverage Restrictions: Over-the-counter drugs and compound drugs not covered

PROGRAM CONTACT

Janice Hall Phone: 916/657-4302


Department of Health Services E-Mail: sb393rx@dhs.ca.gov
714 P Street, Room 1253
Sacramento, CA 95814


Price inquires do not always result in sales because customers may elect not to purchase a pharmaceutical once its price has been
quoted.

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Pharmaceutical Benefits 2002

California
Golden Bear State Pharmacy Assistance Program
Program Type: State-Negotiated Discounts
Projected Operational Date: not available*
Estimated Eligibles (November 2002): 1 to 3 million

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): See notes Eligibility Age (Disabled): See notes
Eligible Income Level (Single): All income levels Eligible Income Level (Married): All income levels
Other Eligibility Notes: Program covers pharmaceuticals not covered by a private insurer or other State
program. Anyone who has a Medicare card is eligible; however, unlike the
California Discount Prescription Medication Program, enrollment is required to
receive services.

FUNDING AND REIMBURSEMENT

Funding Source: Manufacturer negotiated discounts


Budget: None
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Medicaid rebate plus manufacturer-negotiated discounts
Ingredient Cost Calculation: AWP – 10%
Enrollment Fee: Not Available
Deductible Amount: None
Copayment Amount: None
Dispensing Fee: $4:05 per prescription (-50 cents to help balance the FY 2002-03 State
budget, + 15 cents for switching costs)
Notes: Medi-Cal collects a 99-cent per Rx administrative fee from drug
manufacturers and reimburses pharmacies with the remainder of the
negotiated discount.

DRUGS COVERAGE

Formulary: No formulary
Drugs Covered: Prescription drugs for which the State has negotiated manufacturer
discounts that supplement the Medi-Cal discount already mandated
under the California Discount Prescription Medication Program.
Drug Coverage Restrictions: Only prescription drugs with manufacturer-negotiated discounts.

PROGRAM CONTACT

Janice Hall Phone: 916/657-4302


Department of Health Services E-Mail: sb393rx@dhs.ca.gov
714 P Street, Room 1253
Sacramento, CA 95814
*
Not yet operational.

National Pharmaceutical Council 6-9


Pharmaceutical Benefits 2002

Connecticut
Pharmaceutical Assistance Contract to the Elderly and Disabled
(ConnPACE)
Program Type: Direct Assistance
Year Operational: 1986
Number of Recipients (January 2003): 50,037
(Elderly: 43,193; Disabled: 6,844)

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): 18+


Eligible Income Level (Single): $20,300 Eligible Income Level (Married): $27,500
Other Eligibility Notes: The Connecticut Department of Social Services has also submitted an
1115 waiver application that, if approved by the Centers for Medicare
and Medicaid Services, would increase eligible income levels for both
single and married individuals to 300% of FPL.

FUNDING AND REIMBURSEMENT

Funding Source: State General Revenue Fund


Budget (FY 03): $63.8 million
Cost per Participant (FY 02): $944.69
# of Rx’s Per Participant (FY 02): 18.6
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP – 12%
Enrollment Fee: $30.00 per year
Deductible Amount: None
Copayment Amount: $16.25
Dispensing Fee: $3.60

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: All prescription drugs and insulin.
Drug Coverage Restrictions: ConnPACE does not cover drugs prescribed for cosmetic purposes,
experimental drugs, drugs FDA has determined are ineffective,
antihistamines, contraceptives, cough preparations, anti-obesity drugs,
multi-vitamin combinations, smoking cessation gum, vaccines
obtained free of charge from the Department of Health Services,
prescription drugs in excess of manufacturer’s recommendations with
documented legal justification, drugs for lock-in clients from other
than lock-in pharmacy, and over-the-counter drugs (with certain
exceptions). Other drugs may not be covered if pharmaceutical
manufacturers opt not to participate in the Drug Rebate Program.
ConnPACE restricts beneficiaries to 120 units or a 30-day supply,
whichever is greater.

6-10 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Notes: Generic drugs must be substituted for brand-name drugs, unless


otherwise indicated by the prescribing physician.

PROGRAM CONTACT

Evelyn A. Dudley Phone: 860/424-5654


Manager Fax: 860/424-5206
Department of Social Services E-mail: evelyndudley@po.state.ct.us
25 Sigourney Street
Hartford, CT 06106

National Pharmaceutical Council 6-11


Pharmaceutical Benefits 2002

Delaware
Nemours Health Clinic Pharmaceutical Assistance Program
Program Type: Private Discount
Year Operational: 1981
Number of Enrollees (November 2002): 8,616

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): 65+


Eligible Income Level (Single): $12,500 Eligible Income Level (Married): $17,125
Other Eligibility Notes: Must be a U.S. citizen and resident of Delaware.

FUNDING AND REIMBURSEMENT

Funding Source: Nemours Foundation


Budget: Not Available
Cost per Enrollee: Not Available
# of Rx’s Per Enrollee (FY 02): 1.7
Manufacturer Rebate Type: None
Ingredient Cost Calculation: Not Available
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: 20% of drug cost
Dispensing Fee: $5.00
Notes: Maximum annual benefit is $2,000.00 per enrollee.

DRUGS COVERAGE

Formulary: None
Drugs Covered: Due to severe budgetary constraints, covered drugs are chosen
individually, based on physician recommendations.
Drug Coverage Restrictions: As many recommended drugs as allowed by the budget are purchased
and made available to enrollees.
Notes: One central pharmacy distributes all drugs by courier to branch
locations where citizens can pick up a 2-3 month supply.

PROGRAM CONTACT

W. Frank Morris, Jr. Phone: 302/651-4405


Nemours Clinic Pharmacy Assistance Fax: 302/651-4445
1801 Rockland Road E-mail: fmorris@nemours.org
Wilmington, DE 19803

6-12 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Delaware
Prescription Drug Assistance Program (DPAP)
Program Type: Direct Assistance
Year Operational: 2000
Number of Recipients (December 2002): 5,510

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): see notes


Eligible Income Level (Single): 200% of FPL Eligible Income Level (Married): 200% of FPL
Other Eligibility Notes: Must be a U.S. citizen and resident of Delaware. Disabled, must be
eligible for SSDI.

FUNDING AND REIMBURSEMENT

Funding Source: Tobacco Settlement Fund


Budget: Not Available; not subject to budget appropriation
Cost per Participant (FY 02): $1159.56
# of Rx’s Per Participant (FY 02): 4.0 per month
Manufacturer Rebate Type: Negotiated between the State and individual manufacturers
Ingredient Cost Calculation: Lower of AWP – 12.9% or Federal Upper Limit or State MAC
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: Greater of $5.00 or 25% of the cost of the prescription
Dispensing Fee: $3.48
Notes: Annual maximum benefit of $2,500.00 per recipient

DRUGS COVERAGE

Formulary: Open
Drugs Covered: Same as Medicaid (medically necessary prescription drugs)
Drug Coverage Restrictions: Only drugs from manufacturers that agree to participate in State rebate
program.

PROGRAM CONTACT

Cynthia R. Denemark Phone: 302/453-8453


Division of Social Services Fax: 302/454-7603
248 Chapman Road Suite 100 E-mail: cynthia.denemark@eds.com
Newark, DE 19702

National Pharmaceutical Council 6-13


Pharmaceutical Benefits 2002

Florida
Silver SaveRx∗
Program Type: Direct Assistance (1115 waiver)
Year Operational: 2002
Number of Enrollees (May 2003): 46,312

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): 120% of FPL Eligible Income Level (Married): 120% of FPL
Other Eligibility Notes: Must be dually-eligible Medicare-Medicaid.

FUNDING AND REIMBURSEMENT

Funding Source: State General Revenue Fund, Federal matching funds, and
manufacturer rebates
Budget (FY 03): $109.0 million
Cost per Enrollee : Not Available
# of Rx’s Per Enrollee: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP – 13.25%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $2.00 for generic drugs, $5.00 for brand name drugs on the preferred
drug list, and $15.00 for brand name drugs not on the preferred drug
list
Dispensing Fee: $4.23
Notes: Enrollees receive a cash benefit of up to $160.00 per month.

DRUGS COVERAGE

Formulary: Preferred drug list


Drugs Covered: Same as Medicaid
Drug Coverage Restrictions: Same as Medicaid

PROGRAM CONTACT

Matthew Dull Phone: 850/414-8306


Agency for Health Care E-mail: dullm@fdhc.state.fl.us
Administration
2727 Mahan Drive
Tallahassee, FL 32308-7703


On August 1, 2002, Florida replaced its state-funded Pharmaceutical Expense Assistance Program with the Ron Silver Senior Drug
Program, now known as the Silver SaveRx.

6-14 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Florida
Medicare Prescription Discount Program∗
Program Type: Discount
Year Operational: 2000
Estimated Participants: Not Available

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): See notes Eligibility Age (Disabled): See notes
Eligible Income Level (Single): All income Eligible Income Level (Married): All income
levels levels
Other Eligibility Notes: Anyone who has a Medicare card is eligible.

FUNDING AND REIMBURSEMENT

Funding Source: None


Budget: None
Cost per Participant: N/A
# of Rx’s Per Participant: N/A
Manufacturer Rebate Type: N/A
Ingredient Cost Calculation: AWP – 9%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: None
Dispensing Fee: $4.50
Notes: Pharmacies that participate in Medicaid must offer participants a
discount based on AWP – 9% + $4.50 dispensing fee.

DRUGS COVERAGE

Formulary: None
Drugs Covered: All prescription drugs
Drug Coverage Restrictions: None

PROGRAM CONTACT

Matthew Dull Phone: 850/414-8306


Agency for Health Care E-mail: dullm@fdhc.state.fl.us
Administration
2727 Mahan Drive
Tallahassee, FL 32308-7703


By law Florida pharmacies are required to provide this discount in order to participate in Medicaid.

National Pharmaceutical Council 6-15


Pharmaceutical Benefits 2002

Hawaii
Hawaii Rx
Program Type: Direct Discount
Projected Operational Date: July 1, 2004
Projected Number of Recipients: Not Available

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): All ages Eligibility Age (Disabled): All ages
Eligible Income Level (Single): All income Eligible Income Level (Married): All income
levels levels
Other Eligibility Notes: Open to all Hawaii residents, regardless of income.

FUNDING AND REIMBURSEMENT

Funding Source: State General Fund


Budget (FY 02-03): $200,000 for plan development and implementation
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Efforts will be made to obtain an initial rebate amount equal to or
greater than the rebate calculated for Medicaid.
Ingredient Cost Calculation: Not Available
Enrollment Fee: Not Available
Deductible Amount: Not Available
Copayment Amount: Not Available
Dispensing Fee: Not less than fee provided under the State Medicaid program.

DRUGS COVERAGE

Formulary: Not Available


Drugs Covered: Not Available
Drug Coverage Restrictions: Not Available
Notes: Each pharmacy participating in the program will discount the price of
drugs covered by the program and sold to program participants.
Participating pharmacies will submit claims to the Department of
Human Services and will be reimbursed for the discounted drugs.

PROGRAM CONTACT

Department of Human Services Phone: 808/692-8050


Medquest
1390 Miller Street
Room 209
Honolulu, HI 96813

6-16 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Hawaii
Medicaid Prescription Drug Expansion Program
Program Type: Direct Discount
Projected Operational Date: Not Available*
Projected Number of Recipients: Not Available

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): All ages Eligibility Age (Disabled): All ages
Eligible Income Level (Single): 300 % FPL Eligible Income Level (Married): 300% FPL
Other Eligibility Notes:

FUNDING AND REIMBURSEMENT

Funding Source: Medicaid Rebates


Budget (FY 02-03): $1,500,000
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: Not Available
Enrollment Fee: Not Available
Deductible Amount: Not Available
Copayment Amount: Not Available
Dispensing Fee: Not Available

DRUGS COVERAGE

Formulary: Not Available


Drugs Covered: Not Available
Drug Coverage Restrictions: Not Available
Notes:

PROGRAM CONTACT

Department of Human Services Phone: 808/692-8050


Medquest
1390 Miller Street
Room 209
Honolulu, HI 96813

*
Not yet operational. Program is comparable to Maine Rx program, which U.S. Supreme Court ruled could go into effect (May 19,
2003, see laws.findlaw.com/us/000/01-188.html for full text of ruling).

National Pharmaceutical Council 6-17


Pharmaceutical Benefits 2002

Illinois
Pharmaceutical Assistance Program, “Circuitbreaker”
Program Type: Direct Assistance
Year Operational: 1985
Number of Recipients (May 2003): 57,444

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): 16+


Eligible Income Level (Single): $21,218 (’03) Eligible Income Level (Married): $28,480 (’03)
Other Eligibility Notes: A widow or widower who turns 63 or 64 before a deceased enrollee’s death
is eligible for PAP. Also, a married couple with a $35,740 annual
household income would be eligible if they were filing with one other
resident. An individual would be eligible with a $35,740 annual household
income if they were filing with two other residents.

FUNDING AND REIMBURSEMENT


Funding Source: State General Revenue Fund and Tobacco Settlement
Budget (FY 03): $83 million
Cost per Participant (2001): $1,040.00
# of Rx’s Per Participant (2001): 29.0
Manufacturer Rebate Type Negotiated by a PBM on behalf of State
Ingredient Cost Calculation: AWP – 10% or MAC if generic is available
Enrollment Fee: $5.00 if income is below 100% of FPL and $25.00 if income is at or above
100% of FPL
Deductible Amount: None
Copayment Amount: For income less than 100% of FPL, there is no copayment until annual drug
cost exceeds $2,000; then copayment is 20% of drug cost. For income at
100% of FPL or greater, there is a $3.00 copayment until annual drug cost
exceeds $2,000.00; then copayment is 20% of drug cost.
Dispensing Fee: $3.60

DRUGS COVERAGE
Formulary: Preferred product formulary
Drugs Covered: Prescription medication used for cancer, Alzheimer’s disease, Parkinson’s
disease, glaucoma, lung disease and smoking-related diseases, cardiovascular,
arthritis, diabetes, and osteoporosis
Drug Coverage Restrictions Participants are able to receive brand-name drugs even if generics are
available provided the doctor marks “dispense as written” on the prescription
and the drug is classified as a “Narrow Therapeutic Index Drug.”

PROGRAM CONTACT
Susan Rohrer Phone: 217/785-5905
Illinois Department of Revenue Fax: 217/524-9213
P.O. Box 19021 E-mail: srohrer@revenue.state.il.us
Springfield, IL 62794-9021

6-18 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Illinois
Illinois Rx SeniorCare
Program Type: Direct Assistance (1115 Waiver)
Year Operational: 2002
Number of Recipients (May 2003): 170,482

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): not eligible


Eligible Income Level (Single): 200% of FPL Eligible Income Level (Married): 200% of FPL
Other Eligibility Notes:

FUNDING AND REIMBURSEMENT

Funding Source: State General Revenue Fund and Tobacco Settlement


Budget (FY 03): $102 million
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type Negotiated by PBM on behalf of State
Ingredient Cost Calculation: AWP- 10% or MAC if generic is available
Enrollment Fee: None, but participants must reapply every year.
Deductible Amount: None
Copayment Amount: If the participant is a single individual with an income of no more than
$8,859 a year or if the participants are a married couple with a
household income of no more than $11,939 a year, SeniorCare pays up
to $1,750 per person for covered medications. After that limit is met,
the participant pays 20% of the cost of each prescription.

If the participant is a single individual with an income of $8,860 to


$17,720 a year, or if the participants are a married couple with a total
household income of $11,940 to $23,880 a year, SeniorCare pays for
the first $1,750 per person. The participants are also required to pay
$1 for a generic drug and $4 for each brand name drug. After the
$1,750 limit is met, the participants continue to pay $1 for a generic
drug and $4 for each brand name drug plus 20% of the cost of each
prescription.

If a generic drug is available but the participant requests a brand name


drug, participants must pay $1 for each prescription plus the difference
in price between the generic and the brand-name drug.

Dispensing Fee: $3.60

DRUGS COVERAGE

Formulary: Preferred product formulary plus over-the-counter medications like


analgesics, stool softeners, laxatives and antacids.

National Pharmaceutical Council 6-19


Pharmaceutical Benefits 2002

Drugs Covered: Prescription medication used for cancer, Alzheimer’s disease,


Parkinson’s disease, glaucoma, lung disease and smoking-related
diseases, cardiovascular, arthritis, diabetes, osteoporosis and the over-
the-counter medications listed above.
Drug Coverage Restrictions Only covered medications

PROGRAM CONTACT

Susan Rohrer Phone: 217/785-5905


Illinois Department of Revenue Fax: 217/524-9213
P.O. Box 19021 E-mail: srohrer@revenue.state.il.us
Springfield, IL 62794-9021

6-20 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Illinois
Senior Citizens and Disabled Persons Prescription Drug Discount
Program
Program Type: Discount
Projected Operational Date: 2003
Projected Number of Recipients: not available

ELIGIBILITY CRITERIA
Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): all ages
Eligible Income Level (Single): all Eligible Income Level (Married): all
Other Eligibility Notes: Circuitbreaker participants will be automatically enrolled

FUNDING AND REIMBURSEMENT


Funding Source: Not available
Budget: Not available
Cost per Participant: Not available
# of Rx’s Per Participant: Not available
Manufacturer Rebate Type: State negotiated
Ingredient Cost Calculation: AWP – 12% for brand name drugs and newly released generics,
AWP – 35% for all other generics
Enrollment Fee: $25 annually
Deductible Amount: None
Copayment Amount: Not available
Dispensing Fee: $3.50 for brand name drugs and newly released generics, $4.25 for all
other generics
Notes:

DRUGS COVERAGE
Formulary: Not available
Drugs Covered: Not available
Drug Coverage Restrictions: Not available

PROGRAM CONTACT

National Pharmaceutical Council 6-21


Pharmaceutical Benefits 2002

Indiana
Indiana Prescription Drug Program, “HoosierRx”
Program Type: Point of Sale
Year Operational: 2000
Number of Recipients (May 2003): 14,156

ELIGIBILITY CRITERIA
Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible
Eligible Income Level (Single): 144% of FPL Eligible Income Level (Married): 135% of FPL
Other Eligibility Notes: Must be an Indiana resident for at least 90 days in the past 12 months,
without prescription drug coverage through an insurance plan,
Medicaid or Medicaid with a spend-down. Benefit is available for one
year. Recipients must submit a new application to re-enroll.

FUNDING AND REIMBURSEMENT


Funding Source: Tobacco Settlement Fund
Budget (FY 03): $20.8 million
Cost per Participant (FY 02): $1,156.00
# of Rx’s Per Participant (FY 02): 10.0-15.0 (estimated)
Manufacturer Rebate Type: Currently only commercial rebates. Once CMS approves 1115
Pharmacy Plus Waiver, OBRA 90 rebates will be applied.
Ingredient Cost Calculation: AWP – 13.5% for brand name drugs, AWP – 20% for generics
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: 50% of HoosierRx negotiated price, up to the maximum benefit limit
($500.00, $750.00 or $1,000.00 per year, depending on income)
Dispensing Fee: $4.90
Notes: Once maximum benefit limit is reached, recipients may continue to
receive the HoosierRx discounted rate during the rest of the enrollment
year.

DRUGS COVERAGE
Formulary: None
Drugs Covered: All legend drugs, as well as insulin
Drug Coverage Restrictions: OTC drugs, fertility enhancement drugs and cosmetic drugs

PROGRAM CONTACT
Lola Sawyerr Phone: 317/233-0587
HoosierRx Fax: 317/232-7382
Family & Social Services Administration Email: lsawyerr@fssa.state.in.us
402 W. Washington Street
W-386, MS-07
Indianapolis, IN 46204-2739

6-22 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Iowa
Iowa Priority Prescription Savings Program
Program Type: Negotiated Discount
Year Operational: 2002
Number of Enrollees (December 2002): 25,000

ELIGIBILITY CRITERIA
Eligibility Age (Elderly): See notes Eligibility Age (Disabled): See notes
Eligible Income Level (Single): All income Eligible Income Level (Married): All income
levels levels
Other Eligibility Notes: Open to all Medicare eligibles. Medicaid recipients are not eligible.

FUNDING AND REIMBURSEMENT


Funding Source: Federal grant
Budget (FY 03): $1.2 million
Cost per Enrollee: $48.00
# of Rx’s Per Enrollee (FY 02): 36.0
Manufacturer Rebate Type: A pharmacy benefit manager company negotiates discounted
prescription costs rather than setting mandatory price reductions.
Ingredient Cost Calculation: AWP – 10% (in certain cases up to AWP – 20%)
Enrollment Fee: $20.00 per year
Deductible Amount: None
Copayment Amount: None
Dispensing Fee: $2.50 for brand name drugs and $3.25 for generics
Notes: Discounts are available on participating manufacturers’ drugs (Bristol-
Myers Squibb, Merck and Schering-Plough).

DRUGS COVERAGE
Formulary: Preferred drug list
Drugs Covered: Allergy (antihistamines, nasal steroids), cholesterol lowering agents,
dermatological products (topical steroids), hypertension/high blood
pressure and cardiovascular (ACE inhibitors, alpha/beta blockers,
angiotensin receptor blockers, potassium supplements, nitrates),
diabetes (biguanides), arthritis and analgesia (COX-2 inhibitors),
asthma (Beta-2 agonists, leukotiene blockers), enlarged prostate
treatment, osteoporosis treatment, glaucoma
Drug Coverage Restrictions: None

PROGRAM CONTACT
David Fries Phone: 515/327-5405, ext. 203
Iowa Prescription Drug Corporation Fax: 515/327-5422
1231 8th Street, Suite 232 Email: info@iowapriority.org
West Des Moines, IA 50265

National Pharmaceutical Council 6-23


Pharmaceutical Benefits 2002

Kansas
Kansas Senior Pharmacy Assistance Program
Program Type: Reimbursement
Year Operational: 2001
Number of Enrollees (September 2002): 1,286

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 67+ Eligibility Age (Disabled): 67+


Eligible Income Level (Single): 135% of FPL Eligible Income Level (Married): 135% of FPL
Other Eligibility Notes: Must be a Kansas resident; not covered under a private prescription
reimbursement plan; not eligible for or enrolled in any other local,
state, or Federal prescription program; not have voluntarily canceled a
local, State, Federal, or private prescription drug program within six
months of application to the program. Must be current recipient of
benefits through the Qualified Medicare Beneficiary Program or
Specified Low Income Medicare Beneficiary Program.

FUNDING AND REIMBURSEMENT

Funding Source: State General Revenue Fund


Budget (FY 03): $1.2 million
Cost per Enrollee (FY 02): $933.00
# of Rx’s Per Enrollee: Not Available
Manufacturer Rebate Type: None
Ingredient Cost Calculation: None
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: 30% of pharmaceutical cost
Dispensing Fee: None
Notes: Maximum annual benefit is $1,200.00 per enrollee.

DRUGS COVERAGE

Formulary: None
Drugs Covered: Legend drugs, diabetic supplies not covered by Medicare, and
prescription drugs that treat chronic illness
Drug Coverage Restrictions: Program does not cover over-the-counter and lifestyle drugs.

PROGRAM CONTACT

Gail Smith Phone: 800/432-3535


Department on Aging E-mail: gailes@aging.state.ks.us
503 S. Kansas Avenue
Topeka, KS 66603-3404

6-24 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Maine
Maine Rx
Program Type: Discount
Law Enacted: 2000∗
Estimated Eligibles (FY 02): Approximately 325,000

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): All ages Eligibility Age (Disabled): All ages
Eligible Income Level (Single): All income Eligible Income Level (Married): All income
levels levels
Other Eligibility Notes: All Maine residents who do not have third-party drug coverage are
eligible.

FUNDING AND REIMBURSEMENT

Funding Source: Not Available


Budget: None
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: N/A
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: Program combines discounts from participating pharmacies with
negotiated rebates from manufacturers
Dispensing Fee: None

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: All prescription drugs with manufacturer rebate agreements.
Drug Coverage Restrictions: Drugs from manufacturers without rebate agreements are not covered.

PROGRAM CONTACT

Ed Bauer Phone: 207/287-4018


Department of Human Services Fax: 207/287-8601
11 State House Station E-mail: ed.bauer@state.me.us
Augusta, ME 04333-0011


On May 19, 2003, the U.S. Supreme Court ruled the Maine Rx Program could go into effect (see laws.findlaw.com/us/000/01-
188.html for full text of ruling). At press time, however, it is anticipated that MaineRx will be abandoned and replaced by MaineRx
Plus.

National Pharmaceutical Council 6-25


Pharmaceutical Benefits 2002

Maine
Maine Rx Plus
Program Type: Discount
Law Enacted: 2003∗
Estimated Eligibles: Approximately 275,000

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): All ages Eligibility Age (Disabled): All ages
Eligible Income Level (Single): $31,400 Eligible Income Level (Married): $42,420
(350% FPL) (350% fPL)
Other Eligibility Notes: Discounts would also be extended to families whose prescription drug
costs are at least 5% of their household income or whose medical
expenses are at least 15% of their household income.

FUNDING AND REIMBURSEMENT

Funding Source: Not Available


Budget: Not Available
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: N/A
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: Program combines discounts from participating pharmacies with
negotiated rebates from manufacturers
Dispensing Fee: None

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: All prescription drugs with manufacturer rebate agreements.
Drug Coverage Restrictions: Drugs from manufacturers without rebate agreements are not covered.

PROGRAM CONTACT

Ed Bauer Phone: 207/287-4018


Department of Human Services Fax: 207/287-8601
11 State House Station E-mail: ed.bauer@state.me.us
Augusta, ME 04333-0011


On May 19, 2003, the U.S. Supreme Court ruled the Maine Rx Program could go into effect (see laws.findlaw.com/us/000/01-
188.html for full text of ruling). At press time, however, it is anticipated that MaineRx Plus will replace MaineRx.

6-26 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Maine
Healthy Maine Prescription Drug Program
Program Type: Subsidy and Discount (1115 Waiver)±
Year Operational: 2001
Number of Recipients (September 2002): 115,000 (36,000 subsidy and 79,000 discount)

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): All ages Eligibility Age (Disabled): All ages
Eligible Income Level (Single): 300% of FPL Eligible Income Level (Married): 300% of FPL
Other Eligibility Notes: All Maine residents with incomes up to 300% of FPL are eligible.
Individuals with full Maine Care benefits are not eligible. It is
estimated that 225,000 residents are eligible for the Healthy Maine
Program.

FUNDING AND REIMBURSEMENT

Funding Source: State appropriations and subsidies


Budget: $20 million∗
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP –13%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: 84% of drug cost
Dispensing Fee: $3.35

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: All prescription drugs from manufacturers with Federal rebate
agreements.
Drug Coverage Restrictions: 34-day supply limit for brand name drugs, 90-day limit for generic
drugs. Some prescriptions require prior approval to assure quality, dose
strength, and cost effectiveness.

PROGRAM CONTACT

Ed Bauer Phone: 207/287-4018


Department of Human Services Fax: 207/287-8601
11 State House Station E-mail: ed.bauer@state.me.us
Augusta, ME 04333-0011

±
Discount program struck down by federal court 12/24/02

This budget is allocated for both Healthy Maine and the Maine Low Cost Drugs for the Elderly and Disabled Program (DEL).

National Pharmaceutical Council 6-27


Pharmaceutical Benefits 2002

Maine
Low Cost Drugs for the Elderly and Disabled Program (DEL)∗
Program Type: Subsidy and Discount
Year Operational: 2001
Number of Recipients (December 2002): 37,802

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 62+ Eligibility Age (Disabled): 19+


Eligible Income Level (Single): 185% of FPL Eligible Income Level (Married): 185% of FPL
Other Eligibility Notes: This program is made available to Maine residents fitting the age and
income eligibility criteria. Individuals with full Maine Care benefits
are not eligible. Medicare recipients are not necessarily excluded.

FUNDING AND REIMBURSEMENT

Funding Source: State appropriations and subsidies


Budget: $20 million∗∗
Cost per Participant (7/1/02- $400.00
12/11/02):
# of Rx’s Per Participant (7/1/02- 15.5
12/11/02):
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP –13%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: Greater of $2.00 or 20% of the cost of generic drugs. Greater of $2.00
or 20% of the cost of prescriptions for select medical conditions. 84%
of the cost of other covered prescriptions
Dispensing Fee: $3.35
Notes: A $1,000.00 catastrophic spending limit is one additional component
of this program where the State pays for 80% of the cost of additional
prescriptions once a person exceeds this dollar limit.

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: All prescription drugs from manufacturers with Federal rebate agreements.
Drug Coverage Restrictions: 34-day supply limit for brand name drugs, 90-day limit for generic drugs.
Some prescriptions require prior approval to assure quality, dose strength,
and cost effectiveness.


The Maine Low Cost Drugs for the Elderly Program is operated within the Healthy Maine Prescription Drug Program.
∗∗
This budget is allocated for both the Healthy Maine Prescription Drug Program and DEL.

6-28 National Pharmaceutical Council


Pharmaceutical Benefits 2002

PROGRAM CONTACT

Ed Bauer Phone: 207/287-4018


Department of Human Services Fax: 207/287-8601
11 State House Station E-mail: ed.bauer@state.me.us
Augusta, ME 04333-0011

National Pharmaceutical Council 6-29


Pharmaceutical Benefits 2002

Maryland
Maryland Pharmacy Assistance Program
Program Type: Direct Assistance
Year Operational: 1979
Projected Number of Recipients (FY 03): 47,700

ELIGIBILITY CRITERIA
Eligibility Age (Elderly): All ages Eligibility Age (Disabled): All ages

Eligible Income Level (Single): $10,000 Eligible Income Level (Married): $10,850∗∗
Other Eligibility Notes: No age restrictions on eligibility. The following groups are ineligible
for participation: people detained in a correctional (Federal, State,
local) system, Medicaid recipients, and non-residents. $4500
maximum assets.

FUNDING AND REIMBURSEMENT


Funding Source: State General Revenue Fund
Budget (FY 03): $73.2 million
Cost per Participant (FY 02): $1,534.00
# of Rx’s Per Participant (FY 02): 29.0
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: For brand name drugs, lower of AWP-10%, Wholesalers Acquisition
Cost (WAC) +10%, Direct Manufacturer’s Cost (DMC)+10%, or
Direct Cost (DC)+10%. For generic drugs, lower of Estimated
Acquisition Cost (EAC), State MAC, or Federal MAC.
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $5.00 per prescription
Dispensing Fee: $4.21

DRUGS COVERAGE
Formulary: Closed formulary
Drugs Covered: Specified categories of maintenance drugs used to treat chronic
conditions, anti-infective drugs, and insulin syringes and needles
Drug Coverage Restrictions: Prior authorization for certain medications, including steroids and some
controlled substances. 75% utilization required for prescription refill.

PROGRAM CONTACT
Paul A. Roeger Phone: 410/767-5394
Division Chief, Office of Operations & Eligibility Fax: 410/333-5027
Department of Health and Mental Hygiene E-mail: roegerp@dhmh.state.md.us
201 West Preston Street
Baltimore, MD 21201


Eligible income/asset scale for 1-person household.
∗∗
Eligible income/asset scale for 2-person household.

6-30 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Maryland
Short-Term Prescription Drug Subsidy Plan
Program Type: Direct Assistance
Year Operational: 2001∗
Number of Recipients (December 2002): 29,490

ELIGIBILITY CRITERIA
Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): All ages
Eligible Income Level (Single): 300% of FPL Eligible Income Level (Married): 300% of FPL
Other Eligibility Notes: Program open to all Medicare recipients.

FUNDING AND REIMBURSEMENT


Funding Source: 37.5% of Substantial Availability and Affordability Coverage (SAAC)
Differential, plus additional funding from MAMSI and Aetna.
Budget (FY 02): $18 million
Cost per Participant (FY 02): $65.12 member/month
# of Rx’s Per Participant (FY 02): 28.1
Manufacturer Rebate Type: Negotiated with individual drug companies
Ingredient Cost Calculation: Negotiated with contracted pharmacies
Enrollment Fee: $10 monthly premium
Deductible Amount: None
Copayment Amount: $10 for generics, $20 for branded products, $35 non-preferred brand
Dispensing Fee: Varies between contracted pharmacy chains.
Notes: Maximum benefit is $1,000 per enrollee per 12-month period.
Funding information for this program will change on April 1, 2003.
The program will then receive funding through CareFirst alone. It is
estimated that the budget will change at that time to $20 million.

DRUGS COVERAGE
Formulary: Open formulary
Drugs Covered: Most generic and brand drugs approved by the Food and Drug
Administration (FDA) are included under this program.
Drug Coverage Restrictions: Anorexants are excluded. Over the counter drugs are excluded.
Quantity limits on certain drugs such as Viagra, migraine medicines
and Oxycontin. Prior authorizations on certain drugs such as growth
hormones.

PROGRAM CONTACT
Robin Vahle Phone: 410/998-5444
Health and Mental Hygiene E-mail: robin.vahle@carefirst.com
201 West Preston Street
Baltimore, MD 21201


The program is ending June 30, 2003.

National Pharmaceutical Council 6-31


Pharmaceutical Benefits 2002

Maryland
Maryland Pharmacy Discount Program
Program Type: Discount (1115 Waiver)
Projected Operational Date: July 1, 2003
Projected Number of Recipients: 105,000

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): see notes


Eligible Income Level (Single): 175% of FPL Eligible Income Level (Married): 175% of FPL
Other Eligibility Notes: Must be a Medicare recipient and a Maryland resident. Disabled are
eligible.

FUNDING AND REIMBURSEMENT

Funding Source: State General Revenue Fund and Federal matching funds
Budget: Not Available
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: Medicaid price less rebates
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: 65% of the Medicaid price
Dispensing Fee: $1.00 per prescription

DRUGS COVERAGE

Formulary: Open
Drugs Covered: Anything included under Medicaid
Drug Coverage Restrictions: Same as Medicaid

PROGRAM CONTACT

Paul A. Roeger Phone: 410/767-5394


Division Chief Fax: 410/333-5027
Office of Operations & Eligibility E-mail: roegerp@dhmh.state.md.us
Department of Health and Mental
Hygiene
201 West Preston Street
Baltimore, MD 21201

6-32 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Massachusetts
Prescription Advantage+
Program Type: Direct Assistance
Year Operational: 2001∗
Number of Recipients (August 2002): 83,000

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): 18+


Eligible Income Level (Single): 188% of Eligible Income Level (Married): 188% of
FPL∗∗ FPL**
Other Eligibility Notes: Individuals receiving drug coverage from MassHealth or
CommonHealth are not eligible.

FUNDING AND REIMBURSEMENT

Funding Source: Tobacco Settlement Fund


Budget (FY 03): $95.6 million
Cost per Participant (FY 02): $90.44 per member per month
# of Rx’s Per Participant (FY 02): No limit. Average is 2.7 per member per month.
Manufacturer Rebate Type: Advance PCS negotiates price and rebates with drug manufacturers.
Ingredient Cost Calculation: AWP-14%
Enrollment Fee: Single: $0-$99 per month per enrollee, depending on income; Married: $0-
$74 per month per enrollee, depending on income
Deductible Amount: $0-$500 annually, depending on income. Payments are accepted quarterly.
Copayment Amount: 30-day prescriptions retail:
Generic-$6 or $10
Brand-Name-$16 or $28
Additional Brand-Name-the greater of 50% or $40.

90-day prescriptions mail:


Generic-$12 or $20
Brand-Name-$32 or $56
Additional Brand-Name-the greater of 50% or $60.
Dispensing Fee: $2.40 per prescription
Notes: The annual out-of-pocket limit per enrollee is $2,000 or 10% of income,
whichever is less. For married members, the out-of-pocket spending limit is
$3,000 combined, or 10% of gross annual household income, whichever is
less. The lower premium for married members only applies to those married
members who are both enrolled in the plan; when not joining as a couple, a
married member must pay the individual rate.
+
Program enrollment closed as of February 1, 2003, due to budget reductions.

The first year of the plan was extended through June 30, 2002, and totaled 15 months in order to synchronize with the State’s fiscal
year.
∗∗
Upper Income eligibility levels apply only to disabled applicants under the age of 65.

National Pharmaceutical Council 6-33


Pharmaceutical Benefits 2002

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: All therapeutic classes, except those excluded from MassHealth.
Includes all FDA approved oral drugs as well as many injectable
drugs, including insulin and disposable insulin syringes with needles.
Drug Coverage Restrictions: Some drugs require prior authorization.

PROGRAM CONTACT

David Morales Phone: 617/727-7750


Massachusetts Executive Office of Elder Affairs 800/AGE-INFO
One Ashburton Place 800/243-4636
Boston, MA 02108 Fax: 617/727-9368
David.morales@state.ma.us

6-34 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Michigan
Elder Prescription Insurance Coverage (EPIC) Program
Program Type: Direct Assistance
Year Operational: 2001
Number of Enrollees (May 2003): 13,034

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): 200% of FPL Eligible Income Level (Married): 200% of FPL
Other Eligibility Notes: EPIC enrollment is currently closed due to budget constraints, except
for 45-day emergency coverage, which is available up to two times a
year. In addition to normal coverage eligibility requirements, to be
eligible for emergency coverage:
• A single applicant must make less than 150% of FPL;
• A married applicant must make equal to or less than $17,910
(150% of FPL);
• A true medical emergency must exist.

To be eligible for normal coverage, an applicant:


• Must be a resident of Michigan for three months prior to
application;
• Cannot be residing in an institution;
• Cannot have other insurance or program coverage for prescription
drugs;
• Cannot currently receive Medicaid benefits.

Additionally, the Appropriations Act for FY 02-03 provides


authorization for the Department of Community Health to accept
additional Federal revenues either as the result of the approval of a
Pharmacy Plus waiver or Federal legislation providing pharmaceutical
assistance to seniors.

FUNDING AND REIMBURSEMENT

Funding Source: State General Fund plus rebate revenue


Budget (FY 01-02): $50 million. Budget for FY 2002-03 has not been determined as of
November 2002; it depends on whether a Pharmacy Plus waiver is
sought.
Cost per Enrollee: Not Available
# of Rx’s Per Enrollee: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: Lesser of usual and customary charge, AWP – 15.1% or 13.5%
(depending on the pharmacy), or the State MAC price
Enrollment Fee: $25.00
Deductible Amount: Based on the participant’s total annual household income. Maximum
annual amount is divided into twelfths so that a monthly amount must
be met.
National Pharmaceutical Council 6-35
Pharmaceutical Benefits 2002

Copayment Amount: If a brand name drug is prescribed and dispensed when a generically
equivalent drug is available, a $15.00 copayment in addition to the
monthly out-of-pocket share is charged.
Dispensing Fee: $3.77

DRUGS COVERAGE

Formulary: Drugs not on the Michigan Pharmaceutical Products List (MPPL) may
require prior authorization before they are paid for by EPIC. The use
of generic drugs is encouraged.
Drugs Covered: Most prescription drugs plus insulin and syringes for diabetics, with
some exceptions.
Drug Coverage Restrictions: The EPIC program does not cover the following types of drugs:
products used for weight loss or weight gain; fertility or infertility
drugs; drugs used to treat erectile dysfunction; drugs or products used
for contraception; products used to promote hair growth or for other
cosmetic purposes; drugs used to treat the skin aging process; smoking
cessation products; cold and cough preparations; fluoride preparations;
experimental and investigational drugs; DESI drugs;
vitamins/minerals, alone or in combination; dietary formulas or
nutritional supplements; central nervous system (CNS) stimulants;
Acquired Immunodeficiency Syndrome (AIDS) drugs/injectables and
orals; injectable drugs; allergy serums; compounds; over-the-counter
(OTC) drugs except for prescription insulin and OTC drugs with
prescriptions used for approved step therapy programs; miscellaneous
products associated with a specific drug administration, except for
diabetes needles and syringes; drugs produced by manufacturers not
participating in the rebate program; non-Food and Drug
Administration (FDA) approved drugs; and drugs for which the
manufacturer seeks to require as a condition of sale that associated
tests or monitoring services be purchased exclusively from the
manufacturer or its designee.

PROGRAM CONTACT

Doris Gellert Phone: 517/335-5182


Department of Community Health E-mail: gellert@michigan.gov
611 West Ottawa, P.O. Box 30676
Lansing, MI 48909-8176

6-36 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Minnesota
Prescription Drug Program∗
Program Type: Direct Assistance
Year Operational: 1999
Number of Enrollees (November 2002): 6,180
(Elderly: 5,230; Disabled: 950)

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): 18-64


Eligible Income Level (Single): 120% of FPL Eligible Income Level (Married): 120% of FPL
Other Eligibility Notes: On July 1, 2002, the program expanded to include coverage for
persons on Medicare due to a disability. To be eligible, enrollees
must:
• Be a Medicare enrollee, age 65 or older, or disabled;
• Be a Minnesota resident for six months;
• Have liquid assets (other than home, car, burial funds, etc.) Of
$10,000 or less for one person or $18,000 or less for a married
couple;
• Not have eligibility for Medicaid;
• Not have prescription drug coverage within four months of
applying;
• Not be enrolled in MinnesotaCare;
• Be enrolled in, or applying for, one of the following Medicare
supplement programs, which help enrollees pay their
Medicare premiums: Qualified Medicare Beneficiary (QMB),
or Specified Low-Income Medicare Beneficiary (SLMB).

FUNDING AND REIMBURSEMENT

Funding Source: State General Revenue Fund plus rebates


Budget (FY 02-03): $5.4 million appropriated for FY 2002 and $8.5 million appropriated
for FY 2003
Cost per Enrollee (2002): $1,200.00
# of Rx’s Per Enrollee (2002): 31.0
Manufacturer Rebate Type: Same as Medicaid less any Consumer Price Index add-on
Ingredient Cost Calculation: AWP – 9%
Enrollment Fee: None
Deductible Amount: $35.00 per month
Copayment Amount: None
Dispensing Fee: $3.65

DRUGS COVERAGE

Formulary: Closed formulary


Formerly the Senior Citizen Drug Program.

National Pharmaceutical Council 6-37


Pharmaceutical Benefits 2002

Drugs Covered: Same drugs as covered under Medicaid if manufacturer signs rebate
agreement with Department of Human Services. Covers over-the-
counter drugs for antacid, insulin products, smoking cessation
products, lice medication and vitamins.
Drug Coverage Restrictions: Most other over-the-counter drugs are not covered.

PROGRAM CONTACT

Steve Hamilton Phone: 651/297-7699


Prescription Drug Program Rebate Analyst E-mail: steve.hamilton@state.mn.us
Department of Human Services
444 Lafayette Road
St. Paul, MN 55155-3853

6-38 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Missouri
SeniorRx Program
Program Type: Direct Assistance
Year Operational: 2002
Number of Enrollees (November 2002): 29,722

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): $17,000 Eligible Income Level (Married): $23,000
Other Eligibility Notes: Applicant must be a Missouri resident and have lived in the State for
12 months by July 1, 2003. Applicants may not receive Medicaid or
veterans pharmacy benefits or have prescription insurance that is
equivalent to or greater than the Missouri SenioRx Program.

FUNDING AND REIMBURSEMENT

Funding Source: Funding comes from the Missouri SenioRx Fund, which consists of all
rebates received through the program; funds that are appropriated to it
by the general assembly; and funds from Federal or other sources.
Budget (FY 02-03): $35 million
Cost Per Enrollee (FY 02): $1,178.00
# of Rx’s Per Enrollee: Not Available
Manufacturer Rebate Type: 15% of AWP
Ingredient Cost Calculation: AWP – 20%
Enrollment Fee: $25.00 to $35.00, depending on income level
Deductible Amount: $250.00 to $500.00, depending on income level
Copayment Amount: 40% of prescription cost
Dispensing Fee: $4.09
Notes: Maximum annual benefit of $5,000.00

DRUGS COVERAGE

Formulary: None
Drugs Covered: Most prescription medications used for outpatient purposes;
Prescription insulin; prescription strength prenatal vitamins; fluoride
preparations; prescription compounds; Drug Efficacy Study
Implementation (DESI) drugs.
Drug Coverage Restrictions: The following drugs are not covered: drugs manufactured by
companies that do not participate in the Missouri SenioRx rebate
program; over-the-counter (OTC) products; drugs used for weight gain
or anorexia; drugs used to promote fertility; cosmetic and hair growth
agents; cough and cold preparations; prescription strength vitamins;
barbiturates; benzodiazepines; insulin syringes and diabetic supplies;
food supplements; and medical equipment, devices and supplies. Use
of generics is encouraged.

National Pharmaceutical Council 6-39


Pharmaceutical Benefits 2002

Notes: An enrollee may receive a name-brand drug when a generic drug is


available only if both the physician and enrollee request that the name-
brand drug be dispensed and the enrollee covers the copayment for the
generic drug plus the difference in cost between the name-brand drug
and the generic drug. Discount cards cannot be used in conjunction
with the program.

PROGRAM CONTACT

Jerry Simon Phone: 573/522-3066


Health and Senior Services Department
P.O. Box 570
Jefferson City, MO 65102

6-40 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Montana
Prescription Drug Expansion Program
Program Type: Discount
Projected Operational Date: 2004
Projected Number of Recipients: not available

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 62+ Eligibility Age (Disabled): 18+


Eligible Income Level (Single): 200% FPL Eligible Income Level (Married): 200% FPL
Other Eligibility Notes:

FUNDING AND REIMBURSEMENT

Funding Source: Discounts only through Medicaid


Budget: Not available
Cost per Enrollee: Not available
# of Rx’s Per Enrollee: Not available
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: Not Available
Enrollment Fee: Not available
Deductible Amount: Not available
Copayment Amount: Not available
Dispensing Fee: Not available

DRUGS COVERAGE

Formulary: Not available


Drugs Covered: Not available
Drug Coverage Restrictions: Not available

PROGRAM CONTACT

Not available

National Pharmaceutical Council 6-41


Pharmaceutical Benefits 2002

Nevada
Senior Rx
Program Type: Subsidy
Year Operational: 2001
Number of Recipients (November 2002): 7,500

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 62+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): see notes Eligible Income Level (Married): see notes
Other Eligibility Notes: Must be a Nevada resident for at least one year and not eligible for full
Medicaid benefits. Family income eligibility: $21,500

FUNDING AND REIMBURSEMENT

Funding Source: Tobacco Settlement Fund


Budget (FY 02-03): $7.6 million
Cost per Enrollee (FY 01-02): $1,023.00
# of Rx’s Per Enrollee (FY 01-02): 36.0
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: Not Available
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $10.00 for generics; $25.00 for preferred drugs or medically necessary
brand name drugs; and provider’s discounted rate for all other drugs
Dispensing Fee: Average of $2.25
Notes: Maximum benefit of $5,000.00 per year. An annual per enrollee
deductible of $100.00 is paid by the State to Pharmaceutical Care
Network, the Pharmacy Benefit Manager that manages the program.

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: Most prescription drugs
Drug Coverage Restrictions: General exclusions for over-the-counter drugs; blood glucose meters;
insulin injecting devices; biologicals; durable medical equipment;
nutritional supplements; and cosmetic drugs.

PROGRAM CONTACT

Jane Smedes Phone: 775/684-4000


Department of Human Resources E-mail: jasmedes@dhr.state.nv.us
505 E. King Street, Room 201
Carson City, NV 89701-4797

6-42 National Pharmaceutical Council


Pharmaceutical Benefits 2002

New Hampshire
Senior Prescription Drug Discount Program
Program Type: Discount
Year Operational: 2000
Number of Enrollees (November 2002): 77,132

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): All income Eligible Income Level (Married): All income
levels levels
Other Eligibility Notes: Must be a New Hampshire resident.

FUNDING AND REIMBURSEMENT

Funding Source: Rebates and incentives from pharmaceutical manufacturers negotiated


through National Prescription Administrators, a division of Express
Scripts, which operates the program.
Budget: The State has not had to fund the program, since it is based on rebates
and incentives
Cost Per Enrollee: There is no associated cost per enrollee.
# of Rx’s Per Enrollee: Not Available
Manufacturer Rebate Type: Rebates negotiated with manufacturer.
Ingredient Cost Calculation: Not Available
Deductible Amount: None
Enrollment Fee: None
Copayment Amount: Participant receives discount and must pay remainder of cost of
prescription.
Dispensing Fee: None
Notes: Discounts vary depending on pharmacy and medication. Discounts can
be up to 40% for generics and up to 15% for brand name products.

DRUGS COVERAGE

Formulary: No formulary
Drugs Covered: All prescription drugs
Drug Coverage Restrictions: Over-the-counter drugs are not covered

PROGRAM CONTACT

Kim Hadank Phone: 603/271-7857


Health And Human Services
Division Of Elderly And Adult Svcs
129 Pleasant Street
Concord, NH 03301

National Pharmaceutical Council 6-43


Pharmaceutical Benefits 2002

New Jersey
Pharmaceutical Assistance to the Aged and Disabled (PAAD)
Program Type: Direct Assistance
Year Operational: 1975
Projected Number of Recipients (FY 2003): 217,484

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): 21


Eligible Income Level (Single): $19,739 Eligible Income Level (Married): $24,203
Other Eligibility Notes: For calendar year 2003, eligible income levels for the program will
increase to $20,016 for single individuals and $24,524 for married
individuals. Disabled individuals are only eligible if they receive Title
II Social Security Disability benefits.

FUNDING AND REIMBURSEMENT

Funding Source: State General Fund and Casino Revenue Fund


Budget (FY 03): $312.9 million
Projected Cost per Participant (FY Senior: $2,200.00
03): Disabled: $4,200.00
Projected # of Rx’s Per Participant Senior: 34.0
(FY 03): Disabled: 45.0
Manufacturer Rebate Type: Medicaid less Consumer Price Index
Ingredient Cost Calculation: AWP – 10%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $5.00 per prescription
Dispensing Fee: $3.73 to $4.07

DRUGS COVERAGE

Formulary: No formulary
Drugs Covered: Legend drugs, insulin, syringes, needles, certain diabetic testing
materials, and injectables used in treatment of multiple sclerosis
Drug Coverage Restrictions: Drugs must be purchased in New Jersey, and must be covered by a
Manufacturer’s Rebate Agreement. DESI drugs are not covered.

PROGRAM CONTACT

Jennifer Barron Phone: 609/588-3460


PAAD/Senior Gold Operations Fax: 609/588-7139
P.O. Box 715 E-mail: jennifer.barron@doh.state.nj.us
Trenton, NJ 08625-0715

6-44 National Pharmaceutical Council


Pharmaceutical Benefits 2002

New Jersey
Senior Gold Prescription Discount Program
Program Type: Direct Assistance
Year Operational: 2001
Projected Number of Recipients (FY 03): 61,972

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): 18-64


Eligible Income Level (Single): $29,739 Eligible Income Level (Married): $34,203
Other Eligibility Notes: For calendar year 2003, eligible income levels for the program will
increase to $30,016 for single individuals and $34,542 for married
individuals. Senior citizens and disabled individuals eligible for the
Pharmaceutical Assistance for the Aged and Disabled program are not
eligible for the Senior Gold Prescription Discount Program. Disabled
individuals are only eligible if they receive Title II Social Security
Disability benefits.

FUNDING AND REIMBURSEMENT

Funding Source: Tobacco Settlement Fund


Budget (FY 03): $32.8 million
Projected Cost Per Participant (FY Senior: $574.00
03): Disabled: $764.00
Projected # of Rx’s Per Participant Senior: 21.0
(FY 03): Disabled: 26.0
Manufacturer Rebate Type: Medicaid less Consumer Price Index
Ingredient Cost Calculation: AWP – 10%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $15.00 plus 50% of the remaining cost of the prescription or the actual
cost if less than $15.00. After unreimbursed out of pocket costs reach
$2,000.00 for an individual, or $3,000.00 for a couple, copayments for
additional prescriptions that year are $15.00.
Dispensing Fee: $3.73 to $4.07
Notes: Once an enrollee incurs in one year unreimbursed out-of-pocket costs
of $2,000.00, if single, or $3,000.00, if married, prescriptions may be
obtained for the balance of that eligibility period for a flat $15.00
copayment or the actual price, if less than $15.00.

DRUGS COVERAGE

Formulary: No formulary
Drugs Covered: Legend drugs, insulin, syringes, needles, certain diabetic testing
materials, and injectables used in treatment of multiple sclerosis
Drug Coverage Restrictions: Drugs must be purchased in New Jersey, and must be covered by a
Manufacturer’s Rebate Agreement. DESI drugs are not covered.

National Pharmaceutical Council 6-45


Pharmaceutical Benefits 2002

PROGRAM CONTACT

Jennifer Barron Phone: 609/588-3460


PAAD/Senior Gold Operations Fax: 609/588-7139
P.O. Box 715 E-mail: jennifer.barron@doh.state.nj.us
Trenton, NJ 08625-0715

6-46 National Pharmaceutical Council


Pharmaceutical Benefits 2002

New Mexico
Senior Prescription Drug Program
Program Type: Discount
Projected Operational Date: Unknown∗
Number of Recipients: N/A

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): All income Eligible Income Level (Married): All income
levels levels
Other Eligibility Notes: Must be a New Mexico resident and have no other prescription drug
benefit through private insurance or other government programs.

FUNDING AND REIMBURSEMENT

Funding Source: None


Budget: None∗∗
Cost per Recipient: Not Available
# of Rx’s Per Recipient: Not Available
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: Not Available
Enrollment Fee: Not to exceed $60.00 per year
Deductible Amount: None
Copayment Amount: See notes
Dispensing Fee: None
Notes: Cost of prescription to recipient is contracted discounted price plus
dispensing fee.

DRUGS COVERAGE

Formulary: Not Available


Drugs Covered: Not Available
Drug Coverage Restrictions: Not Available

PROGRAM CONTACT

Milton Sanchez Phone: 505/986-8556


Executive Director Fax: 505/983-8667
New Mexico Retiree Health Care Authority
810 West San Mateo, Suite D
Santa Fe, NM 87505


Because of difficulties in locating funding for the program, the projected operational date of the program is unknown.
∗∗
On December 4, 2002, the State Agency on Aging issued a statement committing $30,000 for fund administration costs.

National Pharmaceutical Council 6-47


Pharmaceutical Benefits 2002

New Mexico
Prescription Drug Waiver Program
Program Type: Direct Assistance
Projected Operational Date: Unknown
Number of Recipients: N/A

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not


Available
Eligible Income Level (Single): 185% FPL Eligible Income Level (Married): 185% FPL
Other Eligibility Notes:

FUNDING AND REIMBURSEMENT

Funding Source: Not Available


Budget: Not Available
Cost per Recipient: Not Available
# of Rx’s Per Recipient: Not Available
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: Not Available
Enrollment Fee: Not Available
Deductible Amount: Not Available
Copayment Amount: Not Available
Dispensing Fee: Not Available
Notes:

DRUGS COVERAGE

Formulary: Not Available


Drugs Covered: Not Available
Drug Coverage Restrictions: Not Available

PROGRAM CONTACT

Milton Sanchez Phone: 505/986-8556


Executive Director Fax: 505/983-8667
New Mexico Retiree Health Care Authority
810 West San Mateo, Suite D
Santa Fe, NM 87505

6-48 National Pharmaceutical Council


Pharmaceutical Benefits 2002

New York
Elderly Pharmaceutical Insurance Coverage (EPIC) Program
Program Type: Direct Assistance
Year Operational: 1987
Number of Recipients (November 2002): 297,000
ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level, Fee Plan $20,000 Eligible Income Level, Fee Plan $26,000
(Single): (Married):
Eligible Income Level, Deductible $20,001- Eligible Income Level, Deductible $26,001-
Plan (Single): $35,000 Plan (Married): $50,000
Other Eligibility Notes: Medicaid enrollees are not eligible.

FUNDING AND REIMBURSEMENT

Funding Source: State General Fund


Budget (FY 03-04): $610.0 million
Cost per Participant (FY 02): $1,970.00
# of Rx’s Per Participant (FY 02): 36.0
Manufacturer Rebate Type: Full Medicaid rate (base rate plus Consumer Price Index penalty)
Ingredient Cost Calculation: Federal upper limit, when available, on generics and AWP - 10% on
brands
Enrollment Fee: $2.00 - $75.00 per quarter, based on income level
Deductible Amount: $530.00 - $1,715.00 annually, based on income level
Copayment Amount: $3.00 (prescription cost up to $15.00); $7.00 (prescription cost from
$15.01 to $35.00); $15.00 (prescription cost from $35.01 to $55.00);
and $20.00 (prescription cost over $55.00)
Dispensing Fee: $4.50 for generics and $3.50 for brand-name drugs

DRUGS COVERAGE

Formulary: None
Drugs Covered: All legend drugs, insulin and insulin syringes and needles
Drug Coverage Restrictions: DESI drugs and non-participating manufacturers excluded.

PROGRAM CONTACT

Julie A. Naglieri Phone: 518/452-6828


Acting Director Fax: 518/452-6882
NYS EPIC Program E-mail: jab15@health.state.ny.us
1 Corporate Plaza
260 Washington Avenue Ext.
Albany, NY 12203

National Pharmaceutical Council 6-49


Pharmaceutical Benefits 2002

North Carolina
Prescription Drug Assistance Program
Program Type: Direct Assistance
Year Operational: 2000∗
Number of Recipients (FY 2002): 1,800∗∗

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): 150% of FPL Eligible Income Level (Married): 150% FPL
Other Eligibility Notes: Individuals must have cardiovascular disease and/or diabetes

FUNDING AND REIMBURSEMENT

Funding Source: State General Revenue Fund


Budget (FY 03): Approximately $900,000
Cost per Participant (FY 02): Approximately $2,476.00
# of Rx’s Per Participant (FY 02): Approximately 26.0
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP – 10%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $6.00
Dispensing Fee: $5.60 (40 cents retained by claims processor)

DRUGS COVERAGE

Formulary: Limited formulary (category based)


Drugs Covered: All drugs used to treat cardiovascular disease and/or diabetes
Drug Coverage Restrictions: Program will not pay for over-the-counter drugs, potassium
supplements, or cholesterol lowering drugs.
Notes: Prescriptions may be issued for up to a 100-day supply.

PROGRAM CONTACT

Michael Keough Phone: 919/733-2040


Department of Health and Human
Services
2001 Mail Service Center
Raleigh, NC 27699


This program will be ending on June 2, 2003. Enrollees will be eligible for Senior Care
∗∗
Enrollment was closed on March 1, 2002 due to budget limitations.

6-50 National Pharmaceutical Council


Pharmaceutical Benefits 2002

North Carolina
Senior Care∗
Program Type: Direct Assistance
Year Operational: 2002∗∗
Number of Recipients: 4,000∗∗∗

ELIGIBILITY CRITERIA
Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible
Eligible Income Level (Single): 200% of FPL Eligible Income Level (Married): 200% of FPL
Other Eligibility Notes: Individuals must be diagnosed with cardiovascular disease, chronic
obstructive pulmonary disease and/or diabetes, and must not be eligible for
Medicaid benefits or have other coverage for drugs covered by Senior Care.

FUNDING AND REIMBURSEMENT


Funding Source: North Carolina Health and Wellness Trust Fund
Budget (FY 03): $32 million
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP – 10%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $6.00
Dispensing Fee: $5.60 (40 cents retained by claims processor)
Notes: Maximum annual prescription benefit of $600.00. Senior Care pays for 60%
of the first $1,000.00 of prescription costs, and members pay the remaining
40%.

DRUGS COVERAGE
Formulary: Limited formulary (category based)
Drugs Covered: All drugs used to treat cardiovascular disease and/or diabetes
Drug Coverage Restrictions: This program will not pay for over-the-counter drugs or potassium
supplements.

PROGRAM CONTACT
Michael Keough Phone: 919/733-2040
Department of Health and Human Services
2001 Mail Service Center
Raleigh, NC 27699


Previously referred to as Carolina CaRxes in State legislation.
∗∗
Program benefits began on November 1, 2002. This program replaces the pilot program, North Carolina’s Prescription Drug
Assistance Program.
∗∗∗
Full enrollment is expected to be approximately 100,000.

National Pharmaceutical Council 6-51


Pharmaceutical Benefits 2002

Ohio
Golden Buckeye Prescription Drug Program
Program Type: Negotiated Discounts
Projected Operational Date: 2003
Estimated Eligibles: up to 500,000

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 60+ Eligibility Age (Disabled): no age limit


Eligible Income Level (Single): All income Eligible Income Level (Married): All income
levels levels
Other Eligibility Notes: Must be an Ohio resident.

FUNDING AND REIMBURSEMENT

Funding Source: Manufacturer negotiated rebates, 50% of which go to a PBM for


running the program.
Budget: None
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Negotiated by PBM with individual manufacturers
Ingredient Cost Calculation: For drugs purchased in a pharmacy, AWP – 13% for brand names and
AWP – 20% for generics. For drugs purchased via mail order, AWP –
17% for brand names and AWP – 40% for generics.
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: None
Dispensing Fee: $3.50

DRUGS COVERAGE

Formulary: None
Drugs Covered: Drugs for which the PBM has negotiated rebates with manufacturers.
Drug Coverage Restrictions: None

PROGRAM CONTACT

Gary Panek Phone: 800/422-1976


Manager of Golden Buckeye Program E-mail: gpanek@age.state.oh.us
Department of Aging
50 W. Broad Street, 9th Floor
Columbus, OH 43215

6-52 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Oregon
Senior Prescription Drug Assistance Program
Program Type: Discount
Projected Operational Date: not available*
Projected Number of Recipients: up to 100,000

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): 185% of FPL Eligible Income Level (Married): 185% of FPL
Other Eligibility Notes: Individuals must not be covered under any public or private
prescription drug benefit program for the previous six months and
must have less than $2,000.00 in liquid resources. Enrollees are issued
enrollment cards that entitle them to Medicaid prices.

FUNDING AND REIMBURSEMENT

Funding Source: Enrollment fees


Budget: N/A
Cost per Participant: N/A
# of Rx’s Per Participant: N/A
Manufacturer Rebate Type: N/A
Ingredient Cost Calculation: AWP – 14%
Enrollment Fee: $50.00 annually
Deductible Amount: None
Copayment Amount: None
Dispensing Fee: May not exceed Medicaid dispensing fee. Pharmacies designated
“critical access” may charge an additional $2.00 dispensing fee.
Notes : The law authorizing the program allows for coverage up to 50% of
pharmaceutical cost, with a maximum annual benefit of $2,000.00.
However, because the program was not funded in FY 02 or FY 03, the
program will operate as a discount program. The program will operate
as a direct assistance program when funding is available.

DRUGS COVERAGE

Formulary: None
Drugs Covered: All legend drugs.

PROGRAM CONTACT

Sandy Wood, Program Manager Phone: 503/945-6530


Office of Medical Assistance Programs Email: sandy.a.wood@state.or.us
500 Summer St. NE
Salem, OR 97301-107

*
Postponed due to lack of funds.

National Pharmaceutical Council 6-53


Pharmaceutical Benefits 2002

Pennsylvania
Pharmaceutical Assistance Contract for the Elderly (PACE)
Type of Program: Direct Assistance
Year Operational: 1984
Number of Recipients (May 2003): 192,384

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): $14,000 Eligible Income Level (Married): $17,200
Other Eligibility Notes: Must be a resident of Pennsylvania for at least 90 days prior to the
date of application.

FUNDING AND REIMBURSEMENT

Funding Source: State Lottery, Tobacco Settlement Fund


Budget (FY 03-04): $507 million
Cost per Participant (FY 02-03): $2,144.00
# of Rx’s Per Participant (FY 02-03): Approximately 4.0-5.0 per month
Manufacturer Rebate Type: Flat 17% of AMP plus inflation penalty indexation
Ingredient Cost Calculation: Lesser of AWP – 10% or usual and customary
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $6.00
Dispensing Fee: $3.50 on AWP-reimbursed claims
Notes: A penalty rebate is applied if year-to-year price inflation exceeds
Consumer Price Index

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: All Federal legend drugs and insulin, insulin syringes and needles
Drug Coverage Restrictions: 30-day supply or 100 units, whichever is less. No experimental drugs,
drugs for baldness and wrinkles, over-the-counter drugs, or most off-
label uses. Mandatory generic substitution for A-rated (therapeutically
equivalent) products. DESI drugs require documentation of medical
necessity.

PROGRAM CONTACT
Thomas Snedden Phone: 717/787-7313
Director, PACE Program Fax: 717/772-2730
PA Department of Aging E-mail: tsnedden@aging.state.pa.us
555 Walnut Street, 5th Floor
Harrisburg, PA 17101-1919

6-54 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Pennsylvania
PACE Needs Enhancement Tier (PACENET)
Program Type: Direct Assistance
Year Operational: 1996
Number of Recipients (May 2003): 32,142

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): $14,000 - Eligible Income Level (Married): $17,200 -
$17,000 $20,200
Other Eligibility Notes: Must be a resident of Pennsylvania for at least 90 days prior to the date
of application

FUNDING AND REIMBURSEMENT

Funding Source: State Lottery, Tobacco Settlement Funds


Budget (FY 03-04): $507 million
Cost per Participant (FY 02): $1,412.00
# of Rx’s Per Participant (FY 02): Approximately 4.0-5.0 per month
Manufacturer Rebate Type: Flat 17% of AMP plus inflation penalty indexation
Ingredient Cost Calculation: Lesser of AWP – 10% or usual and customary
Enrollment Fee: None
Deductible Amount: $500.00 per year
Copayment Amount: $15.00 for brand name drugs and $8.00 for generics
Dispensing Fee: $3.50 on AWP-reimbursed claims
Notes: A penalty rebate is applied if year-to-year price inflation exceeds
Consumer Price Index

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: All Federal legend drugs and insulin, insulin syringes and needles
Drug Coverage Restrictions: 30-day supply or 100 units, whichever is less. No experimental drugs,
drugs for baldness and wrinkles, over-the-counter drugs, or most off-
label uses. Mandatory generic substitution for A-rated (therapeutically
equivalent) products. DESI drugs require documentation of medical
necessity.

PROGRAM CONTACT

Thomas Snedden Phone: 717/787-7313


Director, PACE Program Fax: 717/772-2730
PA Department of Aging E-mail: tsnedden@aging.state.pa.us
555 Walnut Street, 5th Floor
Harrisburg, PA 17101-1919

National Pharmaceutical Council 6-55


Pharmaceutical Benefits 2002

Rhode Island
Rhode Island Pharmaceutical Assistance to the Elderly (RIPAE)
Program Type: Direct Assistance, Discount
Year Operational: 1985
Number of Enrollees (July 2002): 39,568

ELIGIBILITY CRITERIA
Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): 55-65
Eligible Income Level (Single): 420% of FPL Eligible Income Level (Married): 420% of FPL
Other Eligibility Notes: Income levels exclude income spent on medical expenses if greater
than 3% of total income. Eligible social security disability recipients
between the ages of 55-65 may receive the program’s discount price or
the Federal MAC price for their prescriptions, whichever is lower;
they do not receive a subsidy.

FUNDING AND REIMBURSEMENT


Funding Source: State General Revenue Fund and manufacturer rebates
Budget (FY 03): $12.6 million
Cost per Enrollee (FY 02): $290.00
# of Rx’s Per Enrollee (FY 02): 13.5
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP – 13%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: Copayment covers 40%, 70%, or 85% of prescription cost depending
on income. For members in the lowest income class, the program will
pay 100% of the cost of covered medications after the member has
paid $1,500.00 in copayments.
Dispensing Fee: $2.75

DRUGS COVERAGE
Formulary: Open formulary
Drugs Covered: Drugs for Alzheimer’s disease, anti-infectives, arthritis, asthma and
chronic respiratory conditions, cancer, circulatory insufficiency,
depression, diabetes (including insulin syringes), heart problems, high
cholesterol, hypertension, Parkinson’s disease, glaucoma, prescription
mineral and vitamin supplements for renal patients, urinary
incontinence, and osteoporosis
Drug Coverage Restrictions: Non-cosmetic Food and Drug Administration approved drugs that
were not previously listed are covered at the program’s discount price
or at the Federal MAC price, whichever is lower.

6-56 National Pharmaceutical Council


Pharmaceutical Benefits 2002

PROGRAM CONTACT
Dennis Costa Phone: 401/462-3000
Rhode Island Dept. Of Elderly Affairs E-mail: dennis@dea.state.ri.us
Benjamin Rush Building #55
35 Howard Avenue
Cranston, RI 02920

National Pharmaceutical Council 6-57


Pharmaceutical Benefits 2002

South Carolina
SilveRxCard Senior Prescription Drug Program
Program Type: Direct Assistance (1115 waiver)∗
Year Operational: 2003
Number of Enrollees (November 2002): 42,000

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): 200% of FPL Eligible Income Level (Married): 200% of FPL
Other Eligibility Notes: Must be a South Carolina resident. Must be ineligible for Medicaid
with no prescription benefits from any other source.

FUNDING AND REIMBURSEMENT

Funding Source: Tobacco Settlement Fund and Federal matching funds


Budget (FY 03): $81.0 million
Cost per Enrollee (FY 02): $500.00
# of Rx’s Per Enrollee (FY 02): 54.0
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP – 10%
Enrollment Fee: None
Deductible Amount: $500.00 per calendar year
Copayment Amount: Members receive a small discount, up to 10%, on prescriptions while
meeting the deductible. After the $500.00 deductible is met, the
copayment is $10.00 for generic drugs, $15.00 for brand name drugs,
and $21.00 for drugs requiring prior authorization.
Dispensing Fee: $4.05

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: Same as Medicaid
Drug Coverage Restrictions: Same as Medicaid

PROGRAM CONTACT

Ray Sharpe Phone: 803/898-2673


SilverRxCard Manager Fax: 803/898-4517
Office of Insurance Services E-mail: rsharpe@ois.state.sc.us
1201 Main Street, Suite 350
Columbia, SC 29201


The SilveRxCard program previously operated as a non-CMS waiver program funded only by State revenue. The waiver program
begins on January 1, 2003.

6-58 National Pharmaceutical Council


Pharmaceutical Benefits 2002

South Dakota
Senior Citizen Prescription Drug Benefit Program
Program Type: Discount
Year Operational: Not Yet Operational
Number of Enrollees: Not Available

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): no age limit


Eligible Income Level (Single): no limit Eligible Income Level (Married): no limit
Other Eligibility Notes:

FUNDING AND REIMBURSEMENT

Funding Source: Not Available


Budget (FY 03): Not Available
Cost per Enrollee (FY 02): Not Available
# of Rx’s Per Enrollee (FY 02): Not Available
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: Not Available
Enrollment Fee: Not Available
Deductible Amount: Not Available
Copayment Amount: Not Available
Dispensing Fee: Not Available

DRUGS COVERAGE

Formulary: Not Available


Drugs Covered: Not Available
Drug Coverage Restrictions: Not Available

PROGRAM CONTACT

Not Available

National Pharmaceutical Council 6-59


Pharmaceutical Benefits 2002

Texas
State Prescription Drug Program
Program Type: State-Subsidy
Law Enacted: 2001∗
Estimated Eligibles: N/A

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): 100% of FPL Eligible Income Level (Married): 100% of FPL
Other Eligibility Notes: Upper income limits may increase if funding becomes available.
However, the categories most likely to receive qualify for the program
at proposed FY 04-05 funding levels are Qualified Medicare
Beneficiaries (QMBS) and Specified Low-Income Medicare
Beneficiaries (SLMBS).

FUNDING AND REIMBURSEMENT

Funding Source: State General Revenue Fund, unless funds are available under Federal
law to fund all or part of the program
Budget (FY 02-03): None
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: Not Available
Enrollment Fee: Not Available
Deductible Amount: Not Available
Copayment Amount: Not Available
Dispensing Fee: Not Available
Notes: According to statute, the Health and Human Services Commission
may require a cost-sharing payment.

DRUGS COVERAGE

Formulary: Not Available


Drugs Covered: Not Available
Drug Coverage Restrictions: Not Available


Since implementation of this program is contingent on funding availability, and no funding was forthcoming in FY 2002-03, no
action has been taken to implement the program. The Texas Health and Human Resources Commission is seeking an appropriation
of $35 million in the FY 2003-04 budget.

6-60 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Notes: The Health and Human Services Commission may require that, unless
the practitioner’s signature on a prescription clearly indicates that the
prescription must be dispensed as written, the pharmacist may select a
generic equivalent of the prescribed drugs. The Health and Human
Resources Commission is also authorized to establish a formulary,
prior authorization requirements, and a drug utilization program.

PROGRAM CONTACT

Charles Stewart Phone: 512/424-6514


Health and Human Services
Commission
P.O. Box 13247
Austin, TX 787111-3247

National Pharmaceutical Council 6-61


Pharmaceutical Benefits 2002

Vermont
VSCRIPT
Program Type: Direct Assistance (1115 Waiver)
Year Operational: 1989∗
Number of Recipients (October 2002): 3,032

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): All ages


Eligible Income Level (Single): 150% - 175% Eligible Income Level (Married): 150% - 175%
of FPL of FPL

FUNDING AND REIMBURSEMENT

Funding Source: State General Fund


Budget (FY 03): $5.1 million
Cost per Participant (FY 02): $1,603.00
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP – 11.9%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $5.00 for generic drugs, $10.00 for brand-name drugs. Once a
maximum of $100.00 in copayments is reached in a calendar quarter, no
further copayments are required for the rest of the quarter.
Dispensing Fee: $4.25

DRUGS COVERAGE

Formulary: Preferred Drug List


Drugs Covered: Maintenance drugs covered by Medicaid.
Drug Coverage Restrictions: No experimental or over-the-counter drugs.

PROGRAM CONTACT

Paul Wallace-Brodeur Phone: 802/241-3985


Office of Vermont Health Access Fax: 802/241-2897
103 South Main Street E-mail: paulw@wpgate1.ahs.state.vt.us
Waterbury, VT 05671-1201


This program was integrated into the VHAP (1115 waiver) program in 1999.

6-62 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Vermont
VSCRIPT Expanded
Program Type: Direct Assistance
Year Operational: 2000
Number of Recipients: 3,200

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): All ages


Eligible Income Level (Single): 175% - 225% Eligible Income Level (Married): 175% - 225%
of FPL of FPL

FUNDING AND REIMBURSEMENT

Funding Source: State General Fund


Budget (FY 03): $2.0 million
Cost per Participant (FY 02): $530.00
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP – 11.9%
Enrollment Fee: None
Deductible Amount: $275.00 per year
Copayment Amount: The coinsurance rate for maintenance prescriptions is 41%. Once the
maximum annual coinsurance contribution of $2,500.00 is reached,
there is no charge for rest of the year. (July 1-June 30)
Dispensing Fee: $4.25

DRUGS COVERAGE

Formulary: Preferred Drug List


Drugs Covered: Medicaid covered maintenance drugs
Drug Coverage Restrictions: No experimental or over-the-counter drugs
Notes: Same coverage as V-SCRIPT basic program

PROGRAM CONTACT

Paul Wallace-Brodeur Phone: 802/241-3985


Office of Vermont Health Access Fax: 802/241-2897
103 South Main Street E-mail: paulw@wpgate1.ahs.state.vt.us
Waterbury, VT 05671-1201

National Pharmaceutical Council 6-63


Pharmaceutical Benefits 2002

Vermont
Vermont Health Access Plan (VHAP)
Program Type: Direct Assistance (1115 Waiver)
Year Operational: 1996
Number of Recipients (November 2002): 11,550

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): All ages


Eligible Income Level (Single): 150% of FPL Eligible Income Level (Married): 150% of FPL
Other Eligibility Notes: This program is for individuals not eligible for Medicaid.

FUNDING AND REIMBURSEMENT

Funding Source: State Revenue Fund


Budget (FY 03): $16.3 million
Cost per Participant (FY 02): $1,752.00
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: AWP – 11.9%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $3.00 copayment for generic drugs; $6.00 copayment for brand-name
drugs. Once a maximum of $50.00 in copayments is reached in a
calendar quarter, no further copayments are required for the rest of the
quarter.
Dispensing Fee: $4.25

DRUGS COVERAGE

Formulary: Preferred Drug List


Drugs Covered: All drugs covered by Vermont Medicaid, including insulin and insulin
syringes, and eyeglasses and the services to obtain them
Drug Coverage Restrictions: No experimental or over-the-counter drugs

PROGRAM CONTACT

Paul Wallace-Brodeur Phone: 802/241-3985


Office of Vermont Health Access Fax: 802/241-2897
103 South Main Street E-mail: paulw@wpgate1.ahs.state.vt.us
Waterbury, VT 05671-1201

6-64 National Pharmaceutical Council


Pharmaceutical Benefits 2002

Vermont
*
Healthy Vermonters Program
Program Type: Direct Assistance (1115 Waiver)
Year Operational: 2002
Number of Recipients (November 2002): 7,140
(Healthy Vermonters: 440; VSCRIPT, VSCRIPT Expanded participants: 6,700)

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): All ages


Eligible Income Level (Single): 400% of FPL Eligible Income Level (Married): 400% of FPL
Other Eligibility Notes: Vermont residents of any age who have an income at or below 300% FPL
are also eligible. This program is for those who have no insurance for
prescriptions or those who have a commercial insurance plan with a yearly
limit. VSCRIPT and VSCRIPT Expanded beneficiaries will be
automatically enrolled and have the advantage of Healthy Vermonters
benefits for prescriptions not covered under the VSCRIPT programs.

FUNDING AND REIMBURSEMENT

Funding Source: State Revenue Fund


Budget (FY 03): $200,000
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: AWP – 11.9%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: See note below
Dispensing fee: $4.25
Note: Participant pays the Medicaid rate for drugs.

DRUGS COVERAGE

Formulary: Medicaid Formulary


Drugs Covered: Maintenance drugs covered by Medicaid
Drug Coverage Restrictions: No experimental or over-the-counter drugs

PROGRAM CONTACT

Jackie Levine Phone: 802/241-2992


Department of PATH E-mail: jackiel@path.state.vt.us
103 South Main Street
Waterbury, CT 05676

* The Healthy Maine program, which allowed seniors to purchase prescriptions through a Medicaid waiver, was halted by a U.S. Court of Appeals ruling on
December 24, 2002. The Healthy Vermonters Program may be affected by this ruling. Currently, participants receive the Medicaid rate for prescription drugs, with
no additional discounts. Additional discounts were planned based on manufacturers’ rebates and the State’s contribution.

National Pharmaceutical Council 6-65


Pharmaceutical Benefits 2002

West Virginia
Gold Mountaineer Discount Card Program
Program Type: Direct Assistance
Year Operational: 2001
Number of Recipients (October 2002): 17,061

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 60+ Eligibility Age (Disabled): Not eligible


Eligible Income Level (Single): All income Eligible Income Level (Married): All income
levels levels
Other Eligibility Notes: Must be a resident of West Virginia.

FUNDING AND REIMBURSEMENT

Funding Source: Lottery funds and State General Fund


Budget (FY 03): $12,420
Cost per Participant (2002): $0.69
# of Rx’s Per Participant (2002): 35.00
Manufacturer Rebate Type: Rebates negotiated by PBM with individual manufacturers
Ingredient Cost Calculation: AWP – 13% for brand name drugs and generics and AWP – 60% for
MAC drugs.
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: None
Dispensing Fee: $3.50
Notes: Enrollees will receive discounts set by PBM.

DRUGS COVERAGE

Formulary: None
Drugs Covered: All FDA Federal legend pharmaceuticals and diabetic supplies
Drug Coverage Restrictions: None

PROGRAM CONTACT

Kim Fetty Phone: 304/558-3317


Bureau of Senior Services
Holly Grove, Building No. 10
Charleston, WV 25305-0160
Lansing, MI 48909-8176

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Pharmaceutical Benefits 2002

Wisconsin
Wisconsin SeniorCare Prescription Drug Assistance Program
Program Type: Direct Assistance
Year Operational: 2002
Estimated Enrollment (December 2002): 73,000

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): 65+ Eligibility Age (Disabled): 18+


Eligible Income Level (Single): 240% of FPL Eligible Income Level (Married): 240% of FPL
Other Eligibility Notes: Person must not be a recipient of medical assistance and must be a
resident of the State. Wisconsin residents with incomes exceeding
240% of FPL may participate by “spending down” to 240% of FPL
level.

FUNDING AND REIMBURSEMENT

Funding Source: State funded, unless funds are available under Federal law to fund all
or part of the program
Budget (FY 02-03): $49.9 million
Cost per Participant: Not Available
# of Rx’s Per Participant: Not Available
Manufacturer Rebate Type: Medicaid
Ingredient Cost Calculation: Not Available
Enrollment Fee: $20.00
Deductible Amount: $500.00 (unless household income is less than 160% of FPL, in which
case no deductible is required)
Copayment Amount: $5.00 for generic drugs, $15.00 for name-brand drugs
Dispensing Fee: Not Available

DRUGS COVERAGE

Formulary: None
Drugs Covered: Most prescription drugs
Drug Coverage Restrictions: The program does not cover: prescription drugs administered in a
physician’s office; drugs that are experimental or have a cosmetic, not
a medical, purpose; over-the-counter drugs such as vitamins and
aspirin, even if prescribed, except for insulin; prescription drugs for
which prior authorizations has been denied. If a drug is available in
generic form, the brand-name form is covered only when medically
necessary. Reimbursement for most drugs is limited to a 34-day
supply. Some maintenance drugs may be provided in a 100-day
supply.

National Pharmaceutical Council 6-67


Pharmaceutical Benefits 2002

PROGRAM CONTACT

Roma Rowlands Phone: 608/266-3753


Division of Health Care Financing Fax: 608/267-3380
1 West Wilson Street E-mail: rowlarm@dhfs.state.wi.us
P.O. Box 309
Madison, WI 53701-3380

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Pharmaceutical Benefits 2002

Wyoming
Prescription Drug Assistance Program
Program Type: Direct Assistance
Year Operational: 2002∗
Number of Recipients (November 2002): 9,120

ELIGIBILITY CRITERIA

Eligibility Age (Elderly): All ages Eligibility Age (Disabled): All ages
Eligible Income Level (Single): 100% of FPL Eligible Income Level (Married): 100% of FPL
Other Eligible Groups: Medicaid enrollees are not eligible. No more than $1000 in resources,
home and one car exempt.

FUNDING AND REIMBURSEMENT

Funding Source: General Revenue Fund


Budget (FY 03-04): $2.1 million
Cost per Participant (FY 02): $1,611.96
# of Rx’s Per Participant (FY 02): 23.0
Manufacturer Rebate Type: Not Available
Ingredient Cost Calculation: AWP – 4%
Enrollment Fee: None
Deductible Amount: None
Copayment Amount: $10.00 for generics and $25.00 for brand-name drugs
Dispensing Fee: None
Notes: Maximum 3 prescriptions per month and oxygen services if needed

DRUGS COVERAGE

Formulary: Open formulary


Drugs Covered: Any FDA approved prescription medications
Drug Coverage Restrictions: No smoking cessation agents, hair growth products, anorexiant
products, or fertility promotion agents. One month supply restriction.

PROGRAM CONTACT

Roxanne Homar, R.Ph. Phone: 307/777-6032


Community and Family Health Fax: 307/777-6964
Division E-mail: rhomar@state.wy.us
Hathaway Bldg, Rm 157
2300 Capitol Ave.
Cheyenne, WY 82002


Absorbed the Minimum Medical Program.

National Pharmaceutical Council 6-69


Pharmaceutical Benefits 2002

6-70 National Pharmaceutical Council


Pharmaceutical Benefits 2002

ALABAMA

A. BENEFITS PROVIDED AND GROUPS ELIGIBLE


Type of Benefit Categorically Needy Medically Needy (MN) Other
Aged Blind/ Child Adult Aged Blind/ Child Adult SFO
Disabled Disabled
Prescribed Drugs    
Inpatient Hospital Care    
Outpatient Hospital Care    
Laboratory & X-ray Service    
Nursing Facility Services    
Physician Services    
Dental Services    

B. EXPENDITURES FOR DRUGS


2000 2001**
Expenditures Recipients Expended Recipients

TOTAL $331,574,388 438,529 $385,168,230 465,236

RECEIVING CASH ASSISTANCE TOTAL $244,874,432 209,643


Aged $36,886,212 28,320
Blind/Disabled $194,628,187 122,355
Child $6,923,518 43,011
Adult $6,436,515 15,957

MEDICALLY NEEDY, TOTAL $0 0


Aged $0 0
Blind/Disabled $0 0
Child $0 0
Adult $0 0

POVERTY RELATED, TOTAL $33,759,075 189,144


Aged $740,219 829
Blind/Disabled $703,166 808
Child $30,621,597 172,402
Adult $1,694,093 15,105

Total Other Expenditures/Recipients* $52,940,881 39,742

*Total Other Expenditures/Recipients includes foster care children, 1115 demonstration participants, other recipients, and unknown.
**2001 data on expenditures and number of recipients by maintenance assistance status and basis of eligibility are unavailable.
Source: CMS, MSIS Report, FY 2000 and Alabama Medicaid Statistical Information System, FY 2001.
Note: Alabama estimates 2002 drug expenditures to be approximately $451 million and the number of Medicaid drug recipients to be
505,000.

National Pharmaceutical Council Alabama-1


Pharmaceutical Benefits 2002

C. ADMINISTRATION Director required for appeal of prior authorization


decisions.
Alabama Medicaid Agency. Prescribing or Dispensing Limitations

D. PROVISIONS RELATING TO DRUGS Prescription Refill Limit: 30 day supply, maximum of five
Benefit Design refills.

Drug Benefit Product Coverage: Products covered: Drug Utilization Review


prescribed insulin, disposable needles used for insulin;
and syringe combinations for insulin (considered OTC). PRODUR system implemented in July 1996. State
Products covered as DME: blood glucose test strips; urine currently has a DUR Board with a quarterly review.
ketone test strips; total parenteral nutrition; and Pharmacy Payment and Patient Cost Sharing
interdialytic parenteral nutrition. Prior authorization
required for: Retin A, Accutane, Dipyridamole. Products Dispensing Fee: $5.40.
not covered: cosmetics; fertility drugs and experimental
drugs. Ingredient Reimbursement Basis: AWP-10%, WAC +
9.2%.
Over-the-Counter Product Coverage: Products covered if
prescribed by a physician: allergy, asthma and sinus Prescription Charge Formula: Medicaid pays for
products; analgesics; cough and cold preparations; prescribed legend and non-legend drugs authorized under
digestive products; prenatal vitamins; hemorrhoidal the program based upon and shall not exceed the lowest
products. Partial coverage for: topical products. Products of:
not covered: smoking deterrent products and feminine
products. 1. The Maximum Allowable Cost (MAC) of the drug
plus a dispensing fee,
Therapeutic Category Coverage: Therapeutic categories
covered: anabolic steroids; anoretics; antibiotics; 2. The Estimated Acquisition Cost (EAC) of the drug
anticoagulants; anticonvulsants; antidepressants; plus a dispensing fee, or
antidiabetic agents; antilipemic agents; anxiolytics, 3. The provider’s usual and customary charge to the
sedatives, and hypnotics; cardiac drugs; chemotherapy public for the drug.
agents; estrogens; hypotensive agents; misc. GI drugs;
sympathominetics (adrenergic) and thyroid agents. Partial Maximum Allowable Cost: State imposes Federal Upper
coverage for: anti-psychotics; prescribed cold Limits as well as state-specific limits on generic drugs.
medications; and contraceptives. Prior authorization Override requires “Dispense as Written” and “Brand
required for: analgesics, antipyretics, and (brand name) Medically Necessary.”
NSAIDs; antihistamine drugs (adult only); ENT anti-
inflammatory agents; growth hormones; and nutritional Incentive Fee: None.
supplements. Therapeutic categories not covered:
prescribed smoking deterrents. Patient Cost Sharing: Variable copayment.
Drug Ingredient Cost Copayment
Coverage of Injectables: Injectable medicines
$0.00 to $10.00 $0.50
reimbursable through the Prescription Drug Program
$10.01 to $25.00 $1.00
when used in physician offices, home health care, and
$25.01 to $50.00 $2.00
extended care facilities.
$50.01 or more $3.00
Vaccines: Vaccines reimbursable as part of the EPSDT Exemptions: No copayment amount is to be collected by
service and the Vaccines for Children Program. Adult the pharmacy or paid by the recipient for recipients under
vaccines are available through the Health Department. age 18, pregnant or living in nursing facilities.

Unit Dose: Unit dose packaging reimbursable. Cognitive Services: Clozaril care management fee of
$3.00.
Formulary/Prior Authorization

Formulary: Open formulary.


E. USE OF MANAGED CARE

Prior Authorization: State currently has a formal prior Does not use MCOs to deliver services to Medicaid
authorization procedure. Review by Medicaid’s Medical recipients.

2-Alabama National Pharmaceutical Council


Pharmaceutical Benefits 2002

F. STATE CONTACTS Roger Lander, Pharm.D. (Vice-chair)


School of Pharmacy
State Drug Program Administrator Samford University
Louise F. Jones 800 Lakeshore Drive
Alabama Medicaid Agency Birmingham, AL 35229
501 Dexter Avenue 205/726-2102
P.O. Box 5624
Montgomery, AL 36103-5624 Frank Skinner, R.Ph.
T: 334/242-5039 90 County Road 1310
F: 334/353-7014 Vinemont, AL 35179
E-mail: lljones@Medicaid.state.al.us 256/734-4933
Internet Address: www.medicaid.state.al.us
W. Thomas Geary, Jr., M.D. (Chair)
Prior Authorization Contact 2801-B Zelda Road
Louise F. Jones, 334/242-5039 Montgomery, AL 36106
334/395-5372
DUR Contact
Louise Jones, 334/242-5039 Steven Rostand, M.D.
University of Alabama Birmingham
Medicaid DUR Board Division of Nephrology
John Searcy, M.D. 2RB 606 1530 3rd Avenue South
Medical Director Birmingham, AL 35294
Alabama Medicaid Agency 205/934-2646
501 Dexter Avenue
Montgomery, AL 36130 Margaret Thrower, Pharm.D.
334/242-5619 Auburn University
105 Walker Building
Jimmy Jackson, R.Ph. Auburn University, AL 36849
1874 Cherokee Road 334/844-8287
Alexander City, AL 35010
256/234-2538 Rob Colburn, R.Ph.
909 McFarland Boulevard
Johnny Brooklere, R.Ph. Northport, AL 35476
3600 Main Street 205/339-5800
Adamsville, AL 35005
205/674-1400 Jefferson Underwood, III, M.D.
2171 Normandie Drive
John E. Brandon, M.D. Montgomery, AL 36111
Intersection Highway 82 and 86 334/288-7531
P.O. Box 390 Prescription Price Updating
Gordo, AL 35466
205/364-7135 Beverly R. Churchwell, Administrator
Alabama Medicaid Agency
Kathy B. Portner, M.D. 501 Dexter Avenue
251 Cox Street P.O. Box 5624
Suite 100 Montgomery, AL 36103-5424
Mobile, AL 36604 T: 334/242-5034
251/415-1566 F: 334/353-7014
E-mail: bchurchwell@medicaid.state.al.us
Richard Freeman, M.D.
411 B Opelika Road
Auburn, AL 36830
334/821-4766

National Pharmaceutical Council Alabama-3


Pharmaceutical Benefits 2002

Medicaid Drug Rebate Contacts 501 Dexter Avenue; P.O. Box 5624
Montgomery, AL 36103
Gladys Gray, Associate Director
334/242-5619
Alabama Medicaid Agency
501 Dexter Avenue Title XIX Medical Care Advisory Committee
P.O. Box 5624
Alabama State Government Representatives
Montgomery AL 36103-5624
Dr. Milissa Mauser-Galvin
T: 334/242-2327
Executive Director, Department of Senior Services
F: 334/353-7014
P.O. Box 301851
E-mail: ggray@medicaid.state.al.us
Montgomery, AL 36130-1851
Claims Submission Contact 334/242-5743
Keith Hollis
Bill Fuller, Commissioner
Account Manager, EDS
Alabama Department of Human Resources
301 Technacenter Dr.
50 Ripley Street, 2nd Floor
Montgomery, AL 36117
Montgomery, AL 36130
334/215-0111
334/242-1160
Medicaid Managed Care Contact
Kathy Sawyer, Commissioner
Kim Davis-Allen
Alabama Department of Health and Mental Retardation
Director, Managed Care
P.O. Box 301410
Alabama Medicaid Agency
Montgomery, AL 36130-1410
501 Dexter Avenue
334/242-3107
Montgomery, AL 36103-5624
334/242-5011
Donald Williamson, M.D.
Mail Order Pharmacy Program
State Health Officer
None P.O. Box 303017
Montgomery, AL 36130-3017
Disease Management Program/Initiative Contact 334/206-5200
Mary H. Finch
Associate Medical Director Steve Shivers
Alabama Medicaid Agency Alabama Department of Rehabilitation Services
501 Dexter Avenue 2129 East South Boulevard
Montgomery, AL 36103-5624 Montgomery, AL 36116-2455
334/242-5610 334/281-8780
Physician-Administered Drug Program Contact Medical Association of State of Alabama
Mary G. McIntyre, M.D. Marsha D. Raulerson, M.D.
334/242-5574 1205 Belleville Avenue
Brewton, AL 36426-1304
Alabama Medicaid Agency Officials 251/867-3609
Mike Lewis
Commissioner Wilburn Smith, Jr., M.D.
Alabama Medicaid Agency 2023 Normandie Drive
501 Dexter Avenue Montgomery, AL 36111
P.O. Box 5624 334/281-2633
Montgomery, AL 36103-5624
T: 334/242-5600 Cary J. Kuhlmann, Executive Director
F: 334/242-0556 Medical Association of the State of Alabama
E-mail: Almedicaid@medicaid.state.al.us P.O. Box 1900-C
Montgomery, AL 36104
334/263-6441

John Searcy, M.D. Alabama Nursing Home Association


Medical Director Mr. Louis E. Cottrell, Jr., Executive Director
Alabama Medicaid Agency 4156 Carmichael Road
Montgomery, AL 36106

4-Alabama National Pharmaceutical Council


Pharmaceutical Benefits 2002

334/271-6214 334/273-4404

Alabama State Medical Association Alabama Optometric Association


Roosevelt McCorvey, M.D. Amanda Jones, Executive Director
3088 Rosa L. Parks Avenue 400 South Union Street, Suite 435
Montgomery, AL 36105 Montgomery, AL 36104
334/262-0259 334/834-1057

J.A. Powell, M.D. Alabama Association of Home Health Agencies


2212 Mallard Lane SE Melane Golson
Decatur, AL 35602 Office of Executive Director
256/340-1068 P.O. Box 40
Montgomery, AL 36101
Alabama Chap. Am. Academy of Family Physicians 334/395-9949
Holly Midgley, Executive Vice President
P.O. Box 1900 Alabama Primary Health Care Association
19 South Jackson Street Al Fox, Executive Director
Montgomery, AL 36102-1900 6008 East Shirley Lane, Suite A
334/263-6441 Montgomery, AL 36117
334/271-7068
Alabama Pharmacy Association
William S. Eley, II, Executive Director Alabama Academy of Ophthalmology
1211 Carmichael Road Leigh Jones
Montgomery, AL 36106 P.O. Box 11455
334/271-4222 Montgomery, AL 36111-0455
334/269-9900
Page Dunlap
P.O. Box 354 Assisted Living Association of Alabama
Hartselle, AL 35640 Frank Holden, President
256/773-5421 400 S. Union Street, Suite 235
Montgomery, AL 36104
Alabama Chap. American Academy of Pediatrics 334/262-5523
Karin Scott, Executive Director
735 Montgomery Highway, Suite 323 Alabama Hospice Organization
Birmingham, AL 35216 David Stone, Executive Director
205/824-0888 P.O. Box 1835
Calera, AL 35040
Alabama Dietetic Association 205/668-0460
Gayle Mask
Alabama Department of Public Health Alabama State Nurses Association
RSA Tower, Suite 1300 Karen Pakkala, Executive Director
P.O. Box 303017 360 North Hill Street
Montgomery, AL 36130-3017 Montgomery, AL 36104-3658
334/206-2922 334/262-8321

Alabama Hospital Association Consumer Representatives


J. Michael Horsley, President Lawrence F. Gardella
East Station Senior Staff Attorney
P.O. Box 210759 Montgomery Regional Office
Montgomery, AL 36121 Legal Services Corporation of Alabama
334/272-8781 600 Bell Building, 207 Montgomery Street
Montgomery, AL 36104
334/832-4570

Jody Pigg, CEO Bill Chandler


Baptist Health Services General Director
P.O. Box 11010 Montgomery YMCAs
Montgomery, AL 36111-0010 P.O. Box 2336

National Pharmaceutical Council Alabama-5


Pharmaceutical Benefits 2002

Montgomery, AL 36102-2336 Jefferson Underwood, III, M.D. (Chair)


334/269-4362 2171 Normandie Drive
Montgomery, AL 36111
Teresa Easterling
334/288-7531
325 Spigener Road
Titus, AL 36080
W. Thomas Geary, Jr., M.D.
334/567-5020
2801-B Zelda Road
Montgomery, AL 36111-1103
Linda McWilliams
334/395-5372
Top of Alabama Regional Council of Governments
(TARCOG)
Rob Colburn, R.Ph.
115 Washington Street, SE
909 McFarland Blvd.
Huntsville, AL 35801
Northport, AL 35476
205/533-3330
205/339-5800
Rogene W. Parris
John Searcy, M.D.
2061 Fire Pink Court
Medical Director
Birmingham, AL 35244
Alabama Medicaid Agency
205/987-0338
501 Dexter Avenue
Montgomery, AL 36104
Louise Pittman
334/242-5619
3355 Lexington Road
Montgomery, AL 36106
Dane Yarbrough, R.Ph.
334/264-8780
8750 Ashford Circle
Pharmacy and Therapeutics Committee Tuscaloosa, AL 35406
205/391-3636
A. Z. Holloway, M.D.
2611 Woodley Park Drive Executive Officers of State Medical and
Montgomery, AL 36116 Pharmaceutical Societies
334/288-0009
Medical Association of the State of Alabama (MASA)
Cary Kuhlmann
Richard Freeman, M.D.
Executive Director
411 B Opelika Road
19 S. Jackson Street
Auburn, AL 36830
P.O. Box 1900
334/821-4766
Montgomery, AL 36102-1900
T: 334/954-2500
Ben Main, R.Ph.
F: 334/269-5200
302 North Prairie Street
E-mail: cary@masalink.org
Union Springs, AL 36089
Internet Address: www.masalink.org
334/738-2020
Alabama Osteopathic Medical Association
Gary Magouirk, M.D.
E. Jason Hatfield, D.O.
110 23rd Street NW
Secretary of Treasure
Fayette, AL 35555
P.O. Box 1857
205/932-3891
U.S. Highway 43
Winfield, AL 35594
Ray Thweatt, M.D.
T: 205/487-7556
University of Alabama Birmingham
F: 205/487-7559
433 CPM
Internet Address: www.aloma.org
1713 6th Avenue South
Birmingham, AL 35294-0018
Alabama State Medical Association
205/934-6737
Joel Powell, M.D., President
1408 5th Avenue, SE
Suite 1
Decatur, AL 35601
T: 256/340-9445
F: 256/350-0499
Alabama Pharmacy Association (APA)

6-Alabama National Pharmaceutical Council


Pharmaceutical Benefits 2002

William S. Eley, II
Executive Director
1211 Carmichael Way
Montgomery, AL 36106-3672
T: 334/271-4222
F: 334/271-5423
E-mail: aparx@aparx.org
Internet Address: www.aparx.org

State Board of Pharmacy


Jerry Moore
Executive Director
1 Perimeter Park South, Suite 425
Birmingham, AL 35243
T: 205/967-0130
F: 205/967-1009
E-mail: jmoore@albop.com
Internet Address: www.albop.com

Alabama Independent Drugstore Association (AIDA)


Sharon Taylor, Executive Director
400 Interstate Park Drive
Suite 401
Montgomery, AL 36109
T: 334/213-2432
F: 334/213-2406
E-mail: Sharon@aidarx.org
Internet Address: www.aidarx.org

Alabama Hospital Association


Michael Horsley
President CEO
500 North East Blvd.
Montgomery, AL 36117
T: 334/272-8781
F: 334/270-9527
E-mail: mhorsley@alaha.org
Internet Address: www.alaha.org

National Pharmaceutical Council Alabama-7


Pharmaceutical Benefits 2002

8-Alabama National Pharmaceutical Council


Pharmaceutical Benefits 2002

ALASKA

A. BENEFITS PROVIDED AND GROUPS ELIGIBLE


Type of Benefit Categorically Needy Medically Needy (MN) Other
Aged Blind/ Child Adult Aged Blind/ Child Adult SFO
Disabled Disabled

Prescribed Drugs    
Inpatient Hospital Care    
Outpatient Hospital Care    
Laboratory & X-ray Service    
Nursing Facility Services    
Physician Services    
Dental Services    

B. DRUG PAYMENTS AND RECIPIENTS


2000 2001**
Expended Recipients Expended Recipients

TOTAL $51,196,685 60,273 $64,923,574 65,278

RECEIVING CASH ASSISTANCE TOTAL $42,312,292 33,977 $52,946,651 33,640


Aged $7,815,093 4,574 $9,954,837 4,747
Blind/Disabled $26,292,009 8,385 $33,634,846 8,964
Child $1,717,322 10,368 $1,778,759 9,519
Adult $6,487,868 10,650 $7,578,209 10,410

MEDICALLY NEEDY, TOTAL $0 0 $0 0


Aged $0 0 $0 0
Blind/Disabled $0 0 $0 0
Child $0 0 $0 0
Adult $0 0 $0 0

POVERTY RELATED, TOTAL $3,540,104 20,691 $5,303,090 25,775


Aged $3,280 5 $6,244 8
Blind/Disabled $411 1 $368 2
Child $2,935,102 16,590 $4,319,775 20,919
Adult $601,311 4,095 $976,703 4,846

TOTAL OTHER EXPENDITURES/RECIPTENTS* $5,344,289 5,605 $6,673,833 5,863

*Total Expenditures/Recipients includes foster care children, 1115 demonstration participants, other recipients, and unknown.
**2001 data are preliminary and subject to change.
Source: CMS, MSIS Report, FY 2000 and FY 2001.

National Pharmaceutical Council Alaska-1


Pharmaceutical Benefits 2002

C. ADMINISTRATION for appealing coverage of an excluded product and PA


decision. Medical necessity form required.
Department of Health and Social Services, Division of
Medical Assistance. Prescribing or Dispensing Limitations

D. PROVISIONS RELATING TO DRUGS Monthly Quantity Limit: Prescriptions are limited to 30-day
supplies. Dispensing of generic multi-source product is
Benefit Design required. Maximum number of units for about 50
therapeutic classes and 40 narcotic analgesics.
Drug Benefit Product Coverage: Products covered:
cosmetics (covered with restrictions); prescribed insulin; Drug Utilization Review
disposable needles and syringe combinations used for
insulin; blood glucose test strips; urine ketone test strips; PRODUR system implemented in June 1995. State
and total parental nutrition. Prior authorization required for: currently has a DUR Board that meets nine times per year.
Clorazil; Lupron Depot; ADC infant vitamins; some DME; Pharmacy Payment and Patient Cost Sharing
Synagis; Pauretin; and Actig Naltrexone. Products not
covered: fertility drugs; experimental drugs; and intedialytic Dispensing Fee: No less than $3.45 and no more than the
parenteral nutrition. 90th percentile of all dispensing fees determined under the
formula:
Over-the Counter Product Coverage: Products covered
with restrictions: topical products (vasatrace ointment). 1) $23,192 added to the number resulting from
Products not covered: allergy, asthma, and sinus products; multiplying total prescriptions filled by that pharmacy
analgesics; cough and cold preparations, digestive products; in the previous calendar year by 5.070;
feminine products; and smoke deterrent products.
2) to 1), add the result of multiplying total Medicaid
Therapeutic Category Coverage: Categories covered: prescriptions filled in the previous calendar year by
anabolic steroids; antibiotics; anticoagulants; 12.44;
anticonvulsants; anti-depressants; antidiabetic agents;
antihistamine drugs; antilipemic agents; anti-psychotics; 3) from 2), subtract the result of multiplying the total floor
anxiolytics, sedatives, and hypnotics; cardiac drugs; space volume of the pharmacy in sq. ft. by 2.103;
chemotherapy agents; contraceptives; ENT anti-
inflammatory agents; estrogens; hypotensive agents; 4) divide 3) by total prescriptions filled by that pharmacy
miscellaneous GI drugs; sympathominetics (adrenergic);
and thyroid agents. Partial coverage for: anoretics; 5) add $0.73 to 4)
prescribed cold medications. Prior authorization required
for: analgesics, antipyretics, and NSAIDs; growth Ingredient Reimbursement Basis: EAC = AWP - 5%.
hormones. Categories not covered: amphetamines (except
for narcolepsy and hyperactivity); prescribed smoking Maximum Allowable Cost: State imposes Federal Upper
deterrents; cough suppressants; DESI drugs; vitamins Limits on generic drugs. Override requires “Brand
(except prenatal); and vitamins with fluoride. Medically Necessary” and the reason of necessity.
Coverage of Injectables: Injectable medicines reimbursable Incentive Fee: None.
through the Prescription Drug Program and through
physician payment when used in physician offices. No
Cognitive Services: Does not pay for cognitive services.
information provided on reimbursement for non-self-
administered injectable medicines in home health care or in
Patient Cost Sharing: $2.00 copayment for branded and
extended care facilities.
generic products.
Vaccines: Vaccines reimbursable at cost as part of EPSDT
services and the Vaccines for Children Program.
E. USE OF MANAGED CARE

Does not use MCOs to deliver services to Medicaid


Unit Dose: Unit dose packaging reimbursable.
recipients.
Formulary/Prior Authorization
F. STATE CONTACTS
Formulary: No formulary.
Medicaid Drug Program Administrator
Prior Authorization: State currently has a formal prior Dave Campana, R.Ph.
authorization procedure. Request for fair hearing required Pharmacy Program Manager

2-Alaska National Pharmaceutical Council


Pharmaceutical Benefits 2002

Division of Medical Assistance Disease Management Program/Initiative Contact


4501 Business Park Blvd., Suite 24
Teri Keklak
Anchorage, AK 99503
Health Policy Manager
T: 907/334-2425
Division of Medical Assistance
F: 907/561-1684
4501 Business Park Blvd, Suite 24
E-mail: david_campana@health.state.ak.us
Anchorage, AK 99503
Health and Social Services Department Officials T: 907/334-2424
F: 907/561-1684
Joel Gilbertson, Commissioner
E-mail: teri_keklak@health.state.ak.us
Department of Health and Social Services
P.O. Box 110601 Mail Order Pharmacy Benefit
Juneau, AK 99811-0601
Yes, for Medicaid recipients living in rural areas.
T: 907/465-3030
F: 907/465-3068 Physician-Administered Drug Program Contact
E-mail: joel_gilbertson@health.state.ak.us
Dave Campana, 907/334-2425
Alaska Medical Care Advisory Committee
Bob Labbe, Director
Division of Medical Assistance, DHSS Patty Hong, R.N., Chair
P.O. Box 110660 School of Nursing
Juneau, AK 99811-0660 University of Alaska Anchorage
T: 907/465-3355 3211 Providence Drive
F: 907/465-2204 Anchorage, AK 99508
E-mail: Blabbe@health.state.ak.us
Alaska DUR Committee
Jack Nielson, Director Dave Campana, R.Ph.
Division of Medical Assistance Anchorage, AK 99503
4501 Business Park Blvd., Suite 24
Anchorage, AK 99503 Richard Reem, M.D.
907/334-2400 Fairbanks, AK 99701-3639
Prior Authorization Contact
Heide Brainerd, P.H.
Dave Campana, 907/334-2425 Anchorage, AK
DUR Contact
Arthur Hansen, D.D.S.
Dave Campana, 907/334-2425 Fairbanks, AK 99712
Prescription Price Updating
Greg Polston, M.D.
Dave Campana, 907/334-2425 Fairbanks, AK.
Medicaid Drug Rebate Contact
Peter Yan
Accountant
Division of Medical Assistance
4501 Business Park Blvd., Suite 24
Anchorage, AK 99503 Executive Officers of State Medical and
T: 907/334-2409 Pharmaceutical Societies
F: 907/561-1684 Alaska State Medical Association
E-mail: peter_yan@health.state.ak.us Jim Jordan, Executive Director
Claims Submission Contact 4107 Laurel Street
Anchorage, AK 99508
Linda Walsh
T: 907/562-0304
Systems Administrator
F: 907/561-2063
Division of Medical Assistance
E-mail: asma@alaska.net
4501 Business Park Blvd, Suite 24
Anchorage, AK 99503
Alaska Osteopathic Medical Association
T: 907/334-2441
Cheryl Richards
F: 907/561-1684
Executive Secretary
E-mail: linda_walsh@health.state.ak.us

National Pharmaceutical Council Alaska-3


Pharmaceutical Benefits 2002

P.O. Box 3887


Palmer, AK 99645
907/745-8202
E-mail: akoma@mtaonline.net
Internet Address: www.nwosteo.org/alaska.html

Alaska Pharmaceutical Association


Nancy Davis, Executive Director
4107 Laurel Street
Anchorage, AK 99508-5334
T: 907/563-8880
F: 907/563-7880
E-mail: akphrmcy@alaska.net
Internet Address: www.alaskapharmacy.org

Alaska State Board of Pharmacy


Barbara Roche
Lic. Examiner
P.O. Box 110806
Juneau, AK 99811-0806
T: 907/465-2589
F: 907/465-2974
E-mail: barbara_roche@dced.state.ak.us
Internet Address: www.dced.state.ak.us/occ/ppha.htm

Alaska State Hospital and Nursing Home Association


Laraine L. Derr
President/CEO
426 Main Street
Juneau, AK 99801
T: 907/586-1790
F: 907/463-3573
E-mail: lderr@ashnha.com
Internet Address: www.ashnha.com

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Pharmaceutical Benefits 2002

ARIZONA
ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM
(AHCCCS - PRONOUNCED "ACCESS")
of primary care physicians was established to perform the
AHCCCS FEATURES gatekeeping function for the system.
The Arizona Health Care Cost-Containment System Prepaid Capitated Financing
(AHCCCS) is a Title XIX (Medicaid) demonstration
project, jointly funded by the federal government and the It was the intent of the AHCCCS legislation that health
State of Arizona. Begun in October 1982, it serves as a plans and their providers offer all covered services to
model for providing medical services to the indigent in a groups of members within a geographical area for a fixed
managed care system rather than through fee-for-service price, for a definite period. The law allowed for the
arrangements. Typically, Medicaid programs have establishment of a statewide bidding process to
incorporated the traditional hallmarks of the U.S. health accomplish this. Services are provided on a county-by-
care system: namely, independent providers and fee-for- county basis, by prepaid health plans. Providers may bid
service reimbursement. In contrast, organized health on a prepaid capitated basis for covered services to be
plans and capitation mark the AHCCCS model. provided within a particular county. The law allows for
expansion and contraction of bids to achieve the best
In traditional Medicaid programs, the States assume possible system. In the event there are insufficient bids
responsibility for contracting with individual pharmacies for a given area, the legislation permits capped fee-for-
and reimbursing them. In the AHCCCS model however, service arrangements. It is intended, however, that capped
the State contracts instead with pre-paid health plans, fee-for-service will be authorized as a last resort only.
HMOs and HMO-like entities. These plans are paid on a
capitation basis and are responsible for providing all of In essence, AHCCCS prepaid health plans (PHPs), health
the services covered by the program. Thus, the delivery maintenance organizations (HMOs), and other types of
of pharmacy services is the responsibility of each prepaid organized health delivery systems charge a fixed fee per
plan. individual enrolled (i.e., a capitation rate) and assume
responsibility for providing a broad array of health care
GENERAL INFORMATION services to members. The plan or contractor is then “at
risk” to deliver the necessary services within the capitated
The Arizona Health Care Cost Containment System amount. AHCCS receives federal, state, and county funds
(AHCCCS), developed in Senate Bill 1001, was passed by to operate, plus some monies from Arizona’s tobacco tax.
the Legislature and signed by the Governor in November Competitive Bidding Process
1981. It contained six major mechanisms for restraining
health care costs at the same time ensuring that The statewide competitive aspect of the bid process for
appropriate levels of quality health care services are selecting providers and offering prepaid capitated services
provided to eligible persons in a dignified fashion. The is the most unique feature of the AHCCCS model. A
goal of these 6 items was to contribute to the competition of this magnitude had never been attempted
establishment of health care financing that is less in any other State. The AHCCCS administration believes
expensive than conventional fee-for-service systems. The competitive bidding for health care service contracts, as
six mechanisms were: opposed to conventional negotiation processes, provides
• Primary Care Physicians Acting as Gatekeepers accessible cost-effective delivery of health care without
• Prepaid Capitated Financing sacrificing quality performance.
• Competitive Bidding Process
• Cost Sharing The AHCCCS administration issues an invitation to
• Limitations on Freedom-of-Choice qualified health plans once every five years. Qualified
health plans may bid to offer the full range of AHCCCS
• Capitation of the State by the Federal
services in one or more counties.
Government
Primary Care Physicians as Gatekeepers Cost Sharing

AHCCCS legislation provided that all members must be The fourth major device for containing costs in the
under the care and supervision of a primary care physician AHCCCS model is a provision for cost sharing by users.
who assumed the role of gatekeeper. A statewide network A statewide co-payment schedule was developed for this

National Pharmaceutical Council Arizona-1


Pharmaceutical Benefits 2002

purpose, and the medically needy participate in The second mode of participation is on a capped fee-for-
coinsurance cost sharing. It is expected that the service basis. Here, providers agree to accept capped fee
imposition of nominal co-payments will ensure optimal payments as payments in full for services provided on a
effectiveness in the area of service utilization. The co- FFS basis.
payment schedule accomplishes three objectives:
Functions of the AHCCCS Administration
curtailment of over-utilization; enhancement of patient
dignity; and service utilization by members for truly
The Arizona Health Care Containment System
needed health care. There is no co-payment for drugs and
Administration (AHCCCSA) contracts with full benefit
medication, prenatal care including all obstetrical visits,
capitated health plans to serve AHCCCS members
members in long care facilities and for visits scheduled by
through a network of providers.
the primary care physician or practitioner, and not at the
request of the member. Contracting Health Plans
Limitations On Freedom-of-Choice Under the Contracting Health Plan arrangement, plans are
defined in terms of explicit groups of providers organized
The fifth major item for containing costs is a restriction on as entities that are more formal. These consortia, or
provider/physician selection by AHCCCS members. formal entities, are capable of providing the full range of
Unlike conventional delivery models, Arizona does not AHCCCS benefits within a defined service area for all
rely on fee-for-service arrangements. The goal is to have AHCCCS members who elect to join the plans, up to a
the state completely blanketed with prepaid capitated predetermined capacity. This is the dominant mode of
arrangements. Members are linked to selected or assigned operation within AHCCCS -- with two or more competing
plans for definite durations of time. Freedom-of-choice is plans wherever possible.
permitted to the extent practicable for members to select
the particular group with which to enroll, as well as the The Contracting Health Plans are delivery systems, not
primary care physician within the selected group. Capped simply insurance plans, but they need not be Health
fee-for-service health service arrangements are used as a Maintenance Organizations by any legal or conventional
last resort, and only in areas not covered by prepaid definition of the term. The AHCCCS legislation provides
capitated plans. for the creation of provider consortia for the purpose of
participation in the program. The Contracting Health Plan
CAPITATION BY THE FEDERAL may be a loosely organized system, but it must be capable
GOVERNMENT of providing the full range of AHCCCS benefits to a
defined population at a capitation rate.
The State of Arizona will itself be capitated by the Federal
Government and therefore will be at financial risk for The Organizational Role of AHCCCS
containing health care costs. Capitation rates will be Administration
established according to sound actuarial principles, and
will represent no more than 95 percent of the estimated The AHCCCS Administration has been charged with the
cost of services delivered in Arizona under conventional general implementation and monitoring of the AHCCCS
fee-for-service arrangements. Capitation provides a key program.
incentive for the State to monitor health care costs on a
careful and continuous basis. The AHCCCS Administration develops the Rules and
Regulations; manages the health plan bidding processes;
awards the contracts; provides technical assistance to
IMPLEMENTATION OF AHCCCS
providers for the purpose of forming consortia to contract
with AHCCCS; and monitors the overall operation of the
AHCCCS is based on plans that have been tested, in part,
program.
on smaller scales in different areas of the country. By
combining a number of key mechanisms on a statewide The Operational Role of the AHCCCS
basis, AHCCCS represents a novel health care model. Administration
The purpose of this section is to present a discussion of
how the key concepts embodied in the AHCCCS Organizationally, the AHCCCS Administration assumes
legislation will be implemented and rendered operational. responsibility for the oversight of every day operations.
Provider Participation
The AHCCCS Administration has overall responsibility
for the following activity areas:
Providers may participate in AHCCCS in 2 different
ways. First, they may contract with prepaid capitated plans • Eligibility Oversight
as either full or partial benefit providers. • Procurement of Health Plans
• Quality Management

2-Arizona National Pharmaceutical Council


Pharmaceutical Benefits 2002

• Health Plan Oversight 928/448-3585


• Provider, Member Call Center
• Grievances and Complaints Health Choice Arizona
• Fee for Service for IHS Suite 260
1600 West Broadway
AHCCCS became effective December 1, 1981, and Tempe, AZ 85282-1136
services commenced October 1, 1982. Services include: 480/968-6866
inpatient, outpatient, laboratory, x-ray, prescription drugs,
medical supplies, prosthetic devices, emergency dental Maricopa Health Plan
care including extractions and dentures, treatment of eye 2502 East University Drive
conditions and EPSDT. Phoenix, AZ 85034
602/344-8700
Though AHCCCS was a three-year experiment that was to
end in October 1985, the Federal government continues to Mercy Care Plan
extend funding for the program. In 1988, AHCCCS Suite 400
received a five-year extension from the Federal 2800 North Central
government and in 1993, it received an additional one- Phoenix, AZ 85004
year extension. In 1994, AHCCCS received a three-year 602/263-3000
extension and in 1998, it received a one-year extension.
Since then, AHCCCS has received additional extensions. Phoenix Health Plan/Community Connection
Currently, AHCCCS is operating under a five year waiver 1209 South 7th Avenue
extension that will expire on September 30, 2006. Some Phoenix, AZ 85004
20 years after it first began, AHCCCS has grown in 602/824-3700
numbers from the first wave of 180,000 enrollees to move
than 800,000 beneficiaries, representing 16 percent of Pima Health System
Arizona’s population. AHCCCS has also become a model Suite A-200
as managed care is increasingly by being implemented in 5055 East Broadway
other states’ Medicaid programs. Tucson, AZ 85711
602/512-5500
MEDICAL PLANS AND ADMINISTRATORS
AHCCCS Contracted Health Plans University Family Care
575 East River Road
Arizona Physicians IPA, Inc. Tucson, AZ 85704
3141 North 3rd Avenue 888/708-2930
Phoenix, AZ 85013
602/264-1232 Phoenix Arizona Indian Health Services (IHS)
Two Renaissance Square
CIGNA Community Choice 40 N. Central Avenue
11001 North Black Canyon Highway Phoenix, AZ 85004-5036
Phoenix, AZ 85029 602/364-5038
602/371-2621
Phoenix Indian Medical Center
4212 North 16th Street
Phoenix, AZ 85016
602/263-1200

DES/CMDP Indian Health Services (IHS)


CMDP-942-C Southern Region
Century Plaza Building, 10th Floor 7900 J.J. Stock Road
3225 North Central Avenue Tucson, AZ 85746
Phoenix, AZ 85012 520/295-2406
602/351-2245
Navajo Area Indian Health Services (IHS)
Family Health Plan of NE Arizona P.O. Box 9020
258 Justin Drive Window Rock, AZ 86515-9020
P.O. Box 2069 928/871-5811
Cottonwood, AZ 86326

National Pharmaceutical Council Arizona-3


Pharmaceutical Benefits 2002

ALTCS Contractor List Phoenix, AZ 85034


T: 602/417-4680
Cochise Health Systems
F: 602/252-6536
Cochise County Health & Social Services
E-mail: PXBiedess@ahcccs.state.az.us
1415 West Melody Lane, Building A
Bisbee, AZ 85603
C.J. Hindman, M.D.
520/432-9481
Medical Director
DES/DDD
(Additional information about AHCCCS can be found on
1789 West Jefferson, 4th Floor
the agency’s website at www.ahcccs.state.az.us)
Phoenix, AZ 85034
602/542-6866 Executive Officers of State Medical and
Pharmaceutical Societies
Evercare Select
Arizona Medical Association, Inc.
Chic Older
Maricopa Managed Care Systems
Executive Vice President
2502 East University Drive
810 West Bethany Home Road
Phoenix, AZ 85034
Phoenix, AZ 85013
602/344-8700
T: 602/246-8901
F: 602/242-6283
Mercy Care Plan
E-mail: chicolder@azmedassn.org
Suite 400
Internet address: www.azmedassn.org
2800 North Central
Phoenix, AZ 85004
Arizona Pharmacy Association
602/263-3000
Kathy Boyle
Executive Director
Pima County LTC
1845 E. Southern Ave.
Pima Health System
Tempe, AZ 852-82-5831
Suite A-200, 5055 East Broadway
T: 480/838-3385
Tucson, AZ 85711
F: 480/838-3557
520/512-5500
E-mail: azpa@azpharmacy.org
Pinal/Gila County-LTC
Arizona Osteopathic Medical Association
P.O. Box 2140
Amanda Weaver
574 South Central Avenue
Executive Director
Florence, AZ 85232-2140
5150 N. 16th St., Suite A-122
520/868-6775
Phoenix, AZ 85016
T: 602/266-6699
Yavapai County LTC
F: 602/266-1393
Yavapai County Department of Medical Assistance
E-mail: mweaver@az-osteo.org
255 East Gurley Street, First Floor
Internet address: www.az-osteo.org
Prescott, AZ 86301
520/771-3560

Arizona Board of Pharmacy


Llyn. A. Lloyd
AHCCCS FFS (ALTCS)
Executive Director
Ventilator Dependent
4425 W. Olive Avenue, Suite 140
Office of Medical Management
Glendale, AZ 85302
602/417-4283
T: 623/463-2727
F: 623/934-0583
STATE CONTACTS E-mail: info@azsbp.com
AHCCCS Officials Internet address: www.pharmacy.state.az.us
Phyllis Biedess, Director Arizona Hospital and Healthcare Association
AHCCCS John R. Rivers, FACHE
801 E. Jefferson Street President/CEO

4-Arizona National Pharmaceutical Council


Pharmaceutical Benefits 2002

2901 North Central Avenue


Suite 900
Phoenix, AZ 85012
T: 602/445-4300
F: 602/445-4299
E-mail: jrivers@azha.org
Internet address: www.azha.org

National Pharmaceutical Council Arizona-5


Pharmaceutical Benefits 2002

6-Arizona National Pharmaceutical Council


Pharmaceutical Benefits 2002

1
ARKANSAS

A. BENEFITS PROVIDED AND GROUPS ELIGIBLE


Type of Benefit Categorically Needy Medically Needy (MN) Other
Aged Blind/ Child Adult Aged Blind/ Child Adult SFO
Disabled Disabled
Prescribed Drugs        
Inpatient Hospital Care        
Outpatient Hospital Care        
Laboratory & X-ray Service        
Nursing Facility Services        
Physician Services        
Dental Services        

B. EXPENDITURES FOR DRUGS


2000 2001**
Expended Recipients Expended Recipients
TOTAL $209,933,612 290,749 $248,392,084 321,920

RECEIVING CASH ASSISTANCE, TOTAL $125,221,968 111,942 $142,811,387 111,016


Aged $17,273,356 14,363 $18,083,097 13,278
Blind/Disabled $101,382,563 67,787 $117,036,376 68,665
Child $3,571,657 20,226 $4,248,875 19,495
Adult $2,994,392 9,566 $3,443,039 9,578

MEDICALLY NEEDY, TOTAL $7,336,056 16,317 $7,660,175 13,964


Aged $122,924 214 $130,249 203
Blind/Disabled $2,751,009 1,993 $2,721,983 2,036
Child $1,837,114 8,028 $1,664,186 5,912
Adult $2,625,009 6,082 $3,143,757 5,813

POVERTY RELATED, TOTAL $13,636,604 74,453 $21,594,533 100,643


Aged $511,191 470 $370,667 367
Blind/Disabled $887,917 582 $917,628 673
Child $11,290,143 63,157 $18,932,809 88,224
Adult $947,353 10,244 $1,373,429 11,379

TOTAL OTHER EXPENDITURES/RECIPIENTS* $63,738,984 88,037 $76,325,989 96,297

*Total Other Expenditures/Recipients includes foster care children, 1115 demonstration participants, other recipients, and unknown.
**2001 data are preliminary and subject to change.

Source: CMS, MSIS Report, FY 2000 and FY 2001.

1 The State of Arkansas did not respond to the 2002 NPC Survey. Using CMS data and other source materials, we have, to the extent
possible, updated the Profile and the tables in other sections of the Compilation. Users should contact the Arkansas Medicaid program to
assess the accuracy and currency of the information included.

National Pharmaceutical Council Arkansas-1


Pharmaceutical Benefits 2002

C. ADMINISTRATION Formulary/Prior Authorization


Department of Human Services, Division of Medical Formulary: Closed formulary. General exclusions
Services, Pharmacy Program. include:

D. PROVISIONS RELATING TO DRUGS 1. Agents used for hair growth.


Benefit Design 2. Vitamin products except prescription prenatal
vitamins.
Drug Benefit Product Coverage: Products covered:
3. Drugs determined by the FDA to be ineffective
prescribed insulin; disposable needles and syringe
(DESI drugs).
combinations used for insulin. Products not covered:
blood glucose test strips; urine ketone test strips; total 4. Sedatives and hypnotics in the benzodiazepine
parenteral nutrition, interdialytic parenteral nutrition; category (partial coverage).
cosmetics; fertility drugs; and experimental drugs. Prior
5. Compounded prescriptions (mixtures of two or more
authorization required for: nitroglycerin patches; agents
ingredients). States are not allowed to have state
for impotence; Synagis; Respigam; and Xenical-hyper
codes such as 99999-9999-99. All drugs reimbursed
lipidemia.
by the State must be traced by NDC code and appear
on the utilization report.
Over-the-Counter Product Coverage: Products covered:
digestive products (H2 antagonist). Limited coverage for: Prior Authorization: State currently has a prior
allergy, asthma and sinus products; analgesics; cough and authorization procedure.
cold preparations (under 21 years and long-term care
limited needs); digestive products (non-H2 antagonist); Prescribing or Dispensing Limitations
feminine products; topical products; and selected smoking
deterrent products (Zyban PA only). Prescription Refill Limit: 5 refills within 6 months are
allowed. New Rx required every 6 months.
Therapeutic Category Coverage: Therapeutic categories
covered: anabolic steroids; antibiotics; anticoagulants; Monthly Quantity Limit: 31-day supply.
anticonvulsants; anti-depressants; antidiabetic agents;
antilipemic agents; anti-psychotics; anxiolytics, sedatives, Monthly Prescription Limit: Three prescriptions per
and hypnotics; cardiac drugs; chemotherapy agents; month per recipient, except unlimited in certified LTC
contraceptives; ENT anti-inflammatory agents; estrogens; recipients and recipients under 21 years old. Others can
growth hormones; hypotensive agents; sympathominetics receive extension of three more per month.
(adrenergic); and thyroid agents. Prior authorization Drug Utilization Review
required for: analgesics, antipyretics, NSAIDs;
antihistamine drugs; misc. GI drugs; prescribed smoking PRODUR system implemented in March 1997. State
deterrents. Therapeutic categories not covered: currently has a DUR Board with a quarterly review.
anorectics.
Pharmacy Payment and Patient Cost Sharing
Coverage of Injectables: Injectable medicines are
reimbursable through the Prescription Drug Program Dispensing Fee: $5.51 effective 7/1/99.
when used in home health care, extended care facilities
and through physician payment when used in physicians Ingredient Reimbursement Basis: EAC = AWP–10.5%.
offices.
Prescription Charge Formula: Legend drugs: lower of the
Vaccines: Vaccines reimbursable as part of the Vaccines EAC plus a dispensing fee or CFA/state upper limit plus a
for Children Program. dispensing fee. Total charge may not exceed provider’s
charge to the self-paying public.
Unit Dose: Unit dose packaging reimbursable.
Maximum Allowable Costs: State imposes Federal Upper
Limits as well as state-specific limits on generic drugs.
State-specific MAC list contains 800 drugs. Override
requires “Brand Medically Necessary.” PA must be
obtained once the pharmacy obtains the BNM Rx.

Incentive Fee: None.

2-Arkansas National Pharmaceutical Council


Pharmaceutical Benefits 2002

Patient Cost Sharing: Effective 9/1/92, for each DUR Contact


prescription reimbursed, the Medicaid recipient is
Pamela Ford, P.D.
responsible for paying a copayment based on the
Division of Medical Services
following:
Dept. of Human Services
P.O. Box 1437 Slot S 415
Little Rock, AR 72203
T: 501/683-4120
State Payment Copay
F: 501/683-4124
E-mail: pamela.ford@medicaid.state.ar.us
$10.00 or less $0.50
DUR Board
$10.01 to $25.00 $1.00
Steve Bryant, P.D.
Bryant’s Pharmacy
$25.01 to $50.00 $2.00
2000 Harrison Street
Batesville, AR 72501
$50.01 or more $3.00
501/793-3999
ArKids $5.00 Jason B. Hawkins, P.D.
Services to individuals under 18, pregnant women, Benji Post, P.D.
nursing home residents, emergency services, family
planning services, and services provided by an HMO to its Debbie Hayes
enrollees are excluded from the Medicaid copay policy.
Ann Blaylock, A.P.N.
Cognitive Services: Does not pay for cognitive services.
Thomas Lewellen, D.O.
E. USE OF MANAGED CARE 105 West Waterman
Dumas, AR 71639
An estimated 400,000 Medicaid recipients are enrolled 870/382-1188
with Primary Care Physicians and ArKids.
Pharmaceutical benefits are provided through the State. Michael N. Moody, M.D.
P.O. Box 829
F. STATE CONTACTS Salem, AR 72576
501/895-2541
Medicaid Drug Program Administrator
Suzette Bridges, P.D., Administrator Laurence Miller, M.D.
Prescription Drug Program
Division of Medical Services Prescription Price Updating
Dept. of Human Services
First DataBank
P.O. Box 1437, Slot S 415
1111 Bay Hill Drive
Little Rock, AR 72203
San Bruno, CA 74066
T: 501/683-4120
650/588-5454
F: 501/683-4124
E-mail: suzette.bridges@medicaid.state.ar.us Medicaid Drug Rebate Contacts
Prior Authorization Contact
Audits: Suzette Bridges, P.D., 501/683-4120
Suzette Bridges, P.D.
501/683-4120 Dispute Resolution: Mary Alice Easterling
EDS
500 President Clinton Ave, Suite 400
Little Rock, AR 72201
T: 501/374-6608
F: 501/372-2971
E-mail: mary.easterling@mediciad.state.ar.us
Claims Submission Contact
John Herzog, Account Manager
EDS

National Pharmaceutical Council Arkansas-3


Pharmaceutical Benefits 2002

500 President Clinton Ave, Suite 400 F: 501/372-0546


Little Rock, AR 72201 E-mail: rbeck@arpharmacists.org
T: 501/374-8650 Internet address: www.arpharmacists.org
F: 501/372-2971
E-mail: john.herzog@medicaid.state.ar.us Arkansas State Board of Pharmacy
Charles S. Campbell
Medicaid Managed Care Contact
Executive Director
Bob Paladino 101 E. Capitol, Suite 218
Division of Medicaid Services Little Rock, AR 72201
Dept. of Human Services T: 501/682-0190
P.O. Box 1437 F: 501/682-0195
Little Rock, AR 72203 E-mail: charlie.campbell@mail.state.ar.us
T: 501/682-8334 Internet address: www.state.ar.us/asbp
F: 501/683-4124
E-mail: bob.paladino@medicaid.state.ar.us Arkansas Osteopathic Medical Association
Ed Bullington
Mail Order Pharmacy Benefit
Executive Director
None 412 Union Station
1400 West Markham
Department of Human Services Officials Little Rock, AR 72201
Kurt Knickrehm, Director T: 501/374-8900
Department of Human Services F: 501/374-8959
P.O. Box 1437, Slot 329 E-mail: osteomed@ipa.net
Little Rock, AR 72203-1437 Internet address: www.arkosteomed.org
T: 501/682-8292
F: 501/682-6836 Arkansas Medical Society
E-mail: kurt.knickrehm@state.ar.us Ken LaMastus
Executive Vice President
Ray Hanley, Director P.O. Box 55088
Division of Medical Services Little Rock, AR 72215
P.O. Box 1437, Slot 1100 T: 501/224-8967
Little Rock, AR 72203-1437 F: 501/224-6489
T: 501/682-8292 E-mail: klamastus@arkmed.org
F: 501/682-1197 Internet address: www.arkmed.org
E-mail: ray.hanley@medicaid.state.ar.us

Executive Officers of State Medical and


Pharmaceutical Societies
Arkansas Hospital Association
James R. Teeter
419 Natural Resources Drive
Little Rock, AR 72205
T: 501/224-7878
F: 501/224-0519
E-mail: aha@arkhospital.org
Internet address: www.arkhospitals.org

Arkansas Pharmacists Association


Richard E. Beck, P.D., C.A.E.
Executive Vice President and CEO
417 S. Victory Street
Little Rock, AR 72201-2932
T: 501/372-5250

4-Arkansas National Pharmaceutical Council


Pharmaceutical Benefits 2002

CALIFORNIA

A. BENEFITS PROVIDED AND GROUPS ELIGIBLE


Type of Benefit Categorically Needy Medically Needy (MN) Other
Aged Blind/ Child Adult Aged Blind/ Child Adult SFO
Disabled Disabled
Prescribed Drugs        
Inpatient Hospital Care        
Outpatient Hospital Care        
Laboratory & X-ray Service        
Nursing Facility Services        
Physician Services        
Dental Services        
Note: Certain classifications of aliens in the above categories are eligible only for emergency and pregnancy-related benefits.

B. EXPENDITURES FOR DRUGS


2000 2001**
Expenditures Recipients Expenditures Recipients

TOTAL $2,316,135,493 2,487,875 $2,808,298,437 2,486,910

RECEIVING ASSISTANCE, TOTAL $1,770,765,371 1,301,543 $2,143,413,178 1,334,480


Aged $389,560,223 260,790 $479,791,420 266,911
Blind/Disabled $1,284,923,008 572,336 $1,547,024,854 579,572
Children $32,410,720 288,397 $39,100,804 299,830
Adult $63,871,420 180,020 $77,496,100 188,167

MEDICALLY NEEDY, TOTAL $373,918,597 320,922 $423,154,155 279,326


Aged $156,177,417 112,375 $198,544,758 120,346
Blind/Disabled $187,650,486 58,626 $198,371,267 53,459
Children $12,528,551 99,463 $11,503,750 68,297
Adults $17,562,143 50,458 $14,734,380 37,224

POVERTY RELATED, TOTAL $20,626,801 157,404 $54,387,618 103,247


Aged $3,087,289 3,281 $14,257,426 11,923
Disabled $3,156,657 1,617 $32,358,484 10,485
Children $12,175,851 119,040 $5,572,729 51,243
Adults $2,207,004 33,466 $2,198,979 29,596

TOTAL OTHER EXPENDITURES/RECIPIENTS* $150,824,724 708,006 $187,343,486 769,857

*Total Other Expenditures/ Recipients include foster care children, demonstration participants, other recipients, and unknown.
**2001 data are preliminary and subject to change.

Source: CMS, MSIS Report, FY 2000 and FY 2001.

National Pharmaceutical Council California-1


Pharmaceutical Benefits 2002

C. ADMINISTRATION Manufacturers Manufacturers frequently petition Medi-


Cal to add drugs to the list of contract drugs. Based on
Under the Health and Human Services Agency with direct Medi-Cal’s five criteria (safety, efficacy, misuse potential,
administration by the Department of Health Services. essential need, and cost), a drug may be added to the list
on contractual agreement by the manufacturer to provide
The Department of Health Services Pharmaceutical Unit the State a negotiated rebate. The Medi-Cal website at:
of the Medi-Cal Policy Division monitors the full scope http://www.dhs.ca.gov/mcs/mcpd/MBB/contracting/html/f
and quality of pharmaceutical benefits covered under the aqpage.htm has details of how the drug contracting
provisions of the California Medical Assistance Program. process works.

D. PROVISIONS RELATING TO DRUGS Examples of general limitations and exclusions (other


uses require prior authorization):
Benefit Design
1. CNS stimulants, i.e., amphetamines and
Drug Benefit Product Coverage: The Medi-Cal pharmacy methylphenidate, are restricted to attention deficit
benefit covers practically all FDA-approved drugs, disorder in individuals between 4 and 16 years of age.
including both legend and over-the-counter products.
2. Diazepam is restricted to use in cerebral palsy,
There are very few drugs or classes of drugs that are non-
athetoid states, and spinal cord degeneration.
benefits. Non-benefits include common household
remedies; non-legend analgesics and cough/cold 3. Most non-steroidal anti-inflammatory agents are
medications, except when specifically listed; multivitamin restricted to use for arthritis.
preparations except certain pre-natal and pediatric
4. Many antibiotics have diagnostic and/or age
products; cosmetics, fertility drugs, and experimental
restrictions.
drugs. Most other products are potential benefits.
5. Acyclovir capsules are restricted to herpes genitalis,
In general, products that are listed on the Medi-Cal List of immunocompromised patients and herpes zoster
Contract Drugs do not require prior authorization. Those (shingles).
not on the List of Contract Drugs requires prior
6. Codeine Combinations: payment to a pharmacy for
authorization.
ASA or APAP with codeine 30 mg is limited to a
maximum dispensing quantity of 45 tablets or
Physician-administered drugs: The Medi-Cal List of
capsules and a maximum of 3 claims for the same
Contract Drugs applies to drugs dispensed from
beneficiary in any 75-day period.
pharmacies to patients. Drugs administered directly in a
physician's, dentist's, or podiatrist's office are not bound 7. Enteral nutritional supplements or replacements are
by the List of Contract Drugs. covered, subject to prior authorization, if used as a
therapeutic regimen to prevent serious disability or
Coverage of Injectables: Injectable medicines death in patients with medically diagnosed conditions
reimbursable through the Prescription Drug Program that preclude the full use of regular foodstuffs.
when used in home health care and extended care facilities
8. Cancer, AIDS, and DESI Drugs: Any antineoplastic
and through physician payment when used in physician
drug approved by FDA for the treatment of cancer
offices.
and any drug approved by FDA for the treatment of
AIDS or AIDS-related condition is covered through
Vaccines