Pharmaceutical Benefits Under State Medical Assistance Programs, 2004

Pharmaceutical Benefits
Under State Medical

Assistance Programs
2004
Published by the
National Pharmaceutical Council, Inc.
1894 Preston White Drive
Reston, VA 20191-5433
©2005 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 Total Compensation Solutions 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, Stanley Weintraub, C.P.A, Daniel B. Gurley, M.P.A.,
Jaclyn S. Kuwada, M.P.P, Steven Heath, M.P.A., Errica Philpott, Liz Segall, and Tiffany Crawford of
Muse & Associates. Paul Gavejian and Matthew Leach of Total Compensation Solutions prepared
and conducted the 2004 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 Westrich of the National Pharmaceutical Council
provided valuable input and support.
National Pharmaceutical Council Pharmaceutical Benefits 2004
TABLE OF CONTENTS
INTRODUCTION......................................................................................................................................v
SECTION 1: ESTIMATES OF MEDICAID EXPENDITURES AND RECIPIENTS:

FY 2003 TO FY 2005 BY STATE ................................................................................ 1-1
SECTION 2: THE MEDICAID PROGRAM ..................................................................................... 2-1
Medicaid Program Overview.................................................................................................... 2-3

- Total Medicaid Eligibles by Maintenance Assistance Status, 2002........................ 2-11
- Total Medicaid Eligibles by Age Group, 2002........................................................ 2-12
- Total Medicaid Eligibles by Gender, 2002.............................................................. 2-13
- Total Medicaid Eligibles by Race/Ethnicity 2002................................................... 2-14
- Total Medicaid Eligibles by Basis of Eligibility, 2002 ........................................... 2-15
- Total Medicaid Eligibles by per 1000 Population, 2002 ........................................ 2-16
- Total Net U.S. Medical Assistance Expenditures by Type of Service ................... 2-17
- Federal Medical Assistance Percentages (FMAP), FY 2005 and FY 2006 ........... 2-18
- Medicaid Total Net Expenditures and Eligibles, 2002 ........................................... 2-19
- Total Medicaid Program Expenditures, 2003 ......................................................... 2-20
- Total SCHIP Enrollment, 2003 .............................................................................. 2-21
- Total SCHIP Expenditures, 2003 ........................................................................... 2-22
- Total Medicaid/Medicare Dual Eligibles by Dual Eligibility Type, 2002 .............. 2-23
- Total Medicaid Medical Vendor Payments and Dual Eligibility Status, 2002 ....... 2-25
Medicaid Managed Care Enrollment ................................................................................... 2-27

- Medicaid Managed Care Enrollment, As of June 30, 2004..................................... 2-29
- Pharmaceutical Benefits Under Managed Care Plans ............................................ 2-30
- Medicaid Managed Care Enrollment Trends, 2000-2004 ....................................... 2-31
- Medicaid Managed Care Plan Type, As of June 30, 2004 ...................................... 2-32
- Medicaid Managed Enrollment by Plan Type, As of June 30, 2004....................... 2-33
- Medicaid Managed Care Enrollment by Payment Arrangement,
As of June 30, 2004.. ............................................................................................... 2-34
Medicaid Managed Care Waivers.......................................................................................... 2-35

- Section 1915(b) Waivers, As of June 30, 2003 ....................................................... 2-39
- Section 1115 Research and Demonstration Waivers, As of June 30, 2003............. 2-41
- Pharmacy Plus Demonstrations Program Status, Pharmacy Waivers
Under 1115 Authority.............................................................................................. 2-42
i
SECTION 3: STATE CHARACTERISTICS ……………………………………………………….3-1
Sociodemographics
- Age Demographics, 2003 .......................................................................................... 3-5
- Race Demographics, 2003 ......................................................................................... 3-6
- Hispanic Demographics, 2003 .................................................................................. 3-7
- Insurance Status-Populations, 2003 .......................................................................... 3-8
- Insurance Status-Percentages, 2003 ........................................................................ 3-9
- Poverty Status-Populations, 2003............................................................................ 3-10
- Poverty Status-Percentages, 2003............................................................................ 3-11
- Employment Status, 2004........................................................................................ 3-12
Health Care Delivery System

− Medicaid/Medicare Certified Facilities, 2004 ......................................................... 3-13
− Licensed Pharmacies, As of June 30, 2004.............................................................. 3-14
− Physicians, 2001 ...................................................................................................... 3-16
− Other Providers, 2001/2004 .................................................................................... 3-17
SECTION 4: PHARMACY PROGRAM CHARACTERISTICS..................................................... 4-1
Medicaid Drug Program ........................................................................................................... 4-3

− Drug Expenditures Trends ......................................................................................... 4-5
− Ranking Based on Drug Expenditures....................................................................... 4-6
− Drugs as a Percentage of Total Net Expenditures, 2003 ........................................... 4-7
− Drugs as a Percentage of Total Net Expenditures, 2001-2003 .................................. 4-8
− Share of Drug Expenditures by Category, 2003 ........................................................ 4-9
− Share of Prescriptions Processed, 2003 ................................................................... 4-11
− Medicaid Average Cost per Prescription, 2003 ....................................................... 4-13
Medicaid Drug Rebates ........................................................................................................... 4-15

− Medicaid Drug Rebates, 2003 ................................................................................. 4-17
− Medicaid Drug Rebate Trends, 1999-2003.............................................................. 4-18
− Medicaid Drug Rebate Trends, Annual Percent Change, 1998-2003...................... 4-19
− Rebates as a Percent of Drug Expenditures, 2003 ................................................... 4-20
Medicaid Drug Coverage ........................................................................................................ 4-21

− Pharmacy Advisory Committees ............................................................................. 4-23
− Pharmacy Benefit Design – Coverage ..................................................................... 4-24
− Coverage of Injectables ........................................................................................... 4-27
− Coverage of Vaccines and Unit Dose ...................................................................... 4-28
− Coverage of Over-the-Counter Medications............................................................ 4-29
− Prior Authorization Process and Procedures ........................................................... 4-31
− Prior Authorization .................................................................................................. 4-34
− Drug Utilization Review.......................................................................................... 4-37
− Prescribing/Dispensing Limits................................................................................. 4-38
ii
Pharmacy Payment and Patient Cost Sharing...................................................................... 4-39

− Pharmacy Payment and Patient Cost Sharing.......................................................... 4-41
− Maximum Allowable Cost (MAC) Programs.......................................................... 4-42
− Mandatory Substitution............................................................................................ 4-43
− Counseling Requirements and Payment for Cognitive Services ............................. 4-44
− Prescription Price Updating ..................................................................................... 4-45
SECTION 5: STATE PHARMACY PROGRAM PROFILES ......................................................... 5-1
SECTION 6: STATE PHARMACY ASSISTANCE PROGRAMS .................................................. 6-1
APPENDIXES
Appendix A: State and Federal Medicaid Contacts.................................................................... A-1
Appendix B: Medicaid Program Statistics – CMS MSIS Tables ................................................B-1
Appendix C: Medicaid Rebate Law.............................................................................................C-1
Appendix D: Federal Upper Limits for Multiple Source Products............................................. D-1
Appendix E: Glossary ..................................................................................................................E-1
iii
iv
INTRODUCTION
The 2004 edition of Pharmaceutical Benefits under State Medical Assistance Programs marks the 39th
year that the National Pharmaceutical Council (NPC) has compiled and published one of the largest
sources of information on pharmacy programs within the State Medical Assistance Programs (Title
XIX) and expanded pharmacy programs for the elderly and disabled. Due to the hard work of a skilled
team and countless contributors, the “Medicaid Compilation” has become a standard reference and
invaluable resource in government offices, research libraries, consultancies, the pharmaceutical
industry, numerous businesses, and policy organizations.
The data used to create each edition of the Compilation are assembled from numerous sources. The
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
organizations.
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: Presents estimates of Medicaid expenditures and recipients for FY 2003 to FY
2005 by State.
• 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 2003.
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 2004
NPC annual survey of State pharmacy program administrators. In addition, this section
provides Medicaid eligibility statistics from CMS for fiscal year 2002 and program
expenditure data for fiscal years 2002 and 2003. 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.
• 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 2001 and FY 2002 and data on total
number of drug recipients for each State and the nation as a whole for the period 1996-2002.
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.
v
Each year, finding and compiling current, relevant information for inclusion in the Compilation
presents a challenge. This year was no exception. For example, CMS makes available on its website
the Medicaid Statistical Information System (MSIS) Statistical Reports for the most recent enrollment
and expenditure data available. MSIS tables are used in several sections of the Compilation as a
secondary data source. This year, CMS released MSIS reports on Federal Fiscal Year 2002.
However, the 2002 MSIS data have been reformatted to appear more like the older Health Care
Financing Administration (HCFA) 2082 reports. Hence, we requested, and CMS provided, a special
version of the 2002 MSIS Report in original MSIS format. This enabled us to compile 2002 data on
pharmaceutical expenditures and recipients for inclusion in each State profile. Also, CMS has yet to
release an update of The CMS 64-Report, a major data source used throughout the Compilation.
However, we were fortunate to obtain a pre-release version of the 2003 CMS 64-Report and thank
CMS for making it available to us.
For the past several years, the Health Resources and Services Administration’s (HRSA) Area
Resource File (ARF) has served as the primary source for statistics on physicians and registered
nurses. Unfortunately, HRSA was not able to obtain updated physician information for the 2004
version of the ARF. Therefore, we have repeated last year’s data on physicians and registered nurses.
As we continue to update and discover data, we are able to improve the Compilation with new tables
and sources that we believe enhance its overall significance to the user. These new tables and sources
include:
• Data on Medicaid eligibles by gender and race/ethnicity;

• Total SCHIP enrollment by State;
• Information on the number of Medicaid/Medicare dual eligibles and Medicaid medical vendor
payments for dual eligibles by State.
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 a 94 percent response rate to
the 2004 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, Total 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
vi
Section 1:
Estimates of Medicaid
Total and Prescription
Drug Expenditures and
Recipients: FY 2003
Through FY 2005 by State
1-1
1-2
BACKGROUND AND PURPOSE
The Centers for Medicare and Medicaid Services (CMS) are responsible for publishing data on the
Medicaid program. The most recent State-by-State statistics on recipients and expenditures for the
Medicaid program, as of the date of preparation of this publication, were for 2002.1 Based on the best
available data from states and CMS, the section provides more recent estimates through 2005 of
Medicaid spending and recipients of prescription drugs. Estimates are presented for each State and for
the nation overall.
OBJECTIVES OF THIS SECTION
The objective of this Section is to estimate total Medicaid expenditures and recipients for FY 2003,
FY 2004, and FY 2005 in the aggregate and by State.2 This will provide interested parties with
estimates of trends more current than estimates available through CMS. The Office of the Actuary at
CMS publishes aggregate estimates of Medicaid expenditures in the National Health Accounts.3 The
Congressional Budget Office (CBO) also publishes aggregate estimates of Medicaid expenditures and
recipients.4 Neither of these organizations has published estimates of State-by-State spending through
FY 2005 in recent years.5 However, these previous estimates document the importance and feasibility
of this chapter’s goals. The aggregate estimates presented in this Section are numerically very similar
in all but one instance, projections of 2005 recipients, to those of CMS and CBO.
SUMMARY
The analysis presented in this Section is based on State reports to CMS. Table 1 contains aggregate
data on total expenditures and number of recipients by fiscal year. Estimates by Muse & Associates
are indicated by the bolded text. All other data are State actual, or estimated by the authors.
Table 1
Total Program Expenditures and Recipients by Source
By Fiscal Year: FY 2000 through FY 2005
Fiscal Expenditures Percent Recipients Percent

Year ($ billions) Increase (millions) Increase
2000 $195.2 NA** 42.9 NA**
2001 $215.8 11% 46.2 8%
2002 $245.7 14% 49.8 8%
2003 $259.9 6% 53.4 7%
2004 $289.8* 12% 57.5 8%
2005 $316.2* 9% 62.0 8%
Source: CMS, State data reported to CMS (CMS-37, 64 and MSIS Reports) and Office of the Actuary, National Health Expenditures
Estimates. The 2003-2005 recipient estimates were generated by Muse & Associates.
*CMS, Office of the Actuary, January 2005.
**Not Applicable
1
The most recent estimates can be found at www.cms.hhs.gov/medicaid/msis/mstats.asp.
2
FY stands for Federal Fiscal Year. Federal Fiscal Years are from October 1 to September 30. For example, FY 2003 is
from October 1, 2002 to September 30, 2003.
3
These can be found at www.cms.hhs.gov/statistics/nhe.
4
http://www.cbo.gov/factsheets/2005/Medicaid.pdf
5
Katherine R. Levit, et al, State Health Expenditures Accounts: Building Blocks for State Health Spending Analysis, Health
Care Financing Review, Fall 1995, Vol. 17, No. 1.
1-3
The methodology used for developing the 2003-2005 recipient estimates employed the cube root of
the change over a four year period for each state with outliers trimmed. The trimming procedures are
described later in the paper. The estimation technique we employed is commonly used in statistical
and actuarial estimates and simply means that the fifth point in a curve is estimated by using the rate
of change for the preceding four years. Table 1 shows that expenditures have risen between 6 percent
and 14 percent per year while the number of recipients has increased between 7 percent and 8 percent
per year. We estimate that the accuracy of these estimates is between plus or minus 2.2 percent by
using the methodology to estimate preceding years where the actual data were already available.
DATA
The analysis presented in this Section is based on State data submitted to CMS. We assume that the
States are in the best position to predict the future of their programs. Actual expenditure and recipient
data for FY 2000 through FY 2002 were available from the Medicaid Statistical Information System
(MSIS). Aggregate expenditure data for FY 2003 were available from State reports known as the
CMS-64s. Expenditure estimates for FY 2004 and FY 2005 were compiled from State reports known
as CMS-37s. Aggregate data by type of service and recipient estimates by State were prepared by
Muse & Associates. Each of these sources is discussed below.
MSIS Data
MSIS files are used by CMS to produce data on Medicaid program characteristics and utilization
information by State. The MSIS system collects, manages, analyzes, and disseminates information on
eligibles, beneficiaries, utilization, and payment for services covered by each State Medicaid program.
These data provide CMS with a large-scale database of State eligibles and services for many types of
analyses. States provide CMS with quarterly computer files containing specified data elements for:
(1) eligible persons who received services covered by Medicaid (recipient files); and (2) adjudicated
claims (paid claims files) for medical services reimbursed with Title XIX funds. These data are
furnished on the Federal fiscal year quarterly schedule, which begins October 1 of each year.
Each State recipient file contains one record for each person covered by Medicaid for at least one day
during the reporting quarter. Individual recipient records consist of demographic and monthly
enrollment data. Paid claims files contain information from adjudicated medical service related claims
and capitation payments. Each State submits to CMS four types of claims files representing inpatient,
long-term care, prescription drugs, and non-institutional services. These are claims that have
completed the State's payment processing cycle for which the State has determined it has a liability to
reimburse the provider from Title XIX funds. Claims records contain information on the types of
services provided, providers of services, service dates, costs, types of reimbursement, and
epidemiological variables.
The data files are subjected to quality assurance edits to ensure that the data are within acceptable error
tolerances. A distributional review verifies the reasonableness of the data. Once accepted, valid tape
files are created which serve as the historical source of detailed Medicaid eligibility and paid claims
data maintained by CMS. The individual paid claims and eligible information are used for program
analysis and research and to produce various public use reports that represent national Medicaid
populations and expenditures. After processing, CMS creates the tables and publishes the data. The
MSIS system was our primary source for expenditure and recipient data for FY 2000 through FY
2002.
1-4
CMS-37s and 64s
The primary source of data for our estimates for FY 2003 through FY 2005 is the CMS-37 Report, a
financial reporting form submitted by the States to CMS. This form is submitted on a quarterly basis
and requires the States to project their expenditures for two fiscal years. The single State agency must
attest to the accuracy of the estimates. The data in the CMS-37s are used by CMS to set the amount
the State may withdraw from the Federal Reserve for Federal Medicaid matching.
The data on this form have known strengths and weaknesses. As with all State submitted data, some
States appear to provide more accurate data than others. Not surprisingly, the States are clearly more
accurate at predicting the present year, at this writing FY 2005, than they are at predicting the
following year, FY 2006. States have, as of this writing, yet to adjust their FY 2006 Medicaid
prescription drug expenditures for the implementation of the Medicare Modernization Act (MMA)
which will transfer the fiscal responsibility for those recipients eligible for both Medicare and
Medicaid to the Federal government. The limitations of the data led us not to attempt to estimate FY
2006.
A third source of data was the CMS-64s, another fiscal reporting form submitted by the States which
contains details of their past expenditures. These reports contain expenditures, reversals,
disallowances, third-party collections and a variety of other adjustments. However, they represent the
most current statement of State-by-State expenditures available for FY 2003. Hence, they were used
for FY 2003 expenditure estimates.
It must be noted that while the data from the three sources (the MSIS, CMS-37, and CMS-64) are
highly correlated, they are not identical. The data do not match for a variety of reasons. Some are
prospective and some are retrospective, some contain adjustments and other do not. Table 2 compares
the three sources at the aggregate expenditure level.
Table 2
Total Program Expenditures by Source
By Fiscal Year: FY 2000 through FY 2005
($ billions)
Fiscal Year 37s 64s MSIS

2000 $168.3 $195.2 $168.3
2001 $185.8 $215.8 $185.8
2002 $213.5 $245.7 $213.5
2003 $268.5 $259.9 N/A**
2004* $290.7 N/A** N/A**
2005* $315.7 N/A** N/A**
Source: State data reported to CMS, CMS-37, 64, and MSIS Reports
* CMS 37s as of May 2004.
** N/A is not available
Table 2 clearly shows that the data reported on the CMS-64 reports are higher, until 2003, compared
to the other two data sets. The primary reason for this is that the MSIS reports do not contain
Disproportionate Share (DSH) payments to providers, while the other two reports do contain DSH
data.
1-5
METHODOLOGY
Muse & Associates has accumulated Medicaid data from the CMS-37, CMS-64, MSIS, and the
forerunner to the MSIS, the HCFA 2082, for more than two decades. To create the estimates, we
explored two methodological approaches. The first approach was regression based. Several different
types of regressions were considered, including log-based approaches. The problem we encountered
with regression analysis was that the regression model was over specified.6 This is primarily due to
the fact that the number of States being estimated (fifty-one) is much larger than the small number of
years (three) of data selected for use.7 Five years was selected because of the cyclical nature of the
Medicaid program. CMS published an analysis that clearly shows the trend in drug spending between
the first and second half of the 1990s.8 Their observations and our own analysis show that the
optimum period that State trends appear stable is four years. The regression approach did not yield
results with statistically significant predictability as measured by R2, a measure of the predictive ability
of the regression model. Hence, this approach was abandoned.
The approach that yielded more stable and predictive results was employing the cube root of the
change over a four year period for each state with outliers trimmed.. However, several States had very
significant programmatic changes in recent years that required data trimming. A total of four States
required trimming.9 Outliers were defined as changes of more than 20 percent from year to year for
year to year increase. These were trimmed to 20 percent. Two States, Tennessee and New Mexico
presented special problems. The statistical portions of their data processing systems had considerable
problems over the last five years. The estimates for these States were developed through direct
conversations with State Medicaid officials.
Factors Leading to Year-to-Year Variation in State Estimates
The CMS-37 and CMS-64 reports from States often show significant swings for both total program
and prescription drugs expenditures. State expenditures for Medicaid can have significant swings in
spending for a variety of reasons. For example, all of the Medicaid data systems are on a cash basis
rather than an accrual basis. States often have cash flow concerns that require that they pay claims on
one side or the other at the end of the State fiscal year. Many States have the same Fiscal Year as the
Federal government, which can result in FY data showing decreases followed by substantial increases
in expenditures. In addition, States may incur large settlements with CMS and/or providers in a
particular year. These, and a variety of other factors, lead to real swings in the expenditure data.
DISCUSSION
Presented on the pages that follow are tables showing national and State-level data on Medicaid
expenditures and recipients, including our estimates for the most recent fiscal years. Table 3 shows
national-level data from the CMS-64s for expenditures by type of service for the period FY 2000
through FY 2005. Similarly, Table 4 presents national-level MSIS data on the number of Medicaid
recipients by type of service. Tables 5 through 8 provide national and State-level information on total
6
In non-statistical terms, a regression model becomes over specified when the number of points being estimates
exceeds the number of data points available for the analysis.
7
The District of Columbia was included in the analysis but Puerto Rico and the Trust Territories were excluded.
8
David Baugh, M.A, Penelope I. Pine, Steve Blackwell, Ph.D., J.D. R.Ph. and Gary Ciborowski, M.A..
Medicaid Prescription Drug Spending in the 1990s: A Decade of Change, Health Care Financing Review, Spring
2004, Volume 25, Number 3, page 5 to 23.
9
The States were Connecticut, Delaware, and Nevada. The District of Columbia also required trimming
1-6
Medicaid expenditures, number of recipients, recipients of prescription drugs, and Medicaid program
payments for prescription drugs.
Tables 3 & 4
Table 3 shows the distribution of Medicaid expenditures by service category from the CMS-64s and
the National Health Expenditures Accounts for the period FY 2000 through FY 2005. The data show
that total Medicaid program expenditures have or are expected to increase annually by 6 to 14 percent
per year between FY 2000 and FY 2005, or at an average annual increase of approximately 10 percent
per year. Our estimates indicate that total Medicaid program expenditures will exceed $316 billion in
FY 2005. The data from the CMS-64s indicate that pharmaceuticals are the third highest Medicaid
program expenditure category in each fiscal year, exceeded only by nursing facility expenditures and
payments for inpatient acute care hospital services. For FY 2005, we estimate that Medicaid program
expenditures for pharmaceutical will be $44.3 billion.
Table 4 presents national-level data from the MSIS system on the number of Medicaid recipients by
type of service. Between FY 2000 and FY 2005, the number of Medicaid recipients has or is expected
to increase at annual rates of between 6.4 percent and 7.8 percent, or at an average annual rate of about
seven percent. In FY 2005, it is estimated that 62 million beneficiaries will receive medical services
through the Medicaid program. Aside from capitated payment services (i.e., per capita payments to
managed care organizations), the service category with the highest number of recipients is
pharmaceuticals. It is estimated that 29.9 million Medicaid beneficiaries will receive pharmaceutical
services during FY 2005.
Tables 5 & 6
Presented in Tables 5 and 6 are data on total Medicaid expenditures and number of Medicaid
recipients on a State-by-State basis for the period FY 2000 to FY 2005. The data source for the
expenditures distributions in Table 5 is the CMS-37s. Based on State data submitted to CMS in their
quarterly CMS-37 submissions, Medicaid program expenditures for FY 2005 are expected to total
$315.7 billion, similar to the $316.2 billion FY 2005 estimate derived from the CMS-64s. Also shown
in Table 5 are year-by-year data on total Medicaid expenditures by State for the period. A review of
the State-by-State data indicates that in most States, Medicaid program spending has increased from
one year to the next. There are few instances over the entire period where total Medicaid program
spending has declined from one year to the next.
The MSIS system was the primary source for data on the distribution Medicaid recipients by State
(Table 6). CMS has released MSIS data through FY 2002. FY 2003, FY 2004, and FY 2005 are
estimates, based on the cubed root of change over a 4 year period methodology discussed above. As
shown in Table 6, the total number of Medicaid recipients, like the expenditure data in Table 5, has
increased or is estimated to increase each year between FY 2005 and FY 2006. Likewise, with few
exceptions, the number of Medicaid recipients has increased each year in each State over the period.
Tables 7 & 8
Tables 7 and 8 present MSIS data on State-by-State prescription drug payments and the number of
drug recipients for the period FY 2000-FY 2005. As shown in Table 7, Medicaid program payments
for prescription drugs have more than doubled over the period, from approximately $20 billion in FY
2000 to an estimated $44.3 billion in FY 2005. Few states experienced any declines in prescription
drug payments between one year and the next.
The total number of Medicaid recipients receiving prescription drug services has increased by slightly
more than 50 percent between FY 2000 and FY 2005 (Table 8). For FY 2005, it is estimated that 29.8
1-7
million beneficiaries will receive prescription drug services under the Medicaid program. Most States
are expected to experience increases in the number of Medicaid prescription drug recipients over the
period. However, in a small number of States, including Kansas and Massachusetts, the number of
Medicaid prescription drug recipients are expected to remain relatively constant or even decline
slightly between FY 2000 and FY 2005.
How Good are the Estimates?
One way to ascertain whether an estimation methodology is accurate is to apply it to earlier years
where the estimated year is known. We chose this methodology as way to address the question of the
probable accuracy of our estimates. We applied the final estimation method to the years FY 1999 to
FY 2002. Specifically, we used FY 1999, FY 2000, and FY 2001 data to predict FY 2002, a year in
which we had actual values for aggregate and State-by-State data. The results were that the actual
aggregate totals were within 0.3 percent of the estimated totals. The State-by-State estimates were less
accurate but still within what we judge as acceptable limits. Forty-two States were within plus or
minus five percent. Seven States were within plus or minus twenty percent, and two States exceeded
twenty percent.
Despite these limitations and the variations inherent in the use of different data systems, we believe
that our estimates provide useful information on Medicaid program expenditures and recipients that is
more up to date than that which is currently available from CMS.
1-8
Table 3
Medicaid Expenditures, by Type of Service: In dollars by Fiscal Year
Se rvice FY 2000* FY 2001* FY 2002* FY 2003* FY 2004** FY 2005**

Nursing Facility $39,607,169,035 $43,317,811,704 $47,466,264,432 $44,345,682,144 $46,047,973,158 $46,995,743,244
Inpatient Acute Care Hospital $36,650,532,554 $39,586,413,122 $43,690,502,629 $45,839,127,080 $49,388,028,311 $53,167,576,794
Pharmaceuticals $20,551,215,451 $24,656,812,921 $29,339,050,970 $33,794,520,738 $39,601,058,000 $44,308,084,000
HCBS Waivers $12,628,550,113 $14,864,788,473 $17,169,137,673 $19,302,698,045 $22,235,122,443 $25,429,224,889
ICF-Mentally Retarded $10,184,590,576 $10,686,809,919 $11,205,483,449 $11,614,424,195 $12,134,327,720 $12,659,161,248
Hospital Outpatient $7,055,207,899 $7,709,540,429 $9,245,799,624 $9,394,646,018 $10,335,637,983 $11,396,554,078
Inpatient Mental Health Hospital $7,331,896,067 $6,862,423,184 $7,559,242,098 $7,299,165,193 $7,288,287,404 $7,436,036,077
Clinic $5,863,580,557 $6,689,968,278 $7,499,886,627 $7,582,867,230 $8,261,463,159 $8,863,418,884
Physicians $5,892,807,109 $6,670,379,109 $7,446,842,170 $7,863,653,436 $8,657,484,947 $9,443,626,907
Personal Care Services $4,566,864,434 $5,251,140,806 $6,037,450,986 $7,881,552,380 $9,453,870,484 $11,500,806,850
Home Health Care $2,311,780,853 $2,613,356,673 $2,766,480,497 $2,886,980,643 $3,108,920,442 $3,294,174,359
Dental $1,795,228,321 $2,193,475,415 $2,630,870,620 $3,015,702,590 $3,584,908,827 $4,222,729,183
Other Practitioners $1,030,135,204 $1,141,272,064 $1,413,870,565 $1,438,109,885 $1,607,279,303 $1,801,601,525
EPSDT $829,205,382 $935,836,328 $1,007,637,056 $1,079,836,415 $1,179,206,654 $1,273,659,272
Lab/X-ray $612,378,794 $660,398,684 $781,820,930 $856,521,207 $957,879,281 $1,084,290,467
Other $38,245,755,438 $41,969,472,522 $50,437,280,350 $55,700,409,296 $65,958,551,884 $73,323,312,221
Total Expenditures*** $195,156,897,787 $215,809,899,631 $245,697,620,676 $259,895,896,495 $289,800,000,000 $316,200,000,000

Percent Change from Year to
Year 11% 14% 6% 12% 9%
*Source: CMS-64 Reports

**Source: CMS, Office of the Actuary, National Health Expenditures Estimates, January 2005 and Muse & Associates Estimat
***T otals may not add due to rounding
Table 4
Medicaid Recipients, by Type of Service and Fiscal Year
Se rvice FY 1999* FY 2000* FY 2001* FY 2002* FY 2003** FY 2004** FY 2005**

Capitated Payment Services 20,678,898 21,292,179 23,355,569 25,863,748 27,866,311 30,481,238 33,310,411
Pharmaceuticals 19,428,344 20,324,675 21,910,532 24,424,493 26,027,090 27,929,225 29,946,171
Physicians 18,052,586 18,965,002 20,021,029 22,102,682 23,645,409 25,449,435 27,568,220
Hospital Outpatient 12,323,540 13,169,841 13,731,009 14,861,211 15,818,323 16,814,621 17,989,342
Lab/X-ray 10,103,678 11,438,835 12,339,065 14,067,422 15,708,192 17,459,869 19,601,707
Other Care^ 8,781,097 9,232,630 9,897,625 11,195,848 12,140,216 13,300,258 14,676,970
Clinic 6,660,804 7,677,662 8,463,753 9,498,844 10,691,832 11,939,693 13,390,698
Dental 5,577,468 5,922,244 7,018,692 7,885,538 8,850,397 10,118,626 11,430,801
PCCM Services 3,962,942 5,649,174 6,377,864 7,177,583 8,749,134 10,122,593 11,807,662
Hospital Inpatient 4,479,391 4,912,833 4,879,194 5,051,356 5,257,803 5,378,094 5,555,483
Other Practitioners 3,945,721 4,758,086 5,102,653 5,570,691 6,249,376 6,843,917 7,547,579
Personal Support Services 4,061,799 4,558,732 4,977,823 5,688,386 6,364,231 7,112,898 8,011,532
Nursing Facility 1,624,163 1,705,947 1,702,251 1,765,700 1,815,569 1,853,653 1,907,056
Home Health Care 808,751 1,007,025 1,013,796 1,065,050 1,167,405 1,226,353 1,306,684
ICF-Mentally Retarded 121,318 118,857 116,610 117,497 116,250 115,394 114,992
Mental Health Facility 96,904 99,521 91,209 99,403 100,250 100,495 103,795
Total Unduplicated Recipients*** 40,300,394 42,886,999 46,163,776 49,754,619 53,446,822 57,546,074 61,991,626
Percent Change from Year to Year 6% 8% 8% 7% 8% 8%
*Source: CMS Medicaid Statistical Information System

** Source Muse & Asscoiates Estimates
*** Since any recipient can get any number of different typess of service, the unduplicated total is not a sum.
^ includes sterilizations and unknown care
1-9
Table 5
Total Medicaid Expenditures in thousands of dollars by Fiscal Year by State
S tate FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005
National Total $168,307,231 $185,786,851 $213,491,313 $268,496,116 $290,680,584 $315,701,965
Alabama $2,391,195 $2,950,096 $3,204,064 $3,603,097 $3,445,986 $3,850,214
Alaska $470,250 $557,399 $686,795 $774,755 $909,840 $942,281
Arizona $2,111,770 $2,453,184 $2,881,870 $4,253,304 $5,135,647 $5,772,557
Arkansas $1,510,080 $1,684,718 $2,015,437 $2,394,653 $2,762,943 $2,989,172
California $17,060,494 $19,824,989 $23,636,240 $29,897,092 $32,173,749 $36,362,263
Colorado $1,808,569 $1,952,709 $2,166,200 $2,597,187 $2,703,792 $2,902,011
Connecticut $2,839,310 $2,962,088 $3,245,143 $3,691,626 $3,866,361 $4,103,564
Delaware $528,340 $601,182 $651,385 $737,360 $752,775 $855,737
District of Columbia $792,584 $830,258 $1,027,022 $1,072,802 $1,165,242 $1,241,190
Florida $7,350,363 $8,398,160 $9,827,004 $11,041,401 $12,340,063 $13,790,043
Georgia $3,577,903 $3,815,267 $4,796,005 $7,055,152 $7,045,377 $7,154,685
Hawaii $535,163 $535,163 $695,279 $759,731 $846,973 $1,026,277
Idaho $593,751 $713,433 $791,864 $853,256 $905,311 $1,058,487
Illinois $7,807,447 $8,150,021 $9,121,713 $8,954,270 $10,073,437 $11,400,358
Indiana $2,976,177 $3,355,996 $3,725,258 $4,584,428 $4,699,660 $5,563,225
Iowa $1,476,340 $1,660,864 $1,855,817 $2,360,040 $2,196,622 $2,448,931
Kansas $1,226,211 $1,370,248 $1,501,270 $1,789,086 $1,754,285 $2,096,225
Kentucky $2,912,792 $3,235,073 $3,459,366 $3,864,583 $4,075,918 $4,464,305
Louisiana $2,630,563 $2,881,578 $3,234,422 $4,858,435 $4,633,523 $4,990,753
M aine $1,306,809 $1,457,466 $1,716,582 $1,680,703 $1,916,751 $2,072,414
M aryland $3,585,781 $3,855,003 $3,662,090 $4,359,399 $4,494,121 $4,708,992
M assachusetts $5,397,153 $5,765,108 $6,387,100 $8,632,074 $8,987,848 $9,968,515
M ichigan $4,880,769 $5,316,249 $5,918,817 $8,150,661 $8,507,062 $8,850,936
M innesota $3,277,014 $3,766,605 $4,439,494 $5,117,771 $5,225,883 $5,719,244
M ississippi $1,807,392 $2,180,662 $2,499,641 $3,028,552 $3,280,007 $3,658,914
M issouri $3,270,152 $3,626,213 $4,071,544 $5,578,991 $5,966,126 $6,744,680
M ontana $433,208 $482,543 $532,886 $519,065 $601,474 $700,806
Nebraska $958,490 $1,089,788 $1,255,040 $1,351,142 $1,354,239 $1,424,542
Nevada $515,444 $565,300 $723,957 $989,559 $1,053,794 $1,160,591
New Hampshire $650,594 $691,196 $745,754 $1,014,956 $1,180,678 $1,272,117
New Jersey $4,706,929 $5,011,795 $5,497,284 $8,358,844 $7,883,350 $8,416,526
New M exico $1,248,764 $1,476,538 $1,796,901 $2,030,060 $2,230,879 $2,416,959
New York $26,147,613 $27,497,918 $31,488,930 $40,551,353 $49,425,404 $49,312,629
North Carolina $4,830,026 $5,499,094 $6,041,011 $7,139,629 $7,613,812 $8,901,127
North Dakota $356,185 $374,197 $422,745 $463,348 $496,642 $535,293
Ohio $7,090,396 $7,772,738 $9,186,331 $10,601,589 $12,030,919 $12,595,864
Oklahoma $1,603,789 $2,004,799 $2,238,213 $2,402,648 $2,720,199 $2,860,078
Oregon $1,700,409 $1,878,673 $2,136,401 $2,757,488 $2,535,181 $3,057,873
Pennsylvania $6,365,806 $7,634,325 $8,523,928 $13,168,602 $14,422,482 $16,466,731
Rhode Island $1,069,994 $1,095,853 $1,251,440 $1,472,595 $1,533,600 $1,771,549
South Carolina $2,672,146 $3,096,854 $3,382,951 $3,766,709 $3,576,207 $4,097,262
South Dakota $401,175 $426,634 $503,947 $546,789 $579,726 $666,494
Tennessee $3,490,957 $4,059,332 $4,747,550 $6,639,519 $6,735,962 $7,837,560
Texas $9,075,306 $9,644,600 $11,121,020 $15,289,859 $16,621,374 $17,735,949
Utah $959,100 $1,059,730 $1,215,620 $1,123,620 $1,258,360 $1,428,054
Vermont $479,259 $541,283 $607,250 $713,582 $766,279 $862,161
Virginia $2,483,931 $2,715,962 $3,017,870 $3,706,653 $4,156,487 $4,723,322
Washington $2,432,050 $2,432,050 $4,373,171 $5,180,773 $5,304,530 $5,762,663
West Virginia $1,391,731 $1,565,009 $1,577,698 $1,873,502 $1,912,439 $2,157,688
Wisconsin $2,905,599 $3,029,723 $3,605,542 $4,806,489 $4,478,875 $4,403,336
Wyoming $213,958 $241,187 $280,452 $337,334 $342,390 $398,818
* Data from CM S-37 reports filed with CM S by the States.

1-10
Table 6
Total Unduplicated Medicaid Recipients by State by Fiscal Year
State FY 2000* FY 2001* FY 2002* FY 2003** FY 2004** FY 2005**
National Total 42,886,999 46,163,776 49,754,619 53,446,822 57,546,074 61,991,626
Alabama 619,480 882,105 765,328 836,803 925,028 939,796
Alaska 96,432 105,464 109,641 119,836 128,838 137,728
Arizona 681,258 763,422 878,362 976,625 1,101,200 1,244,229
Arkansas 489,325 531,533 579,278 622,674 674,759 730,614
California 7,918,151 8,583,027 9,301,001 10,323,828 11,278,372 12,353,265
Colorado 381,018 393,160 425,878 450,793 476,784 508,439
Connecticut 419,968 685,246 479,051 502,652 533,685 533,685
Delaware 115,267 122,947 167,162 193,885 230,582 276,698
District of Columbia 138,677 140,719 193,494 218,982 255,002 306,002
Florida 2,372,585 2,471,771 2,676,235 2,833,382 3,006,073 3,208,707
Georgia 1,369,006 1,514,398 1,637,329 1,777,775 1,939,549 2,106,303
Hawaii 194,376 191,533 199,966 198,658 200,106 203,048
Idaho 131,077 157,121 176,499 200,665 231,270 263,077
Illinois 1,519,313 1,657,954 1,731,398 1,834,859 1,953,984 2,063,973
Indiana 706,476 777,418 849,427 940,652 1,034,840 1,138,359
Iowa 313,648 319,740 352,635 368,428 388,738 414,900
Kansas 262,557 272,783 289,349 296,359 308,567 321,509
Kentucky 763,587 806,578 808,294 847,565 877,563 902,586
Louisiana 761,252 804,996 898,824 966,003 1,045,831 1,141,171
Maine 193,582 251,511 275,826 316,222 372,421 424,483
Maryland 625,863 656,307 692,539 732,052 771,312 813,962
Massachusetts 1,059,612 1,054,916 1,065,636 1,073,987 1,078,821 1,086,909
Michigan 1,351,852 1,352,610 1,449,915 1,490,027 1,539,155 1,606,888
Minnesota 558,089 600,686 620,652 641,859 672,488 698,281
Mississippi 605,078 707,911 712,457 794,881 870,561 932,694
Missouri 890,338 978,656 1,036,150 1,128,728 1,221,614 1,315,332
Montana 104,354 108,409 103,617 106,048 106,619 106,029
Nebraska 229,379 243,421 255,771 270,822 286,238 302,123
Nevada 138,076 153,777 202,306 231,948 275,728 330,873
New Hampshire 96,935 97,062 104,138 108,072 112,062 117,561
New Jersey 821,579 881,468 954,491 1,002,879 1,071,803 1,143,978
New Mexico 375,585 385,180 798,665 958,398 1,150,078 1,380,093
New York 3,419,983 3,590,999 3,920,718 4,180,420 4,469,771 4,808,120
North Carolina 1,214,174 1,309,810 1,355,269 1,424,834 1,502,884 1,573,372
North Dakota 63,165 63,566 70,132 73,108 76,759 81,739
Ohio 1,304,886 1,498,322 1,656,124 1,805,943 2,012,556 2,220,558
Oklahoma 507,060 589,363 631,498 699,125 778,132 853,644
Oregon 557,809 582,112 621,462 649,472 683,258 720,739
Pennsylvania 1,492,352 1,557,801 1,627,261 1,652,312 1,709,355 1,763,081
Rhode Island 178,859 188,228 199,014 213,572 226,581 241,029
South Carolina 689,159 760,805 809,136 871,535 942,482 1,012,216
South Dakota 102,039 109,516 117,631 130,669 141,898 154,694
T ennessee 1,568,318 1,602,027 1,732,381 1,797,473 1,881,071 1,984,497
T exas 2,633,498 2,659,932 2,952,569 3,113,488 3,292,193 3,534,736
Utah 224,732 232,997 274,707 294,790 322,698 359,703
Vermont 139,351 149,763 153,731 161,978 170,309 177,766
Virginia 626,996 619,727 665,203 680,602 699,471 728,271
Washington 895,567 957,731 1,039,070 1,105,389 1,185,735 1,273,217
West Virginia 342,189 349,229 362,030 367,825 376,790 386,452
Wisconsin 576,636 637,069 716,298 793,773 883,002 984,509
Wyoming 46,451 50,950 59,071 64,164 71,459 79,989
*Source: Data from M edicaid Statistical Information System 2000 to 2002.

** Source: M use and Associates Estimates
1-11
Table 7
Medicaid Prescription Drug Payments, Before Rebates are Deducted
in thousands of dollars by State by Fiscal Year
S tate FY 2000* FY 2001* FY 2002* FY 2003** FY 2004*** FY 2005***
National Total $19,898,312 $23,764,447 $28,408,182 $33,794,521 $39,601,058 $44,308,084

Alabama $331,577 $392,483 $454,370 $536,223 $605,511 $605,879
Alaska $53,404 $66,768 $83,324 $69,512 $116,150 $121,760
Arizona $1,953 $4,668 $4,339 $4,744 $5,548 $6,267
Arkansas $209,933 $248,391 $279,645 $310,709 $387,052 $434,360
California $2,316,407 $2,808,442 $3,402,508 $4,219,505 $4,750,190 $5,317,841
Colorado $153,250 $178,063 $202,286 $225,298 $257,798 $295,078
Connecticut $264,645 $304,481 $356,980 $403,802 $398,722 $472,331
Delaware $66,264 $81,623 $100,113 $109,845 $93,525 $111,529
District of Columbia $55,095 $62,296 $68,051 $81,763 $124,842 $134,209
Florida $1,368,714 $1,490,096 $1,736,992 $2,018,037 $2,429,764 $2,674,708
Georgia $586,864 $702,719 $749,552 $1,073,715 $1,193,822 $1,218,423
Hawaii $58,839 $71,232 $81,454 $97,386 $110,648 $125,751
Idaho $83,568 $105,497 $121,781 $132,143 $149,492 $170,886
Illinois $846,986 $934,231 $1,222,947 $1,469,191 $1,961,260 $2,056,659
Indiana $464,985 $562,127 $636,358 $627,575 $731,105 $824,891
Iowa $194,212 $231,010 $277,754 $331,222 $378,817 $430,892
Kansas $167,632 $189,946 $220,801 $228,921 $270,542 $304,050
Kentucky $465,788 $599,970 $661,410 $685,230 $800,000 $887,357
Louisiana $477,852 $556,393 $682,557 $827,713 $881,272 $978,547
M aine $176,215 $204,015 $250,332 $268,548 $258,764 $253,115
M aryland $222,250 $267,760 $320,314 $429,589 $495,397 $524,293
M assachusetts $682,873 $796,341 $952,791 $946,211 $1,024,485 $1,001,318
M ichigan $374,353 $604,782 $674,898 $758,267 $864,623 $999,294
M innesota $221,522 $265,098 $294,839 $276,731 $413,889 $420,785
M ississippi $370,355 $494,809 $568,084 $568,007 $772,523 $750,000
M issouri $602,457 $682,958 $799,910 $941,522 $1,102,434 $1,292,349
M ontana $59,250 $69,742 $77,981 $79,772 $90,075 $103,011
Nebraska $135,402 $161,820 $196,526 $210,200 $234,619 $253,346
Nevada $51,683 $63,364 $90,135 $106,821 $127,271 $149,591
New Hampshire $80,560 $90,928 $98,837 $112,949 $124,977 $145,276
New Jersey $585,892 $649,650 $686,302 $766,996 $1,074,306 $1,143,626
New M exico $57,504 $70,202 $92,674 $86,408 $99,646 $113,460
New York $2,366,916 $2,782,394 $3,413,405 $4,218,812 $4,942,274 $5,602,883
North Carolina $794,630 $971,104 $1,069,141 $1,291,263 $1,567,559 $1,493,467
North Dakota $38,079 $43,288 $51,750 $56,960 $60,718 $68,164
Ohio $882,955 $1,118,120 $1,330,569 $1,520,147 $1,804,931 $2,087,450
Oklahoma $178,254 $216,827 $267,549 $301,294 $274,858 $486,920
Oregon $163,523 $222,392 $269,937 $262,335 $214,588 $238,388
Pennsylvania $533,534 $690,559 $719,243 $791,054 $904,875 $1,100,066
Rhode Island $89,482 $104,918 $126,331 $140,687 $160,000 $186,000
South Carolina $334,746 $438,502 $456,977 $558,129 $624,704 $571,057
South Dakota $44,651 $52,611 $63,655 $71,223 $83,503 $94,589
Tennessee $0 $0 $573,588 $1,280,130 $1,793,149 $2,536,901
Texas $1,125,248 $1,327,255 $1,591,828 $1,920,866 $2,202,804 $2,554,080
Utah $101,145 $117,478 $140,520 $163,218 $192,000 $233,000
Vermont $92,391 $105,994 $115,624 $127,764 $147,557 $181,165
Virginia $381,391 $419,148 $453,663 $506,414 $595,258 $672,205
Washington $389,977 $464,083 $549,216 $592,437 $659,706 $711,718
West Virginia $216,077 $256,395 $274,613 $345,831 $388,383 $446,874
Wisconsin $349,560 $389,374 $455,721 $592,295 $601,206 $676,921
Wyoming $27,466 $32,100 $38,009 $49,106 $53,916 $55,354
*Source: Data from M edicaid Statistical Information System.

**FY 2003 Data from CM S-64 Report.
***FY 2004 andFY 2005 are M use & Associates estimates.
1-12
Table 8
Medicaid Recipients Receiving Prescription Drugs by State by Fiscal Year
S tate FY 1999* FY 2000* FY 2001* FY 2002* FY 2003** FY 2004** FY 2005**

National Total 19,428,344 20,324,675 21,910,532 24,424,493 26,027,090 27,929,225 29,946,171
Alabama 405,330 438,529 464,695 500,789 537,366 575,035 617,357
Alaska 52,070 60,273 65,278 70,550 78,067 85,097 92,960
Arizona 5,545 7,034 9,761 7,805 8,747 9,406 9,291
Arkansas 280,552 290,749 321,920 356,233 385,752 423,875 464,587
California 2,252,441 2,491,537 2,489,050 2,651,229 2,799,273 2,910,077 3,065,689
Colorado 151,537 160,265 143,167 153,520 154,187 152,212 155,353
Connecticut 108,754 113,101 116,785 123,704 129,131 134,964 141,632
Delaware 73,093 78,167 85,350 125,461 150,217 186,761 242,463
District of Columbia 37,862 38,129 35,324 45,216 47,972 51,788 58,833
Florida 991,927 1,078,631 1,165,866 1,245,841 1,344,178 1,446,499 1,554,324
Georgia 843,353 882,309 978,404 1,076,904 1,168,332 1,282,965 1,404,258
Hawaii 35,837 37,316 39,288 39,320 40,555 41,696 42,530
Idaho 81,980 92,776 112,357 125,537 144,697 167,804 191,809
Illinois 966,790 1,013,387 1,068,687 1,199,933 1,289,531 1,397,390 1,528,058
Indiana 361,661 420,071 464,975 490,386 542,771 591,173 640,437
Iowa 213,144 212,178 221,690 245,711 257,637 274,860 295,279
Kansas 153,054 158,334 158,515 157,618 159,169 159,449 159,761
Kentucky 366,051 425,721 476,774 489,416 539,167 583,342 623,917
Louisiana 551,698 581,356 628,574 689,973 743,377 806,860 876,890
M aine 143,548 149,262 194,288 224,664 260,843 314,187 368,782
M aryland 159,779 163,410 171,747 181,101 188,823 198,144 207,815
M assachusetts 671,741 671,716 671,756 659,626 655,636 650,363 643,384
M ichigan 436,848 435,723 551,680 577,785 634,227 718,770 785,038
M innesota 184,075 179,879 187,854 190,577 192,795 197,303 200,557
M ississippi 375,573 415,925 478,409 526,923 589,881 662,747 738,807
M issouri 412,597 447,068 472,645 493,230 523,469 551,734 580,935
M ontana 59,182 58,918 63,352 67,365 70,337 74,615 78,798
Nebraska 155,136 166,031 178,634 194,889 210,287 227,520 246,626
Nevada 48,534 51,170 58,699 71,950 82,040 96,020 113,137
New Hampshire 71,039 73,313 73,489 78,861 81,655 84,642 88,724
New Jersey 301,022 299,356 305,962 296,059 294,423 292,797 288,535
New M exico 55,018 67,239 75,892 122,098 146,518 175,821 210,985
New York 2,024,870 2,173,856 2,458,197 2,567,595 2,779,092 3,016,202 3,229,051
North Carolina 812,234 827,389 907,741 949,795 1,000,644 1,066,112 1,124,820
North Dakota 37,780 38,964 39,758 44,428 46,894 49,882 53,800
Ohio 796,720 777,632 934,632 997,246 1,074,734 1,197,136 1,300,103
Oklahoma 222,456 221,985 252,025 276,111 296,731 326,871 356,469
Oregon 174,931 193,924 223,580 242,865 270,935 302,883 335,137
Pennsylvania 520,221 416,498 461,114 464,848 447,733 458,656 457,840
Rhode Island 49,277 49,809 50,411 53,729 55,301 57,263 59,747
South Carolina 446,893 474,470 542,768 576,136 627,045 688,117 744,752
South Dakota 50,780 53,666 58,212 64,948 70,500 77,212 84,836
Tennessee 0 0 0 916,968 916,968 916,968 916,968
Texas 1,853,348 1,852,828 1,917,398 2,153,316 2,263,730 2,420,033 2,615,316
Utah 130,682 133,224 136,719 152,268 160,228 170,396 183,373
Vermont 89,547 103,635 109,578 112,227 120,998 127,410 133,977
Virginia 377,588 344,877 334,008 319,196 301,812 288,688 274,991
Washington 301,907 339,611 385,408 423,758 474,460 530,402 589,975
West Virginia 274,894 262,675 269,174 276,338 276,821 281,704 286,009
Wisconsin 224,165 267,417 262,238 309,795 345,072 375,679 423,504
Wyoming 33,280 33,342 36,704 42,652 46,330 51,699 57,952
*Source: Data from Medicaid Statistical Information System.

**Source: Muse & Associates Estimates.
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1-14
Section 2:
The Medicaid Program
2-1
2-2
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.
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.
2-3
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 Federal 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 (FQHC) services and any other ambulatory services
offered by an FQHC that are otherwise covered under the State Plan.
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;
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• 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
• 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 “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 the Department of Health
2-5
and Human Services (DHHS) 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
• 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, Diagnostic and Treatment Services

Early and periodic screening, diagnostic 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
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• 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.)
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 or 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 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 DHHS 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.
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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 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
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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 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 DHHS 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:
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• The facility receives a grant under sections 329, 330, or 340 of the Public Health Service
Act;
• The Health Resources and Services Administration (HRSA) recommends, and the DHHS
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.
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 77%, depending on the State’s per capita income (see the FY 2005 Federal
Medical Assistance Percentage (FMAP) table, page 2-18).
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 77%.
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 2002, the Medicaid program enrolled 51.6 million eligible individuals with vendor payments for
medical care services totaling $213.5 billion. The vendor payments reported in the 2002 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, which
does include such expenditures, shows total net expenditures for 2002 of $245.7 billion. When
administrative costs are added to total net expenditures, total Medicaid program expenditures in 2002
were $257.6 billion. For FY 2003, total program expenditures, including those for administration,
were $272.9 billion.
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Total Medicaid Eligibles by Maintenance Assistance Status, 20021
Receiving
Total Cash Medically Poverty 1115 MAS
State Eligibles Assistance Needy Related Other Demonstration Unknown
National Total 51,552,491 18,215,830 4,401,790 15,073,035 8,638,035 5,222,626 1,175
Alabama 845,125 285,853 0 415,276 37,583 106,412 1
Alaska 121,400 51,076 0 59,975 10,349 0 0
Arizona 1,053,602 464,480 0 261,509 191,223 136,390 0
Arkansas 608,017 157,551 10,178 240,028 53,153 147,107 0
California 9,336,447 4,248,290 954,214 515,990 1,439,123 2,178,830 0
Colorado 438,670 219,239 0 163,359 56,072 0 0
Connecticut 487,989 90,988 37,438 77,862 281,701 0 0
Delaware 147,197 69,003 0 13,727 42,564 21,903 0
District of Columbia 204,591 121,320 37,458 35,262 10,551 0 0
Florida 2,691,502 1,113,402 73,312 978,702 387,399 138,672 15
Georgia 1,459,631 525,736 11,140 647,738 275,017 0 0
Hawaii 195,684 97,250 2,434 44,997 15,949 35,054 0
Idaho 196,406 27,994 0 112,074 56,338 0 0
Illinois 2,076,146 293,787 464,565 907,285 247,823 162,686 0
Indiana 881,942 346,171 0 334,326 201,445 0 0
Iowa 358,708 153,913 10,470 111,512 82,813 0 0
Kansas 305,110 106,986 20,423 125,774 51,927 0 0
Kentucky 769,826 343,646 34,626 313,097 78,457 0 0
Louisiana 990,286 347,677 12,207 526,815 103,587 0 0
Maine 346,449 75,324 2,281 89,232 63,619 115,993 0
Maryland 752,065 208,927 91,591 396,639 54,907 0 1
Massachusetts 1,204,312 330,017 21,919 444,390 154,005 253,981 0
Michigan 1,527,627 438,127 128,552 524,624 436,113 0 211
Minnesota 680,627 227,569 55,720 47,787 229,354 120,197 0
Mississippi 707,986 305,857 0 380,081 22,009 0 39
Missouri 1,098,525 679,410 0 128,970 170,202 119,943 0
Montana 106,229 45,831 8,812 25,458 26,119 0 9
Nebraska 266,245 62,809 43,608 130,929 28,238 0 661
Nevada 203,251 78,290 0 65,462 59,499 0 0
New Hampshire 115,517 26,064 11,039 53,280 25,134 0 0
New Jersey 982,676 359,040 5,133 373,027 145,072 100,404 0
New Mexico 462,878 184,972 0 206,152 59,022 12,713 19
New York 4,139,898 1,337,584 1,883,373 420,071 100,457 398,413 0
North Carolina 1,389,455 601,045 42,021 678,924 67,465 0 0
North Dakota 71,619 36,148 14,690 5,330 15,451 0 0
Ohio 1,754,379 430,980 0 363,075 960,324 0 0
Oklahoma 677,788 108,330 7,706 463,661 98,091 0 0
Oregon 637,140 146,559 9,472 171,403 129,447 180,084 175
Pennsylvania 1,710,999 699,940 114,369 574,506 322,184 0 0
Rhode Island 204,789 82,419 4,330 29,368 47,524 41,148 0
South Carolina 895,863 295,611 0 382,483 217,753 0 16
South Dakota 113,925 40,732 0 48,892 24,301 0 0
Tennessee 1,700,384 485,216 121,968 252,406 181,966 658,809 19
Texas 3,202,171 930,165 77,768 1,618,830 574,504 904 0
Utah 233,156 85,897 5,558 87,040 54,661 0 0
Vermont 156,958 30,893 13,253 48,162 14,078 50,572 0
Virginia 727,784 141,198 8,395 422,709 155,481 0 1
Washington 1,104,813 260,809 16,819 394,375 361,851 70,959 0
West Virginia 362,264 133,188 5,087 198,667 25,322 0 0
Wisconsin 776,638 263,555 39,861 124,246 177,525 171,443 8
Wyoming 69,802 18,962 0 37,548 13,283 9 0
1
Eligibles are defined as individuals who were on the Medicaid roles at least one month during the year.
Source: CMS, MSIS Report, FY 2002.
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Total Medicaid Eligibles by Age Group, 20021

65 Years and
State Total Eligibles <20 Years 21-64 Years Older Age Unknown
National Total 51,552,491 27,830,240 18,033,921 5,544,601 143,729
Alabama 845,125 455,093 269,582 120,450 0
Alaska 121,400 82,578 31,688 7,134 0
Arizona 1,053,602 574,000 421,245 58,356 1
Arkansas 608,017 365,392 178,945 63,680 0
California 9,336,447 4,230,729 4,277,322 828,384 12
Colorado 438,670 262,328 127,620 48,718 4
Connecticut 487,989 259,235 166,009 62,740 5
Delaware 147,197 75,237 60,665 11,295 0
District of Columbia 204,591 104,485 80,275 19,822 9
Florida 2,691,502 1,520,203 817,314 353,617 368
Georgia 1,459,631 945,513 378,997 135,099 22
Hawaii 195,684 99,110 76,962 19,611 1
Idaho 196,406 136,581 47,020 12,803 2
Illinois 2,076,146 1,171,404 585,568 319,048 126
Indiana 881,942 562,820 240,101 79,021 0
Iowa 358,708 201,581 115,218 41,908 1
Kansas 305,110 190,189 81,486 33,431 4
Kentucky 769,826 424,499 251,029 94,298 0
Louisiana 990,286 653,260 231,482 105,540 4
Maine 346,449 120,724 149,048 76,640 37
Maryland 752,065 459,015 225,256 67,777 17
Massachusetts 1,204,312 532,861 527,402 144,049 0
Michigan 1,527,627 916,024 480,234 131,296 73
Minnesota 680,627 367,223 221,524 91,869 11
Mississippi 707,986 426,575 186,397 95,014 0
Missouri 1,098,525 622,881 374,782 100,861 1
Montana 106,229 59,726 35,435 11,066 2
Nebraska 266,245 169,018 67,742 23,966 5,519
Nevada 203,251 114,834 67,557 20,857 3
New Hampshire 115,517 71,933 30,875 12,709 0
New Jersey 982,676 533,051 308,299 141,326 0
New Mexico 462,878 310,835 121,019 31,011 13
New York 4,139,898 1,781,762 1,729,739 491,484 136,913
North Carolina 1,389,455 778,046 432,309 179,100 0
North Dakota 71,619 36,026 25,492 10,101 0
Ohio 1,754,379 1,014,369 593,119 146,891 0
Oklahoma 677,788 460,532 152,105 64,717 434
Oregon 637,140 291,300 299,144 46,682 14
Pennsylvania 1,710,999 917,552 580,664 212,783 0
Rhode Island 204,789 104,208 76,806 23,773 2
South Carolina 895,863 528,384 288,446 78,998 35
South Dakota 113,925 74,224 27,550 12,151 0
Tennessee 1,700,384 782,478 759,130 158,776 0
Texas 3,202,171 2,069,588 745,796 386,784 3
Utah 233,156 148,783 71,488 12,882 3
Vermont 156,958 72,887 62,894 21,176 1
Virginia 727,784 429,053 196,691 102,023 17
Washington 1,104,813 679,132 346,020 79,661 0
West Virginia 362,264 202,204 126,548 33,512 0
Wisconsin 776,638 395,964 266,229 114,377 68
Wyoming 69,802 44,811 19,653 5,334 4
1
2-12
Total Medicaid Eligibles by Gender, 20021

State Total Eligibles Female Male Gender Uknown
National Total 51,552,491 30,707,492 20,705,398 139,601
Alabama 845,125 531,748 307,660 5,717
Alaska 121,400 67,277 54,120 3
Arizona 1,053,602 595,081 458,521 0
Arkansas 608,017 381,241 226,535 241
California 9,336,447 5,988,836 3,347,600 11
Colorado 438,670 262,530 176,140 0
Connecticut 487,989 290,201 197,788 0
Delaware 147,197 87,751 59,446 0
District of Columbia 204,591 127,262 77,296 33
Florida 2,691,502 1,596,454 1,093,453 1,595
Georgia 1,459,631 876,947 582,681 3
Hawaii 195,684 106,664 89,020 0
Idaho 196,406 111,449 84,957 0
Illinois 2,076,146 1,239,054 837,092 0
Indiana 881,942 521,432 360,510 0
Iowa 358,708 209,128 149,580 0
Kansas 305,110 176,354 128,712 44
Kentucky 769,826 445,886 323,935 5
Louisiana 990,286 570,955 419,254 77
Maine 346,449 186,109 160,089 251
Maryland 752,065 455,274 296,791 0
Massachusetts 1,204,312 691,423 512,889 0
Michigan 1,527,627 883,138 644,489 0
Minnesota 680,627 393,589 287,038 0
Mississippi 707,986 419,267 288,704 15
Missouri 1,098,525 642,307 456,217 1
Montana 106,229 61,106 45,120 3
Nebraska 266,245 149,431 111,756 5,058
Nevada 203,251 118,988 83,534 729
New Hampshire 115,517 67,520 47,997 0
New Jersey 982,676 589,014 393,662 0
New Mexico 462,878 270,390 192,481 7
New York 4,139,898 2,307,595 1,707,302 125,001
North Carolina 1,389,455 841,783 547,672 0
North Dakota 71,619 42,289 29,329 1
Ohio 1,754,379 1,028,389 725,990 0
Oklahoma 677,788 395,398 282,390 0
Oregon 637,140 349,494 287,642 4
Pennsylvania 1,710,999 1,002,800 708,199 0
Rhode Island 204,789 120,816 83,973 0
South Carolina 895,863 560,528 335,099 236
South Dakota 113,925 64,800 49,125 0
Tennessee 1,700,384 974,861 725,523 0
Texas 3,202,171 1,883,560 1,318,539 72
Utah 233,156 137,218 95,573 365
Vermont 156,958 87,283 69,675 0
Virginia 727,784 432,806 294,978 0
Washington 1,104,813 657,323 447,461 29
West Virginia 362,264 206,131 156,078 55
Wisconsin 776,638 459,856 316,781 1
Wyoming 69,802 40,756 29,002 44
1
2-13
Total Medicaid Eligibles by Race/Ethnicity, 20021
American
Indian/
Total Black/African Alaska Hispanic or
State Eligibles White American Native Asian Latino Other
National Total 51,552,491 22,476,575 12,282,148 743,956 1,222,704 10,694,241 4,132,867
Alabama 845,125 386,692 413,920 2,204 3,651 13,566 25,092
Alaska 121,400 51,974 6,275 44,388 5,695 4,449 8,619
Arizona 1,053,602 385,624 62,086 137,230 12,181 436,283 20,198
Arkansas 608,017 378,477 194,146 4,844 5,151 21,159 4,240
California 9,336,447 2,136,678 943,186 43,312 460,010 4,871,320 881,941
Colorado 438,670 203,858 31,916 3,275 4,264 163,887 31,470
Connecticut 487,989 227,213 108,673 946 10,545 140,416 196
Delaware 147,197 63,923 63,337 288 2,042 17,181 426
District of Columbia 204,591 3,166 180,962 25 1,568 11,859 7,011
Florida 2,691,502 1,015,714 807,949 1,271 13,788 552,750 300,030
Georgia 1,459,631 595,614 735,738 1,084 13,586 12,675 100,934
Hawaii 195,684 41,169 2,973 469 57,127 5,882 88,064
Idaho 196,406 158,930 1,547 5,082 861 29,782 204
Illinois 2,076,146 837,072 779,474 3,752 50,926 383,503 21,419
Indiana 881,942 609,861 197,903 579 3,173 60,867 9,559
Iowa 358,708 261,289 27,993 1,874 3,504 8,402 55,646
Kansas 305,110 201,217 51,148 4,073 2,696 36,404 9,572
Kentucky 769,826 626,904 97,351 297 1,913 11,867 31,494
Louisiana 990,286 346,283 574,364 1,780 3,425 5,539 58,895
Maine 346,449 334,640 5,131 3,005 2,274 1,399 0
Maryland 752,065 254,437 397,418 1,284 20,551 51,213 27,162
Massachusetts 1,204,312 592,131 127,243 2,646 39,039 188,078 255,175
Michigan 1,527,627 863,660 520,060 7,779 22,142 79,963 34,023
Minnesota 680,627 413,244 105,466 27,520 44,513 2,140 87,744
Mississippi 707,986 241,923 424,485 2,901 2,786 5,042 30,849
Missouri 1,098,525 773,021 283,495 2,204 7,027 351 32,427
Montana 106,229 78,698 730 23,975 435 2,336 55
Nebraska 266,245 180,346 32,801 9,318 2,845 95 40,840
Nevada 203,251 114,714 37,657 3,362 6,727 40,791 0
New Hampshire 115,517 106,887 2,032 95 832 3,342 2,329
New Jersey 982,676 342,642 306,819 3,263 20,462 200,015 109,475
New Mexico 462,878 116,769 10,384 87,040 2,627 236,470 9,588
New York 4,139,898 1,250,339 898,747 52,389 154,509 648,943 1,134,971
North Carolina 1,389,455 607,557 569,579 23,854 12,478 94,973 81,014
North Dakota 71,619 54,016 1,367 15,907 294 0 35
Ohio 1,754,379 1,142,733 529,489 1,788 8,405 51,314 20,650
Oklahoma 677,788 421,204 111,899 87,341 5,973 51,371 0
Oregon 637,140 469,028 27,287 14,161 17,365 102,107 7,192
Pennsylvania 1,710,999 1,020,844 470,098 1,961 32,235 129,568 56,293
Rhode Island 204,789 92,982 17,997 327 5,046 37,098 51,339
South Carolina 895,863 359,348 480,943 1,294 1,757 13,314 39,207
South Dakota 113,925 68,633 2,346 39,991 651 2,120 184
Tennessee 1,700,384 1,121,661 471,076 3,605 11,783 36,923 55,336
Texas 3,202,171 855,101 606,560 11,602 41,413 1,650,717 36,778
Utah 233,156 163,596 4,815 10,234 9,678 41,538 3,295
Vermont 156,958 92,535 1,023 244 425 302 62,429
Virginia 727,784 333,733 335,288 1,125 18,601 37,338 1,699
Washington 1,104,813 709,195 68,751 29,629 52,419 148,121 96,698
West Virginia 362,264 335,086 18,575 180 719 702 7,002
Wisconsin 776,638 378,877 130,331 11,703 20,320 41,865 193,542
Wyoming 69,802 55,337 1,315 5,456 267 6,901 526
1
2-14
Total Medicaid Eligibles by Basis of Eligibility, 20021
Blind/ Foster Care BCCA BOE

State Total Eligibles Aged Disabled Children Adults Children Women Unknown
National Total 51,552,491 4,759,065 8,055,109 24,583,011 13,245,645 901,951 5,931 1,779
Alabama 845,125 98,709 191,405 411,324 137,462 6,224 0 1
Alaska 121,400 6,569 12,271 73,962 26,602 1,938 58 0
Arizona 1,053,602 43,667 109,978 505,858 386,179 7,920 0 0
Arkansas 608,017 50,510 108,792 304,343 138,152 6,206 0 14
California 9,336,447 664,023 989,758 3,462,819 4,058,935 157,995 2,917 0
Colorado 438,670 47,555 66,257 219,718 87,722 17,297 24 97
Connecticut 487,989 61,797 60,596 255,429 102,704 7,372 91 0
Delaware 147,197 10,769 17,642 64,174 52,705 1,876 31 0
District of Columbia 204,591 13,747 43,794 88,534 51,827 6,689 0 0
Florida 2,691,502 255,655 522,310 1,331,626 538,542 43,369 0 0
Georgia 1,459,631 108,680 232,728 844,963 252,563 19,550 1,147 0
Hawaii 195,684 17,396 23,627 86,034 62,685 5,942 0 0
Idaho 196,406 12,968 26,651 124,773 29,809 2,205 0 0
Illinois 2,076,146 279,046 300,341 1,016,068 395,940 84,506 245 0
Indiana 881,942 78,441 116,543 521,163 152,889 12,730 176 0
Iowa 358,708 41,577 60,717 175,535 70,565 10,314 0 0
Kansas 305,110 30,702 52,879 161,499 47,647 12,383 0 0
Kentucky 769,826 72,121 207,955 370,090 110,257 9,403 0 0
Louisiana 990,286 105,311 177,258 588,077 110,170 9,470 0 0
Maine 346,449 71,964 119,321 97,156 55,101 2,907 0 0
Maryland 752,065 55,354 121,570 415,260 142,405 17,373 0 103
Massachusetts 1,204,312 116,164 243,326 482,300 361,857 665 0 0
Michigan 1,527,627 99,714 297,112 804,779 285,805 40,006 0 211
Minnesota 680,627 69,759 93,872 333,759 174,200 8,983 54 0
Mississippi 707,986 74,033 161,410 384,360 84,985 3,159 0 39
Missouri 1,098,525 98,744 150,368 566,155 258,115 25,143 0 0
Montana 106,229 10,102 17,688 52,662 21,852 3,829 87 9
Nebraska 266,245 23,526 29,885 150,254 51,584 10,267 68 661
Nevada 203,251 19,562 33,202 95,730 46,638 8,119 0 0
New Hampshire 115,517 12,654 14,611 68,911 16,632 2,709 0 0
New Jersey 982,676 111,710 178,819 462,890 207,270 21,926 61 0
New Mexico 462,878 23,371 55,032 290,553 90,085 3,771 47 19
New York 4,139,898 398,070 688,012 1,737,279 1,241,408 75,129 0 0
North Carolina 1,389,455 178,258 236,259 699,139 259,289 16,510 0 0
North Dakota 71,619 10,032 9,841 31,859 18,097 1,790 0 0
Ohio 1,754,379 144,622 279,463 924,487 371,476 33,937 0 394
Oklahoma 677,788 63,837 81,293 432,322 93,949 6,387 0 0
Oregon 637,140 44,325 68,379 247,763 261,511 14,987 0 175
Pennsylvania 1,710,999 212,480 386,422 779,880 283,257 48,635 325 0
Rhode Island 204,789 19,667 38,418 88,794 52,218 5,522 170 0
South Carolina 895,863 78,066 122,846 463,859 222,576 8,423 77 16
South Dakota 113,925 10,139 16,420 67,273 18,157 1,922 14 0
Tennessee 1,700,384 90,398 340,155 723,890 531,554 14,368 0 19
Texas 3,202,171 383,307 379,541 1,870,141 534,638 34,544 0 0
Utah 233,156 12,102 28,075 130,577 55,627 6,676 99 0
Vermont 156,958 19,661 19,109 66,331 49,235 2,610 0 12
Virginia 727,784 98,274 139,382 378,035 97,000 14,946 146 1
Washington 1,104,813 79,445 145,928 579,607 283,313 16,520 0 0
West Virginia 362,264 29,678 89,755 176,277 59,878 6,676 0 0
Wisconsin 776,638 95,507 139,297 335,343 188,479 17,910 94 8
Wyoming 69,802 5,297 8,796 39,397 14,099 2,213 0 0
1
Eligibles are defined as individuals who were on the Medicaid rolls at least one month during the year.
2-15
Total Medicaid Eligibles Per 1000 Population, 2002
Total State Total Eligibles per

State Population Eligibles1 1000 Population
National Total 287,973,924 51,552,491 179.0
Alabama 4,478,896 845,125 188.7
Alaska 641,482 121,400 189.2
Arizona 5,441,125 1,053,602 193.6
Arkansas 2,706,268 608,017 224.7
California 35,001,986 9,336,447 266.7
Colorado 4,501,051 438,670 97.5
Connecticut 3,458,587 487,989 141.1
Delaware 805,945 147,197 182.6
District of Columbia 566,157 204,591 361.4
Florida 16,691,701 2,691,502 161.2
Georgia 8,544,005 1,459,631 170.8
Hawaii 1,240,663 195,684 157.7
Idaho 1,343,124 196,406 146.2
Illinois 12,586,447 2,076,146 164.9
Indiana 6,156,913 881,942 143.2
Iowa 2,935,840 358,708 122.2
Kansas 2,711,769 305,110 112.5
Kentucky 4,089,822 769,826 188.2
Louisiana 4,476,192 990,286 221.2
Maine 1,294,894 346,449 267.6
Maryland 5,450,525 752,065 138.0
Massachusetts 6,421,800 1,204,312 187.5
Michigan 10,043,221 1,527,627 152.1
Minnesota 5,024,791 680,627 135.5
Mississippi 2,866,733 707,986 247.0
Missouri 5,669,544 1,098,525 193.8
Montana 910,372 106,229 116.7
Nebraska 1,727,564 266,245 154.1
Nevada 2,167,455 203,251 93.8
New Hampshire 1,274,405 115,517 90.6
New Jersey 8,575,252 982,676 114.6
New Mexico 1,852,044 462,878 249.9
New York 19,134,293 4,139,898 216.4
North Carolina 8,305,820 1,389,455 167.3
North Dakota 636,911 71,619 112.4
Ohio 11,408,699 1,754,379 153.8
Oklahoma 3,489,700 677,788 194.2
Oregon 3,520,355 637,140 181.0
Pennsylvania 12,328,827 1,710,999 138.8
Rhode Island 1,068,326 204,789 191.7
South Carolina 4,103,770 895,863 218.3
South Dakota 760,437 113,925 149.8
Tennessee 5,789,796 1,700,384 293.7
Texas 21,736,925 3,202,171 147.3
Utah 2,318,789 233,156 100.6
Vermont 616,408 156,958 254.6
Virginia 7,287,829 727,784 99.9
Washington 6,067,060 1,104,813 182.1
West Virginia 1,804,884 362,264 200.7
Wisconsin 5,439,692 776,638 142.8
Wyoming 498,830 69,802 139.9
1
Source: U.S. Department of Commerce, Bureau of the Census, Population Estimates, December 18, 2003; CMS, MSIS Report,
FY 2002.
2-16
Total Net U.S. Medical Assistance Expenditures

by Type of Service, FY 2002 & FY 2003
Percent Percent Percent

Service FY 2003 FY 2002
of Total of Total Change
Inpatient Acute Care Hospital $45,839,127,080 17.6% $43,690,502,629 17.8% 4.9%
Nursing Facility $44,345,682,144 17.1% $47,466,264,432 19.3% -6.6%
Pharmaceuticals $33,794,520,738 13.0% $29,339,050,970 11.9% 15.2%
HCBS Waivers $19,302,698,045 7.4% $17,169,137,673 7.0% 12.4%
ICF-Mentally Retarded $11,614,424,195 4.5% $11,205,483,449 4.6% 3.6%
Hospital Outpatient $9,394,646,018 3.6% $9,245,799,624 3.8% 1.6%
Personal Care Services $7,881,552,380 3.0% $6,037,450,986 2.5% 30.5%
Physicians $7,863,653,436 3.0% $7,559,242,098 3.1% 4.0%
Clinic* $7,582,867,230 2.9% $7,499,886,627 3.1% 1.1%
Inpatient Mental Health Hospital $7,299,165,193 2.8% $7,446,842,170 3.0% -2.0%
Dental $3,015,702,590 1.2% $2,630,870,620 1.1% 14.6%
Home Health Care $2,886,980,643 1.1% $2,766,480,497 1.1% 4.4%
Other Practitioners $1,438,109,885 0.6% $1,413,870,565 0.6% 1.7%
EPSDT $1,079,836,415 0.4% $1,007,637,056 0.4% 7.2%
Lab/X-ray $856,521,207 0.3% $781,820,930 0.3% 9.6%
Other** $55,700,409,296 21.4% $50,437,280,350 20.5% 10.4%
Total Expenditures $259,895,896,495 100% ‡ $245,697,620,676 100% ‡ 5.8%

‡ 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, CMS-64 Report, FY 2002 and FY 2003.
2-17
Federal Medical Assistance Percentage (FMAP),

FY 2005 and FY 2006
2006
2005 Enhanced Enhanced
State 2005 FMAP FMAP* 2006 FMAP FMAP*
Alabama 70.83% 79.58% 69.51% 78.66%
Alaska** 57.58% 70.31% 50.16% 65.11%
Arizona 67.45% 77.22% 66.98% 76.89%
Arkansas 74.75% 82.33% 73.77% 81.64%
California 50.00% 65.00% 50.00% 65.00%
Colorado 50.00% 65.00% 50.00% 65.00%
Connecticut 50.00% 65.00% 50.00% 65.00%
Delaware 50.38% 65.27% 50.09% 65.06%
District of Columbia** 70.00% 79.00% 70.00% 79.00%
Florida 58.90% 71.23% 58.89% 71.22%
Georgia 60.44% 72.31% 60.00% 72.42%
Hawaii 58.47% 70.93% 58.81% 71.17%
Idaho 70.62% 79.43% 69.91% 78.94%
Illinois 50.00% 65.00% 50.00% 65.00%
Indiana 62.78% 73.95% 62.98% 74.09%
Iowa 63.55% 74.49% 63.61% 74.53%
Kansas 61.01% 72.71% 60.41% 72.29%
Kentucky 69.60% 78.72% 69.26% 78.48%
Louisiana 71.04% 79.73% 69.79% 78.85%
Maine 64.89% 75.42% 62.90% 74.03%
Maryland 50.00% 65.00% 50.00% 65.00%
Massachusetts 50.00% 65.00% 50.00% 65.00%
Michigan 56.71% 69.70% 56.59% 69.61%
Minnesota 50.00% 65.00% 50.00% 65.00%
Mississippi 77.08% 83.96% 76.00% 83.20%
Missouri 61.15% 72.81% 61.93% 73.35%
Montana 71.90% 80.33% 70.54% 79.38%
Nebraska 59.64% 71.75% 59.68% 71.78%
Nevada 55.90% 69.13% 54.76% 68.33%
New Hampshire 50.00% 65.00% 50.00% 65.00%
New Jersey 50.00% 65.00% 50.00% 65.00%
New Mexico 74.30% 82.01% 71.15% 79.81%
New York 50.00% 65.00% 50.00% 65.00%
North Carolina 63.63% 74.54% 63.49% 74.44%
North Dakota 67.49% 77.24% 65.85% 76.10%
Ohio 59.68% 71.78% 59.88% 71.92%
Oklahoma 70.18% 79.13% 67.91% 77.54%
Oregon 61.12% 72.78% 61.57% 73.10%
Pennsylvania 53.84% 67.69% 55.05% 68.54%
Rhode Island 55.38% 68.77% 54.45% 68.12%
South Carolina 69.89% 78.92% 69.32% 78.52%
South Dakota 66.03% 76.22% 65.07% 75.55%
Tennessee 64.81% 75.37% 63.99% 74.79%
Texas 60.87% 72.61% 60.66% 72.46%
Utah 72.14% 80.50% 70.76% 79.53%
Vermont 60.11% 72.08% 58.49% 70.94%
Virginia 50.00% 65.00% 50.00% 65.00%
Washington 50.00% 65.00% 50.00% 65.00%
West Virginia 74.65% 82.26% 72.99% 81.09%
Wisconsin 58.32% 70.82% 51.65% 70.36%
Wyoming 57.90% 70.53% 54.23% 67.96%
* 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 Alaska and 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 Alaska is 53.23% and for the
District of Columbia is 50.00%.
Source: Federal Register, December 3, 2003, Vol. 68, No. 232, pages 67676-67678 and November 24, 2004, Vol. 69, No. 226, pages 68370–68373.
2-18
Medicaid Total Net Expenditures and Eligibles, 2002
Total Net Medical Total Average

1
State Assistance Expenditures Eligibles Per Eligible
National Total $245,697,620,676 51,552,491 $4,766
Alabama $3,093,270,640 845,125 $3,660
Alaska $685,772,985 121,400 $5,649
Arizona $3,541,598,721 1,053,602 $3,361
Arkansas $2,237,817,554 608,017 $3,681
California $26,890,540,967 9,336,447 $2,880
Colorado $2,323,068,699 438,670 $5,296
Connecticut $3,456,338,545 487,989 $7,083
Delaware $634,046,351 147,197 $4,307
District of Columbia $1,021,772,693 204,591 $4,994
Florida $9,871,508,234 2,691,502 $3,668
Georgia $6,241,211,454 1,459,631 $4,276
Hawaii $740,007,314 195,684 $3,782
Idaho $773,534,776 196,406 $3,938
Illinois $8,809,060,004 2,076,146 $4,243
Indiana $4,448,318,143 881,942 $5,044
Iowa $2,575,146,342 358,708 $7,179
Kansas $1,836,717,196 305,110 $6,020
Kentucky $3,763,204,047 769,826 $4,888
Louisiana $4,885,971,853 990,286 $4,934
Maine $1,430,109,134 346,449 $4,128
Maryland $3,613,476,100 752,065 $4,805
Massachusetts $8,063,005,258 1,204,312 $6,695
Michigan $7,562,053,407 1,527,627 $4,950
Minnesota $4,414,511,470 680,627 $6,486
Mississippi $2,877,013,521 707,986 $4,064
Missouri $5,360,607,640 1,098,525 $4,880
Montana $571,456,455 106,229 $5,379
Nebraska $1,339,132,070 266,245 $5,030
Nevada $808,198,344 203,251 $3,976
New Hampshire $1,016,094,814 115,517 $8,796
New Jersey $7,745,877,997 982,676 $7,882
New Mexico $1,776,811,688 462,878 $3,839
New York $36,295,107,368 4,139,898 $8,767
North Carolina $6,723,598,560 1,389,455 $4,839
North Dakota $461,401,546 71,619 $6,442
Ohio $9,658,040,587 1,754,379 $5,505
Oklahoma $2,260,403,490 677,788 $3,335
Oregon $2,571,560,664 637,140 $4,036
Pennsylvania $12,130,925,035 1,710,999 $7,090
Rhode Island $1,358,500,649 204,789 $6,634
South Carolina $3,292,901,444 895,863 $3,676
South Dakota $549,884,391 113,925 $4,827
Tennessee $5,787,079,096 1,700,384 $3,403
Texas $13,523,486,149 3,202,171 $4,223
Utah $984,160,785 233,156 $4,221
Vermont $660,731,979 156,958 $4,210
Virginia $3,812,166,436 727,784 $5,238
Washington $5,168,511,470 1,104,813 $4,678
West Virginia $1,584,166,286 362,264 $4,373
Wisconsin $4,193,175,197 776,638 $5,399
Wyoming $274,565,128 69,802 $3,933
1
Source: CMS, CMS-64 Report, FY 2002 and CMS-MSIS Report, FY 2002.
2-19
Total Medicaid Program Expenditures, 2003
Total Net Medical Administrative Total Program

State Assistance Expenditures Expenditures Expenditures
National Total $259,895,896,495 $13,046,737,079 $272,942,633,574
Alabama $3,477,832,931 $127,998,912 $3,605,831,843
Alaska $563,428,717 $46,999,870 $610,428,587
Arizona $4,219,253,105 $206,926,196 $4,426,179,301
Arkansas $2,329,593,600 $111,158,811 $2,440,752,411
California $30,051,769,056 $2,056,182,686 $32,107,951,742
Colorado $2,552,159,860 $111,002,758 $2,663,162,618
Connecticut $3,506,583,946 $103,831,118 $3,610,415,064
Delaware $718,470,271 $46,279,569 $764,749,840
District of Columbia $1,076,136,978 $75,714,431 $1,151,851,409
Florida $10,946,214,986 $548,942,130 $11,495,157,116
Georgia $6,300,856,479 $380,246,357 $6,681,102,836
Hawaii $766,109,972 $69,711,658 $835,821,630
Idaho $809,931,820 $68,634,984 $878,566,804
Illinois $9,253,097,164 $695,015,816 $9,948,112,980
Indiana $4,282,435,701 $203,536,402 $4,485,972,103
Iowa $2,136,386,901 $82,657,277 $2,219,044,178
Kansas $1,764,536,608 $90,446,401 $1,854,983,009
Kentucky $3,697,230,708 $106,527,424 $3,803,758,132
Louisiana $4,423,174,011 $161,791,590 $4,584,965,601
Maine $1,747,306,187 $79,401,252 $1,826,707,439
Maryland $4,343,054,613 $294,904,663 $4,637,959,276
Massachusetts $7,680,882,159 $365,645,374 $8,046,527,533
Michigan $7,967,828,590 $498,571,420 $8,466,400,010
Minnesota $3,604,575,049 $211,870,042 $3,816,445,091
Mississippi $2,853,086,305 $94,898,736 $2,947,985,041
Missouri $5,541,604,705 $253,735,879 $5,795,340,584
Montana $511,474,712 $30,195,882 $541,670,594
Nebraska $1,325,133,485 $71,664,220 $1,396,797,705
Nevada $1,015,796,455 $67,798,693 $1,083,595,148
New Hampshire $916,422,038 $62,874,759 $979,296,797
New Jersey $7,858,368,246 $515,324,283 $8,373,692,529
New Mexico $2,006,492,205 $67,963,008 $2,074,455,213
New York $39,585,134,508 $874,715,468 $40,459,849,976
North Carolina $7,050,804,888 $301,214,843 $7,352,019,731
North Dakota $468,522,734 $21,101,570 $489,624,304
Ohio $10,177,517,569 $360,355,327 $10,537,872,896
Oklahoma $2,311,939,159 $168,986,258 $2,480,925,417
Oregon $2,678,357,318 $241,943,386 $2,920,300,704
Pennsylvania $12,772,008,268 $625,292,638 $13,397,300,906
Rhode Island $1,436,618,006 $80,854,110 $1,517,472,116
South Carolina $3,540,107,364 $136,496,403 $3,676,603,767
South Dakota $536,195,894 $17,468,705 $553,664,599
Tennessee $6,348,262,631 $523,172,782 $6,871,435,413
Texas $15,420,026,696 $749,960,111 $16,169,986,807
Utah $1,092,519,199 $79,037,866 $1,171,557,065
Vermont $705,028,688 $63,031,099 $768,059,787
Virginia $3,524,849,814 $226,683,382 $3,751,533,196
Washington $5,006,473,801 $459,002,964 $5,465,476,765
West Virginia $1,857,747,927 $88,915,675 $1,946,663,602
Wisconsin $4,799,267,070 $94,223,622 $4,893,490,692
Wyoming $337,284,398 $25,828,269 $363,112,667
Source: CMS, CMS-64 Report, FY 2003.
2-20
Total SCHIP Enrollment, 2003*

Medicaid SCHIP Non-Medicaid SCHIP Total SCHIP Adults Enrolled in SCHIP
State Enrollment Enrollment Enrollment Demonstrations
National Total 1,503,775 4,370,484 5,874,259 483,728
Alabama - 78,554 78,554 -
Alaska 22,934 - 22,934 -
Arizona - 90,491 90,468 98,431
Arkansas - - - -
California 99,366 855,786 955,152 -
Colorado - 74,144 74,144 1,423
Connecticut - 20,971 20,971 -
Delaware 159 9,744 9,903 -
District of Columbia 5,875 - 5,875 -
Florida 2,188 440,989 443,177 -
Georgia - 251,711 251,711 -
Hawaii 12,022 - 12,022 -
Idaho 16,877 - 16,877 -
Illinois 81,692 53,917 135,609 70,773
Indiana 51,587 22,175 73,762 -
Iowa 14,001 23,059 37,060 -
Kansas - 45,662 45,662 -
Kentucky 57,553 34,275 94,053 -
Louisiana 104,908 - 104,908 -
Maine 19,280 10,194 29,474 -
Maryland 122,229 7,932 130,161 -
Massachusetts 85,104 43,686 128,790 -
Michigan 26,391 51,076 77,467 -
Minnesota 48 NR 48 41,317
Mississippi - 75,010 75,010 -
Missouri 150,954 - 150,954 -
Montana - 13,084 13,084 -
Nebraska 45,490 - 45,490 -
Nevada - 47,183 47,183 -
New Hampshire 517 9,376 9,893 -
New Jersey 40,414 78,858 119,272 123,716
New Mexico 18,841 - 18,841 -
New York NR 795,111 795,111 -
North Carolina - 150,444 150,444 -
North Dakota 1,773 3,180 4,953 -
Ohio 207,854 - 207,854 -
Oklahoma 91,914 - 91,914 -
Oregon - 44,752 44,752 2,129
Pennsylvania - 160,015 160,015 -
Rhode Island 22,893 1,612 24,505 22,044
South Carolina 90,764 - 90,764 -
South Dakota 9,529 2,759 12,288 -
Tennessee - - - -
Texas - 726,428 726,428 -
Utah - 37,766 37,766 -
Vermont - 6,467 6,467 -
Virginia 30,616 53,100 83,716 -
Washington - 9,571 9,571 -
West Virginia - 35,320 35,320 -
Wisconsin 68,641 - 68,641 123,895
Wyoming - 5,241 5,241 -
*The data displayed in this table were compiled from the CMS website at http://www.cms.hhs.gov/schip/enrollment/schip03.pdf.
Column and row values do not always sum to totals.
NR- State has not reported data via the Statistical Enrollment Data System (SEDS).
Source: CMS, SCHIP Enrollment Report, August 5, 2004.
2-21
Total SCHIP Expenditures, 2003
Medicaid SCHIP Non-Medicaid SCHIP Total SCHIP

State Expenditures Expenditures Expenditures
National Total $1,485,602,154 $4,553,214,312 $6,038,816,466
Alabama $150,501 $89,648,415 $89,798,916
Alaska $31,134,733 $2,712,687 $33,847,420
Arizona $0 $242,147,701 $242,147,701
Arkansas $36,903,302 $3,450,290 $40,353,592
California $53,141,395 $816,155,723 $869,297,118
Colorado $0 $62,458,057 $62,458,057
Connecticut $48,883 $26,708,904 $26,757,787
Delaware $248,572 $6,834,859 $7,083,431
District of Columbia $7,499,314 $117,097 $7,616,411
Florida $81,965,839 $420,667,742 $502,633,581
Georgia $0 $250,756,400 $250,756,400
Hawaii $9,892,694 $280,288 $10,172,982
Idaho $14,386,996 $871,565 $15,258,561
Illinois $43,386,825 $47,932,135 $91,318,960
Indiana $63,114,262 $20,952,924 $84,067,186
Iowa $16,301,477 $27,868,966 $44,170,443
Kansas $0 $51,147,118 $51,147,118
Kentucky $56,334,856 $31,383,334 $87,718,190
Louisiana $92,640,822 $5,431,165 $98,071,987
Maine $16,771,385 $10,828,951 $27,600,336
Maryland $190,811,878 $21,020,162 $211,832,040
Massachusetts $86,316,863 $24,583,525 $110,900,388
Michigan $25,992,200 $62,429,891 $88,422,091
Minnesota $0 $98,837,468 $98,837,468
Mississippi $16,595 $106,051,546 $106,068,141
Missouri $95,388,625 $2,840,651 $98,229,276
Montana $0 $14,854,662 $14,854,662
Nebraska $34,045,772 $871,781 $34,917,553
Nevada $0 $33,446,385 $33,446,385
New Hampshire $400,083 $6,070,794 $6,470,877
New Jersey $44,419,989 $359,565,535 $403,985,524
New Mexico $20,793,527 $1,362,438 $22,155,965
New York $82,448,115 $459,337,745 $541,785,860
North Carolina $0 $177,136,298 $177,136,298
North Dakota $3,016,734 $3,535,216 $6,551,950
Ohio $188,302,322 $6,305,620 $194,607,942
Oklahoma $47,612,740 $660,522 $48,273,262
Oregon $0 $27,505,941 $27,505,941
Pennsylvania $0 $176,193,192 $176,193,192
Rhode Island $24,779,497 $31,490,573 $56,270,070
South Carolina $52,274,653 $4,647,136 $56,921,789
South Dakota $8,289,917 $3,785,231 $12,075,148
Tennessee $0 $0 $0
Texas $452,389 $563,044,186 $563,496,575
Utah $0 $25,145,487 $25,145,487
Vermont $0 $4,042,623 $4,042,623
Virginia $21,674,120 $56,729,935 $78,404,055
Washington $0 $24,851,674 $24,851,674
West Virginia $0 $32,668,647 $32,668,647
Wisconsin $33,377,550 $100,484,536 $133,862,086
Wyoming $0 $5,360,591 $5,360,591
Source: CMS, CMS-64 Report, 2003.
2-22
Total Medicaid/Medicare Dual Eligibles by Dual Eligibility Type, 20021
Not a QMB/
State All Eligibles Dual Eligible QMB Only Medicaid SLMB Only
National Total 51,552,491 40,008,697 461,055 3,946,067 319,072
Alabama 845,125 627,146 24,763 91,387 22,661
Alaska 121,400 99,842 5 7,852 119
Arizona 1,053,602 891,673 918 52,667 114
Arkansas 608,017 421,744 18,403 96,042 2,907
California 9,336,447 7,523,677 7,008 764,249 3,122
Colorado 438,670 336,155 6,320 41,897 3,476
Connecticut 487,989 376,168 6,209 45,416 3,443
Delaware 147,197 118,672 3,935 5,658 3,242
District of Columbia 204,591 173,783 87 11,381 860
Florida 2,691,502 2,072,192 21,989 280,205 19,242
Georgia 1,459,631 1,163,783 50,127 0 46
Hawaii 195,684 156,830 107 21,515 1,262
Idaho 196,406 171,732 2,809 10,706 0
Illinois 2,076,146 1,581,719 10,717 125,373 2,311
Indiana 881,942 706,225 8,787 61,139 5,842
Iowa 358,708 257,128 4,533 29,288 3,574
Kansas 305,110 227,750 4,191 25,299 2,366
Kentucky 769,826 549,992 24,944 83,171 10,805
Louisiana 990,286 787,181 24,420 101,528 12,220
Maine 346,449 242,436 2,524 31,984 5,013
Maryland 752,065 612,534 13,750 53,339 5,475
Massachusetts 1,204,312 887,127 184 67,784 14,098
Michigan 1,527,627 1,217,506 552 78,539 12,687
Minnesota 680,627 504,862 1,705 58,945 6,072
Mississippi 707,986 523,298 603 140,540 1,512
Missouri 1,098,525 899,710 9,149 58,471 4,953
Montana 106,229 78,459 394 10,236 603
Nebraska 266,245 215,554 0 22,551 2,305
Nevada 203,251 150,778 7,223 18,404 5,670
New Hampshire 115,517 90,356 1,838 17,973 0
New Jersey 982,676 715,363 0 111,678 20,333
New Mexico 462,878 408,518 10,191 4,404 0
New York 4,139,898 2,963,226 2,007 224,938 0
North Carolina 1,389,455 1,004,720 720 194,145 27,374
North Dakota 71,619 51,954 724 1,431 598
Ohio 1,754,379 1,450,281 29,749 0 0
Oklahoma 677,788 495,758 22 82,863 8,308
Oregon 637,140 476,725 4,571 29,713 8,937
Pennsylvania 1,710,999 1,294,399 520 205,913 18,831
Rhode Island 204,789 158,661 221 18,337 1,138
South Carolina 895,863 756,869 0 78,482 17
South Dakota 113,925 88,716 2,370 3,010 1,171
Tennessee 1,700,384 1,322,117 36,052 54,344 21,870
Texas 3,202,171 2,471,405 57,996 280,680 30,912
Utah 233,156 194,965 1,084 8,481 492
Vermont 156,958 120,711 159 9,750 361
Virginia 727,784 524,983 32,289 73,502 13,000
Washington 1,104,813 936,178 8,113 76,956 6,089
West Virginia 362,264 286,111 12,924 0 0
Wisconsin 776,638 565,889 1,686 71,103 2,979
Wyoming 69,802 55,136 1,463 2,798 662
1
QMB Only = Qualified Medicare Beneficiaries Without Other Medicaid
QMB/ Medicaid = QMBs With Full Medicaid
SLMB Only = Specified Low-Income Beneficiaries Without Other Medicaid
SLMB/Medicaid = SLMBs with full Medicaid
QDWI = Qualified Disabled and Working Individuals
QI 1 = Qualifying Individuals (1)
Other = Other Dual Eligibles, Dual Category Unknown, and Dual Status Unknown
2-23
Total Medicaid/Medicare Dual Eligibles by Dual Eligibility Type, 2002. (Con’t)1
SLMB/
State Medicaid QDWI QI(1) QI(2) Other
National Total 284,793 3,961 136,263 45,553 6,347,030
Alabama 9,952 0 2,897 62 66,257
Alaska 0 0 0 0 13,582
Arizona 0 0 31 43 108,156
Arkansas 0 3,881 0 0 65,040
California 113,100 4 1,714 1,532 922,041
Colorado 3 1 1,556 767 48,495
Connecticut 6,160 0 4,116 0 46,477
Delaware 0 0 23 0 15,667
District of Columbia 0 0 261 237 17,982
Florida 37,316 0 22,385 0 238,173
Georgia 0 0 0 0 245,675
Hawaii 0 0 0 0 15,970
Idaho 0 0 0 0 11,159
Illinois 17,643 0 10,360 0 328,023
Indiana 14,933 3 3,235 3,278 78,500
Iowa 6,464 0 1,817 1,019 54,885
Kansas 210 0 852 34 44,408
Kentucky 4,315 0 3,979 1,225 91,395
Louisiana 446 0 6,214 4,267 54,010
Maine 1,899 51 1,464 693 60,385
Maryland 0 0 1,833 1,192 63,942
Massachusetts 0 0 2,915 3,267 228,937
Michigan 0 6 5,506 5,628 207,203
Minnesota 10,521 0 2,243 0 96,279
Mississippi 0 0 0 2,840 39,193
Missouri 8,260 0 290 533 117,159
Montana 1,698 0 0 0 14,839
Nebraska 0 0 0 0 25,835
Nevada 0 0 0 0 21,176
New Hampshire 0 0 0 0 5,350
New Jersey 0 0 8,334 0 126,968
New Mexico 0 0 0 0 39,765
New York 0 0 0 0 949,727
North Carolina 5,547 0 12,133 0 144,816
North Dakota 337 0 270 77 16,228
Ohio 0 0 0 0 274,349
Oklahoma 4,688 0 0 0 86,149
Oregon 4 0 4,871 4,647 107,672
Pennsylvania 13,066 0 11,249 4,496 162,525
Rhode Island 0 0 653 564 25,215
South Carolina 0 0 6 2 60,487
South Dakota 934 0 514 152 17,058
Tennessee 0 0 0 0 266,001
Texas 8,073 0 15,658 5,381 332,066
Utah 0 0 223 146 27,765
Vermont 5,266 0 12 0 20,699
Virginia 0 14 4,644 3,218 76,134
Washington 1,923 0 2,700 0 72,854
West Virginia 0 0 0 0 63,229
Wisconsin 8,477 1 969 135 125,399
Wyoming 3,558 0 336 118 5,731
1
2-24
Total Medicaid Medical Vendor Payments and Dual Eligibility Status, 20021
Not a QMB/
State All Eligibles Dual Eligible QMB Only Medicaid SLMB Only
National Total $213,491,313,278 $106,490,928,726 $1,030,874,920 $42,127,217,095 $380,179,278
Alabama $3,204,063,602 $1,274,232,277 $15,621,507 $776,780,560 $1,742,014
Alaska $686,795,186 $453,075,715 $2,393 $115,089,861 $42,590
Arizona $2,881,870,077 $1,948,997,686 $1,060,033 $434,460,779 $370,784
Arkansas $2,015,436,554 $883,682,774 $33,136,737 $982,685,560 $876,861
California $23,636,239,505 $13,213,780,910 $17,194,733 $5,372,345,733 $8,953,869
Colorado $2,166,199,614 $1,025,390,092 $2,726,907 $539,103,641 $378,910
Connecticut $3,245,142,644 $1,175,956,667 $4,499,349 $1,158,720,879 $932,196
Delaware $651,384,655 $376,621,212 $5,282,458 $96,699,451 $710,727
District of
Columbia $1,027,022,357 $628,363,371 $31,210 $145,262,877 $391,722
Florida $9,827,003,688 $4,874,067,948 $70,370,898 $1,572,827,572 $1,914,956
Georgia $4,796,005,361 $2,604,578,450 $75,123,488 $0 $481,290
Hawaii $695,279,178 $350,981,489 $98,371 $170,361,874 $438,832
Idaho $791,863,699 $574,360,327 $2,988,527 $155,399,823 $0
Illinois $9,121,713,188 $4,462,411,533 $8,884,937 $1,663,359,310 $150,684
Indiana $3,725,257,965 $1,828,126,131 $4,655,964 $965,283,909 $770,567
Iowa $1,855,817,441 $849,122,634 $4,851,165 $514,241,421 $1,118,401
Kansas $1,501,270,019 $641,032,282 $2,589,548 $442,607,105 $623,360
Kentucky $3,459,365,581 $2,024,455,125 $30,181,481 $837,839,353 $5,423,430
Louisiana $3,234,421,939 $1,818,732,605 $15,725,714 $1,129,348,514 $1,891,563
Maine $1,716,581,955 $1,007,751,695 $2,241,357 $402,060,123 $4,571,138
Maryland $3,662,089,984 $2,174,249,468 $42,413,617 $561,303,632 $7,178,292
Massachusetts $6,387,100,271 $2,842,987,095 $1,119,363 $1,276,162,774 $13,833,824
Michigan $5,918,817,382 $2,383,042,311 $239,353 $324,807,789 $12,825,261
Minnesota $4,439,493,794 $1,971,803,574 $1,834,826 $1,269,281,520 $1,576,820
Mississippi $2,499,640,805 $1,244,615,576 $460,562 $1,115,192,344 $529,391
Missouri $4,071,544,403 $2,116,935,133 $13,187,461 $722,404,739 $1,793,555
Montana $532,886,400 $267,585,800 $95,329 $121,091,801 $1,823
Nebraska $1,255,039,718 $597,240,859 $0 $203,777,475 $830,507
Nevada $723,956,752 $393,365,477 $4,139,667 $205,892,296 $1,351,254
New
Hampshire $745,754,084 $322,552,211 $5,726,610 $393,680,976 $0
New Jersey $5,497,284,438 $2,463,309,859 $0 $2,200,468,218 $21,904,790
New Mexico $1,796,901,383 $270,634,581 $2,669,257 $26,751,670 $0
New York $31,488,930,244 $14,675,424,270 $283,178 $4,530,472,744 $0
North
Carolina $6,041,011,008 $3,069,848,793 $476,113 $1,956,224,103 $11,998,085
North Dakota $422,745,114 $141,026,852 $527,092 $11,637,757 $70,489
Ohio $9,186,330,669 $4,505,534,072 $53,754,743 $0 $0
Oklahoma $2,238,213,087 $1,000,843,567 $1,581 $866,098,451 $1,100,816
Oregon $2,136,400,869 $1,197,343,350 $2,454,895 $331,546,311 $104,945,182
Pennsylvania $8,523,928,057 $4,394,947,388 $180,299 $2,006,722,671 $5,704,980
Rhode Island $1,251,440,036 $618,547,690 $29,133 $197,393,826 $650,916
South
Carolina $3,382,950,504 $1,596,815,267 $0 $633,188,504 $332
South Dakota $503,947,234 $245,685,676 $2,324,910 $86,640,920 $486,079
Tennessee $4,747,549,898 $2,989,461,147 $423,736,615 $193,006,651 $148,528,283
Texas $11,121,020,040 $6,226,003,393 $13,230,318 $2,572,622,555 $2,739,277
Utah $1,215,620,497 $597,811,407 $20,665,614 $148,327,002 $617,489
Vermont $607,249,969 $345,763,875 $326,101 $80,741,638 $810,752
Virginia $3,017,869,649 $1,491,183,939 $97,494,303 $840,368,767 $3,077,319
Washington $4,373,171,467 $1,866,732,897 $11,597,264 $725,557,952 $4,353,706
West Virginia $1,577,697,829 $809,141,082 $32,163,017 $0 $0
Wisconsin $3,605,541,906 $1,518,334,992 $1,330,865 $1,025,297,993 $1,423,172
Wyoming $280,451,579 $136,436,202 $1,146,057 $26,025,571 $62,990
1
Source: CMS, MSIS Report, FY 2002
2-25
Total Medicaid Medical Vendor Payments and Dual Eligibility Status, 2002 (Con’t)1
SLMB/
State Medicaid QDWI QI (1) QI (2) Other
National Total $3,559,380,313 $735,149 $178,350,688 $74,882,766 $59,648,764,343
Alabama $112,567,502 $0 $513,112 $92,115 $1,022,514,515
Alaska $0 $0 $0 $0 $118,584,627
Arizona $0 $0 $84,004 $243,720 $496,653,071
Arkansas $0 $672,119 $0 $0 $114,382,503
California $745,947,070 $4,165 $1,162,676 $566,590 $4,276,283,759
Colorado $142 $0 $146,264 $68,737 $598,384,921
Connecticut $197,571,333 $0 $411,137 $0 $707,051,083
Delaware $0 $0 $333,000 $0 $171,737,807
District of Columbia $0 $0 $85,870 $206,988 $252,680,319
Florida $123,645,804 $0 $20,102,739 $0 $3,164,073,771
Georgia $0 $0 $0 $0 $2,115,822,133
Hawaii $0 $0 $0 $0 $173,398,612
Idaho $0 $0 $0 $0 $59,115,022
Illinois $296,069,746 $0 $63,709,153 $0 $2,627,127,825
Indiana $263,277,503 $0 $608,687 $847,483 $661,687,721
Iowa $115,732,538 $0 $615,501 $498,436 $369,637,345
Kansas $1,482,507 $0 $126,091 $0 $412,809,126
Kentucky $105,575,625 $0 $1,404,720 $323,582 $454,162,265
Louisiana $5,298,239 $0 $769,228 $665,812 $261,990,264
Maine $26,664,799 $42,650 $1,479,128 $829,750 $270,941,315
Maryland $0 $0 $676,428 $943,460 $875,325,087
Massachusetts $0 $0 $708,782 $592,059 $2,251,696,374
Michigan $0 $9,474 $5,622,730 $6,009,856 $3,186,260,608
Minnesota $228,125,144 $0 $651,618 $0 $966,220,292
Mississippi $0 $0 $0 $1,279,733 $137,563,199
Missouri $109,503,184 $0 $164,581 $159,402 $1,107,396,348
Montana $23,213,856 $0 $0 $0 $120,897,791
Nebraska $0 $0 $0 $0 $453,190,877
Nevada $0 $0 $0 $0 $119,208,058
New Hampshire $0 $0 $0 $0 $23,794,287
New Jersey $0 $0 $10,312,558 $0 $801,289,013
New Mexico $0 $0 $0 $0 $1,496,845,875
New York $0 $0 $0 $0 $12,282,750,052
North Carolina $145,924,080 $0 $4,503,365 $0 $852,036,469
North Dakota $2,172,957 $0 $28,265 $3,604 $267,278,098
Ohio $0 $0 $0 $0 $4,627,041,854
Oklahoma $80,888,878 $0 $0 $0 $289,279,794
Oregon $20,304 $0 $57,550,344 $58,249,186 $384,291,297
Pennsylvania $418,438,234 $0 $2,601,815 $1,411,225 $1,693,921,445
Rhode Island $0 $0 $121,993 $246,581 $434,449,897
South Carolina $0 $0 $0 $0 $1,152,946,401
South Dakota $22,512,693 $0 $482,607 $95,771 $145,718,578
Tennessee $0 $0 $0 $0 $992,817,202
Texas $150,439,855 $0 $971,338 $0 $2,155,013,304
Utah $0 $0 $158,160 $162,856 $447,877,969
Vermont $129,875,293 $0 $33,049 $0 $49,699,261
Virginia $0 $6,741 $1,129,860 $1,371,915 $583,236,805
Washington $9,357,997 $0 $879,661 $0 $1,754,691,990
West Virginia $0 $0 $0 $0 $736,393,730
Wisconsin $150,448,240 $0 $193,214 $7,787 $908,505,643
Wyoming $94,626,790 $0 $9,010 $6,118 $22,088,741
1
Source: CMS, MSIS Report, FY 2002
2-26
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. Since 1993, managed care enrollment has increased from 14.4% to 60.7%
of total Medicaid enrollment. In 2004, 60.7% of all Medicaid beneficiaries were enrolled in some
type of managed care program. As of June 30, 2004, all but three States (Alaska, Mississippi, New
Hampshire 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% 52.2% 46.4% 44.4% 44.2% 43.2% 42.4% 40.9% 39.3%

59.9%
70.6%
60% 76.8%
85.6%
40%
55.6% 55.8% 56.8% 57.6% 59.1% 60.7%
47.8% 53.6%
20% 29.4%
40.1%
23.2%
14.4%
0%
19 9 3 19 9 4 19 9 5 19 9 6 19 9 7 19 9 8 19 9 9 2000 2001 2002 2003 2004
Managed Care Fee for Service
Source: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2004. 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.
• 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): an MCO that
provides comprehensive services to Medicaid beneficiaries, but not commercial or
Medicare enrollees.
• Prepaid Inpatient Health Plan (PIHP): an entity that provides less than
comprehensive services on an at-risk basis or one that provides any benefit package
on a non-risk or other than State reimbursement Plan basis; and provides, arranges
2-27
for or otherwise has responsibility for the provision of any inpatient hospital or
institutional services.
• Prepaid Ambulatory Health Plan (PAHP): a prepaid ambulatory health plan that
provides less than comprehensive services on an at-risk or other than State Plan
reimbursement basis, and does not provide, arranges for, or otherwise has
responsibility for the provision of any inpatient hospital or institutional services.
• 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
PIHPs that act as PCCMs.
• Program for All-Inclusive Care for the Elderly (PACE): a program that provides
prepaid, capitated comprehensive health care services to the frail elderly.
• “Other” Managed Care Arrangement: An entity where the plan is not considered
a PCCM, PIHP, PAHP, Comprehensive MCO, Medicaid-only MCO, HIO, or PACE.
The most utilized of these plans are Comprehensive MCOs and Prepaid Health Plans.
Table 2-1: Medicaid Managed Care Plans
Number of Number of Enrollees

Plans
Health Insuring Organization (HIO) 5 513,255
Commercial Managed Care Organization (COM-MCO) 156 9,680,307
Medicaid-Only Managed Care Organization (Mcaid-MCO) 131 7,841,591
Primary Care Case Management (PCCM) 36 5,891,174
Prepaid Inpatient Health Plan (PIHP) 121 7,961,643
Prepaid Ambulatory Health Plan (PAHP) 34 3,799,313
Program of All-Inclusive Care for the Elderly (PACE) 31 9,999
Other 9 213,113
Total 523 35,910,395*
*This table provides duplicated figures by plan type. The total number of enrollees includes 8,996,825 individuals who were
enrolled in more than one managed care plan. It also includes 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, 2004. DHHS, CMS, Center for Medicaid
& State Operations.
The following tables provide an overview of Medicaid managed care enrollment at the State level.
2-28
Medicaid Managed Care Enrollment, As of June 30, 2004
Rank Based on
Medicaid Medicaid Managed Percent in Percent in
State Enrollment Care Enrollment Managed Care Managed Care
National Total 44,355,955 26,913,570 60.68%
Alabama 800,569 439,832 54.94% 39
Alaska 96,630 0 0.00% 50
Arizona 904,658 806,193 89.12% 8
Arkansas 594,264 386,395 65.02% 29
California 6,471,239 3,258,787 50.36% 42
Colorado 378,416 369,270 97.58% 3
Connecticut 402,286 303,404 75.42% 17
Delaware 135,224 99,598 73.65% 18
District of Columbia 138,637 88,452 63.80% 31
Florida 2,207,375 1,450,117 65.69% 27
Georgia 1,323,036 1,273,133 96.23% 5
Hawaii 190,381 145,580 78.04% 15
Idaho 166,088 131,693 79.29% 12
Illinois 1,740,488 158,869 9.13% 48
Indiana 803,786 509,732 63.42% 33
Iowa 284,918 262,487 92.13% 7
Kansas 269,032 153,395 57.02% 38
Kentucky 678,529 625,807 92.23% 6
Louisiana 919,079 723,837 78.76% 14
Maine 258,686 154,785 59.84% 36
Maryland 696,097 469,998 67.52% 24
Massachusetts 947,297 581,520 61.39% 35
Michigan 1,409,832 1,255,067 89.02% 9
Minnesota 568,761 361,381 63.54% 32
Mississippi 637,910 73,445 11.51% 47
Missouri 974,310 432,339 44.37% 44
Montana 86,452 58,030 67.12% 25
Nebraska 206,701 149,405 72.28% 19
Nevada 169,334 89,846 53.06% 40
New Hampshire 96,188 0 0.00% 50
New Jersey 798,132 541,820 67.89% 23
New Mexico 420,935 273,018 64.86% 30
New York 4,022,544 2,341,733 58.22% 37
North Carolina 1,112,341 788,943 70.93% 20
North Dakota 52,458 33,065 63.03% 34
Ohio 1,645,454 507,337 30.83% 46
Oklahoma 518,926 354,110 68.24% 22
Oregon 426,905 345,410 80.91% 11
Pennsylvania 1,599,570 1,265,891 79.14% 13
Puerto Rico 873,211 842,827 96.52% 4
Rhode Island 180,528 124,921 69.20% 21
South Carolina 845,870 69,791 8.25% 49
South Dakota 97,774 95,577 97.75% 2
Tennessee 1,345,131 1,345,131 100.00% 1
Texas 2,692,012 1,150,773 42.75% 45
Utah 188,839 167,338 88.61% 10
Vermont 130,782 86,263 65.96% 26
Virgin Islands 10,900 0 0.00% 50
Virginia 607,493 398,871 65.66% 28
Washington 1,080,738 834,883 77.25% 16
West Virginia 298,093 156,468 52.49% 41
Wisconsin 792,177 374,003 47.21% 43
Wyoming 58,939 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, 2004. DHHS, CMS, Center for Medicaid & State Operations.
2-29
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, guidelines, contractual
Colorado Managed Care Plan Statutes, regulations, contractual
Connecticut Managed Care Plan Statutes, regulations, contractual
Delaware State N/A
District of Columbia Managed Care Plan Contractual
Florida Managed Care Plan Statutes
Georgia N/A N/A
Hawaii Managed Care Plan (Except dental claims) Guidelines
Idaho N/A N/A
Illinois Managed Care Plan Contractual
Indiana Managed Care Plan Statutes
Iowa State None
Kansas Both Guidelines, contractual
Kentucky Both Contractual
Louisiana N/A N/A
Maine State N/A
Maryland Both Regulations
Massachusetts Both Contractual
Michigan Managed Care Plan Contractual
Minnesota Managed Care Plan Contractual
Mississippi State -
Missouri Managed Care Plan Guidelines, contractual
Montana State None
Nebraska State None
Nevada Managed Care Plan None
New Hampshire State None
New Jersey Both Contractual
New Mexico Managed Care Plan Regulations, contractual
New York State N/A
North Carolina State None
North Dakota State None
Ohio Managed Care Plan Statutes
Oklahoma State -
Oregon Managed Care Plan Contractual
Pennsylvania Managed Care Plan Statutes, regulations, contractual
Rhode Island Managed Care Plan Regulations
South Carolina Managed Care Plan Contractual
South Dakota N/A N/A
Tennessee* Managed Care Plan Statutes
Texas State N/A
Utah State Regulations
Vermont State None
Virginia Managed Care Plan Regulations, contractual
Washington Both Contractual
West Virginia State N/A
Wisconsin Managed Care Plan Statutes, regulations, guidelines, 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 2004 NPC Survey.
2-30
Medicaid Managed Care Enrollment Trends, 2000-2004

State 2000 2001 2002 2003 2004
National Total 18,786,137 20,773,813 23,117,668 25,262,873 26,913,570
Alabama 325,059 350,485 405,090 404,797 439,832
Alaska 0 0 0 0 0
Arizona 442,254 527,674 697,171 808,506 806,193
Arkansas 222,261 257,662 336,111 374,067 386,395
California 2,525,406 2,870,514 3,191,168 3,258,787 3,258,787
Colorado 254,232 247,181 278,095 262,263 369,270
Connecticut 229,995 239,829 280,106 294,331 303,404
Delaware 75,535 83,422 87,465 86,709 99,598
District of Columbia 78,864 79,673 80,300 85,370 88,452
Florida 1,016,641 1,184,506 1,267,998 1,354,025 1,450,117
Georgia 806,009 878,140 1,043,154 1,212,639 1,273,133
Hawaii 121,581 127,779 132,787 141,399 145,580
Idaho 32,338 37,913 58,284 101,257 131,693
Illinois 137,622 136,497 130,988 137,682 158,869
Indiana 376,066 433,014 484,116 502,401 509,732
Iowa 182,251 206,751 227,495 243,954 262,487
Kansas 108,093 118,209 130,162 141,119 153,395
Kentucky 464,191 489,711 500,987 611,878 625,807
Louisiana 48,802 56,542 206,992 505,434 723,837
Maine 57,151 96,051 110,922 148,151 154,785
Maryland 385,687 421,355 451,307 466,688 469,998
Massachusetts 583,324 616,241 628,832 572,835 581,520
Michigan 1,063,557 1,023,264 1,208,803 1,314,810 1,255,067
Minnesota 291,365 322,640 368,186 362,349 361,381
Mississippi 218,431 297,916 0 0 73,445
Missouri 304,499 378,771 413,361 425,161 432,339
Montana 42,312 46,995 52,209 55,372 58,030
Nebraska 140,199 150,840 163,772 142,377 149,405
Nevada 37,945 47,518 60,823 74,923 89,846
New Hampshire 4,432 6,200 9,206 13,407 0
New Jersey 371,641 459,087 523,904 525,864 541,820
New Mexico 199,297 212,456 243,069 261,015 273,018
New York 691,422 728,709 1,099,900 1,914,794 2,341,733
North Carolina 598,852 674,133 722,089 749,152 788,943
North Dakota 23,962 25,540 30,808 35,515 33,065
Ohio 239,460 277,617 378,476 436,146 507,337
Oklahoma 279,205 299,272 338,819 338,859 354,110
Oregon 312,064 360,926 378,739 330,874 345,410
Pennsylvania 975,211 1,037,374 1,140,211 1,192,031 1,265,891
Puerto Rico 828,021 898,171 865,285 857,310 842,827
Rhode Island 104,041 111,624 117,024 119,257 124,921
South Carolina 32,149 41,716 64,272 71,195 69,791
South Dakota 67,835 79,641 85,868 90,733 95,577
Tennessee 1,323,319 1,426,622 1,430,966 1,304,794 1,345,131
Texas 606,238 753,613 839,798 1,065,945 1,150,773
Utah 119,200 128,898 154,784 162,364 167,338
Vermont 55,605 78,181 82,261 85,751 86,263
Virgin Islands 0 0 0 0 0
Virginia 280,978 291,767 323,863 262,961 398,871
Washington 800,481 766,366 829,625 854,861 834,883
West Virginia 90,631 122,230 144,911 151,515 156,468
Wisconsin 210,423 266,577 317,106 349,246 374,003
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.
Sources: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2000; 2001; 2002; 2003and. DHHS, CMS, Center for
Medicaid & State Operations.
2-31
Medicaid Managed Care Plan Type, As of June 30, 2004

Commercial Medicaid-only
State HIO MCO MCO PCCM PIHP PAHP PACE Other
National Total 5 156 131 36 121 34 31 9
Alabama 0 0 0 0 1 0 0 1
Alaska - - - - - - - -
Arizona 0 0 26 0 1 0 0 0
Arkansas 0 0 0 1 0 1 0 0
California 5 23 0 0 0 11 4 1
Colorado 0 0 2 1 9 0 1 0
Connecticut 0 2 2 0 0 0 0 0
Delaware 0 0 1 0 0 0 0 1
District of Columbia 0 0 4 0 1 0 0 0
Florida 0 10 1 1 2 4 1 2
Georgia 0 0 0 1 1 1 0 0
Hawaii 0 2 1 0 2 0 0 1
Idaho 0 0 0 1 0 0 0 0
Illinois 0 3 2 0 0 0 0 0
Indiana 0 0 3 3 0 0 0 0
Iowa 0 3 0 1 1 0 0 0
Kansas 0 0 1 1 0 0 1 0
Kentucky 0 0 1 1 0 1 0 0
Louisiana 0 0 0 1 0 0 0 0
Maine 0 0 0 1 0 0 0 0
Maryland 0 0 7 0 0 0 1 0
Massachusetts 0 2 2 1 1 0 6 0
Michigan 0 7 11 0 18 0 0 0
Minnesota 0 6 3 0 0 0 0 1
Mississippi 0 0 0 0 0 1 0 0
Missouri 0 3 4 0 0 0 1 0
Montana 0 0 0 1 0 0 0 0
Nebraska 0 1 0 1 0 0 0 1
Nevada 0 2 0 0 0 0 0 0
New Hampshire - - - - - - - -
New Jersey 0 2 3 0 0 0 0 0
New Mexico 0 3 0 0 0 0 1 0
New York 0 14 22 6 12 1 4 1
North Carolina 0 1 0 2 0 0 0 0
North Dakota 0 1 0 1 0 0 0 0
Ohio 0 4 2 0 0 0 2 0
Oklahoma 0 0 0 1 0 1 0 0
Oregon 0 2 11 1 10 8 1 0
Pennsylvania 0 2 10 1 28 0 2 0
Puerto Rico 0 5 0 0 2 0 0 0
Rhode Island 0 3 0 0 0 0 0 0
South Carolina 0 0 1 0 0 1 1 0
South Dakota 0 0 0 1 0 1 0 0
Tennessee 0 4 3 0 2 0 1 0
Texas 0 9 2 2 1 0 2 0
Utah 0 0 0 1 12 1 0 0
Vermont 0 0 0 1 0 0 0 0
Virgin Islands - - - - - - - -
Virginia 0 6 1 1 0 0 0 0
Washington 0 5 2 1 14 2 1 0
West Virginia 0 3 0 1 0 0 0 0
Wisconsin 0 28 3 0 3 0 1 1
Wyoming - - - - - - - -
HIO=Health Insuring Organization; Commercial MCO=Commercial Managed Care Organization; Medicaid-only MCO=Medicaid-only
Managed Care Organization; PCCM=Primary Care Case Management; PIHP=Prepaid Inpatient Health Plan; PAHP=Prepaid Ambulatory Health
Plans; PACE=Program for All-Inclusive Care for the Elderly.
Source: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2004. DHHS, CMS, Center for Medicaid & State
Operations.
2-32
Medicaid Managed Care Enrollment by Plan Type,

As of June 30, 2004
Commercial Medicaid-
State HIO MCO only MCO PCCM PIHP PAHP PACE Other
National Total 513,255 9,680,307 7,841,591 5,891,174 7,961,643 3,799,313 9,999 213,113
Alabama - - - - 423,112 - - 16,720
Alaska - - - - - - - -
Arizona - - 806,193 - 75,548 - - -
Arkansas - - - 332,473 - 386,395 - -
California 531,255 2,650,685 - - - 297,180 1,665 2,652
Colorado - - 56,351 57,561 381,312 - 830 -
Connecticut - 223,366 80,038 - - - - 13,565
Delaware - - 85,598 - - - - -
District of Columbia - - 88,452 - 3,198 - - -
Florida - 512,210 195,046 688,109 95,287 88,698 55 17,810
Georgia - - - 840,002 2,235 1,273,133 - -
Hawaii - 100,121 48,459 - 673 - - 1,409
Idaho - - - 131,693 - - - -
Illinois - 80,187 78,682 - - - - -
Indiana - - 294,014 326,484 - - - -
Iowa - 54,253 - 102,434 262,487 - - -
Kansas - - 63,997 89,287 - - 111 -
Kentucky - - 132,813 339,003 - 625,807 - -
Louisiana - - - 723,837 - - - -
Maine - - - 154,785 - - - -
Maryland - - 469,849 - - - 149 -
Massachusetts - 98,639 178,735 304,146 325,344 - 1,310 -
Michigan - 417,394 470,643 - 1,255,067 - - -
Minnesota - 336,417 25,144 - - - - 926
Mississippi - - - - - 73,445 - -
Missouri - 116,997 315,342 - - 0 176 -
Montana - - - 58,030 - - - -
Nebraska - 31,204 - 37,636 - - - 149,405
Nevada - 89,846 - - - - - -
New Hampshire - - - - - - - -
New Jersey - 186,407 355,413 - - - - -
New Mexico - 272,783 - - - - 235 -
New York - 756,800 1,538,431 20,335 9,849 6,725 1,967 10,626
North Carolina - 13,153 - 775,790 - - - -
North Dakota - 794 - 32,271 - - - -
Ohio - 157,281 350,056 - - 458 -
Oklahoma - - - 5,572 - 348,538 - -
Oregon - 24,563 233,567 11,414 291,480 303,495 530 -
Pennsylvania - 233,871 897,047 140,668 1,030,653 - 437 -
Puerto Rico - 842,827 - - 842,827 - - -
Rhode Island - 124,921 - - - - - -
South Carolina - - 52,944 - - 16,480 367 -
South Dakota - - - 74,264 - 95,577 - -
Tennessee - 887,027 458,104 - 1,345,131 - 269 -
Texas - 472,762 320,182 357,097 292,623 - 732 -
Utah - - - 44,898 238,152 154,730 - -
Vermont - - - 86,263 - - - -
Virgin Islands - - - - - - - -
Virginia - 230,959 78,352 89,560 - - - -
Washington - 427,612 48,217 4,087 1,077,312 129,110 215 -
West Virginia - 92,993 - 63,475 - - - -
Wisconsin - 244,235 119,922 - 9,353 - 493 -
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.
Operations.
2-33
Medicaid Managed Care Enrollment by Payment Arrangement,

As of June 30, 2004
State Fee-for-Service (FFS) Capitated Other
National Total 6,058,012 29,707,004 145,379
Alabama 423,112 16,720
Alaska
Arizona 881,741
Arkansas 332,473 386,395
California 3,465,437
Colorado 57,561 438,493
Connecticut 303,404
Delaware 13,565 85,598
District of Columbia 91,650
Florida 705,895 802,598 88,722
Georgia 840,002 1,275,368
Hawaii 150,662
Idaho 131,693
Illinois 158,869
Indiana 326,484 294,014
Iowa 102,434 316,740
Kansas 89,287 64,108
Kentucky 339,003 758,620
Louisiana 723,837
Maine 154,785
Maryland 469,998
Massachusetts 304,146 604,028
Michigan 2,143,104
Minnesota 926 361,561
Mississippi 73,445
Missouri 432,515
Montana 58,030
Nebraska 187,041 31,204
Nevada 89,846
New Hampshire
New Jersey 541,820
New Mexico 273,018
New York 5,491 2,339,242
North Carolina 775,790 13,153
North Dakota 32,271 794
Ohio 507,795
Oklahoma 5,572 348,538
Oregon 11,414 853,635
Pennsylvania 140,668 2,162,008
Puerto Rico 1,685,654
Rhode Island 124,921
South Carolina 69,791
South Dakota 74,264 95,577
Tennessee 2,690,531
Texas 357,097 1,086,299
Utah 44,898 352,945 39,937
Vermont 86,263
Virgin Islands
Virginia 89,560 309,311
Washington 4,087 1,682,466
West Virginia 63,475 92,993
Wisconsin 374,003
Wyoming
Individual State totals may not sum to total managed care enrollment (page 2-29) because State totals include individuals enrolled in more than
one plan type including dental, mental, and long-term care.
Operation
2-34
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 can also allow a State to create a “carveout” delivery system for
specialty care, e.g., a Managed Behavioral Health Care Plan. 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 on an ongoing basis 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. The
Balanced Budget Act of 1997 also gave States the option to enroll certain beneficiaries
into managed care via a State Plan Amendment.
• 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. For example, some approved 1915(b)(4) waivers include
programs to restrict the number of providers of transportation services, organ transplants,
and inpatient obstetrical care.
Refer to the table on page 2-38 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 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.
2-35
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 allow States to waive freedom of choice, statewide
access to care, and comparability requirements. However, a Section 1115 waiver also allows 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 do 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) of 2000
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, California,
Delaware, Hawaii, Kentucky, Maryland, Massachusetts, Minnesota, Missouri, New York, Oklahoma,
Oregon, Rhode Island, Tennessee, Utah, Vermont and Wisconsin. Refer to the table on page 2-40 for
a listing of implemented Section 1115 waivers.
PHARMACY PLUS DEMONSTRATIONS UNDER SECTION 1115 AUTHORITY
Section 1115 demonstration authority may be used to extend pharmacy coverage to certain low-
income elderly and disabled individuals who are not otherwise eligible for Medicaid. This type of
Section 1115 waiver program is commonly referred to as “Pharmacy Plus.” Its purpose is to provide
a subsidized pharmacy benefit that is intended to assist individuals in maintaining their healthy status
and avoid spending down to Medicaid income and asset eligibility levels. The waivers will test how
provision of a pharmacy benefit to a non-Medicaid covered population will affect Medicaid costs,
utilization and future eligibility trends.
Pharmacy Plus demonstrations 1) cover an individual’s cost of drugs; 2) cover the individual’s cost
sharing obligation for private prescription programs; and 3) provide wrap-around coverage to bring
private sources of drug coverage up to the level of the Pharmacy Plus benefit. States may construct
their Pharmacy Plus programs to provide eligibility for individuals who are not eligible for full
Medicaid benefits and who have incomes below 200 percent of the Federal Poverty Level. Under a
Pharmacy Plus waiver, States may elect to provide a prescription and over-the-counter drug benefit
that is similar to, or different from, the benefits provided in the Medicaid State Plan. States may
choose to deliver the services via fee-for-service or capitation. Last, States may choose whether to
perform assets tests and income adjustments, and may also choose to enact an enrollment ceiling on
the number of individuals who participate in the demonstration.
Like all 1115 demonstrations, Pharmacy Plus waivers must be budget neutral to the Federal
government. Under the terms and conditions of an approved plan, which is usually granted for a 5-
year period, a ceiling cap is placed on Federal financial payments for services included in the budget
neutrality agreement. States are encouraged to involve the private sector in implementing these
programs and are encouraged to explore the use of pharmacy benefit managers (PBM). Premiums,
cost sharing (deductibles, co-payments and coinsurance), and benefit limitations are all available tools
for providing incentives and cost containment.
2-36
As of September 16, 2004, four States had received Pharmacy Plus demonstration approval: Florida,
Illinois, South Carolina and Wisconsin. Another 8 states had applications pending and one state
withdrew its request.
Refer to the table on page 2-41 for a complete status of the Pharmacy Plus Demonstrations Program.
2-37
2-38
SECTION 1915(b) WAIVERS, AS OF JUNE 30, 2003
1915)
Statutes
State Program(s) Approved Utilized Implemented Expiration
st
Alabama Patient 1 1, 3, 4 01/1/97 2/18/04
Alaska None -- -- --
Arizona None -- -- --
Non-Emergency Transportation 1, 4 3/1/98 11/21/05
Arkansas
Primary Care Physician 1 11/1/96 12/17/04
Caloptima 1, 4 10/1/95 7/10/05
Central Coast Alliance for Health 1, 4 1/1/96 7/10/05
Health Plan of San Mateo 1, 4 11/30/87 8/26/04
Hudman 4 4/24/92 10/14/03
Managed Care Network 1, 2, 4 3/1/97 6/30/03
Medi-Cal Mental Health Care Field Test (San Mateo Co.) 4 4/1/95 7/25/05
Medi-Cal Specialty Mental Health Services Consolidation 4 3/15/95 4/27/05
California
Partnership Health Plan of California 1, 4 5/1/94 2/10/05
Primary Care Case Management Program 1, 4 8/1/84 8/13/03
Sacramento Geographic Managed Care 1, 2, 4 4/1/94 10/8/04
San Diego Geographic Managed Care 1, 2, 4 10/17/98 10/10/03
Santa Barbara Health Initiative 1, 4 9/1/83 1/11/05
Selective Provider Contracting Program 4 9/21/82 12/31/04
Two-Plan Model Program 1, 2, 4 1/23/96 11/8/03
Colorado Mental Health Capitation Program 1, 3, 4 7/1/95 5/4/05
Connecticut HUSKY A 1, 4 10/1/95 5/30/04
Delaware None -- -- --
District of
DC Medicaid Managed Care Program
Columbia 1, 2, 4 4/1/94 6/30/04
Managed Health Care 1, 2, 3, 4 10/1/92 9/26/04
Florida Prepaid Mental Health Plan 1, 4 3/1/96 11/12/03
Statewide Inpatient Psychiatric Program 4 4/1/99 12/31/03
Non-Emergency Transportation Broker Program 4 10/1/97 1/10/04
Georgia Preadmission Screening and Annual Resident Review
(PASARR) 1, 4 11/1/94 10/5/05
Hawaii None -- -- --
Idaho Healthy Connections 1, 2 10/1/93 9/21/04
Illinois None -- -- --
Indiana Hoosier Healthwise 1 7/1/94 9/22/05
Indiana Medicaid Select 1 1/1/03 7/22/05
Iowa Iowa Plan for Behavioral Health 1, 3, 4 1/1/99 6/30/05
Kansas None -- -- --
Kentucky Human Service Transportation 1, 4 6/1/98 6/12/05
Louisiana Community Care 1 6/1/92 2/28/04
Maine None -- -- --
Maryland None -- -- --
Massachusetts None -- -- --
Michigan Comprehensive Health Care 1, 2, 4 7/1/97 4/21/05
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
2-39
1915)
Statutes
State Program(s) Approved Utilized Implemented Expiration
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 6/30/05
Nevada None -- -- --
New
None
Hampshire -- -- --
New Jersey New Jersey Care 2000+ 1915(b) 1, 2 10/1/00 12/29/04
New Mexico SALUD! 1,4 7/1/97 6/30/04
New York Non-Emergency Transportation 1, 4 7/1/96 11/14/04
ACCESS II/III 1915(b) 1 7/1/98 8/5/03
North Carolina Carolina Access 1915(b) 1 4/1/91 8/5/03
Health Care Connection 1915(b) 1 7/1/96 8/5/03
North Dakota None -- -- --
Ohio PremierCare 1, 2, 4 7/1/01 6/30/05
Oklahoma None -- -- --
Oregon Transportation Program 4 9/1/94 7/25/03
Family Care Network 1 2/1/94 10/26/03
Pennsylvania
HealthChoices 1, 2, 3, 4 2/1/97 6/16/04
Puerto Rico None -- -- --
Rhode Island None -- -- --
South Carolina None
-- -- --
South Dakota None -- -- --
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 11/1/99 11/5/03
STAR 1, 2, 3, 4 8/1/93 8/31/03
Choice of Health Care Delivery 1, 2, 4 7/1/82 7/23/03
Utah Non-Emergency Transportation 1, 4 7/1/01 10/21/05
Prepaid Mental Health Program 4 7/1/91 12/26/05
Vermont None -- -- --
Medallion 1, 2 3/1/92 3/24/04
Virginia
Medallion II 1, 2, 4 1/1/96 12/25/04
Healthy Options 1, 4 10/1/93 7/1/03
Washington
The Integrated Mental Health Services 1, 4 7/1/93 3/4/04
Mountain Health Trust 1, 4 9/1/96 3/22/04
West Virginia
Physician Assured Access System 1,2 6/1/92 4/27/04
Wisconsin None -- -- --
Wyoming None -- -- --
Source: 2003 National Summary of State Medicaid Managed Care Programs. Program Descriptions as of June 30, 2003.
Centers for Medicare and Medicaid Services, Center for Medicaid & State Operations.
2-40
Section 1115 Research and Demonstration Waivers

As of June 30, 2003
State Program Implemented Expiration
Arizona Arizona Health Care Cost Containment System (AHCCCS) 10/1/82 9/30/06
Centers For Elders Independence 4/1/95 11/24/03
On Lok Senior Health Services 11/1/83 11/24/03
California
Senior Care Action Network 1/1/85 12/31/03
Sutter Senior Care 5/1/94 11/24/03
Delaware Diamond State Health Plan 1/1/96 3/15/04
Hawaii Hawaii QUEST 8/1/94 3/31/05
Kentucky Kentucky Health Care Partnership Program 11/1/97 11/1/05
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 3/1/07
Partnership Plan – Family Health Plus 9/04/01 3/31/06
New York
Partnership Plan Medicaid Managed Care Program 10/1/97 3/31/06
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
Utah Primary Care Network (PCN) 7/1/02 7/31/07
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 12/31/03
Source: 2003 National Summary of State Medicaid Managed Care Programs. Program Descriptions as of June 30, 2003. Centers
for Medicare and Medicaid Services, Center for Medicaid & State Operations. Last Modified: 9/16/04.
2-41
Pharmacy Plus Demonstrations Program Status
Pharmacy Waivers Under 1115 Authority
STATE PROGRAM NAME STATUS

Arkansas Arkansas RX Senior Care Pending
Connecticut ConnPACE Program Rx Pending
Delaware Delaware Pharmacy Assistance Program Disapproved
Florida Ron Silver Senior Rx Program Approved
Hawaii Prescription Plus Disapproved

Prescription Drug Benefit for Illinois’ Low
Illinois Approved
Income
Indiana Hoosier Rx Pending
Indiana
Pending
Maine Maine Health Prescription Drug Demonstration
Massachusetts Pharmacy Waiver Withdrawn
Michigan EPIC Ex Pending

Pharmaceutical Assistance for the Aged and
New Jersey Pending
Disabled
North Carolina North Carolina Senior Care Pending
Pending
Rhode Island Rhode Island RX+
Prescription Drug Benefit for South Approved
South Carolina
Carolina’s Low Income Seniors
Wisconsin WI Senior Care Approved
Source: CMS Website at www.cms.DHHS.gov/medicaid/1115/pharmplusstatus.asp; last modified on September 16, 2004.
2-42
Section 3:
State Characteristics
3-1
3-2
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, insurance coverage, poverty status,
employment, and income 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 2003 American
Community Survey conducted by the U.S. Bureau of the Census. 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 Current Population Survey, 2004 Annual
Social and Economic Supplement, 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. In addition, more detailed data on poverty, also compiled from 2004 Annual
Social and Economic Supplement to the Current Population Survey, have been included in this
year’s Compilation.
HRSA’s Bureau of Health Professions, National Center for Health Workforce Analysis is
responsible for compiling the Area Resource File (ARF), an important annual data file for
researchers, planners, policymakers, and others seeking information on the health professions
workforce, health care facilities, health care utilization and expenditures, etc. at a variety of
geographic levels. The ARF has been our primary source of information on physicians and, for
the past several years, registered nurses. Unfortunately, 2002 physician data provided by the
American Medical Association (AMA) that HRSA had hoped to include in the 2004 ARF were
not able to be included. Instead, HRSA carried over 2001 physician data from the 2003 ARF.
Therefore, since no update information was available, we decided not to acquire the 2004 ARF
and have repeated the 2001 physician data that appeared in last year’s Compilation (see page 3-
16).
3-3
The National Sample Survey of Registered Nurses is the most extensive and comprehensive
source of nursing statistics for the U.S health care system. Conducted every four years by
HRSA’s Bureau of Health Professions, Division of Nursing, the most recent data currently
available from this survey are for 2000. Since these data are somewhat out-of-date, we have, for
the past two years, turned to the ARF for nursing statistics. However, as is often the case, data
from different sources are not exactly the same. The ARF, for example, provides information on
the number of “full-time equivalent registered nurses, not a simple body count of the number of
full-time and part-time RNs. Thus, the number of nurses presented in the ARF may be lower than
those compiled from the National Sample Survey of Registered Nurses. Also, since we did not
obtain the 2004 ARF because of the lack of updated physician data, we also repeated the RN data
that were presented in the 2003 Compilation (see page 3-17).
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.
3-4
Age Demographics, 2003*

Total Percent Ages Percent Percent Percent
State Population 19 and under Ages 20-44 Ages 45-64 Ages 65+
National Total 282,909,885 28.1% 35.9% 24.0% 12.0%
Alabama 4,385,446 27.8% 34.6% 24.8% 12.8%
Alaska 629,832 33.3% 35.1% 25.3% 6.3%
Arizona 5,470,843 30.1% 35.4% 21.8% 12.7%
Arkansas 2,650,062 27.9% 34.5% 24.0% 13.6%
California 34,650,690 29.6% 37.6% 22.5% 10.3%
Colorado 4,447,892 28.2% 38.5% 23.9% 9.5%
Connecticut 3,371,241 26.8% 34.4% 26.0% 12.8%
Delaware 792,494 27.0% 35.7% 24.3% 12.9%
District of Columbia 528,759 20.8% 43.5% 23.7% 12.0%
Florida 16,618,145 25.8% 33.2% 24.3% 16.7%
Georgia 8,438,203 29.4% 38.8% 22.6% 9.2%
Hawaii 1,221,885 26.6% 34.3% 25.7% 13.4%
Idaho 1,333,165 30.7% 34.7% 23.6% 11.1%
Illinois 12,328,721 28.5% 36.5% 23.6% 11.4%
Indiana 6,017,445 28.8% 35.5% 23.9% 11.9%
Iowa 2,839,868 26.5% 34.5% 25.0% 14.0%
Kansas 2,641,747 28.5% 35.6% 23.6% 12.3%
Kentucky 4,003,036 27.1% 35.9% 24.9% 12.1%
Louisiana 4,361,271 29.5% 35.4% 23.7% 11.3%
Maine 1,270,602 24.8% 33.4% 27.9% 13.9%
Maryland 5,372,472 27.9% 35.9% 25.2% 11.1%
Massachusetts 6,218,773 25.9% 36.5% 24.8% 12.8%
Michigan 9,825,840 28.2% 35.0% 24.8% 12.0%
Minnesota 4,919,584 27.8% 36.5% 24.2% 11.4%
Mississippi 2,785,493 29.6% 35.3% 23.2% 11.8%
Missouri 5,534,753 27.7% 35.1% 24.5% 12.7%
Montana 892,497 26.8% 32.5% 27.6% 13.1%
Nebraska 1,687,661 28.3% 35.0% 24.0% 12.6%
Nevada 2,207,574 28.6% 36.7% 23.5% 11.1%
New Hampshire 1,251,572 26.5% 35.2% 26.9% 11.4%
New Jersey 8,444,076 27.3% 35.4% 24.8% 12.6%
New Mexico 1,838,277 30.0% 33.9% 24.1% 12.0%
New York 18,600,527 26.4% 36.4% 24.6% 12.6%
North Carolina 8,146,508 27.6% 36.8% 24.0% 11.7%
North Dakota 609,236 26.4% 34.6% 25.0% 14.1%
Ohio 11,134,722 27.6% 34.6% 25.0% 12.8%
Oklahoma 3,396,794 28.3% 34.6% 24.4% 12.6%
Oregon 3,482,337 26.5% 35.6% 25.5% 12.4%
Pennsylvania 11,922,023 25.7% 33.7% 25.8% 14.8%
Rhode Island 1,037,196 25.3% 36.1% 25.0% 13.6%
South Carolina 4,008,553 27.6% 35.2% 25.0% 12.2%
South Dakota 735,349 28.9% 33.8% 23.7% 13.6%
Tennessee 5,689,261 26.7% 35.9% 25.3% 12.0%
Texas 21,547,821 31.5% 37.1% 21.8% 9.6%
Utah 2,309,555 35.1% 38.3% 18.1% 8.5%
Vermont 598,352 25.0% 33.8% 28.5% 12.7%
Virginia 7,151,960 27.4% 36.4% 25.2% 11.0%
Washington 5,990,020 27.4% 36.6% 25.0% 11.0%
West Virginia 1,766,196 24.2% 33.4% 27.5% 14.9%
Wisconsin 5,316,215 27.2% 35.5% 24.8% 12.5%
Wyoming 487,341 27.4% 33.4% 27.6% 11.6%
This information was taken from the 2003 American Community Survey conducted by the U.S. Bureau of The Census. The information
provided is limited to the household population and excludes the population living in institutions, college dormitories, and other group
quarters. 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. Data based on twelve monthly samples
during 2003.
*Sum of percentages may not equal 100 percent due to rounding.
Source: U.S. Department of Commerce, Bureau of the Census, 2003 American Community Survey.
3-5
Race Demographics, 2003*

% Native % Indicated
% American Hawaiian and 2
Total Indian and Other Pacific % Some or More
State Population % White % Black % Asian Alaska Native Islander other race Races
National Total 282,909,885 76.2% 12.1% 4.2% 0.8% 0.1% 4.8% 1.9%
Alabama 4,385,446 71.1% 26.2% 0.7% 0.3% 0.0% 0.5% 1.3%
Alaska 629,832 69.6% 3.5% 4.1% 14.7% 0.6% 1.5% 6.1%
Arizona 5,470,843 76.8% 3.0% 2.1% 4.8% 0.2% 11.1% 2.0%
Arkansas 2,650,062 79.3% 15.5% 1.0% 0.6% 0.0% 2.0% 1.6%
California 34,650,690 66.2% 6.2% 11.9% 0.8% 0.3% 11.6% 2.9%
Colorado 4,447,892 83.8% 4.1% 2.7% 0.7% 0.0% 6.7% 2.1%
Connecticut 3,371,241 81.5% 9.1% 3.1% 0.4% 0.0% 4.6% 1.4%
Delaware 792,494 75.5% 19.0% 2.5% 0.3% 0.0% 1.4% 1.4%
District of Columbia 528,759 30.5% 58.9% 3.2% 0.5% 0.1% 5.3% 1.5%
Florida 16,618,145 77.1% 15.2% 2.0% 0.4% 0.1% 3.6% 1.7%
Georgia 8,438,203 66.2% 27.6% 2.5% 0.2% 0.1% 2.5% 1.0%
Hawaii 1,221,885 24.3% 2.1% 42.3% 0.1% 9.0% 1.1% 21.1%
Idaho 1,333,165 92.4% 0.6% 1.5% 1.8% 0.0% 2.8% 1.0%
Illinois 12,328,721 74.5% 14.7% 3.9% 0.2% 0.0% 5.2% 1.4%
Indiana 6,017,445 87.2% 7.9% 1.2% 0.3% 0.0% 1.9% 1.5%
Iowa 2,839,868 93.7% 1.9% 1.5% 0.3% 0.0% 1.1% 1.4%
Kansas 2,641,747 86.5% 5.7% 2.7% 0.8% 0.0% 1.8% 2.5%
Kentucky 4,003,036 89.9% 7.3% 0.8% 0.3% 0.0% 0.6% 1.1%
Louisiana 4,361,271 64.0% 32.1% 1.5% 0.6% 0.1% 0.6% 1.1%
Maine 1,270,602 97.0% 0.4% 0.7% 0.7% 0.0% 0.1% 1.0%
Maryland 5,372,472 64.2% 27.6% 4.7% 0.3% 0.0% 1.7% 1.5%
Massachusetts 6,218,773 84.4% 6.0% 4.4% 0.2% 0.0% 3.5% 1.4%
Michigan 9,825,840 80.3% 13.9% 2.2% 0.5% 0.0% 1.4% 1.7%
Minnesota 4,919,584 88.6% 3.8% 3.5% 0.9% 0.0% 1.5% 1.7%
Mississippi 2,785,493 61.0% 36.6% 0.7% 0.3% 0.0% 0.6% 0.8%
Missouri 5,534,753 85.0% 11.3% 1.4% 0.4% 0.0% 0.6% 1.3%
Montana 892,497 90.1% 0.2% 0.6% 6.4% 0.1% 0.6% 2.1%
Nebraska 1,687,661 89.0% 4.0% 1.7% 0.8% 0.0% 2.9% 1.6%
Nevada 2,207,574 77.2% 6.4% 5.0% 1.3% 0.3% 5.9% 3.8%
New Hampshire 1,251,572 95.5% 0.9% 1.7% 0.2% 0.0% 1.0% 0.7%
New Jersey 8,444,076 72.3% 13.4% 6.7% 0.1% 0.0% 6.0% 1.5%
New Mexico 1,838,277 70.2% 1.8% 1.4% 9.1% 0.3% 14.6% 2.7%
New York 18,600,527 68.8% 15.8% 6.5% 0.3% 0.0% 6.6% 2.0%
North Carolina 8,146,508 71.9% 21.2% 1.6% 1.1% 0.1% 2.6% 1.5%
North Dakota 609,236 92.2% 0.8% 0.9% 4.6% 0.2% 0.6% 0.8%
Ohio 11,134,722 84.9% 11.5% 1.4% 0.2% 0.0% 0.7% 1.3%
Oklahoma 3,396,794 76.1% 7.6% 1.6% 8.0% 0.1% 2.3% 4.3%
Oregon 3,482,337 87.8% 1.7% 3.2% 1.1% 0.3% 2.8% 3.1%
Pennsylvania 11,922,023 85.1% 9.8% 2.0% 0.1% 0.0% 1.9% 1.0%
Rhode Island 1,037,196 85.2% 5.2% 2.7% 0.5% 0.6% 4.6% 1.2%
South Carolina 4,008,553 66.9% 29.8% 1.0% 0.2% 0.0% 0.8% 1.2%
South Dakota 735,349 94.5% 0.7% 0.6% 2.3% 0.0% 0.5% 1.3%
Tennessee 5,689,261 79.9% 16.4% 1.2% 0.3% 0.1% 1.3% 0.9%
Texas 21,547,821 73.0% 11.0% 3.1% 0.4% 0.1% 11.0% 1.5%
Utah 2,309,555 90.3% 1.1% 1.8% 0.7% 0.8% 3.5% 1.8%
Vermont 598,352 96.5% 0.4% 0.9% 0.4% 0.0% 0.4% 1.4%
Virginia 7,151,960 72.7% 19.3% 4.4% 0.3% 0.0% 1.6% 1.7%
Washington 5,990,020 81.3% 3.3% 6.4% 1.2% 0.4% 3.6% 3.8%
West Virginia 1,766,196 95.1% 3.1% 0.5% 0.1% 0.0% 0.2% 1.0%
Wisconsin 5,316,215 88.3% 5.7% 1.8% 0.6% 0.0% 2.0% 1.6%
Wyoming 487,341 92.6% 0.7% 0.5% 2.0% 0.0% 1.9% 2.3%
This information was taken from the 2003 American Community Survey conducted by the U.S. Bureau of The Census. The information provided is limited to the household population and
excludes the population living in institutions, college dormitories, and other group quarters. This accounts for the difference in the estimates of the U.S. population from this source
compared to other estimates presented by U.S. Census. The data are based on a sample and are subject to sampling variability. Data based on twelve monthly samples during 2002.
*Sum of percentages may not equal 100 percent due to rounding.
3-6
Hispanic Demographics, 2003
State Total Population Hispanic Population Percent Hispanic

National Total 282,909,885 39,194,837 13.9%
Alabama 4,385,446 84,021 1.9%
Alaska 629,832 28,011 4.4%
Arizona 5,470,843 1,525,366 27.9%
Arkansas 2,650,062 98,628 3.7%
California 34,650,690 11,980,884 34.6%
Colorado 4,447,892 831,314 18.7%
Connecticut 3,371,241 337,911 10.0%
Delaware 792,494 42,514 5.4%
District of Columbia 528,759 51,900 9.8%
Florida 16,618,145 3,108,578 18.7%
Georgia 8,438,203 530,896 6.3%
Hawaii 1,221,885 92,014 7.5%
Idaho 1,333,165 110,604 8.3%
Illinois 12,328,721 1,694,185 13.7%
Indiana 6,017,445 237,800 4.0%
Iowa 2,839,868 88,869 3.1%
Kansas 2,641,747 178,727 6.8%
Kentucky 4,003,036 60,593 1.5%
Louisiana 4,361,271 108,563 2.5%
Maine 1,270,602 9,946 0.8%
Maryland 5,372,472 259,160 4.8%
Massachusetts 6,218,773 463,452 7.5%
Michigan 9,825,840 341,722 3.5%
Minnesota 4,919,584 155,015 3.2%
Mississippi 2,785,493 38,226 1.4%
Missouri 5,534,753 125,406 2.3%
Montana 892,497 17,646 2.0%
Nebraska 1,687,661 105,122 6.2%
Nevada 2,207,574 487,022 22.1%
New Hampshire 1,251,572 22,649 1.8%
New Jersey 8,444,076 1,234,632 14.6%
New Mexico 1,838,277 797,141 43.4%
New York 18,600,527 3,034,125 16.3%
North Carolina 8,146,508 456,334 5.6%
North Dakota 609,236 8,762 1.4%
Ohio 11,134,722 227,059 2.0%
Oklahoma 3,396,794 191,993 5.7%
Oregon 3,482,337 320,243 9.2%
Pennsylvania 11,922,023 405,083 3.4%
Rhode Island 1,037,196 100,242 9.7%
South Carolina 4,008,553 93,580 2.3%
South Dakota 735,349 9,931 1.4%
Tennessee 5,689,261 135,669 2.4%
Texas 21,547,821 7,614,414 35.3%
Utah 2,309,555 229,386 9.9%
Vermont 598,352 4,339 0.7%
Virginia 7,151,960 379,423 5.3%
Washington 5,990,020 478,824 8.0%
West Virginia 1,766,196 12,322 0.7%
Wisconsin 5,316,215 211,352 4.0%
Wyoming 487,341 33,239 6.8%
This information was taken from the 2003 American Community Survey conducted by the U.S. Bureau of The Census. The information
provided is limited to the household population and excludes the population living in institutions, college dormitories, and other group
quarters. This accounts for the difference in the estimates of the U.S. population from this source compared to other estimates presented by
the U.S. Census. The data are based on a sample and are subject to sampling variability. Data based on twelve monthly samples during
2003.
3-7
Insurance Status - Populations, 2003*
Total Medicaid Medicare Military Privately Not

State Population Population Population Insurance Insured Insured
National Total 288,280,000 35,647,000 39,456,000 9,979,000 197,869,000 44,961,000
Alabama 4,427,000 584,000 685,000 182,000 2,997,000 629,000
Alaska 645,000 97,000 55,000 90,000 396,000 122,000
Arizona 5,576,000 739,000 757,000 354,000 3,568,000 951,000
Arkansas 2,671,000 428,000 455,000 188,000 1,621,000 465,000
California 35,394,000 5,340,000 4,132,000 964,000 22,591,000 6,499,000
Colorado 4,480,000 406,000 446,000 250,000 3,125,000 772,000
Connecticut 3,421,000 365,000 525,000 73,000 2,594,000 357,000
Delaware 820,000 92,000 110,000 32,000 620,000 91,000
District of Columbia 554,000 101,000 69,000 12,000 358,000 79,000
Florida 16,921,000 1,900,000 3,116,000 791,000 10,950,000 3,071,000
Georgia 8,571,000 965,000 994,000 280,000 5,954,000 1,409,000
Hawaii 1,253,000 133,000 176,000 104,000 927,000 127,000
Idaho 1,360,000 167,000 167,000 40,000 912,000 253,000
Illinois 12,628,000 1,194,000 1,706,000 216,000 9,238,000 1,818,000
Indiana 6,149,000 566,000 842,000 92,000 4,529,000 853,000
Iowa 2,921,000 233,000 465,000 78,000 2,317,000 329,000
Kansas 2,683,000 237,000 346,000 205,000 2,024,000 294,000
Kentucky 4,110,000 551,000 662,000 248,000 2,813,000 574,000
Louisiana 4,429,000 606,000 605,000 194,000 2,716,000 912,000
Maine 1,283,000 231,000 222,000 54,000 877,000 133,000
Maryland 5,493,000 441,000 673,000 186,000 4,129,000 762,000
Massachusetts 6,367,000 756,000 892,000 112,000 4,740,000 682,000
Michigan 9,918,000 1,258,000 1,394,000 135,000 7,555,000 1,080,000
Minnesota 5,076,000 484,000 572,000 106,000 4,110,000 444,000
Mississippi 2,854,000 537,000 421,000 188,000 1,696,000 511,000
Missouri 5,623,000 680,000 912,000 190,000 4,210,000 620,000
Montana 917,000 114,000 135,000 68,000 589,000 177,000
Nebraska 1,727,000 152,000 216,000 83,000 1,316,000 195,000
Nevada 2,250,000 188,000 278,000 90,000 1,518,000 426,000
New Hampshire 1,264,000 87,000 159,000 30,000 1,003,000 131,000
New Jersey 8,579,000 712,000 1,085,000 124,000 6,368,000 1,201,000
New Mexico 1,871,000 362,000 281,000 91,000 1,033,000 414,000
New York 18,970,000 3,125,000 2,754,000 234,000 12,594,000 2,866,000
North Carolina 8,253,000 1,057,000 1,213,000 438,000 5,277,000 1,424,000
North Dakota 631,000 55,000 88,000 43,000 480,000 69,000
Ohio 11,247,000 1,207,000 1,471,000 230,000 8,413,000 1,362,000
Oklahoma 3,438,000 397,000 555,000 224,000 2,136,000 701,000
Oregon 3,569,000 415,000 475,000 122,000 2,437,000 613,000
Pennsylvania 12,155,000 1,271,000 2,077,000 253,000 9,208,000 1,384,000
Rhode Island 1,053,000 160,000 163,000 27,000 766,000 108,000
South Carolina 4,064,000 553,000 663,000 221,000 2,777,000 584,000
South Dakota 751,000 81,000 119,000 34,000 560,000 91,000
Tennessee 5,909,000 964,000 856,000 258,000 3,935,000 778,000
Texas 21,858,000 2,916,000 2,320,000 686,000 12,663,000 5,374,000
Utah 2,352,000 199,000 208,000 85,000 1,831,000 298,000
Vermont 611,000 113,000 94,000 20,000 435,000 58,000
Virginia 7,386,000 574,000 986,000 750,000 5,301,000 962,000
Washington 6,091,000 842,000 688,000 314,000 4,160,000 944,000
West Virginia 1,787,000 298,000 355,000 65,000 1,089,000 296,000
Wisconsin 5,429,000 654,000 754,000 89,000 4,081,000 593,000
Wyoming 488,000 60,000 64,000 38,000 333,000 78,000
*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.
Source: U.S. Department of Commerce, Bureau of the Census, Current Population Survey, 2004 Annual Social and
Economic Supplement.
3-8
Insurance Status - Percentages, 2003*
% Covered by % Covered by
Total % Covered by % Covered by Military Private
State Population Medicaid Medicare Insurance Insurance % Not Insured
National Total 288,280,000 12.4% 13.7% 3.5% 68.6% 15.6%
Alabama 4,427,000 13.2% 15.5% 4.1% 67.7% 14.2%
Alaska 645,000 15.1% 8.5% 14.0% 61.5% 18.9%
Arizona 5,576,000 13.3% 13.6% 6.3% 64.0% 17.0%
Arkansas 2,671,000 16.0% 17.0% 7.0% 60.7% 17.4%
California 35,394,000 15.1% 11.7% 2.7% 63.8% 18.4%
Colorado 4,480,000 9.1% 9.9% 5.6% 69.8% 17.2%
Connecticut 3,421,000 10.7% 15.4% 2.1% 75.8% 10.4%
Delaware 820,000 11.2% 13.4% 3.9% 75.7% 11.1%
District of Columbia 554,000 18.2% 12.5% 2.1% 64.6% 14.3%
Florida 16,921,000 11.2% 18.4% 4.7% 64.7% 18.2%
Georgia 8,571,000 11.3% 11.6% 3.3% 69.5% 16.4%
Hawaii 1,253,000 10.6% 14.1% 8.3% 74.0% 10.1%
Idaho 1,360,000 12.3% 12.3% 3.0% 67.1% 18.6%
Illinois 12,628,000 9.5% 13.5% 1.7% 73.2% 14.4%
Indiana 6,149,000 9.2% 13.7% 1.5% 73.7% 13.9%
Iowa 2,921,000 8.0% 15.9% 2.7% 79.3% 11.3%
Kansas 2,683,000 8.8% 12.9% 7.6% 75.4% 11.0%
Kentucky 4,110,000 13.4% 16.1% 6.0% 68.4% 14.0%
Louisiana 4,429,000 13.7% 13.7% 4.4% 61.3% 20.6%
Maine 1,283,000 18.0% 17.3% 4.2% 68.4% 10.4%
Maryland 5,493,000 8.0% 12.3% 3.4% 75.2% 13.9%
Massachusetts 6,367,000 11.9% 14.0% 1.8% 74.4% 10.7%
Michigan 9,918,000 12.7% 14.1% 1.4% 76.2% 10.9%
Minnesota 5,076,000 9.5% 11.3% 2.1% 81.0% 8.7%
Mississippi 2,854,000 18.8% 14.8% 6.6% 59.4% 17.9%
Missouri 5,623,000 12.1% 16.2% 3.4% 74.9% 11.0%
Montana 917,000 12.5% 14.7% 7.4% 64.2% 19.4%
Nebraska 1,727,000 8.8% 12.5% 4.8% 76.2% 11.3%
Nevada 2,250,000 8.3% 12.4% 4.0% 67.5% 18.9%
New Hampshire 1,264,000 6.9% 12.6% 2.4% 79.3% 10.3%
New Jersey 8,579,000 8.3% 12.6% 1.4% 74.2% 14.0%
New Mexico 1,871,000 19.3% 15.0% 4.8% 55.2% 22.1%
New York 18,970,000 16.5% 14.5% 1.2% 66.4% 15.1%
North Carolina 8,253,000 12.8% 14.7% 5.3% 63.9% 17.3%
North Dakota 631,000 8.7% 13.9% 6.8% 76.0% 10.9%
Ohio 11,247,000 10.7% 13.1% 2.0% 74.8% 12.1%
Oklahoma 3,438,000 11.5% 16.1% 6.5% 62.1% 20.4%
Oregon 3,569,000 11.6% 13.3% 3.4% 68.3% 17.2%
Pennsylvania 12,155,000 10.5% 17.1% 2.1% 75.8% 11.4%
Rhode Island 1,053,000 15.2% 15.5% 2.5% 72.7% 10.2%
South Carolina 4,064,000 13.6% 16.3% 5.4% 68.3% 14.4%
South Dakota 751,000 10.8% 15.8% 4.6% 74.6% 12.2%
Tennessee 5,909,000 16.3% 14.5% 4.4% 66.6% 13.2%
Texas 21,858,000 13.3% 10.6% 3.1% 57.9% 24.6%
Utah 2,352,000 8.5% 8.8% 3.6% 77.8% 12.7%
Vermont 611,000 18.4% 15.4% 3.3% 71.1% 9.5%
Virginia 7,386,000 7.8% 13.4% 10.2% 71.8% 13.0%
Washington 6,091,000 13.8% 11.3% 5.2% 68.3% 15.5%
West Virginia 1,787,000 16.6% 19.9% 3.6% 60.9% 16.6%
Wisconsin 5,429,000 12.1% 13.9% 1.6% 75.2% 10.9%
Wyoming 488,000 12.3% 13.1% 7.8% 68.2% 15.9%
*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.
3-9
Poverty Status - Populations, 2003
Population Population Population Population

Total Below 100% Below 135% Below 150% Below 200%
State Population FPL* FPL* FPL* FPL*
National Total 287,699,000 35,861,000 54,460,000 62,553,000 287,699,000
Alabama 4,417,000 663,000 945,000 1,067,000 4,417,000
Alaska 643,000 62,000 99,000 120,000 643,000
Arizona 5,558,000 749,000 1,225,000 1,446,000 5,558,000
Arkansas 2,670,000 474,000 665,000 761,000 2,670,000
California 35,309,000 4,634,000 7,310,000 8,467,000 35,309,000
Colorado 4,478,000 436,000 682,000 789,000 4,478,000
Connecticut 3,417,000 278,000 420,000 496,000 3,417,000
Delaware 818,000 60,000 100,000 120,000 818,000
Florida 16,884,000 2,148,000 3,266,000 3,714,000 16,884,000
Georgia 8,559,000 1,014,000 1,544,000 1,722,000 8,559,000
Hawaii 1,250,000 117,000 184,000 205,000 1,250,000
Idaho 1,356,000 138,000 220,000 263,000 1,356,000
Illinois 12,616,000 1,592,000 2,282,000 2,672,000 12,616,000
Indiana 6,130,000 610,000 1,062,000 1,205,000 6,130,000
Iowa 2,916,000 260,000 418,000 495,000 2,916,000
Kansas 2,676,000 288,000 443,000 508,000 2,676,000
Kentucky 4,100,000 589,000 952,000 1,113,000 4,100,000
Louisiana 4,422,000 750,000 1,129,000 1,239,000 4,422,000
Maine 1,279,000 149,000 246,000 280,000 1,279,000
Maryland 5,485,000 472,000 705,000 863,000 5,485,000
Massachusetts 6,357,000 652,000 1,010,000 1,172,000 6,357,000
Michigan 9,893,000 1,125,000 1,676,000 1,910,000 9,893,000
Minnesota 5,075,000 376,000 570,000 677,000 5,075,000
Mississippi 2,851,000 456,000 681,000 811,000 2,851,000
Missouri 5,606,000 602,000 929,000 1,084,000 5,606,000
Montana 915,000 139,000 231,000 262,000 915,000
Nebraska 1,725,000 168,000 273,000 314,000 1,725,000
Nevada 2,242,000 244,000 408,000 488,000 2,242,000
New Hampshire 1,263,000 73,000 119,000 141,000 1,263,000
New Jersey 8,574,000 741,000 1,138,000 1,304,000 8,574,000
New Mexico 1,867,000 338,000 510,000 589,000 1,867,000
New York 18,922,000 2,707,000 3,879,000 4,354,000 18,922,000
North Carolina 8,223,000 1,289,000 1,912,000 2,202,000 8,223,000
North Dakota 631,000 61,000 103,000 120,000 631,000
Ohio 11,227,000 1,226,000 1,771,000 2,053,000 11,227,000
Oklahoma 3,430,000 440,000 720,000 820,000 3,430,000
Oregon 3,560,000 446,000 646,000 758,000 3,560,000
Pennsylvania 12,135,000 1,279,000 1,894,000 2,237,000 12,135,000
Rhode Island 1,051,000 121,000 176,000 201,000 1,051,000
South Carolina 4,060,000 516,000 843,000 960,000 4,060,000
South Dakota 749,000 95,000 139,000 159,000 749,000
Tennessee 5,901,000 829,000 1,331,000 1,515,000 5,901,000
Texas 21,827,000 3,705,000 5,592,000 6,256,000 21,827,000
Utah 2,346,000 213,000 349,000 390,000 2,346,000
Vermont 610,000 52,000 93,000 107,000 610,000
Virginia 7,367,000 740,000 1,024,000 1,186,000 7,367,000
Washington 6,078,000 766,000 1,041,000 1,230,000 6,078,000
West Virginia 1,785,000 310,000 458,000 517,000 1,785,000
Wisconsin 5,412,000 528,000 851,000 964,000 5,412,000
Wyoming 487,000 48,000 77,000 93,000 487,000
*FPL- Federal Poverty Level
3-10
Poverty Status - Percentages, 2003
Percent Percent Percent Percent

Total Below 100% Below 135% Below 150% Below 200%
State Population FPL* FPL* FPL* FPL*
National Total 287,699,000 12.5% 18.9% 21.7% 31.1%
Alabama 4,417,000 15.0% 21.4% 24.1% 34.4%
Alaska 643,000 9.6% 15.4% 18.6% 27.5%
Arizona 5,558,000 13.5% 22.0% 26.0% 36.7%
Arkansas 2,670,000 17.8% 24.9% 28.5% 40.5%
California 35,309,000 13.1% 20.7% 24.0% 32.9%
Colorado 4,478,000 9.7% 15.2% 17.6% 26.2%
Connecticut 3,417,000 8.1% 12.3% 14.5% 22.0%
Delaware 818,000 7.3% 12.2% 14.7% 24.1%
District of Columbia 550,000 16.8% 21.8% 24.6% 32.5%
Florida 16,884,000 12.7% 19.3% 22.0% 32.6%
Georgia 8,559,000 11.9% 18.0% 20.1% 28.4%
Hawaii 1,250,000 9.3% 14.7% 16.4% 25.1%
Idaho 1,356,000 10.2% 16.2% 19.4% 34.7%
Illinois 12,616,000 12.6% 18.1% 21.2% 29.6%
Indiana 6,130,000 9.9% 17.3% 19.7% 28.2%
Iowa 2,916,000 8.9% 14.3% 17.0% 25.9%
Kansas 2,676,000 10.8% 16.5% 19.0% 28.9%
Kentucky 4,100,000 14.4% 23.2% 27.1% 35.3%
Louisiana 4,422,000 17.0% 25.5% 28.0% 39.9%
Maine 1,279,000 11.6% 19.3% 21.9% 32.5%
Maryland 5,485,000 8.6% 12.9% 15.7% 24.2%
Massachusetts 6,357,000 10.3% 15.9% 18.4% 25.2%
Michigan 9,893,000 11.4% 16.9% 19.3% 28.9%
Minnesota 5,075,000 7.4% 11.2% 13.3% 21.6%
Mississippi 2,851,000 16.0% 23.9% 28.5% 39.7%
Missouri 5,606,000 10.7% 16.6% 19.3% 27.9%
Montana 915,000 15.1% 25.2% 28.6% 38.5%
Nebraska 1,725,000 9.8% 15.9% 18.2% 26.0%
Nevada 2,242,000 10.9% 18.2% 21.8% 30.9%
New Hampshire 1,263,000 5.8% 9.4% 11.1% 18.6%
New Jersey 8,574,000 8.6% 13.3% 15.2% 23.1%
New Mexico 1,867,000 18.1% 27.3% 31.5% 43.6%
New York 18,922,000 14.3% 20.5% 23.0% 31.6%
North Carolina 8,223,000 15.7% 23.2% 26.8% 37.2%
North Dakota 631,000 9.7% 16.3% 19.0% 29.0%
Ohio 11,227,000 10.9% 15.8% 18.3% 27.7%
Oklahoma 3,430,000 12.8% 21.0% 23.9% 35.4%
Oregon 3,560,000 12.5% 18.1% 21.3% 30.2%
Pennsylvania 12,135,000 10.5% 15.6% 18.4% 27.7%
Rhode Island 1,051,000 11.5% 16.7% 19.1% 28.4%
South Carolina 4,060,000 12.7% 20.8% 23.6% 33.7%
South Dakota 749,000 12.7% 18.6% 21.2% 31.2%
Tennessee 5,901,000 14.0% 22.6% 25.7% 35.3%
Texas 21,827,000 17.0% 25.6% 28.7% 39.5%
Utah 2,346,000 9.1% 14.9% 16.6% 28.6%
Vermont 610,000 8.5% 15.2% 17.6% 26.2%
Virginia 7,367,000 10.0% 13.9% 16.1% 23.0%
Washington 6,078,000 12.6% 17.1% 20.2% 28.8%
West Virginia 1,785,000 17.4% 25.7% 29.0% 40.3%
Wisconsin 5,412,000 9.8% 15.7% 17.8% 26.5%
Wyoming 487,000 9.8% 15.8% 19.1% 29.2%
*FPL- Federal Poverty Level
3-11
Employment Status, 2004*
Total Civilian Population Unemployment

State Population Labor Force Unemployed Rate
National Total 223,357,000 147,401,000 8,149,000 5.5%
Alabama 3,484,000 2,149,000 119,000 5.6%
Alaska 465,000 333,000 25,000 7.5%
Arizona 4,266,000 2,774,000 137,000 5.0%
Arkansas 2,102,000 1,306,000 74,000 5.7%
California 26,768,000 17,552,000 1,092,000 6.2%
Colorado 3,468,000 2,522,000 139,000 5.5%
Connecticut 2,700,000 1,797,000 88,000 4.9%
Delaware 643,000 423,000 17,000 4.1%
District of Columbia 443,000 299,000 24,000 8.2%
Florida 13,521,000 8,396,000 399,000 4.8%
Georgia 6,534,000 4,390,000 202,000 4.6%
Hawaii 946,000 616,000 20,000 3.3%
Idaho 1,039,000 703,000 33,000 4.7%
Illinois 9,641,000 6,396,000 396,000 6.2%
Indiana 4,725,000 3,170,000 165,000 5.2%
Iowa 2,307,000 1,624,000 78,000 4.8%
Kansas 2,069,000 1,464,000 80,000 5.5%
Kentucky 3,194,000 1,974,000 104,000 5.3%
Louisiana 3,377,000 2,058,000 117,000 5.7%
Maine 1,055,000 699,000 32,000 4.6%
Maryland 4,223,000 2,883,000 122,000 4.2%
Massachusetts 5,036,000 3,393,000 174,000 5.1%
Michigan 7,748,000 5,079,000 360,000 7.1%
Minnesota 3,943,000 2,952,000 138,000 4.7%
Mississippi 2,169,000 1,330,000 82,000 6.2%
Missouri 4,424,000 3,031,000 172,000 5.7%
Montana 730,000 483,000 21,000 4.4%
Nebraska 1,331,000 985,000 37,000 3.8%
Nevada 1,759,000 1,178,000 51,000 4.3%
New Hampshire 1,018,000 723,000 27,000 3.8%
New Jersey 6,666,000 4,388,000 212,000 4.8%
New Mexico 1,436,000 912,000 52,000 5.7%
New York 14,906,000 9,355,000 543,000 5.8%
North Carolina 6,439,000 4,256,000 236,000 5.5%
North Dakota 497,000 354,000 12,000 3.4%
Ohio 8,828,000 5,885,000 362,000 6.1%
Oklahoma 2,671,000 1,710,000 83,000 4.8%
Oregon 2,800,000 1,856,000 138,000 7.4%
Pennsylvania 9,702,000 6,275,000 348,000 5.5%
Rhode Island 848,000 562,000 29,000 5.2%
South Carolina 3,193,000 2,046,000 140,000 6.8%
South Dakota 586,000 428,000 15,000 3.5%
Tennessee 4,564,000 2,908,000 156,000 5.4%
Texas 16,388,000 11,035,000 672,000 6.1%
Utah 1,697,000 1,203,000 63,000 5.2%
Vermont 499,000 353,000 13,000 3.7%
Virginia 5,605,000 3,815,000 140,000 3.7%
Washington 4,777,000 3,234,000 201,000 6.2%
West Virginia 1,452,000 788,000 42,000 5.3%
Wisconsin 4,280,000 3,071,000 152,000 4.9%
Wyoming 395,000 282,000 11,000 3.9%
*This information was compiled from the U.S. Department of Labor, Bureau of Labor Statistics News Release on State and
Regional Unemployment, 2004 Annual Averages, released on March 10, 2005. The table summarizes the employment status
of the civilian noninstitutional population, 16 years of age and over, by state.
Source: U.S. Department of Labor, Bureau of Labor Statistics, March 10, 2005.
3-12
Medicaid/Medicare Certified Facilities, 2004
Skilled Nursing ICF-MR Home Health Rural Health

State Hospitals Facilities Facilities Agencies Clinics
National Total* 6,0482 14,982 6,521 7,617 3,545
Alabama 126 226 6 141 66
Alaska 24 14 0 16 6
Arizona 91 132 13 67 12
Arkansas 105 203 41 173 71
California 432 1,228 1,117 621 241
Colorado 87 195 3 130 37
Connecticut 45 246 118 84 0
Delaware 10 37 2 15 16
District of Columbia 14 19 128 18 0
Florida 237 686 108 538 154
Georgia 178 332 12 98 93
Hawaii 27 41 20 14 1
Idaho 48 77 66 49 46
Illinois 220 683 308 329 209
Indiana 156 483 520 185 53
Iowa 120 403 133 181 131
Kansas 152 264 31 136 177
Kentucky 119 295 13 105 118
Louisiana 221 297 486 225 62
Maine 42 117 20 30 46
Maryland 65 231 4 48 0
Massachusetts 112 463 6 118 1
Michigan 175 395 1 244 158
Minnesota 147 396 221 213 73
Mississippi 111 168 13 59 141
Missouri 138 482 19 156 284
Montana 66 100 1 40 42
Nebraska 96 185 4 68 99
Nevada 43 41 19 50 6
New Hampshire 32 72 1 35 17
New Jersey 108 357 9 52 0
New Mexico 51 73 43 62 12
New York 245 659 678 192 9
North Carolina 138 420 332 169 103
North Dakota 50 83 68 26 62
Ohio 216 941 421 386 17
Oklahoma 152 273 72 195 40
Oregon 59 120 1 60 53
Pennsylvania 247 710 192 292 41
Rhode Island 15 95 15 22 1
South Carolina 77 177 121 69 95
South Dakota 66 90 1 46 55
Tennessee 153 304 83 139 41
Texas 517 1,030 894 1,220 327
Utah 48 82 15 49 14
Vermont 16 41 2 12 19
Virginia 109 252 27 164 56
Washington 101 240 14 61 111
West Virginia 68 122 61 63 68
Wisconsin 143 369 36 122 58
Wyoming 30 33 2 30 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 18,
2005.
3-13
Licensed Pharmacies (As of June 30, 2004)*
Hospital/ Independent Out-of-State or

Total Institutional Community Chain Pharmacies Non-Resident
State Pharmacies Pharmacies Pharmacies (Four or More) Pharmacies
National Total 80,858 7,934 15,443 15,651 13,280
Alabama 1,350 163 724 636 404
Alaska 130 (G) 25 (H) 257
Arizona 1,362 85 98 787 295
Arkansas 739 164 404 335 208
California 6,122 497 198
Colorado 1,232 353
Connecticut 617 (D) 50 (D) 162 (D) 455 (D) 312 (D)
Delaware 245 18 63 182 517
District of Columbia 123 13 27 61 0
Florida 6,841 (F) 1,945 (V) (V) 419
Georgia 3,689 205 (P) (P)
Hawaii 209 184
Idaho 639 275 (A, E) 273
Illinois 2,451 342 2,183 (A) (A) 296
Indiana 1,354 371
Iowa 1,247 130(F) 798 (A, F) (A) 302
Kansas 818 175 348 264 372
Kentucky 1,495 (X) 174 633 493 189
Louisiana 1,760 181 633 555 339
Maine 290 42 187
Maryland 2,168 (I) 65 126 700 331
Massachusetts 1,048 (J) 158 250 740 0
Michigan 2,547 150
Minnesota 1,502 134 478 552 334
Mississippi 962 130 220
Missouri 1,561 (K) 115 224 473 290
Montana 312 93 255
Nebraska 500 N/A 204 (L)
Nevada 794 268
New Hampshire 275 32 43 180 276
New Jersey 1,981
New Mexico 499 52 68 (A) 274
New York 4,644 470 (Q) 1,990 2,072 91
North Carolina 2,123 (F) 166 572 990 286
North Dakota 584 47 156 30 289
Ohio 2,984 (N) 227 573 1,544 374
Oklahoma 1,430 154 (D) 871 (A) (A) 383
Oregon 1,147 123 366 543 469
Pennsylvania 3,172 284 0
Rhode Island 206 21 38 5 363
South Carolina 1,169 403
South Dakota 546 45 123 87 291
Tennessee 1,918 444 525 844 105
Texas 5,981 (B) 583 1,737 2,354 332
Utah 898 106 473 (A) (A) 300
Vermont 158 17 141 89
Virginia 1,549 462
Washington 1,633 230 (C) 341 769 293
West Virginia 549 (J) 331
Wisconsin 3,165 0
Wyoming 140 (F) 29 341
*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: 2005 National Association of Boards of Pharmacy, Survey of Pharmacy Law.
3-14
LEGEND
A — Chains included in independent community pharmacies figure.

B — Also licenses 975 nuclear, public health, clinic, ambulatory surgical center, and HMO pharmacies.
C — Includes 121 hospital, 26 nursing home, 19 home infusion, 5 nuclear, 41 HMO, and 18 other pharmacies.
D — Approximately.
E — Plus 22 limited service and 61 parenteral admixture pharmacies.
F — In-state.
G — Includes 19 wholesalers drug distributors.
H — Drug rooms.
I — Total includes other areas not listed: clinic, correctional, HMO, nursing home, IV, nuclear, research, and other.
103 pharmacies have waiver (specialty permits) Board issued 682 distributor permits.
J — Total also includes home IV and mail-order pharmacies.
K — Includes the following pharmacy categories: 15 long-term care, 4 home health, 8 radiopharmaceutical, 2 renal
dialysis, 1 sterile pharmaceuticals, 1 consultant pharmacy, 1 medical gas, 1 shared services, and 405 with multiple
classes.
L — Nebraska licenses out-of-state pharmacies.
M — Plus 336 who are practicing, but place is unknown.
N — Includes 266 nuclear, clinic, fluid therapy, mail-order, specialty, and pharmaciesserving nursing homes only.
O — 2,498 technicians, 415 technicians-in training.
P — 2,202 (2,165 independent and chain pharmacies, 14 nuclear pharmacies, 18 prison pharmacies, 5 clinic
pharmacies, and 2 pharmacy schools).
Q — 16 nuclear pharmacies.
R — PTCB Certified – Total number of technicians unknown.
S — 6,525 plus 1,683 (Technicians-in training).
T — 242 of 609 ship controlled substances to ID.
U — Pharmacists may be counted more than once if work more than one job.
V –– For Florida, 4,477 are primarily community pharmacies but cannot be broken down by chain or independent.
W — Another 2,844 pharmacy technicians are applicants and must complete the registration process by paying the
registration fee; 1,443 pharmacy technicians are pending and the applications are waiting to be processed.
X — Includes 6 charitable pharmacies.
3-15
Physicians, 2001
Physicians Office Based Percent Primary Care Percent

State Physicians Per 1,000 Pop. Physicians Office Based Physicians* Primary Care
National Total 820,869 3.0 507,015 61.8% 313,078 38.1%
Alabama 10,009 2.3 6,743 67.4% 4,208 42.0%
Alaska 1,414 2.3 991 70.1% 756 53.5%
Arizona 12,660 2.4 7,872 62.2% 4,511 35.6%
Arkansas 5,856 2.2 3,889 66.4% 2,883 49.2%
California 99,547 3.0 62,387 62.7% 36,298 36.5%
Colorado 12,095 2.8 7,906 65.4% 4,893 40.5%
Connecticut 13,657 4.1 8,016 58.7% 4,227 31.0%
Delaware 2,152 2.8 1,387 64.5% 824 38.3%
District of Columbia 4,490 8.4 2,082 46.4% 1,180 26.3%
Florida 47,299 3.0 30,148 63.7% 15,311 32.4%
Georgia 19,837 2.4 13,015 65.6% 7,448 37.5%
Hawaii 4,044 3.4 2,606 64.4% 1,420 35.1%
Idaho 2,448 1.9 1,812 74.0% 1,181 48.2%
Illinois 36,361 3.0 21,875 60.2% 14,576 40.1%
Indiana 13,887 2.3 9,378 67.5% 6,356 45.8%
Iowa 6,041 2.1 3,727 61.7% 2,891 47.9%
Kansas 6,533 2.5 4,147 63.5% 2,965 45.4%
Kentucky 9,678 2.4 6,641 68.6% 4,076 42.1%
Louisiana 12,439 2.9 7,956 64.0% 4,466 35.9%
Maine 3,708 3.0 2,423 65.3% 1,653 44.6%
Maryland 23,857 4.6 13,018 54.6% 7,092 29.7%
Massachusetts 29,336 4.8 15,944 54.3% 8,752 29.8%
Michigan 25,710 2.6 15,280 59.4% 9,913 38.6%
Minnesota 14,752 3.1 9,283 62.9% 7,352 49.8%
Mississippi 5,544 2.0 3,741 67.5% 2,221 40.1%
Missouri 14,350 2.6 8,799 61.3% 5,209 36.3%
Montana 2,292 2.6 1,642 71.6% 1,013 44.2%
Nebraska 4,399 2.6 2,829 64.3% 2,286 52.0%
Nevada 4,280 2.1 3,050 71.3% 1,599 37.4%
New Hampshire 3,609 2.9 2,310 64.0% 1,423 39.4%
New Jersey 28,179 3.4 17,727 62.9% 9,672 34.3%
New Mexico 4,678 2.6 2,815 60.2% 1,996 42.7%
New York 79,541 4.3 42,839 53.9% 25,738 32.4%
North Carolina 21,899 2.8 13,922 63.6% 8,668 39.6%
North Dakota 1,602 2.6 1,094 68.3% 879 54.9%
Ohio 30,880 2.8 19,072 61.8% 12,208 39.5%
Oklahoma 6,572 2.0 4,278 65.1% 2,794 42.5%
Oregon 9,748 2.9 6,347 65.1% 3,861 39.6%
Pennsylvania 40,063 3.4 23,701 59.2% 14,387 35.9%
Rhode Island 3,942 3.9 2,254 57.2% 1,365 34.6%
South Carolina 9,939 2.5 6,600 66.4% 4,253 42.8%
South Dakota 1,755 2.4 1,220 69.5% 886 50.5%
Tennessee 15,695 2.8 10,437 66.5% 6,179 39.4%
Texas 48,339 2.3 31,647 65.5% 18,647 38.6%
Utah 5,165 2.3 3,337 64.6% 2,036 39.4%
Vermont 2,403 4.1 1,399 58.2% 1,029 42.8%
Virginia 20,880 3.0 13,050 62.5% 8,082 38.7%
Washington 17,404 3.0 11,170 64.2% 7,527 43.2%
West Virginia 4,498 2.6 2,812 62.5% 1,956 43.5%
Wisconsin 14,374 2.7 9,667 67.3% 6,666 46.4%
Wyoming 1,029 2.1 730 70.9% 557 54.1%
*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 2003.
3-16
Other Providers, 2001/2004
# FTE # FTE
Registered Registered Nurses* Pharmacists** Pharmacists**
State Nurses* per 1,000 population (Licensed by State) per 1,000 population
National Total 962,195 3.4 352,869 1.2
Alabama 17,143 3.8 6,026 1.3
Alaska 2,339 3.7 616 0.9
Arizona 13,058 2.5 6,884 1.2
Arkansas 9,898 3.7 3,649 1.3
California 85,878 2.5 29,676 0.8
Colorado 12,034 2.7 5,445 1.2
Connecticut 9,930 2.9 4,486 1.3
Delaware 2,971 3.7 1,385 1.7
District of Columbia 5,011 8.7 1,564 2.8
Florida 56,078 3.4 21,540 1.2
Georgia 28,447 3.4 10,474 1.2
Hawaii 3,470 2.8 1,574 1.2
Idaho 3,599 2.7 1,623 1.2
Illinois 45,501 3.6 13,151 1.0
Indiana 21,436 3.5 8,696 1.4
Iowa 12,404 4.2 5,001 1.7
Kansas 9,102 3.4 3,652 1.3
Kentucky 16,213 4.0 5,383 1.3
Louisiana 17,274 3.9 5,970 1.3
Maine 5,265 4.1 1,267 1.0
Maryland 16,623 3.1 7,391 1.3
Massachusetts 24,133 3.8 9,940 1.5
Michigan 35,094 3.5 11,322 1.1
Minnesota 16,122 3.2 6,052 1.2
Mississippi 12,356 4.3 3,483 1.2
Missouri 23,650 4.2 7,123 1.2
Montana 3,205 3.5 1,556 1.7
Nebraska 7,249 4.2 2,722 1.6
Nevada 5,084 2.4 8,386 3.6
New Hampshire 4,206 3.3 1,963 1.5
New Jersey 28,082 3.3 13,100 1.5
New Mexico 5,258 2.9 2,325 1.2
New York 72,057 3.8 19,136 1.0
North Carolina 32,695 4.0 9,864 1.2
North Dakota 3,175 5.0 2,155 3.4
Ohio 43,869 3.9 14,703 1.3
Oklahoma 10,827 3.1 4,785 1.4
Oregon 11,674 3.4 4,189 1.2
Pennsylvania 48,786 4.0 17,991 1.5
Rhode Island 2,850 2.7 1,810 1.7
South Carolina 14,942 3.7 5,256 1.3
South Dakota 3,829 5.1 1,443 1.9
Tennessee 20,777 3.6 7,498 1.3
Texas 65,056 3.0 21,795 1.0
Utah 5,446 2.4 2,266 0.9
Vermont 1,656 2.7 840 1.4
Virginia 23,152 3.2 8,754 1.2
Washington 15,440 2.6 7,146 1.2
West Virginia 9,307 5.2 2,970 1.6
Wisconsin 16,878 3.1 5,836 1.1
Wyoming 1,666 3.4 1,007 2.0
*FTE- Full-time equivalent employees as of 2001
**As of June 30, 2004
Source: USDHHS, HRSA, Bureau of Health Professions, National Center for Health Workforce Information & Analysis,
Area Resource File, February 2003. 2005 National Association of Boards of Pharmacy, Survey of Pharmacy Law.
3-17
3-18
Section 4:
Pharmacy Program
Characteristics
4-1
4-2
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.
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.
4-3
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.
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.
4-4
Drug Expenditures Trends*
State 2002 2003 % Change 2002-2003

National Total $29,339,050,970 $33,794,520,738 15.2%
Alabama $452,269,953 $536,222,703 18.6%
Alaska $70,708,412 $69,512,220 -1.7%
Arizona $3,725,371 $4,744,244 27.3%
Arkansas $273,257,660 $310,709,182 13.7%
California $3,591,537,830 $4,219,504,969 17.5%
Colorado $189,717,036 $225,297,507 18.8%
Connecticut $357,919,257 $403,802,170 12.8%
Delaware $97,750,161 $109,844,743 12.4%
District of Columbia $66,129,208 $81,762,504 23.6%
Florida $1,717,652,527 $2,018,037,106 17.5%
Georgia $873,703,133 $1,073,715,230 22.9%
Hawaii $88,256,904 $97,386,406 10.3%
Idaho $119,177,013 $132,143,091 10.9%
Illinois $1,293,435,797 $1,469,190,682 13.6%
Indiana $631,637,846 $627,575,345 -0.6%
Iowa $285,467,642 $331,222,324 16.0%
Kansas $213,778,616 $228,920,787 7.1%
Kentucky $652,904,065 $685,229,661 5.0%
Louisiana $714,107,841 $827,713,132 15.9%
Maine $220,420,714 $268,547,563 21.8%
Maryland $297,291,733 $429,589,193 44.5%
Massachusetts $958,972,520 $946,210,618 -1.3%
Michigan $674,222,281 $758,266,989 12.5%
Minnesota $310,174,144 $276,731,202 -10.8%
Mississippi $567,313,801 $568,007,104 0.1%
Missouri $790,853,387 $941,522,305 19.1%
Montana $83,587,410 $79,771,831 -4.6%
Nebraska $207,782,737 $210,199,726 1.2%
Nevada $86,929,536 $106,821,075 22.9%
New Hampshire $99,682,997 $112,948,647 13.3%
New Jersey $694,669,924 $766,995,569 10.4%
New Mexico $73,877,785 $86,408,362 17.0%
New York $3,660,427,024 $4,218,811,815 15.3%
North Carolina $1,100,822,176 $1,291,263,155 17.3%
North Dakota $52,495,878 $56,960,417 8.5%
Ohio $1,333,992,298 $1,520,147,470 14.0%
Oklahoma $285,068,869 $301,294,000 5.7%
Oregon $279,029,096 $262,335,388 -6.0%
Pennsylvania $718,210,352 $791,053,653 10.1%
Rhode Island $125,187,888 $140,686,626 12.4%
South Carolina $451,846,044 $558,129,364 23.5%
South Dakota $62,382,937 $71,223,108 14.2%
Tennessee $905,405,421 $1,280,129,986 41.4%
Texas $1,591,064,713 $1,920,865,985 20.7%
Utah $140,275,267 $163,217,885 16.4%
Vermont $114,157,870 $127,763,857 11.9%
Virginia $458,953,342 $506,414,352 10.3%
Washington $541,963,790 $592,437,155 9.3%
West Virginia $277,039,990 $345,831,214 24.8%
Wisconsin $442,718,195 $592,295,000 33.8%
Wyoming $39,094,579 $49,106,118 25.6%
*Rebates have not been subtracted from these figures.
Source: CMS, CMS-64 Report, FY 2002 and FY 2003.
4-5
Ranking Based on Drug Expenditures*
% of 2003 National
2003 2003 Medicaid Drug 2002 2002
State Payments Ranking Expenditures Payments Ranking
National Total $33,794,520,738 $29,339,050,970
California $4,219,504,969 1 12.5% $3,591,537,830 2
New York $4,218,811,815 2 12.5% $3,660,427,024 1
Florida $2,018,037,106 3 6.0% $1,717,652,527 3
Texas $1,920,865,985 4 5.7% $1,591,064,713 4
Ohio $1,520,147,470 5 4.5% $1,333,992,298 5
Illinois $1,469,190,682 6 4.3% $1,293,435,797 6
North Carolina $1,291,263,155 7 3.8% $1,100,822,176 7
Tennessee $1,280,129,986 8 3.8% $905,405,421 9
Georgia $1,073,715,230 9 3.2% $873,703,133 10
Massachusetts $946,210,618 10 2.8% $958,972,520 8
Missouri $941,522,305 11 2.8% $790,853,387 11
Louisiana $827,713,132 12 2.4% $714,107,841 13
Pennsylvania $791,053,653 13 2.3% $718,210,352 12
New Jersey $766,995,569 14 2.3% $694,669,924 14
Michigan $758,266,989 15 2.2% $674,222,281 15
Kentucky $685,229,661 16 2.0% $652,904,065 16
Indiana $627,575,345 17 1.9% $631,637,846 17
Washington $592,437,155 18 1.8% $541,963,790 19
Wisconsin $592,295,000 19 1.8% $442,718,195 23
Mississippi $568,007,104 20 1.7% $567,313,801 18
South Carolina $558,129,364 21 1.7% $451,846,044 22
Alabama $536,222,703 22 1.6% $452,269,953 21
Virginia $506,414,352 23 1.5% $458,953,342 20
Maryland $429,589,193 24 1.3% $297,291,733 26
Connecticut $403,802,170 25 1.2% $357,919,257 24
West Virginia $345,831,214 26 1.0% $277,039,990 30
Iowa $331,222,324 27 1.0% $285,467,642 27
Arkansas $310,709,182 28 0.9% $273,257,660 31
Oklahoma $301,294,000 29 0.9% $285,068,869 28
Minnesota $276,731,202 30 0.8% $310,174,144 25
Maine $268,547,563 31 0.8% $220,420,714 32
Oregon $262,335,388 32 0.8% $279,029,096 29
Kansas $228,920,787 33 0.7% $213,778,616 33
Colorado $225,297,507 34 0.7% $189,717,036 35
Nebraska $210,199,726 35 0.6% $207,782,737 34
Utah $163,217,885 36 0.5% $140,275,267 36
Rhode Island $140,686,626 37 0.4% $125,187,888 37
Idaho $132,143,091 38 0.4% $119,177,013 38
Vermont $127,763,857 39 0.4% $114,157,870 39
New Hampshire $112,948,647 40 0.3% $99,682,997 40
Delaware $109,844,743 41 0.3% $97,750,161 41
Nevada $106,821,075 42 0.3% $86,929,536 43
Hawaii $97,386,406 43 0.3% $88,256,904 42
New Mexico $86,408,362 44 0.3% $73,877,785 45
District of Columbia $81,762,504 45 0.2% $66,129,208 47
Montana $79,771,831 46 0.2% $83,587,410 44
South Dakota $71,223,108 47 0.2% $62,382,937 48
Alaska $69,512,220 48 0.2% $70,708,412 46
North Dakota $56,960,417 49 0.2% $52,495,878 49
Wyoming $49,106,118 50 0.1% $39,094,579 50
Arizona $4,744,244 51 0.0% $3,725,371 51
Source: CMS, HCFA-64 Report, FY 2002 and FY 2003.
4-6
Drugs as a Percentage of Total Net Expenditures, 2003
Total Medicaid
Net Medical Assistance Total Drug % of Total
State Expenditures Expenditures* Net Expenditures
National Total $259,895,896,495 $33,794,520,738 13.0%
Alabama $3,477,832,931 $536,222,703 15.4%
Alaska $563,428,717 $69,512,220 12.3%
Arizona $4,219,253,105 $4,744,244 0.1%
Arkansas $2,329,593,600 $310,709,182 13.3%
California $30,051,769,056 $4,219,504,969 14.0%
Colorado $2,552,159,860 $225,297,507 8.8%
Connecticut $3,506,583,946 $403,802,170 11.5%
Delaware $718,470,271 $109,844,743 15.3%
District of Columbia $1,076,136,978 $81,762,504 7.6%
Florida $10,946,214,986 $2,018,037,106 18.4%
Georgia $6,300,856,479 $1,073,715,230 17.0%
Hawaii $766,109,972 $97,386,406 12.7%
Idaho $809,931,820 $132,143,091 16.3%
Illinois $9,253,097,164 $1,469,190,682 15.9%
Indiana $4,282,435,701 $627,575,345 14.7%
Iowa $2,136,386,901 $331,222,324 15.5%
Kansas $1,764,536,608 $228,920,787 13.0%
Kentucky $3,697,230,708 $685,229,661 18.5%
Louisiana $4,423,174,011 $827,713,132 18.7%
Maine $1,747,306,187 $268,547,563 15.4%
Maryland $4,343,054,613 $429,589,193 9.9%
Massachusetts $7,680,882,159 $946,210,618 12.3%
Michigan $7,967,828,590 $758,266,989 9.5%
Minnesota $3,604,575,049 $276,731,202 7.7%
Mississippi $2,853,086,305 $568,007,104 19.9%
Missouri $5,541,604,705 $941,522,305 17.0%
Montana $511,474,712 $79,771,831 15.6%
Nebraska $1,325,133,485 $210,199,726 15.9%
Nevada $1,015,796,455 $106,821,075 10.5%
New Hampshire $916,422,038 $112,948,647 12.3%
New Jersey $7,858,368,246 $766,995,569 9.8%
New Mexico $2,006,492,205 $86,408,362 4.3%
New York $39,585,134,508 $4,218,811,815 10.7%
North Carolina $7,050,804,888 $1,291,263,155 18.3%
North Dakota $468,522,734 $56,960,417 12.2%
Ohio $10,177,517,569 $1,520,147,470 14.9%
Oklahoma $2,311,939,159 $301,294,000 13.0%
Oregon $2,678,357,318 $262,335,388 9.8%
Pennsylvania $12,772,008,268 $791,053,653 6.2%
Rhode Island $1,436,618,006 $140,686,626 9.8%
South Carolina $3,540,107,364 $558,129,364 15.8%
South Dakota $536,195,894 $71,223,108 13.3%
Tennessee $6,348,265,631 $1,280,129,986 20.2%
Texas $15,420,026,696 $1,920,865,985 12.5%
Utah $1,092,519,199 $163,217,885 14.9%
Vermont $705,028,688 $127,763,857 18.1%
Virginia $3,524,849,814 $506,414,352 14.4%
Washington $5,006,473,801 $592,437,155 11.8%
West Virginia $1,857,747,927 $345,831,214 18.6%
Wisconsin $4,799,267,070 $592,295,000 12.3%
Wyoming $337,284,398 $49,106,118 14.6%
4-7
Drugs as a Percentage of Total Net Expenditures, 2001-2003*
State 2001 2002 2003

National Total 11.4% 11.9% 13.0%
Alabama 13.5% 14.6% 15.4%
Alaska 9.7% 10.3% 12.3%
Arizona 0.1% 0.1% 0.1%
Arkansas 13.0% 12.2% 13.3%
California 12.5% 13.4% 14.0%
Colorado 7.7% 8.2% 8.8%
Connecticut 9.5% 10.4% 11.5%
Delaware 13.7% 15.4% 15.3%
District of Columbia 6.5% 6.5% 7.6%
Florida 17.2% 17.4% 18.4%
Georgia 14.6% 14.0% 17.0%
Hawaii 11.8% 11.9% 12.7%
Idaho 14.9% 15.4% 16.3%
Illinois 11.4% 14.7% 15.9%
Indiana 14.0% 14.2% 14.7%
Iowa 14.1% 11.1% 15.5%
Kansas 11.0% 11.6% 13.0%
Kentucky 17.9% 17.3% 18.5%
Louisiana 13.9% 14.6% 18.7%
Maine 14.6% 15.4% 15.4%
Maryland 7.5% 8.2% 9.9%
Massachusetts 12.1% 11.9% 12.3%
Michigan 8.1% 8.9% 9.5%
Minnesota 6.9% 7.0% 7.7%
Mississippi 20.2% 19.7% 19.9%
Missouri 14.2% 14.8% 17.0%
Montana 15.0% 14.6% 15.6%
Nebraska 14.4% 15.5% 15.9%
Nevada 9.1% 10.8% 10.5%
New Hampshire 10.5% 9.8% 12.3%
New Jersey 9.1% 9.0% 9.8%
New Mexico 4.0% 4.2% 4.3%
New York 9.5% 10.1% 10.7%
North Carolina 16.0% 16.4% 18.3%
North Dakota 10.8% 11.4% 12.2%
Ohio 13.0% 13.8% 14.9%
Oklahoma 8.5% 12.6% 13.0%
Oregon 8.6% 10.9% 9.8%
Pennsylvania 6.3% 5.9% 6.2%
Rhode Island 8.6% 9.2% 9.8%
South Carolina 14.5% 13.7% 15.8%
South Dakota 11.1% 11.3% 13.3%
Tennessee 12.4% 15.6% 20.2%
Texas 11.4% 11.8% 12.5%
Utah 14.1% 14.3% 14.9%
Vermont 17.3% 17.3% 18.1%
Virginia 13.8% 12.0% 14.4%
Washington 10.6% 10.5% 11.8%
West Virginia 16.8% 17.5% 18.6%
Wisconsin 9.6% 10.6% 12.3%
Wyoming 12.9% 14.2% 14.6%
*Percentages are based on figures that have not had rebates subtracted from them.
Source: CMS, HCFA-64 Report, FY 2001 - FY 2003.
4-8
Share of Drug Expenditures by Category, 2003
Hormones and
Central Nervous Cardiovascular Anti-Infective Gastrointestinal Synthetic
State System Drugs Drugs Agents Drugs Substitutes
National Total $12,363,631,847 $3,801,947,569 $3,524,213,631 $2,450,238,097 $3,122,393,794
Alabama $190,945,957 $66,659,877 $60,716,138 $27,223,794 $60,041,745
Alaska $40,923,331 $7,768,953 $8,847,721 $9,310,870 $7,442,275
Arizona* - - - - -
Arkansas $124,140,938 $31,785,881 $36,048,688 $15,032,482 $34,833,265
California $1,289,548,645 $559,177,157 $328,595,843 $332,606,715 $446,647,443
Colorado $103,640,073 $22,017,120 $18,531,371 $14,468,064 $20,563,418
Connecticut $175,996,061 $43,649,610 $33,252,384 $33,724,817 $28,069,637
Delaware $35,648,536 $9,932,451 $15,575,193 $6,274,352 $9,960,540
District of Columbia $22,639,645 $11,118,033 $20,050,510 $2,311,674 $5,808,770
Florida $693,597,564 $226,902,557 $327,894,156 $166,461,633 $169,619,538
Georgia $352,660,702 $106,114,919 $146,354,001 $46,097,696 $101,979,157
Hawaii $38,608,056 $16,570,061 $8,256,539 $4,368,883 $10,537,125
Idaho $60,904,208 $9,756,419 $10,628,384 $4,941,868 $12,181,215
Illinois $495,470,501 $216,632,381 $158,093,371 $120,206,662 $147,429,047
Indiana $285,453,451 $56,722,913 $50,052,280 $38,769,474 $61,546,793
Iowa $157,180,331 $29,475,299 $29,648,480 $20,589,271 $31,129,735
Kansas $108,704,011 $20,129,864 $17,339,561 $19,155,941 $20,852,659
Kentucky $259,250,343 $77,499,804 $65,552,414 $38,423,330 $71,239,832
Louisiana $243,290,866 $80,234,506 $109,817,991 $54,704,705 $72,578,920
Maine $117,977,151 $25,767,867 $18,778,785 $25,943,479 $26,564,709
Maryland $204,973,562 $52,518,379 $37,778,689 $30,695,978 $30,165,832
Massachusetts $426,324,589 $92,542,559 $91,559,817 $65,955,409 $76,059,993
Michigan $361,027,746 $76,602,148 $41,181,543 $46,655,710 $59,556,708
Minnesota $181,317,127 $22,612,381 $21,521,170 $26,666,517 $26,618,045
Mississippi $177,433,416 $84,476,651 $66,031,112 $32,146,980 $57,169,431
Missouri $405,814,288 $102,560,092 $85,327,587 $42,501,845 $91,382,260
Montana $40,552,154 $6,856,348 $5,988,940 $7,054,158 $7,814,615
Nebraska $90,518,087 $18,113,336 $17,825,594 $9,825,208 $19,259,675
Nevada $47,839,070 $11,322,593 $12,500,368 $4,793,034 $9,231,504
New Hampshire $55,511,397 $8,670,264 $6,145,697 $7,987,351 $9,272,731
New Jersey $282,889,997 $100,795,953 $86,862,944 $66,022,618 $59,052,329
New Mexico $33,805,242 $10,254,314 $7,189,377 $9,600,179 $11,525,477
New York $1,289,421,527 $466,736,184 $660,900,621 $298,153,780 $377,655,759
North Carolina $448,996,966 $150,623,341 $133,935,843 $137,251,191 $121,245,082
North Dakota $25,861,471 $4,787,469 $3,856,941 $3,635,205 $4,990,743
Ohio $652,799,378 $157,137,204 $135,588,872 $126,543,046 $143,667,021
Oklahoma $119,561,069 $30,104,381 $28,607,550 $17,356,536 $27,406,868
Oregon $141,970,988 $14,073,890 $12,508,942 $9,146,150 $15,944,333
Pennsylvania $307,075,831 $86,090,827 $51,191,071 $76,369,314 $66,108,211
Rhode Island $62,768,301 $18,136,380 $10,787,026 $12,448,121 $11,563,648
South Carolina $207,810,670 $89,756,227 $70,178,436 $28,189,939 $67,604,062
South Dakota $31,103,276 $5,211,572 $7,244,215 $6,629,496 $6,748,303
Tennessee $519,390,119 $161,820,197 $77,633,377 $114,371,425 $102,886,876
Texas $649,950,752 $197,853,618 $227,126,956 $119,278,242 $196,523,211
Utah $76,262,627 $10,588,695 $13,338,853 $12,287,375 $13,644,567
Vermont $12,190,259 $4,029,933 $2,955,483 $1,274,253 $3,432,229
Virginia $191,563,725 $64,498,544 $41,046,594 $55,067,690 $43,083,321
Washington $264,734,853 $57,092,141 $43,927,432 $50,205,897 $54,915,790
West Virginia $132,548,914 $41,425,874 $31,511,034 $22,586,370 $36,930,892
Wisconsin $106,988,776 $34,076,588 $23,531,062 $26,031,579 $27,907,393
Wyoming $18,045,300 $2,663,814 $4,396,675 $2,891,791 $4,001,062
* Data not reported for Arizona. Arizona has a 1115 waiver for which special rules apply.
Source: CMS, State Drug Utilization Data, FY 2003.
4-9
Share of Drug Expenditures by Category, 2003 (Con't.)
Unclassified
Therapeutic Autonomic Blood Formation
State Agents Drugs and Coagulation Other Total
National Average $1,055,465,025 $1,444,434,327 $1,631,603,922 $4,342,078,576 $33,736,006,788
Alabama $16,933,831 $29,117,413 $24,798,577 $88,291,181 $564,728,513
Alaska $3,017,515 $4,143,870 $6,586,137 $10,045,292 $98,085,964
Arizona* - - - - -
Arkansas $11,391,635 $16,290,279 $20,346,625 $43,386,184 $333,255,977
California $124,486,965 $109,440,799 $277,059,101 $392,418,402 $3,859,981,070
Colorado $8,369,762 $12,209,376 $8,772,382 $28,741,953 $237,313,519
Connecticut $10,845,172 $15,529,027 $15,588,038 $42,629,307 $399,284,053
Delaware $3,080,673 $4,797,072 $4,129,047 $14,564,793 $103,962,657
Florida $66,881,733 $92,245,297 $114,802,172 $273,547,974 $2,131,952,624
Georgia $32,931,912 $58,770,316 $47,089,914 $172,266,157 $1,064,264,774
Hawaii $4,528,069 $4,022,621 $6,637,325 $12,070,039 $105,598,718
Idaho $4,314,264 $5,635,849 $2,919,820 $13,229,104 $124,511,131
Illinois $47,769,159 $63,945,423 $85,924,830 $197,901,702 $1,533,373,076
Indiana $23,254,776 $31,028,392 $42,923,482 $102,732,283 $692,483,844
Iowa $9,787,979 $16,730,776 $9,418,099 $39,127,637 $343,087,607
Kansas $7,119,076 $12,062,663 $6,580,327 $28,274,280 $240,218,382
Kentucky $26,072,218 $45,278,547 $30,533,575 $94,528,334 $708,378,397
Louisiana $23,611,873 $38,485,281 $36,873,442 $139,158,070 $798,755,654
Maine $8,040,234 $12,176,814 $10,185,925 $25,153,673 $270,588,637
Maryland $10,075,261 $12,388,585 $21,864,657 $39,448,955 $439,909,898
Massachusetts $25,289,436 $32,901,099 $38,923,231 $105,231,780 $954,787,913
Michigan $24,190,573 $28,593,928 $37,571,523 $85,771,522 $761,151,401
Minnesota $10,553,097 $14,662,898 $13,349,968 $38,123,425 $355,424,628
Mississippi $16,796,656 $27,954,253 $26,440,052 $76,114,896 $564,563,447
Missouri $27,673,946 $51,284,406 $44,879,042 $128,694,744 $980,118,210
Montana $3,539,485 $4,642,139 $2,668,099 $10,979,885 $90,095,823
Nebraska $6,717,962 $9,742,260 $6,302,498 $26,583,522 $204,888,142
Nevada $3,571,056 $5,639,042 $6,116,918 $13,564,994 $114,578,579
New Hampshire $2,992,898 $5,631,726 $2,482,312 $12,988,214 $111,682,590
New Jersey $25,517,275 $33,348,479 $52,697,474 $104,790,316 $811,977,385
New Mexico $3,806,974 $4,222,012 $3,924,480 $13,564,380 $97,892,435
New York $141,742,052 $155,076,486 $197,337,654 $555,046,144 $4,142,070,207
North Carolina $42,606,450 $56,952,033 $60,109,134 $193,389,654 $1,345,109,694
North Dakota $1,697,267 $2,510,695 $1,645,740 $6,675,757 $55,661,288
Ohio $45,200,120 $85,106,203 $57,239,140 $213,194,584 $1,616,475,568
Oklahoma $11,119,046 $14,623,169 $14,922,093 $32,159,087 $295,859,799
Oregon $5,192,257 $8,586,132 $7,653,099 $16,824,128 $231,899,919
Pennsylvania $24,675,241 $44,691,804 $48,107,836 $101,012,127 $805,322,262
Rhode Island $3,880,507 $5,800,930 $4,609,417 $15,825,524 $145,819,854
South Carolina $19,236,343 $28,235,443 $24,643,479 $92,173,886 $627,828,485
South Dakota $2,361,480 $3,460,577 $2,942,659 $10,135,666 $75,837,244
Tennessee $32,266,211 $51,570,846 $37,631,333 $119,158,930 $1,216,729,314
Texas $68,447,771 $95,780,057 $88,073,590 $351,910,677 $1,994,944,874
Utah $4,199,480 $6,240,065 $2,186,777 $19,419,642 $158,168,081
Vermont $1,171,684 $1,460,581 $1,529,437 $4,942,610 $32,986,469
Virginia $15,844,703 $25,131,271 $27,136,311 $71,109,483 $534,481,642
Washington $18,662,019 $24,374,739 $20,421,210 $64,322,622 $598,656,703
West Virginia $11,707,954 $16,987,581 $9,383,374 $43,432,138 $346,514,131
Wisconsin $9,066,980 $10,992,631 $11,481,805 $40,318,584 $290,395,398
Wyoming $1,697,176 $2,051,251 $1,856,163 $6,050,504 $43,653,736
* Data not reported for Arizona. Arizona has a 1115 waiver for which special rules apply.
4-10
Share of Prescriptions Processed, 2003
Hormones and
Central Nervous Cardiovascular Anti-Infective Gastrointestinal Synthetic
State System Drugs Drugs Agents Drugs Substitutes
National Average 171,087,805 80,839,088 48,001,985 34,302,085 55,890,837
Alabama 3,171,638 1,567,963 1,138,879 553,609 1,127,896
Alaska 548,257 203,519 122,476 103,357 149,034
Arizona* - - - - -
Arkansas 1,731,110 797,550 759,124 263,680 648,832
California 14,259,438 7,954,722 3,977,118 3,317,303 5,721,487
Colorado 1,583,124 593,377 413,553 244,334 520,571
Connecticut 2,072,006 915,787 259,671 362,472 545,336
Delaware 487,968 184,937 162,745 76,266 169,529
Florida 9,307,006 5,172,090 2,831,244 1,902,380 3,047,416
Georgia 5,424,867 2,495,750 2,494,567 898,164 1,998,544
Hawaii 490,672 324,763 92,049 136,203 177,740
Idaho 763,814 214,445 196,731 82,277 238,825
Illinois 8,266,131 5,540,656 2,496,296 2,101,959 3,234,926
Indiana 4,206,893 1,419,140 992,144 932,118 1,112,689
Iowa 2,232,976 746,404 578,027 304,342 638,478
Kansas 1,429,685 544,022 345,553 244,418 448,490
Kentucky 4,209,055 1,901,993 1,308,853 1,002,805 1,352,565
Louisiana 3,653,912 1,731,401 1,710,847 586,044 1,301,839
Maine 1,909,114 708,202 356,938 323,601 580,394
Maryland 2,485,651 1,120,167 313,685 353,731 609,632
Massachusetts 5,852,176 2,326,321 1,039,851 891,682 1,614,601
Michigan 5,348,834 2,085,945 746,226 801,119 1,280,656
Minnesota 2,088,156 559,625 311,226 451,235 485,462
Mississippi 2,572,856 1,769,873 1,137,394 451,414 1,012,463
Missouri 5,202,372 2,282,561 1,195,140 814,529 1,643,419
Montana 563,101 171,791 129,643 96,744 172,580
Nebraska 1,289,900 447,252 390,739 310,048 385,045
Nevada 599,049 256,638 151,055 81,940 183,761
New Hampshire 783,744 217,582 131,413 158,724 181,359
New Jersey 3,444,576 1,981,577 628,802 714,276 1,021,018
New Mexico 595,916 281,797 134,825 143,222 286,371
New York 16,319,688 9,021,907 5,175,402 4,049,862 5,817,384
North Carolina 6,235,662 3,386,484 2,032,839 1,332,424 2,364,568
North Dakota 357,380 143,776 91,286 50,922 120,832
Ohio 9,926,750 3,864,726 2,349,075 2,407,992 2,899,276
Oklahoma 1,395,693 581,302 512,325 232,606 454,827
Oregon 2,004,987 453,103 222,004 224,644 397,877
Pennsylvania 4,198,755 2,036,284 837,861 948,649 1,335,172
Rhode Island 813,442 308,215 116,847 159,760 192,723
South Carolina 2,928,723 2,021,657 1,047,783 475,084 1,339,858
South Dakota 399,558 147,440 158,080 71,747 138,279
Tennessee 8,340,084 3,670,322 1,286,313 1,496,149 2,213,225
Texas 9,092,238 3,169,705 4,802,083 1,600,010 2,757,927
Utah 1,109,740 241,808 297,363 166,672 294,969
Vermont 166,600 74,664 41,811 22,874 57,384
Virginia 2,838,758 1,428,824 603,632 774,924 853,123
Washington 3,872,043 1,467,594 701,236 823,549 1,224,420
West Virginia 2,215,492 928,170 664,115 359,356 691,640
Wisconsin 1,788,091 1,087,096 333,075 329,368 675,631
Wyoming 241,705 62,412 97,526 38,433 72,729
*Data not reported for Arizona. Arizona has a 1115 waiver for which special rules apply.
4-11
Share of Prescriptions Processed, 2003 (Con't)
Unclassified
Therapeutic Autonomic Blood Formation
State Agents Drugs and Coagulation Other Total
National Average 11,853,860 30,838,002 13,382,215 115,859,862 562,055,739
Alabama 212,576 658,280 265,307 2,704,930 11,401,078
Alaska 28,043 87,848 30,535 233,712 1,506,781
Arizona* - - - - -
Arkansas 121,607 322,711 129,844 1,262,522 6,036,980
California 1,119,181 2,220,821 1,370,538 9,121,332 49,061,940
Colorado 96,895 298,800 100,463 850,026 4,701,143
Connecticut 125,679 292,253 156,958 939,638 5,669,800
Delaware 33,085 107,860 26,206 328,206 1,576,802
District of Columbia 21,565 44,891 24,297 218,812 1,019,347
Florida 835,642 1,831,715 861,701 6,044,048 31,833,242
Georgia 392,437 1,305,010 428,075 4,639,338 20,076,752
Hawaii 63,617 82,552 45,988 330,097 1,743,681
Idaho 44,790 120,381 33,901 347,382 2,042,546
Illinois 656,985 1,573,171 928,489 6,946,150 31,744,763
Indiana 230,548 698,234 310,000 2,781,211 12,682,977
Iowa 114,630 354,809 140,862 1,107,657 6,218,185
Kansas 81,549 245,679 90,475 771,341 4,201,212
Kentucky 313,874 870,152 342,808 3,154,670 14,456,775
Louisiana 281,821 863,458 341,589 3,512,998 13,983,909
Maine 97,307 303,890 83,761 675,526 5,038,733
Maryland 130,618 299,880 189,155 1,013,935 6,516,454
Massachusetts 275,688 813,956 301,360 2,415,517 15,531,152
Michigan 275,857 652,859 409,452 2,342,925 13,943,873
Minnesota 90,260 280,272 95,056 941,083 5,302,375
Mississippi 208,689 476,308 285,945 2,158,653 10,073,595
Missouri 287,390 973,232 386,707 3,028,715 15,814,065
Montana 34,681 99,230 25,941 275,126 1,568,837
Nebraska 77,885 230,919 84,325 951,883 4,167,996
Nevada 39,978 123,670 40,868 325,257 1,802,216
New Hampshire 32,045 114,142 35,577 398,917 2,053,503
New Jersey 294,180 575,191 332,324 2,355,693 11,347,637
New Mexico 41,959 101,590 49,449 459,079 2,094,208
New York 1,610,186 3,409,929 1,192,203 13,543,607 60,140,168
North Carolina 524,687 1,193,010 454,082 4,694,793 22,218,549
North Dakota 22,156 52,161 25,011 206,338 1,069,862
Ohio 561,787 1,914,814 739,909 6,915,185 31,579,514
Oklahoma 96,291 266,844 81,798 746,371 4,368,057
Oregon 52,451 196,722 73,708 579,612 4,205,108
Pennsylvania 274,742 754,046 579,899 2,602,161 13,567,569
Rhode Island 49,480 120,909 51,961 387,406 2,200,743
South Carolina 225,238 569,221 268,378 2,314,061 11,190,003
South Dakota 27,068 70,636 29,357 270,255 1,312,420
Tennessee 396,317 1,173,744 503,537 3,793,613 22,873,304
Texas 617,164 2,146,746 626,793 10,040,023 34,852,689
Utah 45,455 158,015 42,323 539,754 2,896,099
Vermont 10,812 29,345 9,374 96,604 509,468
Virginia 205,807 486,953 245,099 2,043,981 9,481,101
Washington 189,025 608,244 213,822 1,954,869 11,054,802
West Virginia 143,269 377,868 125,592 1,222,582 6,728,084
Wisconsin 125,280 238,879 157,435 1,112,614 5,847,469
Wyoming 15,584 46,152 13,978 159,654 748,173
*Data not reported for Arizona. Arizona has a 1115 waiver for which special rules apply.
4-12
Medicaid Average Cost Per Prescription, 2003*
Drug Prescriptions Average

State Payments Processed Prescription Cost
National Average $33,736,006,788 562,055,739 $60.02
Alabama $564,728,513 11,401,078 $49.53
Alaska $98,085,964 1,506,781 $65.10
Arizona** - - -
Arkansas $333,255,977 6,036,980 $55.20
California $3,859,981,070 49,061,940 $78.68
Colorado $237,313,519 4,701,143 $50.48
Connecticut $399,284,053 5,669,800 $70.42
Delaware $103,962,657 1,576,802 $65.93
District of Columbia $80,697,072 1,019,347 $79.17
Florida $2,131,952,624 31,833,242 $66.97
Georgia $1,064,264,774 20,076,752 $53.01
Hawaii $105,598,718 1,743,681 $60.56
Idaho $124,511,131 2,042,546 $60.96
Illinois $1,533,373,076 31,744,763 $48.30
Indiana $692,483,844 12,682,977 $54.60
Iowa $343,087,607 6,218,185 $55.17
Kansas $240,218,382 4,201,212 $57.18
Kentucky $708,378,397 14,456,775 $49.00
Louisiana $798,755,654 13,983,909 $57.12
Maine $270,588,637 5,038,733 $53.70
Maryland $439,909,898 6,516,454 $67.51
Massachusetts $954,787,913 15,531,152 $61.48
Michigan $761,151,401 13,943,873 $54.59
Minnesota $355,424,628 5,302,375 $67.03
Mississippi $564,563,447 10,073,595 $56.04
Missouri $980,118,210 15,814,065 $61.98
Montana $90,095,823 1,568,837 $57.43
Nebraska $204,888,142 4,167,996 $49.16
Nevada $114,578,579 1,802,216 $63.58
New Hampshire $111,682,590 2,053,503 $54.39
New Jersey $811,977,385 11,347,637 $71.55
New Mexico $97,892,435 2,094,208 $46.74
New York $4,142,070,207 60,140,168 $68.87
North Carolina $1,345,109,694 22,218,549 $60.54
North Dakota $55,661,288 1,069,862 $52.03
Ohio $1,616,475,568 31,579,514 $51.19
Oklahoma $295,859,799 4,368,057 $67.73
Oregon $231,899,919 4,205,108 $55.15
Pennsylvania $805,322,262 13,567,569 $59.36
Rhode Island $145,819,854 2,200,743 $66.26
South Carolina $627,828,485 11,190,003 $56.11
South Dakota $75,837,244 1,312,420 $57.78
Tennessee $1,216,729,314 22,873,304 $53.19
Texas $1,994,944,874 34,852,689 $57.24
Utah $158,168,081 2,896,099 $54.61
Vermont $32,986,469 509,468 $64.75
Virginia $534,481,642 9,481,101 $56.37
Washington $598,656,703 11,054,802 $54.15
West Virginia $346,514,131 6,728,084 $51.50
Wisconsin $290,395,398 5,847,469 $49.66
Wyoming $43,653,736 748,173 $58.35
**Data not reported for Arizona. Arizona has a 1115 waiver for which special rules apply.
4-13
4-14
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 DHHS 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 DHHS 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 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.
4-15
4-16
Medicaid Drug Rebates, 2003
Allocation of
State Drug Rebate Monies1 Total Rebates2 Federal Share2
National Total $7,008,382,303 $4,145,168,732
Alabama Medicaid Drug Budget $102,784,110 $74,244,635
Alaska General Fund $15,060,446 $8,946,379
Arizona* - - -
Arkansas Medicaid Drug Budget $58,097,761 $44,058,096
California Medicaid Drug Budget $1,207,800,866 $635,884,565
Colorado Medicaid General $32,446,928 $16,743,775
Connecticut General Fund $81,550,711 $42,156,720
Delaware Medicaid General $28,352,506 $14,871,627
District of Columbia Medicaid Drug Budget $15,120,780 $10,813,162
Florida Medicaid Drug Budget $464,880,949 $281,544,767
Georgia General Fund $219,238,104 $133,880,256
Hawaii General Fund $19,212,047 $11,571,434
Idaho General Fund $31,430,642 $22,834,044
Illinois Drug Rebate Fund $292,630,625 $150,740,652
Indiana General Fund $131,850,261 $83,862,599
Iowa Medicaid Drug Budget $62,173,583 $40,568,073
Kansas General Fund $59,849,370 $36,912,589
Kentucky General Fund $124,919,867 $89,772,191
Louisiana Medicaid Drug Budget $165,904,174 $121,064,068
Maine Medicaid Drug Budget $68,331,107 $46,664,469
Maryland Medicaid General $77,934,401 $40,509,917
Massachusetts Medicaid General $208,146,240 $108,049,289
Michigan General Fund $179,774,542 $103,731,878
Minnesota Medicaid General $54,081,115 $27,643,562
Mississippi Medicaid General $114,233,479 $89,163,417
Missouri Medicaid Drug Budget $178,620,625 $112,813,582
Montana General Fund $17,172,113 $12,822,675
Nebraska Medicaid Drug Budget $42,766,762 $26,291,497
Nevada General Fund $21,078,909 $11,402,018
New Hampshire General Fund $27,628,562 $14,223,879
New Jersey Medicaid Drug Budget $149,040,244 $76,924,905
New Mexico General Fund $19,585,223 $14,894,385
New York General Fund $598,407,083 $305,702,916
North Carolina Medicaid General $260,487,290 $168,077,481
North Dakota Medicaid Drug Budget $11,369,358 $8,067,828
Ohio Medicaid General $325,329,459 $196,899,815
Oklahoma Medicaid General $59,205,487 $42,776,373
Oregon General Fund $65,706,778 $40,630,979
Pennsylvania Outpatient Appropriation $149,563,463 $84,158,389
Rhode Island General Fund $30,477,726 $17,361,117
South Carolina Medicaid Drug Budget $119,101,600 $85,684,428
South Dakota Medicaid Drug Budget $14,808,661 $10,010,329
Tennessee Medicaid General $224,072,761 $148,367,141
Texas Medicaid Drug Budget $392,292,711 $242,560,725
Utah General Fund $25,931,043 $19,597,473
Vermont Health Access Trust Fund $28,595,852 $18,448,953
Virginia Medicaid General $112,854,618 $59,506,765
Washington General Fund $123,683,508 $64,563,377
West Virginia Medicaid General $69,568,029 $53,266,225
Wisconsin Medicaid General $118,267,026 $69,458,066
Wyoming Medicaid Drug Budget $6,962,798 $4,425,247
*Does not apply for Arizona. Arizona has a 1115 waiver for which special rules apply.
Sources: 1As reported by State drug program administrators in the 2004 NPC Survey.
2
CMS, CMS-64 Report, FY 2003, includes reported state supplemental rebates for CA, FL, IL, LA, MI, VT, and WV.
4-17
Medicaid Drug Rebate Trends, 1999-2003
State 1999 2000 2001 2002** 2003**

National Total $3,338,497,983 $3,980,646,518 $4,948,222,331 $5,917,504,760 $7,008,382,303
Alabama $49,785,076 $60,984,826 $76,624,463 $84,994,286 $102,784,110
Alaska $7,050,981 $8,594,014 $11,337,883 $14,347,654 $15,060,446
Arizona* - - - - -
Arkansas $37,931,853 $40,814,931 $45,744,406 $56,688,398 $58,097,761
California $539,928,783 $600,895,711 $786,113,991 $946,651,118 $1,207,800,866
Colorado $25,151,080 $28,832,989 $34,264,574 $39,054,140 $32,446,928
Connecticut $38,656,394 $49,164,014 $61,916,192 $62,627,160 $81,550,711
Delaware $9,787,444 $13,780,359 $17,042,045 $16,990,455 $28,352,506
Florida $195,512,719 $248,637,014 $297,362,792 $353,649,807 $464,880,949
Georgia $95,237,778 $91,886,605 $110,087,285 $205,469,531 $219,238,104
Hawaii $8,378,292 $10,947,632 $14,363,603 $15,267,796 $19,212,047
Idaho $11,901,778 $13,984,004 $18,841,154 $22,939,130 $31,430,642
Illinois $121,540,781 $143,590,170 $170,733,612 $190,316,986 $292,630,625
Indiana $62,691,135 $84,453,135 $103,148,144 $126,512,101 $131,850,261
Iowa $32,369,409 $36,040,216 $42,602,101 $50,092,788 $62,173,583
Kansas $26,878,486 $31,022,023 $39,731,568 $29,755,595 $59,849,370
Kentucky $72,676,810 $93,688,165 $104,759,238 $133,330,557 $124,919,867
Louisiana $76,147,317 $84,800,897 $115,254,842 $113,729,749 $165,904,174
Maine $30,032,364 $31,598,262 $41,847,632 $47,395,300 $68,331,107
Maryland $32,311,299 $42,081,781 $34,263,429 $54,261,949 $77,934,401
Massachusetts $140,102,747 $146,225,538 $180,517,139 $191,118,385 $208,146,240
Michigan $75,674,128 $75,687,945 $111,716,756 $172,522,597 $179,774,542
Minnesota $37,389,033 $43,228,324 $54,548,714 $62,655,474 $54,081,115
Mississippi $49,332,307 $61,260,326 $88,481,567 $115,221,421 $114,233,479
Missouri $84,620,799 $110,025,619 $133,927,028 $147,281,505 $178,620,625
Montana $9,290,653 $10,985,923 $13,359,968 $15,955,235 $17,172,113
Nebraska $21,609,490 $31,004,940 $30,219,685 $47,855,128 $42,766,762
Nevada $7,727,267 $4,863,879 $16,330,579 $13,547,604 $21,078,909
New Hampshire $12,956,727 $15,073,211 $13,934,765 $20,888,707 $27,628,562
New Jersey $90,472,488 $105,535,091 $124,127,231 $127,373,014 $149,040,244
New Mexico $7,972,600 $8,901,456 $12,110,896 $13,274,387 $19,585,223
New York $356,088,488 $470,317,992 $543,984,948 $663,973,100 $598,407,083
North Carolina $111,326,116 $140,047,825 $207,551,841 $207,064,443 $260,487,290
North Dakota $5,954,387 $6,503,601 $8,780,182 $11,651,682 $11,369,358
Ohio $148,477,399 $171,685,793 $217,702,350 $263,267,258 $325,329,459
Oklahoma $31,992,100 $37,135,809 $40,177,945 $51,471,649 $59,205,487
Oregon $21,360,688 $32,056,386 $34,991,037 $54,474,938 $65,706,778
Pennsylvania $119,340,064 $118,989,849 $129,265,110 $154,338,235 $149,563,463
Rhode Island $14,440,971 $19,223,034 $21,467,002 $26,213,636 $30,477,726
South Carolina $55,971,288 $73,052,676 $95,438,155 $98,272,773 $119,101,600
South Dakota $5,971,015 $7,198,848 $9,405,933 $12,056,925 $14,808,661
Tennessee $22,434,760 $41,302,450 $102,644,077 $180,613,885 $224,072,761
Texas $185,695,267 $222,314,531 $268,557,241 $305,110,523 $392,292,711
Utah $15,145,126 $21,889,639 $21,949,963 $36,756,960 $25,931,043
Vermont $10,579,999 $17,869,053 $22,045,277 $24,488,863 $28,595,852
Virginia $67,715,512 $75,630,717 $79,484,868 $76,776,155 $112,854,618
Washington $54,331,249 $69,782,396 $91,250,830 $100,874,789 $123,683,508
West Virginia $35,941,495 $46,762,149 $52,402,218 $48,976,536 $69,568,029
Wisconsin $51,869,264 $66,358,433 $79,554,207 $89,226,751 $118,267,026
Wyoming $4,364,795 $4,720,686 $5,809,366 $8,681,912 $6,962,798
*Does not apply for Arizona. Arizona has a 1115 waiver for which special rules apply.
**Includes reported State supplemental rebates.
Source: CMS, HCFA-64 Report, FY 1999-FY 2003.
4-18
Medicaid Drug Rebate Trends

Annual Percent Change, 1998-2003
% Change % Change % Change % Change % Change

State 98-99 99-00 00-01 01-02 02-03
National Total 35.2% 19.2% 24.3% 19.6% 18.4%
Alabama 36.3% 22.5% 25.6% 10.9% 20.9%
Alaska 40.3% 21.9% 31.9% 26.5% 5.0%
Arizona* - - - - -
Arkansas 68.4% 7.6% 12.1% 23.9% 2.5%
California 48.8% 11.3% 30.8% 20.4% 27.6%
Colorado 23.1% 14.6% 18.8% 14.0% -16.9%
Connecticut 20.3% 27.2% 25.9% 1.1% 30.2%
Delaware 37.9% 40.8% 23.7% -0.3% 66.9%
District of Columbia 18.0% 10.0% 13.4% 9.6% 32.1%
Florida 29.7% 27.2% 19.6% 18.9% 31.5%
Georgia 48.1% -3.5% 19.8% 86.6% 6.7%
Hawaii 39.8% 30.7% 31.2% 6.3% 25.8%
Idaho 38.2% 17.5% 34.7% 21.8% 37.0%
Illinois 20.6% 18.1% 18.9% 11.5% 53.8%
Indiana 23.6% 34.7% 22.1% 22.7% 4.2%
Iowa 28.1% 11.3% 18.2% 17.6% 24.1%
Kansas 35.4% 15.4% 28.1% -25.1% 101.1%
Kentucky 27.3% 28.9% 11.8% 27.3% -6.3%
Louisiana 15.4% 11.4% 35.9% -1.3% 45.9%
Maine 52.8% 5.2% 32.4% 13.3% 44.2%
Maryland 29.2% 30.2% -18.6% 58.4% 43.6%
Massachusetts 57.4% 4.4% 23.5% 5.9% 8.9%
Michigan 4.3% 0.0% 47.6% 54.4% 4.2%
Minnesota 20.4% 15.6% 26.2% 14.9% -13.7%
Mississippi 23.4% 24.2% 44.4% 30.2% -0.9%
Missouri 27.3% 30.0% 21.7% 10.0% 21.3%
Montana 25.9% 18.2% 21.6% 19.4% 7.6%
Nebraska 30.6% 43.5% -2.5% 58.4% -10.6%
Nevada 50.2% -37.1% 235.8% -17.0% 55.6%
New Hampshire 33.9% 16.3% -7.6% 49.9% 32.3%
New Jersey 27.4% 16.6% 17.6% 2.6% 17.0%
New Mexico -25.3% 11.7% 36.1% 9.6% 47.5%
New York 41.7% 32.1% 15.7% 22.1% -9.9%
North Carolina 37.1% 25.8% 48.2% -0.2% 25.8%
North Dakota 19.3% 9.2% 35.0% 32.7% -2.4%
Ohio 34.4% 15.6% 26.8% 20.9% 23.6%
Oklahoma 37.1% 16.1% 8.2% 28.1% 15.0%
Oregon 48.0% 50.1% 9.2% 55.7% 20.6%
Pennsylvania 24.7% -0.3% 8.6% 19.4% -3.1%
Rhode Island 30.8% 33.1% 11.7% 22.1% 16.3%
South Carolina 42.9% 30.5% 30.6% 3.0% 21.2%
South Dakota 17.8% 20.6% 30.7% 28.2% 22.8%
Tennessee** - 84.1% 148.5% 76.0% 24.1%
Texas 27.5% 19.7% 20.8% 13.6% 28.6%
Utah 51.6% 44.5% 0.3% 67.5% -29.5%
Vermont 19.3% 68.9% 23.4% 11.1% 16.8%
Virginia 32.6% 11.7% 5.1% -3.4% 47.0%
Washington 38.6% 28.4% 30.8% 10.5% 22.6%
West Virginia 34.3% 30.1% 12.1% -6.5% 42.0%
Wisconsin 27.2% 27.9% 19.9% 12.2% 32.5%
Wyoming 44.3% 8.2% 23.1% 49.4% -19.8%
*Does not apply to Arizona. Arizona has a 1115 waiver for which special rules apply.
**Tennessee did not report data for 1998.
Source: CMS, CMS-64 Report, FY 1998 – FY 2003.
4-19
Rebates as a Percent of Drug Expenditures, 2003
Rebates as % Drug
State Drug Expenditures Rebates** Expenditure
National Total $33,794,520,738 $7,008,382,303 20.7%
Alabama $536,222,703 $102,784,110 19.2%
Alaska $69,512,220 $15,060,446 21.7%
Arizona* $4,744,244 - -
Arkansas $310,709,182 $58,097,761 18.7%
California $4,219,504,969 $1,207,800,866 28.6%
Colorado $225,297,507 $32,446,928 14.4%
Connecticut $403,802,170 $81,550,711 20.2%
Delaware $109,844,743 $28,352,506 25.8%
District of Columbia $81,762,504 $15,120,780 18.5%
Florida $2,018,037,106 $464,880,949 23.0%
Georgia $1,073,715,230 $219,238,104 20.4%
Hawaii $97,386,406 $19,212,047 19.7%
Idaho $132,143,091 $31,430,642 23.8%
Illinois $1,469,190,682 $292,630,625 19.9%
Indiana $627,575,345 $131,850,261 21.0%
Iowa $331,222,324 $62,173,583 18.8%
Kansas $228,920,787 $59,849,370 26.1%
Kentucky $685,229,661 $124,919,867 18.2%
Louisiana $827,713,132 $165,904,174 20.0%
Maine $268,547,563 $68,331,107 25.4%
Maryland $429,589,193 $77,934,401 18.1%
Massachusetts $946,210,618 $208,146,240 22.0%
Michigan $758,266,989 $179,774,542 23.7%
Minnesota $276,731,202 $54,081,115 19.5%
Mississippi $568,007,104 $114,233,479 20.1%
Missouri $941,522,305 $178,620,625 19.0%
Montana $79,771,831 $17,172,113 21.5%
Nebraska $210,199,726 $42,766,762 20.3%
Nevada $106,821,075 $21,078,909 19.7%
New Hampshire $112,948,647 $27,628,562 24.5%
New Jersey $766,995,569 $149,040,244 19.4%
New Mexico $86,408,362 $19,585,223 22.7%
New York $4,218,811,815 $598,407,083 14.2%
North Carolina $1,291,263,155 $260,487,290 20.2%
North Dakota $56,960,417 $11,369,358 20.0%
Ohio $1,520,147,470 $325,329,459 21.4%
Oklahoma $301,294,000 $59,205,487 19.7%
Oregon $262,335,388 $65,706,778 25.0%
Pennsylvania $791,053,653 $149,563,463 18.9%
Rhode Island $140,686,626 $30,477,726 21.7%
South Carolina $558,129,364 $119,101,600 21.3%
South Dakota $71,223,108 $14,808,661 20.8%
Tennessee $1,280,129,986 $224,072,761 17.5%
Texas $1,920,865,985 $392,292,711 20.4%
Utah $163,217,885 $25,931,043 15.9%
Vermont $127,763,857 $28,595,852 22.4%
Virginia $506,414,352 $112,854,618 22.3%
Washington $592,437,155 $123,683,508 20.9%
West Virginia $345,831,214 $69,568,029 20.1%
Wisconsin $592,295,000 $118,267,026 20.0%
Wyoming $49,106,118 $6,962,798 14.2%
*Does not apply to Arizona. Arizona has a 1115 waiver for which special rules apply.
**Includes reported State supplemental rebates.
4-20
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.
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.
4-21
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 judgment 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
• 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.
4-22
Pharmacy Advisory Committees

Preferred Product Introduction
State Pharmacy Advisory Committee Meetings
Process
Alabama Pharmacy & Therapeutic Committee Quarterly Introductory letter
Alaska None - Introductory letter
Arizona* - - Inform health plans directly
Arkansas None - Introductory letter
California Medi-Cal Contract Drug Advisory Committee Ad Hoc Petition with specific content requirements
Colorado Medical Advisory Council - Introductory letter
Connecticut DUR Board and P & T Committee advise Quarterly Introductory letter
Delaware DUR Board Bi-Monthly Introductory letter
District of Columbia DUR Board Monthly Introductory letter
Florida None - Introductory letter
Georgia None - Intro. letter to Express Scripts & Medicaid
Hawaii DUR Board advises Quarterly Formulary kit
Idaho Medical Care Advisory Committee Quarterly Introductory letter
Illinois None - Contact First DataBank
Indiana DUR Board Monthly Electronic form
Iowa DUR Board 8 per year Introductory letter
Kansas DUR Board Bi-Monthly Introductory letter
Kentucky Pharmacy & Therapeutic Advisory Committee Bi-Monthly Introductory letter, Package insert
Louisiana Pharmacy Advisory Committee Semiannually Introductory letter
Maine DUR Committee Monthly Introductory letter
Maryland None - Introductory letter
Massachusetts DUR Board Quarterly Introductory letter
Michigan Pharmacy & Therapeutics Committee Quarterly State form, Introductory letter
Minnesota Drug Formulary Committee Quarterly Introductory letter
Mississippi None - Introductory letter
Missouri Pharmacy Advisory Group Quarterly AMPC format dossier
Montana DUR Board Monthly Electronic submission
Nebraska None - Introductory letter
Nevada DUR Board Quarterly Introductory letter
New Hampshire None - Introductory letter, Information packet
New Jersey None - Introductory letter
New Mexico None - Contact First DataBank
New York Pharmacy Advisory Committee Quarterly Introductory letter
North Carolina NC Physician Advisory Group Quarterly E-mail
North Dakota None - Contact First DataBank
Ohio Pharmacy & Therapeutic Committee Quarterly Introductory letter
Oklahoma DUR Board Monthly E-mail to medicaidrx@ohca.state.ok.us
Oregon DUR Board Quarterly Introductory letter
Pennsylvania Medical Assistance Advisory Committee Monthly Introductory letter to State agency
Rhode Island None - Introductory letter
South Carolina None - Formulary packet
South Dakota Pharmacy & Therapeutics Committee Annually Product profile information
Tennessee* TennCare Pharmacy Advisory Committee Quarterly Introductory letter
Texas None - State form
Utah DUR Board Monthly Introductory letter, FDA information
Vermont DUR Committee Monthly Introductory letter
Virginia Pharmacy Liaison Committee Quarterly Introductory letter
Washington Drug Evaluation Matrix Team Weekly AMCP format dossier
West Virginia Medical Services Fund Advisory Council Quarterly Introductory letter
Wisconsin None - Notification
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 2004 NPC Survey.
4-23
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 Covered with Restrictions Not Covered Not Covered
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 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 Not Covered 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* Not Covered Not Covered Not Covered
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
PA = Prior Authorization, DME = Durable Medical Equipment
4-24
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 with Restrictions Covered Covered Covered as DME
Alaska Covered Covered as DME Covered as DME Covered as DME
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 Covered
Florida Covered Covered with Restrictions Covered with Restrictions Covered with Restrictions
Georgia Covered with Restrictions Covered Covered Covered with Restrictions
Hawaii Covered Covered as DME Covered as DME Covered as DME
Idaho Covered Covered Covered Covered as DME
Illinois Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Indiana Covered Covered Covered Covered
Iowa Covered Not Covered Not Covered Not Covered
Kansas Covered Covered as DME Covered Covered as DME
Kentucky Covered Not Covered Covered Not Covered
Louisiana Covered Covered Covered Covered
Maine Covered Covered Covered with Restrictions Covered
Maryland Covered Covered Covered Covered as DME
Massachusetts Covered Covered with Restrictions Covered with Restrictions Covered with Restrictions
Michigan Covered Covered Covered Covered
Minnesota Covered Covered Covered Covered
Mississippi Covered Not Covered Not Covered Not Covered
Missouri Covered Covered with Restrictions Covered with Restrictions Covered with Restrictions
Montana Covered Not Covered Covered Not Covered
Nebraska Covered, PA Required Covered as DME Covered, PA Required Covered as DME
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 Not Covered Not Covered Not Covered
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 as DME 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* Covered Covered Covered Covered
Texas Covered Covered Covered Not Covered
Utah Covered Covered as DME Covered with Restrictions Covered
Vermont Covered Covered Covered Covered
Virginia Covered Covered Covered Covered
Washington Covered Covered Covered Covered
West Virginia Covered Covered Covered Covered
Wisconsin Covered Covered Covered Covered
Wyoming Covered Covered Covered Covered
PA = Prior Authorization, DME = Durable Medical Equipment
4-25
Pharmacy Benefit Design - Coverage (Con’t)

Urine Ketone Total Interdialytic Parenteral
State Test Strips Parenteral Nutrition Nutrition
Alabama Covered as DME Covered, PA Required Covered, PA Required
Alaska Covered as DME Covered Not Covered
Arizona* - - -
Arkansas Not Covered Not Covered Not Covered
California Covered Covered, PA Required Not Covered
Colorado Covered as DME Covered Covered
Connecticut Covered Not Covered Not Covered
Delaware Covered Covered Covered
District of Columbia Covered Not Covered Not Covered
Florida Covered with Restrictions Covered Covered
Georgia Covered with Restrictions Covered with Restrictions Covered with Restrictions
Hawaii Covered as DME Covered, PA Required Covered, PA Required
Idaho Covered as DME Covered as DME Covered as DME
Illinois Covered Covered Covered
Indiana Covered Covered Covered
Iowa Not Covered Covered Covered
Kansas Covered as DME Covered as DME Covered as DME
Kentucky Not Covered Covered, PA Required Covered, PA Required
Louisiana Covered Covered as DME Covered as DME
Maine Covered Not Covered Not Covered
Maryland Covered as DME Covered Covered
Massachusetts Covered with Restrictions Covered with Restrictions Not Covered
Michigan Covered Covered with Restrictions, PA Covered with Restrictions, PA
required required
Minnesota Covered Covered Covered
Mississippi Not Covered Covered Not Covered
Missouri Covered Covered Covered
Montana Not Covered Covered, PA Required Covered, PA Required
Nebraska Covered as DME Covered as DME Covered as DME
Nevada Covered Covered as DME Covered as DME
New Hampshire Covered Covered Covered
New Jersey Covered Covered Covered
New Mexico Covered Covered Covered
New York Covered Covered Covered
North Carolina Not Covered Not Covered Not Covered
North Dakota Not Covered Covered Not Covered
Ohio Covered as DME Covered as DME, PA Required Covered as DME, PA Required
Oklahoma Covered as DME Covered with Restrictions N/A
Oregon Covered as DME Covered, PA Required Covered, 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 Covered, PA Required Covered, PA Required
Tennessee* Covered Covered Covered
Texas Not Covered Not Covered Not Covered
Utah Not Covered Covered as DME Covered as DME
Vermont Not Covered Covered as DME Not Covered
Virginia Covered Covered Covered
Washington Covered Covered Covered
West Virginia Covered Not Covered Not Covered
Wisconsin Covered Covered Covered
Wyoming Covered Covered as DME Covered as DME
PA= Prior Authorization, DME = Durable Medical Equipment
4-26
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 PP PDP PDP
Alaska PP PDP PDP
Arizona* - - -
Arkansas PP PDP PDP
California PP PDP PDP
Colorado PP PDP PDP
Connecticut PP PP PP
Delaware PP and PDP - PDP
District of Columbia PP PDP PDP
Florida PP PDP PDP
Georgia PP PDP PDP
Hawaii PDP PDP PDP
Idaho PP PP PP
Illinois PDP and PP PDP PDP
Indiana PDP and PP PDP and PP PDP and PP
Iowa PDP and PP PDP and PP PDP and PP
Kansas PP PDP PDP
Kentucky PDP and PP PDP PDP
Louisiana PDP and PP - -
Maine PDP PDP PDP
Maryland PDP and PP PDP PDP
Massachusetts PDP and PP PDP PDP
Michigan PP PDP PDP
Minnesota PP PDP PDP
Mississippi PP PDP PDP
Missouri PDP PDP PDP
Montana PP PP PP
Nebraska PP PDP PDP
Nevada PP PDP PDP
New Hampshire PP PDP PDP
New Jersey PDP and PP PDP and PP PDP and PP
New Mexico PDP and PP PDP and PP PDP and PP
New York PP PDP Included in facility rate
North Carolina PP PDP PDP
North Dakota PDP and PP PDP PDP
Ohio PP PDP PDP
Oklahoma PP PDP and PP PDP and PP
Oregon PP PP PP
Pennsylvania PDP PDP PDP
Rhode Island PDP PDP PDP
South Carolina PP PDP PDP
South Dakota PDP and PP PDP and PP PDP and PP
Tennessee* PP PDP PDP
Texas PP PDP PDP
Utah PP PDP PDP
Vermont PP PP PP
Virginia PP PDP PDP
Washington PP PDP PDP
West Virginia PP PDP PDP
Wisconsin PDP and PP PDP PDP
Wyoming PP PP PP
4-27
Coverage of Vaccines and Unit Dose

State Method for Vaccine Reimbursement ^ Reimbursement for Unit Dose
Alabama VCP Yes
Alaska EPSDT, CHIP, VCP Yes
Arizona* - -
Arkansas EPSDT, CHIP, VCP Yes
California VCP Yes
Colorado EPSDT Yes
Connecticut CHIP No
Delaware CHIP, VCP No
District of Columbia EPSDT, VCP No
Florida VCP Yes
Georgia EPSDT, CHIP, VCP Yes
Hawaii EPSDT, CHIP, VCP Yes
Idaho EPSDT, CHIP, VCP, State Vaccine Program Yes
Illinois EPSDT, VCP No
Indiana EPSDT, CHIP, VCP Yes
Iowa VCP Yes
Kansas VCP No
Kentucky EPSDT, CHIP, VCP, Pharmacy Program Yes
Louisiana EPSDT, VCP Yes
Maine EPSDT, CHIP, VCP No
Maryland VCP No
Massachusetts EPSDT, Department of Public Health No
Michigan EPSDT, CHIP, VCP Yes
Minnesota VCP Yes
Mississippi VCP Yes
Missouri VCP Yes
Montana EPSDT, CHIP, VCP Yes
Nebraska EPSDT, CHIP, VCP No
Nevada EPSDT Yes
New Hampshire EPSDT, CHIP, VCP Yes
New Jersey VCP Yes
New Mexico EPSDT, CHIP, VCP, Dept. of Health No
New York EPSDT, CHIP, VCP No
North Carolina EPSDT, VCP No
North Dakota EPSDT No
Ohio VCP No
Oklahoma EPSDT, VCP No
Oregon VCP No
Pennsylvania EPSDT, CHIP, VCP, Pharmacy Services No
Rhode Island VCP No
South Carolina VCP Yes
South Dakota EPSDT, CHIP, VCP Yes
Tennessee* EPSDT, VCP No
Texas EPSDT, CHIP, VCP Yes
Utah VCP Yes
Vermont Health Dept. provides vaccines to physician offices Yes
Virginia VCP Yes
Washington EPSDT Yes
West Virginia CHIP, VCP Yes
Wisconsin VCP No
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
4-28
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 Covered Covered with Restrictions Covered with Restrictions
Connecticut Covered Not Covered Covered Not Covered
Delaware Covered Covered Covered Covered with Restrictions
District of Columbia Not Covered Covered with Restrictions Not Covered Not Covered
Florida Not Covered Covered with Restrictions Covered with Restrictions Covered with Restrictions
Georgia Limited Coverage Covered with Restrictions Covered with Restrictions Not Covered
Hawaii Covered Covered Limited Coverage Covered with Restrictions
Idaho Not Covered Not Covered Not Covered Not Covered
Illinois Covered with Restrictions 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 Covered with Restrictions Covered Covered with Restrictions Covered with Restrictions
Kentucky Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
Louisiana Not Covered Not Covered Not Covered Not Covered
Maine Covered Covered Not Covered Covered with Restrictions
Maryland Covered with Restrictions Limited Coverage Not Covered Not Covered
Massachusetts Limited Coverage Limited Coverage Limited Coverage Not Covered
Michigan Limited Coverage Limited Coverage Not Covered Limited Coverage
Mississippi Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Missouri Limited Coverage Limited Coverage Limited Coverage Not Covered
Montana Covered with Restrictions Not Covered Not Covered PA Required
Nebraska Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
Nevada Covered Covered Covered Covered
New Jersey Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered
New Mexico Covered Covered Covered Covered
New York Covered Covered Covered Limited Coverage
North Carolina Limited Coverage Not Covered Not Covered Not Covered
North Dakota Covered with Restrictions Covered Not Covered Covered with Restrictions
Ohio Selective Coverage Selective Coverage Selective Coverage Selective Coverage
Oklahoma Covered with Restrictions Not Covered Not Covered Covered with Restrictions
Oregon Covered Covered Covered Covered
Pennsylvania Covered with Restrictions Covered Covered with Restrictions Covered
Rhode Island Covered Covered Covered Not Covered
South Carolina Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
South Dakota Limited Coverage Not Covered Not Covered Not Covered
Tennessee* Covered Covered Not Covered Not Covered
Texas Covered Covered Covered Covered
Utah Limited Coverage Not Covered Limited Coverage Not Covered
Vermont Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Washington Limited Coverage Limited Coverage Limited Coverage Not Covered
West Virginia Limited Coverage Limited Coverage Limited Coverage PA Required
Wisconsin Covered with Restrictions Covered Covered with Restrictions Not Covered
Wyoming Covered Covered Covered Not Covered
PA= Prior Authorization
4-29
Coverage of Over-the-Counter Medications (Con’t)

Digestive Products
State (non- 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 Covered Covered with Restrictions Covered with Restrictions
Connecticut Covered with Restrictions Covered with Restrictions Not Covered Covered
Delaware Covered Covered Covered with Restrictions Covered
District of Columbia Not Covered Not Covered Not Covered Not Covered
Florida Covered with Restrictions Not Covered Covered with Restrictions Not Covered
Georgia Not Covered Not Covered Not Covered Covered with Restrictions
Hawaii Covered Limited Coverage N/A Limited Coverage
Idaho Covered with Restrictions Not Covered Not Covered Not Covered
Illinois Covered with Restrictions Not Covered Not Covered Covered with Restrictions
Indiana Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Iowa Not Covered Not Covered Not Covered Covered with Restrictions
Kansas Covered Covered Covered 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 Covered with Restrictions Covered Covered
Maryland Not Covered Covered with Restrictions Not Covered Not Covered
Massachusetts Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Michigan Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Mississippi Limited Coverage Not Covered Limited Coverage Limited Coverage
Missouri Limited Coverage Not Covered Not Covered Limited Coverage
Montana Not Covered Covered 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 Jersey Not Covered Not Covered Not Covered Covered with Restrictions
New Mexico Covered Covered Not Covered Covered with Restrictions
New York Covered Covered Covered Covered
North Carolina Covered Limited Coverage Not Covered Not Covered
North Dakota Covered Covered Not Covered Covered with Restrictions
Ohio Selective Coverage Selective Coverage Selective Coverage Selective Coverage
Oklahoma Covered with Restrictions Not Covered Not Covered Not Covered
Oregon Covered Covered Covered Covered with Restrictions
Pennsylvania Covered Covered with Restrictions Covered Covered
Rhode Island Not Covered Not Covered Covered Covered
South Carolina Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
South Dakota Limited Coverage Not Covered Not Covered Not Covered
Tennessee* Covered Covered Not Covered Covered
Texas Covered Covered Not Covered Covered
Utah Not Covered Covered Not Covered Not Covered
Vermont Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Washington Limited Coverage Limited Coverage Limited Coverage Limited Coverage
West Virginia Limited Coverage Not Covered Limited Coverage Limited Coverage
Wisconsin Covered with Restrictions Covered Covered Covered with Restrictions
Wyoming Covered with Restrictions Covered Covered with Restrictions Covered
PA= Prior Authorization
4-30
Prior Authorization Process and Procedures

State PA Procedure Prior Authorization Committee Members Meetings
Alabama Yes Pharmacy and Therapeutics Committee 10 Quarterly
Alaska Yes No - -
Arizona* - - - -
Arkansas Yes DUR Board 9 Quarterly
California Yes No - -
Colorado Yes No - -
Connecticut Yes Pharmaceutical and Therapeutics Committee 14 Quarterly
Delaware Yes No - -
District of Columbia Yes No - -
Florida Yes No - -
Georgia Yes No - -
Hawaii Yes No - -
Idaho Yes Pharmacy and Therapeutics Committee 12 Bi-monthly
At least
Illinois Yes Drugs and Therapeutics Committee 12
quarterly
Indiana Yes No - -
Iowa Yes DUR Board 9 8 per year
Kansas Yes DUR Board 9 Bi-monthly
Kentucky Yes Pharmacy and Therapeutics Advisory Committee 14 Bi-monthly
Louisiana Yes Pharmaceutical and Therapeutics Committee 21 Semi-annually
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 Bi-monthly
Missouri Yes Prior Authorization Committee 9 Quarterly
Montana Yes DUR Board 10 Monthly
Nebraska Yes No - -
Nevada Yes No - -
New Hampshire Yes Pharmacy and Therapeutics Advisory Committee 13 Quarterly
New Jersey Yes No - -
New Mexico Yes No - -
New York Yes Pharmacy and Therapeutics Committee 11 Quarterly
North Carolina Yes NC Physician Advisory Group 9 Monthly
North Dakota Yes DUR Board 15 Quarterly
Ohio Yes No - -
Oklahoma Yes No - -
Oregon Yes DUR Board 12 Quarterly
Pennsylvania Yes No - -
Rhode Island Yes DUR Board 7 Quarterly
South Carolina Yes No - -
South Dakota No No - -
Tennessee* Yes No - -
Texas Yes Pharmaceutical and Therapeutics Committee 11 Quarterly
Utah Yes No - -
Vermont Yes No - -
Virginia Yes No - -
Washington Yes DUR Team and Drug Eval. Matrix Team 8 Daily, weekly
West Virginia Yes P and T Committee and DUR Board 11 Semi-annually
Wisconsin Yes Pharmacy Prior Authorization Advisory Comm. 9 As needed
Wyoming Yes DUR Board 12 Bi-monthly
4-31
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. 4,600 98%
Arizona* - - -
Arkansas M.D. 195,000 80%
California M.D., R.Ph. 2,900,000 82%
Colorado M.D., M.D.’s Agent 30,000 75%
Connecticut M.D., R.Ph. 99,000 98%
Delaware M.D., R.Ph. 34,000 92%
District of Columbia R.Ph., Pharm. Tech. 9,000 77%
Florida M.D. 440,000 78%
Georgia M.D., R.Ph. 99,000 90%
Hawaii M.D., R.Ph., Pharm. Tech. N/A 99%
M.D., R.Ph., Pharm. Tech., SmartPA 177,000 76%
Idaho
System
Illinois M.D., R.Ph. 400,000 75%
Indiana M.D., Other Providers N/A N/A
Iowa M.D. 60,000 95%
Kansas M.D., R.Ph. N/A N/A
Kentucky M.D., R.Ph. 285,000 58%
Louisiana M.D. 171,000 95%
Maine M.D. 65,000 82%
Maryland M.D., R.Ph. 68,000 >99%
Massachusetts M.D. 137,000 67%
Michigan M.D. 120,000 95%
Minnesota M.D., R.Ph. 36,000 90%
Mississippi M.D. 200,000 90%
Missouri M.D., R.Ph., Other Authorized Prescriber 87,000 58%
Montana M.D., R.Ph., Pharm. Tech. 27,000 80%
Nebraska M.D., R.Ph. 26,000 27%
Nevada M.D. N/A N/A
New Hampshire M.D. 11,700 79%
New Jersey M.D., R.Ph. 715,000 95%
New Mexico M.D. 1,300 N/A
New York M.D./Ordering Provider 630,000 100%
North Carolina M.D. 57,000 86%
North Dakota M.D., R.Ph., Pharm. Tech. 2,000 60%
Ohio M.D. 240,000 Most
Oklahoma R.Ph. 210,500 53%
Oregon M.D. 30,000 73%
Pennsylvania M.D., Other Licensed Prescriber N/A N/A
Rhode Island M.D. N/A N/A
South Carolina M.D. 37,700 60%
South Dakota M.D., R.Ph. 28 100%
Tennessee* M.D. 180,000 74%
Texas M.D. 1,500 95%
Utah M.D. N/A N/A
Vermont M.D., Prescribing Agent 43,000 92%
Virginia M.D. N/A N/A
Washington R.Ph., Pharm. Tech. N/A N/A
West Virginia M.D., R.Ph. 132,000 53%
Wisconsin M.D., R.Ph. 182,000 97%
Wyoming M.D., R.Ph., Pharm. Tech. 4,500 75%
4-32
Prior Authorization Process and Procedures (Con’t)

State Reviewer Review Time Response Vehicle
Alabama R.Ph., Pharm. Tech. 24 hours or less Phone, fax
Alaska R.Ph., Pharm. Tech. 24 hours Phone, fax
Arizona* - - -
Arkansas Voice response system 1-3 minutes Voice response system
California R.Ph. One business day Phone, fax
Colorado Pharm. Tech. 24 hours Phone, fax
Connecticut R.Ph., Pharm. Tech. 2 hours Phone, fax, mail
Delaware M.D., R.Ph., R.N, Pharm. Tech. < 1 working day Phone, mail, e-mail
District of Columbia R.N., R.Ph. 20 minutes Phone, mail
Florida R.Ph., Pharm. Tech., AHCA 24 hours Phone, fax, mail
Analyst
Georgia PBM 10 minutes Phone, fax, mail
Hawaii R.Ph., Pharm. Tech. 24 hours Phone, fax, mail
Idaho M.D., R.Ph., Pharm. Tech., Smart 24 hours Phone, fax, mail
PA System
Illinois M.D., R.Ph. 24 hours or less Phone
Indiana Medicaid Director or designee 10 days Phone, letter
Iowa R.Ph. 4 hours Fax
Kansas R.N., R.Ph. 24 hours or less Phone, mail
Kentucky R.N., R.Ph. 4-24 hours Phone, fax
Louisiana R.Ph. 3-5 minutes Phone, fax
Maine M.D. 4 hours Mail
Maryland M.D., R.Ph., Pharm. Tech. 24 hours or less Phone, fax
Massachusetts R.Ph. 24 hours Phone, mail
Michigan M.D., R.Ph., Pharm. Tech. 24 hours or less Phone, fax
Minnesota R.N. Within minutes Phone, fax, mail, e-mail
Mississippi R.N., R.Ph., Pharm. Tech. 6 hours Phone, fax, mail
Missouri M.D., R.Ph., R.N., Medicaid Tech. < 5 minutes Phone, fax
Montana R.Ph., Pharm. Tech. 1-2 minutes Phone, fax, mail
Nebraska M.D., R.Ph., Pharm, Tech. varies Phone, fax
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. 3 minutes Phone, fax, mail
New Mexico R.Ph. 24 hours Phone, fax
New York Voice interactive system Processed during call PA issued to prescriber by phone
North Carolina R.Ph., Pharm. Tech. 24 hours or less Phone, fax, e-mail
North Dakota R.Ph. 4 hours Fax, mail
Ohio R.Ph., Pharm. Tech. Immediate Phone, fax
Oklahoma R.Ph., Pharm. Tech, Pharm. Intern 24 hours Mail
Oregon R.Ph., Pharm. Tech. 24 hours or less Phone, fax
Pennsylvania R.N., M.D. Immediately to 24 hours Phone, mail
Rhode Island Contractor Immediately to 24 hours Phone
South Carolina R.Ph., First Health Per OBRA ‘90 guidelines Phone, fax
South Dakota R.Ph. 24 hours Phone, fax, mail, e-mail
Tennessee* R.Ph. Same day Fax
Texas R.Ph. 15 minutes Phone, e-mail
Utah Nurse 1 working day Phone, fax, mail, e-mail
Vermont R.Ph., Pharm. Tech, Medical 24 hours Phone, fax
Director
Virginia M.D., R.Ph. Less than 3 minutes Mail, e-mail
Washington R.Ph. <24 hours Phone, fax; denial through mail
West Virginia R.Ph. 24 hours Phone, fax
Wisconsin R.Ph., Done electronically Immediate Online, phone, fax, mail
Wyoming R.Ph., Pharm. Tech. 24 hours Phone, fax, mail, e-mail
4-33
Prior Authorization
Analgesics,
State Anabolic Steroids Antipyretics, NSAIDs Anorectics
Alabama Covered Covered Covered
Alaska Covered Covered, PA Required Not Covered
Arizona* - - -
Arkansas Covered Covered, 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, PA Required Covered, PA Required
District of Columbia Not Covered Covered, PA Required Covered, PA Required
Florida Covered Covered, PA Required Covered
Georgia Covered, PA Required Covered, PA Required Not covered
Hawaii Covered, PA Required Covered Covered, PA Required
Idaho Partial Coverage, PA Required Covered, PA Required Not Covered
Illinois Covered, PA Required Covered, PA Required 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, PA Required Covered, PA Required Covered, PA Required
Maryland*** Covered Covered Not Covered
Massachusetts Covered Partial Coverage, PA Required Not Covered
Michigan Partial Coverage, PA Required Covered Not Covered
Minnesota Covered Covered, PA Required Not Covered
Mississippi Covered Covered, PA Required Not Covered
Missouri Partial Coverage Covered Not Covered
Montana Covered Covered, PA Required Not Covered
Nebraska Not Covered Partial Coverage, PA Required Not Covered
Nevada Partial Coverage Covered Not Covered
New Hampshire Covered Covered, PA Required Covered, PA Required
New Jersey Covered Covered Partial Coverage
New Mexico Covered Covered Covered, PA Required
New York Covered Covered Not Covered
North Carolina Covered Covered, PA Required Not Covered
North Dakota Covered Covered Partial Coverage, PA Required
Ohio Covered, PA Required Covered Not Covered
Oklahoma Not Covered Covered, PA Required Partial Coverage, PA Required
Oregon Covered, PA Required Covered Covered, PA Required
Pennsylvania Covered Covered Not Covered
Rhode Island Covered Covered, PA Required Covered, PA Required
South Carolina Covered Covered Not Covered
South Dakota Covered Covered Covered
Tennessee* Covered Covered, PA Required Not Covered
Texas Covered Covered Covered, PA Required
Utah Covered Covered, PA Required Covered
Vermont Covered, PA Required Covered, PA Required Not Covered
Virginia Covered Covered Partial coverage, PA Required
Washington Covered, PA Required Covered, PA Required Not Covered
West Virginia Covered Covered Not Covered
Wisconsin Covered Covered, PA Required Covered, PA Required
Wyoming Not Covered Covered, Some require PA Not Covered
** All coverage in accordance with OBRA'90 and OBRA'93.
***PA required for all drugs not on the preferred drug list.
PA = Prior Authorization
4-34
Prior Authorization (Con’t)

Anxiolytics, Prescribed
State Antihistamines Sedatives, and Hypnotics Cold Medications
Alabama Covered Covered Partial Coverage
Alaska Covered Covered Not Covered
Arizona* - - -
Arkansas Covered, PA Required Covered Partial Coverage
Colorado Covered, PA Required Covered, PA Required Covered, PA Required
Connecticut Covered Covered Covered
Delaware Covered Covered, PA Required Covered, PA Required
District of Columbia Covered Covered Covered
Florida Covered Covered Partial Coverage
Georgia Covered Covered, PA Required Partial Coverage
Hawaii Partial Coverage, PA Required Covered Covered, PA Required
Idaho Covered, PA Required Covered, PA Required Not Covered
Illinois Covered, PA Required Covered, PA Required Covered, PA Required
Iowa Covered, PA Required Covered, PA Required Covered, PA Required
Kansas Covered Covered Partial Coverage
Kentucky Covered, PA Required Covered, PA Required Covered, PA Required
Louisiana Covered, PA Required Covered, PA Required Partial Coverage
Maine Covered, PA Required Covered, PA Required Not Covered
Maryland*** Covered Covered Partial Coverage
Massachusetts Partial Coverage, PA Required Partial Coverage, PA Required Partial Coverage
Michigan Covered Covered Partial Coverage
Minnesota Covered, PA Required Covered, PA Required Covered
Mississippi Covered Covered Partial Coverage, PA Required
Missouri Covered Covered, PA Required Covered, PA Required
Montana Covered, PA Required Covered Not Covered
Nebraska Partial Coverage, PA Required Partial Coverage, PA Required Covered
Nevada Covered Covered Covered
New Hampshire Covered, PA Required Covered, PA Required Covered
New Jersey Covered Covered Covered
New York Covered, PA Required Covered Partial Coverage
North Carolina Covered Covered Covered
North Dakota Covered, PA Required Covered Covered
Ohio Covered, PA Required Covered Covered, PA Required
Oklahoma Partial Coverage, PA Required Covered, PA Required Not Covered
Oregon Covered, PA Required Covered, PA Required Covered
Rhode Island Covered, PA Required Covered Covered
South Carolina Covered Covered Covered
South Dakota Covered Covered Covered
Tennessee* Covered, PA Required Covered Not Covered
Texas Covered Covered Covered
Utah Covered Covered Covered
Vermont Covered, PA Required Covered, PA Required Covered, PA Required
Washington Covered, PA Required Covered, PA Required Covered, PA Required
West Virginia Covered Covered Covered
Wisconsin Covered Covered Covered
Wyoming Covered Covered Covered
**All coverage in accordance with OBRA ’90 and OBRA ’93.
4-35
Prior Authorization (Con’t)

Miscellaneous Prescribed
State Growth Hormones GI Products Smoking Deterrents
Alabama Covered Covered Not Covered
Alaska Covered, PA Required Covered Not Covered
Arizona* - - -
Arkansas Covered Covered, PA Required Covered, PA Required
Colorado Covered, PA Required Covered, PA Required Covered, PA Required
Connecticut Covered Covered Not Covered
Delaware Covered, PA Required Covered Covered, PA Required
District of Columbia Covered, PA Required Covered, PA Required Covered
Florida Covered, PA Required Covered Covered
Georgia Covered, PA Required Covered Not Covered
Hawaii Covered, PA Required Covered Covered, PA Required
Idaho Covered, PA Required Covered, PA Required Not Covered
Illinois Covered, PA Required Covered, PA Required Covered
Iowa Covered, PA Required Covered, PA Required Not Covered
Kansas Covered, PA Required Covered, PA Required 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 Partial Coverage
Massachusetts Covered, PA Required Partial Coverage, PA Required Not Covered
Michigan Covered Covered Partial Coverage, PA Required
Minnesota Covered Covered, PA Required Covered
Mississippi Covered Covered Covered
Missouri Covered, PA Required Covered, PA Required Not Covered
Montana Covered, PA Required Covered Covered, PA Required
Nebraska Partial Coverage, PA Required Partial Coverage, PA Required Not Covered
Nevada Partial Coverage, PA Required Covered Covered
New Hampshire Covered Covered, PA Required Covered
New Jersey Partial Coverage Partial Coverage Covered
New York Covered, PA Required Partial Coverage Covered
North Carolina Covered, PA Required Covered Covered
North Dakota Covered Covered, PA Required Partial Coverage
Ohio Covered, PA Required Covered, PA Required Covered, PA Required
Oklahoma Covered, PA Required Covered, PA Required Partial Coverage, PA Required
Oregon Covered, PA Required Covered, PA Required Covered
Rhode Island Covered, PA Required Covered Partial Coverage
South Carolina Covered Covered Not Covered
South Dakota Covered, PA Required Covered Partial Coverage
Tennessee* Covered Covered Not Covered
Texas Covered, PA Required Covered Covered
Utah Covered, PA Required Covered Not Covered
Vermont Covered, PA Required Covered Covered, PA Required
Washington Covered, PA Required Covered, PA Required Not Covered
West Virginia Covered, PA Required Covered Covered, PA Required
Wisconsin Covered PA Required Covered, PA Required Covered
Wyoming Partial Coverage Covered, PA Required on PPIs Not Covered
**All coverage in accordance with OBRA ’90 and OBRA ’93.
4-36
Drug Utilization Review

In-House or PRODUR
State State Contact Telephone Contracted Implemented
Alabama Louise Jones 334-242-5039 Contracted Jul-96
Alaska Dave Campana, R.Ph. 907-334-2425 In-House Jun-95
Arizona* - - - -
Arkansas Pamela Ford, P.D. 501-683-4120 Contracted Mar-97
California Ellis Ellis, Pharm.D. 916-552-9500 Contracted Aug-95
Colorado Catherine Traugott 303-866-2468 Contracted Dec-98
Connecticut James Zakszewski, R.Ph. 860-424-5150 Contracted Sep-96
Delaware Cynthia R. Denemark, R.Ph. 302-453-8453 Contracted Feb-94
District of Columbia Christopher Keeys 301-617-0555 Contracted Sep-96
Florida Linda Barnes 850-487-4441 Contracted Jul-93
Georgia Patricia Z. Jeter, R.Ph., M.P.A. 404-657-9181 In-House Oct-00
Hawaii Kathleen Kang-Kaulupali 808-692-8065 In-House 1997
Idaho Tamara Eide, P.D., B.C.P.S., 208-364-1821 Contracted Jan-98
FASHP
Illinois Pamela Bunch 217-524-7478 In-House Jan-93
Indiana DUR Board Secretary 317-232-4307 Contracted Mar-96
Iowa Julie Kuhle, R.Ph. 515-725-1226 Contracted Jul-97
Kansas Vicki Schmidt 785-274-4287 Contracted Nov-96
Kentucky Debra Bahr, R.Ph. 502-564-7940 In-House 1987
Louisiana Mary J. Terrebonne, Pharm.D. 225-342-9768 Contracted Apr-66
Maine Bruce McClenahan 886-796-2463 Contracted Dec-95
Maryland Jeffrey Gruel 410-767-1455 Contracted Jan-93
Massachusetts Paul L. Jeffrey 617-210-5319 Contracted Oct-95
Michigan Debera Eggleston, M.D. 517-335-5181 Contracted Jul-00
Minnesota Mary Beth Reinke, Pharm.D., 651-215-1239 In-House Feb-96
M.S.A.
Mississippi Judith P. Clark, R.Ph. 601-359-5253 Contracted Oct-93
Missouri Tisha A. Pomering 573-751-6961 In-House Feb-93
Montana Mark Eichler, R.Ph., FASCP 406-457-5818 Contracted Sep-94
Nebraska Beth Wilson, R.Ph. 402-420-1500 Contracted Apr-95
Nevada Dionne Coston, R.N. 702-684-3775 Contracted 2004
New Hampshire Robert Coppola 603-220-2083 Contracted Jul-95
New Jersey Kaye S. Morrow 609-631-2396 In-House Oct-96
New Mexico Neal Solomon, M.P.H., R.Ph. 505-827-3174 In-House Oct-93
New York Lydia Kosinski, R.Ph. 518-474-6866 In-House Mar-95
North Carolina Melissa Weeks, Pharm.D 919-855-4300 Contracted Oct-96
North Dakota Brendan K. Joyce, Pharm.D., R. Ph. 701-328-4023 In-House Jul-96
Ohio Jeff Corzine 614-466-9689 Both Feb-00
Oklahoma Ronald Graham, D.Ph. 405-271-6614 Contracted 2000
Oregon Kathy L. Ketchum, R.Ph., M.P.A 503-494-1589 Contracted Mar-94
Pennsylvania Terri Cathers 717-772-6195 Contracted Jun-93
Rhode Island Paula Avarista, R.Ph., M.B.A. 401-4642-6390 Contracted Dec-94
South Carolina Caroline Sojourner, R.Ph. 803-898-2876 Contracted Nov-00
South Dakota Teddi Martell 605-773-3653 In-House 1996
Tennessee* Jeffrey G. Stockard, D.Ph. 615-532-3107 Contracted Jul-01
Texas Barbara Dean, R.Ph. 512-491-1101 In-House Feb-95
Utah Duane Parke 801-538-6452 In-House 1994
Vermont Felicia Montineri 802-879-5900 Contracted Nov-93
Virginia Rachel E. Cain 804-225-2873 Contracted Jul-94
Washington Nicole Nguyen, Pharm.D. 360-725-1757 In-House Mar-96
West Virginia Vicki M. Cunningham, R.Ph. 304-588-6541 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
PRODUR = Prospective Drug Utilization Review System
4-37
Prescribing/Dispensing Limits
Limits on
State Rx Limits on Number, Quantity, and Refills of Prescriptions
Alabama Yes 5 refills per Rx, 34 day supply per Rx, 4 brand limit per month
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; reasonable amts. for maint. meds. Other limits may apply
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 34 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 per Rx, maximum quantities for some drugs
Idaho Yes 34 day supply per Rx (with exceptions); 3 cycles of birth control; limits on refills/early refills
Illinois Yes Medically appropriate monthly quantity
Indiana No -
Iowa Yes 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, 5 brand scripts
per month
Maryland Yes 34 day supply per Rx; maximum 11 refills per Rx, refills may not exceed 360 day supply
Massachusetts Yes 30 day supply, maximum 11 refills per prescription
Michigan Yes 100 day supply, quantity limits for selected drugs (e.g., sedative hypnotics)
Minnesota Yes 34 day supply
Mississippi Yes 34 day supply or 100 unit doses (whichever is greater); 5 Rx per month; 11 refills maximum
Missouri No -
Montana Yes 34 day supply
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. 5 refills within 6 months.
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) and maintenance drugs (90 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 5 refills per script, limits on refills by Class
Ohio Yes 34 day supply; 102 day supply for maintenance medications; 5 refills per Rx
Oklahoma Yes 6 Rx (incl. 5 brands) per month (21+; under 21 unlimited), 34 day supply or 100 unit doses per Rx
Oregon Yes 34 day supply (15 day supply for initial Rx for chronic conditions), duration limits on selected drugs
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 Yes Varies by drug
Tennessee* Yes 31 day supply, 1 year for non-controlled medications
Texas Yes 3 Rx per month (unlimited Rxs for nursing home recipients or those < 21), max 5 refills or 6 months
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 Yes 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; 11 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 Yes Quantity limits on some medications as deemed clinically appropriate.
4-38
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;
• 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
4-39
of a waiver request by CMS is based partly on the State’s assurance that recipients will have access to
alternative sources of care.
4-40
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 ($7.51 non-MAC generics) B: AWP-14%, G: AWP-20% $0.50 - $5.00
California $7.25 ($8.00 for LTC) AWP-17% $1.00
Colorado $4.00; $1.89 for Institutions AWP-13.5% or WAC+18%, whichever is lowest; B: $3.00, G: $1.00
AWP-35% (for generics)
Connecticut $3.15 AWP-12% None
Delaware $3.65 AWP-14% AWP-16% (LTC) $0.50 - $3.00
DC $4.50 AWP-10% $1.00
Florida $4.23 AWP-15.4%; WAC+5.75% None
Georgia $4.33-$4.63 + $0.50 (for generics) AWP-11% 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: $4.60, B: $3.40 B: AWP-12% B: $3.00
Indiana $4.90 B: AWP-13.5%, G: AWP-20% $3.00
Iowa $4.26 AWP-12% $0.50-$3.00
Kansas $3.40 B: AWP-13%, G: AWP-27%, IV AWP-50%, blood $3.00
AWP-30%
Kentucky $4.51 AWP-12% $1.00
Louisiana $4.45 (avg.) to $5.77 AWP-13.5% (AWP-15% for chains) $0.50 - $3.00
Maine $3.35 - $12.50 AWP-15% $2.50, Max $25/rec/pharm/mo
Maryland $2.69-$4.69 Lowest of :WAC+8%, direct+8%, AWP-12% $2.00 Brand not on PDL,
$1.00 Brand on PDL & generics
Massachusetts $3.50 - $5.00 WAC+5% B: $3.00, G: $1.00
Michigan $2.50 ($2.75 – LTC) AWP-13.5% (1-4 stores), AWP-15.1% (5+stores) B: $3.00, G: $1.00, ABW: $1.00
Minnesota $3.65 AWP-11.5% B: $3.00, G: $1.00
Mississippi $3.91 AWP-12% $1.00 - $3.00
Missouri $4.09 - $8.19 AWP-10.43%, WAC+10% $0.50 - $2.00, $5.00 for some
1115 waiver pop.
Montana $2.00 - $4.70 AWP-15% $1.00 - $5.00
Nebraska $3.27 - $5.00 AWP-11% $2.00
Nevada $4.76 AWP-15% None
New Hampshire $1.75 AWP-16% B: $2.00, G: $1.00
New Jersey $3.70 - $4.07 AWP-12.75%, WAC+30%, AAC for injectables None
New Mexico $3.65 AWP-14% None (except $5.00 for CHIP and
working disabled)
New York B: $3.50, G: $4.50 B: AWP-12. 75%;, G: AWP-16.50% G: $0.50, B: $2.00
North Carolina B: $4.00, G: $5.60 AWP-10% G: $1.00, B: $3.00
North Dakota B: $4.60, G: $5.60 AWP-10% $3.00 (Brand)
Ohio $3.70 WAC + 9% $3.00 (PA drugs only)
Oklahoma $4.15 AWP-12.0% $1.00 - $2.00
Oregon Retail: $3.50, Inst./NF: $3.80 AWP-15% (retail), AWP-11% (institutional) B: $3.00, G: $2.00
Pennsylvania $4.00 ($5.00 for compounds) AWP-10% $1.00 ($2.00 for General Assist.)
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* $2.50 AWP-13% Medicaid: None;
Other: $5/$10 based on income
Texas (EAC+$5.14)/0.98 & delivery fee AWP-15% or WAC+12%, whichever is lowest None
Utah $3.90 (urban), $4.40 (rural) AWP-15% $3.00
Vermont $4.25 AWP-11.9% $1.00 - $3.00 dep. on Rx Cost
Virginia $3.75 AWP-10.25% B: $3.00, G: $1.00
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 - $3.00
Wisconsin $4.88 (to a maximum $40.11) AWP-13% $1.00-$3.00, max
$12/rec/pharm/mo
Wyoming $5.00 (legend), 50% AWP OTC AWP-11% $1.00 - $3.00
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; PDL= Preferred Drug List
*Within Federal and State guidelines, individual managed care and pharmacy benefit management organizations make formulary/drug decisions.
4-41
Maximum Allowable Cost (MAC) Programs
Federal State-Specific
State Upper Limits Upper Limits MAC Override Provisions
Alabama Yes Yes Brand medically necessary
Alaska Yes No Medically necessary and reason for medical necessity
Arizona* - - -
Arkansas Yes Yes Brand medically necessary MedWatch indicating why generics cannot
be dispensed
California Yes Yes Medically necessary and product unavailable at MAC rate
Colorado Yes Yes Medically necessary with documentation
Connecticut Yes Yes No physician MAC override
Delaware Yes Yes MedWatch form for prior authorization
District of Columbia No No -
Florida Yes Yes MedWatch form and prior authorization request
Georgia Yes Yes Prior authorization (Brand medically necessary and MedWatch form)
Hawaii Yes Yes Prior authorization
Idaho Yes Yes Prior authorization for brand names
Illinois Yes Yes Prior authorization request by M.D. justifying need for brand
Indiana Yes Yes Brand medically necessary, prior authorization
Iowa Yes Yes Brand medically necessary
Kansas Yes Yes Prior authorization and MedWatch form
Kentucky Yes Yes Brand necessary, brand medically necessary, plus PA on some drugs
Louisiana Yes Yes Brand necessary, brand medically necessary
Maine Yes Yes Prior authorization
Maryland Yes Yes Brand medically necessary and MedWatch form
Massachusetts Yes Yes Dispense as written, brand medically necessary, prior authorization
Michigan Yes Yes Brand medically necessary and prior authorization
Minnesota Yes Yes Dispense as written, brand medically necessary, plus prior authorization
Mississippi Yes No Brand medically necessary or prior authorization for brand multi-source
Missouri Yes Yes Brand medically necessary, prior authorization and MedWatch form
Montana Yes No Brand necessary or brand required
Nebraska Yes Yes Brand medically necessary
Nevada No Yes Brand medically necessary
New Hampshire Yes Yes Brand medically necessary
New Jersey Yes No Dispense as written, medically necessary
New Mexico Yes Yes Brand necessary, brand medically necessary
New York Yes No Prior authorization
North Carolina Yes Yes Brand medically necessary in writing on prescription
North Dakota Yes Yes Dispense as written
Ohio Yes Yes Prior authorization
Oklahoma Yes Yes Brand medically necessary plus prior authorization
Oregon Yes Yes Brand medically necessary and documentation of generic intolerance
Pennsylvania Yes Yes Brand necessary, brand medically necessary, plus prior authorization
Rhode Island No No -
South Carolina Yes Yes Brand medically necessary w/cert. by prescriber and prior authorization
South Dakota Yes Yes Brand necessary, brand medically necessary
Tennessee* Yes Yes Dispense as written
Texas Yes Yes Dispense as written, medically necessary, brand necessary, brand
medically necessary
Utah Yes Yes Brand medically necessary plus prior approval
Vermont Yes Yes Dispense as written, medically necessary, brand necessary, brand
medically necessary or DAW 8 (generic not available)
Virginia Yes Yes Medically necessary
Washington Yes Yes Brand medically necessary
West Virginia Yes No Dispense as written, brand medically necessary
Wisconsin No Yes Brand medically necessary plus prior authorization
Wyoming Yes Yes Brand medically necessary
4-42
Mandatory Substitution
Incentive Fee for Dispensing of Generic Dispensing of Lowest Cost

State Generic Substitution Multi-Source Required Multi-Source Required
Alabama No Yes Yes
Alaska No Yes No
Arizona* - - -
Arkansas $2.00 Yes Yes
California No No Yes
Colorado No Yes No
Connecticut No Yes No
Delaware No Yes No
District of Columbia No Yes No
Florida No Yes No
Georgia $0.50 Yes (brand PA required) Yes
Hawaii No Yes No
Idaho No Yes No
Illinois No No No
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 $1.00 Yes Yes
Massachusetts No Yes No
Michigan No No No
Minnesota Yes Yes Yes
Mississippi No Yes No
Missouri No Yes Yes
Montana No Yes No
Nebraska No Yes No
Nevada No Yes No
New Hampshire No Yes No
New Jersey No Yes No
New Mexico No No No
New York $1.00 Yes No
North Carolina $1.60 Yes Yes
North Dakota No Yes 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 No No No
Tennessee* No Yes Yes
Texas No No No
Utah No Yes Yes
Vermont No Yes Yes
Virginia No Yes No
Washington No Yes Yes
West Virginia No Yes No
Wisconsin No Yes No
Wyoming No Yes No
4-43
Counseling Requirements and Payment for Cognitive Services
Medicaid Payment
State Patient Counseling Required1 for Cognitive Services2
Alabama All No
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, New Prescriptions No
Florida All No
Georgia All No
Hawaii Medicaid Only No
Idaho All No
Illinois All No
Indiana All No
Iowa All Yes (pharm. Case management)
Kansas All No
Kentucky All No
Louisiana All No
Maine All No
Maryland Medicaid Only, New Prescriptions No
Massachusetts All No
Michigan All No
Minnesota All No
Mississippi All Yes (diabetes, asthma, coagulation, and lipids)
Missouri All Yes (diabetes, asthma, heart failure, and depression
education)
Montana All No
Nebraska All No
Nevada All No
New Hampshire All No
New Jersey All No
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 No
Texas All No
Utah All No
Vermont All No
Virginia All No
Washington All Yes (emergency contraceptive counseling, clozaril
case management)
West Virginia All No
Wisconsin All Yes
Wyoming All No
Source: 12003-2004 National Association of Boards of Pharmacy Law, Survey of Pharmacy Law; 2 As reported by State drug
program administrators in the 2004 NPC Survey.
4-44
Prescription Price Updating
State Contact Telephone Updated

Alabama Allyn Williford 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 Martha Warner 303-866-3176 Weekly
Connecticut Ellen Arce, R.Ph. 860-832-5885 Weekly
Delaware Cynthia R. Denemark, R.Ph. 302-453-8453 Weekly
District of Columbia Christine Quinn 202-906-8304 Monthly
Florida First DataBank 650-588-5454 Weekly
Georgia Express Scripts 770-552-3793 Daily
Hawaii ACS State Healthcare 800-358-2381 Weekly
Idaho Katie Ayad 208-364-1970 Bimonthly
Illinois First DataBank 650-588-5454 Weekly
Indiana First DataBank 650-588-5454 Weekly
Iowa Patrick Danlan 515-725-1226 Weekly
Kansas Mary H. Obley 785-296-3981 Weekly
Kentucky Unisys Provider Services 502-226-1140 Weekly
Louisiana Maggie Vick, Unisys Corp. 225-237-3251 Weekly
Maine Bruce McClanahan 886-796-2463 Weekly
Maryland First DataBank 650-588-5454 Weekly
Massachusetts First DataBank 650-588-5454 Weekly
Michigan First Health Service Corp. 877-864-9014 Weekly
Minnesota First DataBank 650-588-5454 Weekly
Mississippi Terri R. Kirby, R.Ph. 601-359-5253 Weekly
Missouri First DataBank 650-588-5454 Weekly
Montana First DataBank 650-588-5454 Weekly
Nebraska Dyke Anderson, R.Ph. 402-471-9379 Weekly
Nevada First DataBank 650-588-5454 Monthly
New Hampshire First Health Services Corp. 800-884-2822 Weekly
New Jersey First DataBank 650-588-5454 Weekly
New Mexico First DataBank 800-633-3453 Weekly
New York Carl Cioppa, Pharm.D. 518-474-9219 Monthly
North Carolina Tom D’Andrea, R.Ph., M.B.A. 919-855-4300 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 First Health Service Corp. 503-391-1980 Biweekly
Pennsylvania First DataBank 800-633-3453 Monthly
Rhode Island Paula Avarista, R.Ph., M.B.A. 401-462-6390 Biweekly
South Carolina First DataBank 650-588-5454 Weekly
South Dakota Mark Petersen, R.Ph. 605-773-3498 Biweekly
Tennessee* First DataBank 650-588-5454 Weekly
Texas Martha McNeill, R.Ph. 512-491-1157 Continuously
Utah RaeDell Ashley, R.Ph. 801-538-6495 Bimonthly
Vermont Cathy England 804-965-7717 Monthly
Virginia Keith T. Hayashi 804-225-2773 Weekly
Washington Tom Zuchlewski 360-725-1837 Weekly
West Virginia Heather Bodiford 866-322-5960 Weekly
Wisconsin First DataBank 800-633-3453 Biweekly
Wyoming First DataBank 800-633-3453 Weekly
4-45
4-46
Section 5:
State Pharmacy Program
Profiles
5-1
5-2
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
5-3
5-4
ALABAMA
A. BENEFITS PROVIDED AND GROUPS ELIGIBLE

Type of Benefit Categorically Needy Medically Needy (MN)
Aged Blind/ Child Adult Aged Blind/ Child Adult
Disabled Disabled
Prescribed Drugs
Inpatient Hospital Care
Outpatient Hospital Care
Laboratory & X-ray Service
Physician Services
Dental Services
B. EXPENDITURES FOR DRUGS

2002 2003**
Expenditures Recipients Expenditures Recipients
TOTAL $454,370,478 500,789 $536,222,703
RECEIVING CASH ASSISTANCE TOTAL $315,943,060 220,205

Aged $37,738,144 24,294
Blind/Disabled $257,913,536 131,463
Child $11,592,612 46,873
Adult $8,698,768 17,575
MEDICALLY NEEDY, TOTAL $0 0

Aged $0 0
Blind/Disabled $0 0
Child $0 0
Adult $0 0
POVERTY RELATED, TOTAL $59,283,383 228,391

Aged $825,181 717
Blind/Disabled $881,876 798
Child $56,041,627 216,945
Adult $1,534,699 9,931
BCCA Women $0 0
TOTAL OTHER EXPENDITURES/RECIPIENTS* $79,144,035 52,193

*Total other expenditures/recipients includes foster care children, 1115 demonstration participants, other recipients, and unknown.
** 2003 data on expenditures and number of recipients by maintenance assistance status and basis of eligibility are unavailable.
Source: CMS, MSIS Report, FY 2002 and CMS-64 Report, FY 2003.
Alabama-1
C. ADMINISTRATION Formulary/Prior Authorization
Alabama Medicaid Agency. Formulary: Open formulary with preferred drug list.
Formulary managed through restrictions on use, prior
D. PROVISIONS RELATING TO DRUGS authorization, therapeutic substitution, preferred
products, physician profiling, and voluntary
Benefit Design supplemental rebates. Prior authorization required for
non-preferred drugs. Anti-psychotics and HIV/AIDs
Drug Benefit Product Coverage: Products covered: drugs are exempted from the prior authorization
disposable needles and syringe combinations used for requirements. (For additional information see:
insulin. Products covered with restriction: prescribed www.medicaid.state.al.us.)
insulin. Products covered as DME: blood glucose test
strips; urine ketone test strips. Prior authorization Prior Authorization: State currently has a formal
required for: total parenteral nutrition; interdialytic prior authorization procedure. Prior authorization
parenteral nutrition; Retin A; Accutane; decisions may be appealed by physician submitting
Dipyridamole; and Synagis. Products not covered: written notice along with medical documentation to
cosmetics; fertility drugs; experimental drugs; drugs the administrative services contractor for physician
for anorexia or weight gain; hair growth products; review. The request is forwarded to the Medicaid
and DESI drugs. agency’s Medical Director for review.
Over-the-Counter Product Coverage: Products Prescribing or Dispensing Limitations

covered if prescribed by a physician: allergy, asthma
and sinus products; analgesics; cough and cold Prescription Refill Limit: maximum of five refills.
preparations; digestive products; prenatal vitamins;
hemorrhoidal products. Partial coverage for: topical Monthly Quantity Limit: 34-day supply.
products. Products not covered: smoking deterrent
products and feminine products. Monthly Prescription Limit: four brand limit.
Therapeutic Category Coverage: Therapeutic Drug Utilization Review
categories covered: anabolic steroids; analgesics,
antipyretics, and NSAIDs; anoretics; antibiotics; PRODUR system implemented in July 1996. State
anticoagulants; anticonvulsants; antidepressants; currently has a DUR Board with a quarterly review.
antidiabetic agents; antihistamines; antilipemic
agents; anti-psychotics; anxiolytics, sedatives, and
hypnotics; cardiac drugs; chemotherapy agents; ENT
anti-inflammatory agents; estrogens; growth
Dispensing Fee: $5.40.
hormones; hypotensive agents; misc. GI drugs;
sympathominetics (adrenergic); and thyroid agents.
Ingredient Reimbursement Basis: AWP-10%, WAC
Partial coverage for: prescribed cold medications;
+ 9.2%.
and contraceptives. Prior authorization required for:
nutritional supplements; and Synagis. Therapeutic
Prescription Charge Formula: Medicaid pays for
categories not covered: prescribed smoking
prescribed legend and non-legend drugs authorized
deterrents.
under the program based upon and shall not exceed
the lowest of:
Coverage of Injectables: Injectable medicines
reimbursable through the Prescription Drug Program 1. The Maximum Allowable Cost (MAC) of the
when used in home healthcare and extended care drug plus a dispensing fee,
facilities, and through physician payment when used
in physicians’ offices. 2. The Estimated Acquisition Cost (EAC) of the
drug plus a dispensing fee, or
Vaccines: Vaccines reimbursable as part of the 3. The provider’s usual and customary charge to
Vaccines for Children Program. Adult vaccines are the public for the drug.
available through the Health Department.
Unit Dose: Unit dose packaging reimbursable.
Alabama-2
Maximum Allowable Cost: State imposes Federal Medicaid DUR Board

Upper Limits as well as State-specific limits on
John Searcy, M.D.
generic drugs. Override requires “Brand Medically
Jimmy Jackson, R.Ph.
Necessary” in the physician’s own handwriting.
Darin Elliot, Pharm.D.
Greer L. Geiger, M.D.
Incentive Fee: None.
W. Kevin Green, M.D.
Richard Freeman, M.D.
Patient Cost Sharing: Tiered copayment.
Gary Magouirk, M.D.
Drug Ingredient Cost Copayment Paula Thompson, Pharm.D.
$0.00 to $10.00 $0.50 W. Thomas Geary, Jr., M.D.
$10.01 to $25.00 $1.00 Steven Rostand, M.D.
$25.01 to $50.00 $2.00 Rhonda Harden, Pharm.D.
$50.01 or more $3.00 Rob Colburn, R.Ph.
Exemptions: No copayment amount is to be collected New Brand Name Products Contact
by the pharmacy or paid by the recipient for
Louise F. Jones
recipients under age 18, pregnant, or living in nursing
334/242-5039
facilities.
Cognitive Services: Does not pay for cognitive
services. Allyn Williford
Alabama Medicaid Agency
E. USE OF MANAGED CARE 501 Dexter Avenue
P.O. Box 5624
Does not use MCOs to deliver services to Medicaid Montgomery, AL 36103-5424
recipients. T: 334/242-5034
F: 334/353-7014
F. STATE CONTACTS Medicaid Drug Rebate Contact
State Drug Program Administrator Lynn M. Abrell

Louise F. Jones, Director 501 Dexter Avenue
Pharmacy Services P.O. Box 5624
Alabama Medicaid Agency Montgomery AL 36103-5624
501 Dexter Avenue T: 334/242-2326
P.O. Box 5624 F: 334/353-7014
Montgomery, AL 36103-5624 E-mail: ggray@medicaid.state.al.us
T: 334/242-5039
F: 334/353-7014 Claims Submission Contact
E-mail: lljones@medicaid.state.al.us
Internet address: www.medicaid.state.al.us Cyndi Crocket, Supervisor
EDS
Prior Authorization Contact 301 Technacenter Dr.
Montgomery, AL 36117
Louise F. Jones 334/215-0111
334/242-5039
Medicaid Managed Care Contact
DUR Contact
Kim Davis-Allen, Director
Louise Jones Managed Care
334/242-5039 Alabama Medicaid Agency
501 Dexter Avenue
Montgomery, AL 36103-5624
334/242-5011
Alabama-3
J.A. Powell, M.D.

Mail Order Pharmacy Program
Marsha D. Raulerson, M.D.
None John Searcy, M.D.
Doug Sewell
Disease Management Program/Initiative
Karin Scott
Contact
Steve Shivers
Mary H. Finch Wilburn Smith, Jr., M.D.
Associate Medical Director David Stone
Alabama Medicaid Agency Page Walley
501 Dexter Avenue Donald Williamson, M.D.
Montgomery, AL 36103-5624 Helen Wilson
334/242-5610
Pharmacy and Therapeutics Committee
Alabama Medicaid Agency Officials
A. Z. Holloway, M.D.
Carol Herrmann Richard Freeman, M.D.
Commissioner Ben Main, R.Ph.
Alabama Medicaid Agency Gary Magouirk, M.D.
501 Dexter Avenue David Herrick, M.D.
P.O. Box 5624 Jackie Feldman, M.D.
Montgomery, AL 36103-5624 Sheri Lynn Boston, R.Ph.
T: 334/242-5600 Mary McIntyre, M.D.
F: 334/242-5097 Jimmie P. Clark, M.D.
E-mail: Almedicaid@medicaid.state.al.us Dane Yarbrough, R.Ph.
Internet address: www.medicaid.state.al.us
Executive Officers of State Medical and
John Searcy, M.D. Pharmaceutical Societies
Medical Director
Medical Association of the State of Alabama (MASA)
Cary Kuhlmann
501 Dexter Avenue
Executive Director
P.O. Box 5624
19 S. Jackson Street
P.O. Box 1900
334/242-5619
Montgomery, AL 36102-1900
T: 334/954-2500
Title XIX Medical Care Advisory Committee
F: 334/269-5200
Carol Herrmann E-mail: cary@masalink.org
Amanda Buttenshaw Internet address: www.masalink.org
Bill Chandler
Irene Collins Alabama Osteopathic Medical Association
Louis E. Cottrell, Jr. E. Jason Hatfield, D.O.
Page Dunlap Secretary -Treasurer
William S. Eley, II P.O. Box 1857
Teresa Easterling U.S. Highway 43
Al Fox Winfield, AL 35594
Jean Fulton T: 205/487-3625
Lawrence F. Gardella F: 205/487-7559
Melane Golson Internet address: www.aloma.org
Frank Harris
Frank Holden Alabama Pharmacy Association (APA)
John Houston William S. Eley, II
Jolene Jones Executive Director
Leigh Moorer Jones 1211 Carmichael Way
Olivia Kendrick Montgomery, AL 36106-3672
Carl J. Kuhlman T: 334/271-4222
Roosevelt McCorvey, M.D. F: 334/271-5423
Linda McWilliams E-mail: aparx@aparx.org
Holley Midgley Internet address: www.aparx.org
Louise Pittman
Alabama-4
Alabama State Board of Pharmacy

Jerry Moore
Executive Director
1 Perimeter Park South, Suite 425 S
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
T: 334/213-2432
F: 334/213-2406
E-mail: Sharon@aidarx.org
Internet address: www.aidarx.org
Alabama Hospital Association

Tom Cooper, CEO
500 North East Blvd.
T: 334/272-8781
F: 334/270-9527
E-mail: tcooper@alaha.org
Internet address: www.alaha.org
Alabama-5
Alabama-6
ALASKA
A. BENEFITS PROVIDED AND GROUPS ELIGIBLE

Type of Benefit Categorically Needy Medically Needy (MN)
Aged Blind/ Child Adult Aged Blind/ Child Adult
Disabled Disabled
Prescribed Drugs
Inpatient Hospital Care
Outpatient Hospital Care
Laboratory & X-ray Service
Physician Services
Dental Services
B. DRUG PAYMENTS AND RECIPIENTS

2002 2003
Expenditure Recipients Expenditure Recipients
TOTAL $83,324,085 70,550 $96,939,771 74,245
RECEIVING CASH ASSISTANCE TOTAL $64,580,513 33,632 $74,705,928 35,317

Aged $11,177,801 4,845 $13,303,796 5,015
Blind/Disabled $42,891,082 9,620 $48,808,026 9,877
Child $1,864,091 8,904 $2,673,066 10,400
Adult $8,647,539 10,263 $9,921,040 10,025
MEDICALLY NEEDY, TOTAL $0 0 $11,440,828 32,957

Aged $0 0 $7,200 6
Blind/Disabled $0 0 $4,799 4
Child $0 0 $10,337,354 29,226
Adult $0 0 $1,091,475 3,721
POVERTY RELATED, TOTAL $7,856,059 29,364 $9,535,143 4,828

Aged $8,177 8 $3,204,802 696
Blind/Disabled $17,643 7 $4,075,976 846
Child $6,492,328 23,878 $1,260,868 2,208
Adult $1,181,976 5,434 $993,497 1,078
BCCA Women $155,935 37 N/A N/A
TOTAL OTHER EXPENDITURES/RECIPTENTS* $10,887,513 7,554 1,257,872 1,143
*Total Expenditures/Recipients includes foster care children, 1115 demonstration participants, other recipients, and unknown.
Source: CMS, MSIS Report, FY 2002 and Alaska Medicaid Management Information System, FY 2003.
Note: Alaska estimates 2004 drug expenditures of approximately $113.5 million and the number of Medicaid drug recipients to be
75,000.
Alaska-1
C. ADMINISTRATION Formulary/Prior Authorization

Department of Health and Social Services, Division of Formulary: No formulary. Preferred drug list (PDL)
Health Care Services. managed by exclusion of products based on
contracting issues, restrictions on use, therapeutic
D. PROVISIONS RELATING TO DRUGS substitution, preferred products, and physician
profiling.
Benefit Design
Prior Authorization: State currently has a formal prior
Drug Benefit Product Coverage: Products covered: authorization procedure. Request for fair hearing
cosmetics (covered with restrictions- non hair growth required for appealing coverage of an excluded
products); prescribed insulin; and total parental product and PA decision. Medical necessity form
nutrition. Covered under DME: disposable needles and required.
syringe combinations used for insulin; blood glucose
test strips; and urine ketone test strips. Prior Prescribing or Dispensing Limitations
authorization required for: Clorazil; Lupron Depot;
ADC infant vitamins; some DME; Synagis; Panretin; Monthly Quantity Limit: Prescriptions are limited to
and Actig Naltrexone. Products not covered: fertility 30-day supplies (except family planning drugs).
drugs; experimental drugs; and intedialytic parenteral Dispensing of generic multi-source product is required.
nutrition. Maximum number of units for about 50 therapeutic
classes and 40 narcotic analgesics.
Over-the Counter Product Coverage: Products
covered with restrictions: feminine products (yeast Drug Utilization Review
antifungal drugs when ordered by prescription); topical
products (Bacitracin ointment only). Products not PRODUR system implemented in June 1995. State
covered: allergy, asthma, and sinus products; currently has a 5-member DUR Board that meets nine
analgesics; cough and cold preparations, digestive times per year.
products; and smoking deterrent products.
Therapeutic Category Coverage: Categories covered:
anabolic steroids; antibiotics; anticoagulants; Dispensing Fee: No less than $3.45 and no more than
anticonvulsants; anti-depressants; antidiabetic agents; the 90th percentile of all dispensing fees determined
antihistamine drugs; antilipemic agents; anti- under the formula:
psychotics; anxiolytics, sedatives, and hypnotics;
cardiac drugs; chemotherapy agents; contraceptives; 1) $23,192 added to the number resulting from
ENT anti-inflammatory agents; estrogens; hypotensive multiplying total prescriptions filled by that
agents; miscellaneous GI drugs; sympathominetics pharmacy in the previous calendar year by 5.070;
(adrenergic); and thyroid agents. Prior authorization
required for: analgesics, antipyretics, and NSAIDs; 2) to 1), add the result of multiplying total Medicaid
growth hormones. Categories not covered: anoretics; prescriptions filled in the previous calendar year
prescribed cold medications; amphetamines (except for by 12.44;
narcolepsy and hyperactivity); prescribed smoking
deterrents; cough suppressants; DESI drugs; vitamins
3) from 2), subtract the result of multiplying the total
(except prenatal); and vitamins with fluoride.
floor space volume of the pharmacy in sq. ft. by
2.103;
Coverage of Injectables: Injectable medicines
reimbursable through the Prescription Drug Program
4) divide 3) by total prescriptions filled by that
when used in home health care and extended care
pharmacy
facilities, and through physician payment when used in
physicians’ offices.
5) add $0.73 to 4)
Vaccines: Vaccines reimbursable at cost as part of
Extra fee for compounding:
EPSDT services, the Children’s Health Insurance
Program, and the Vaccines for Children Program.
Long-term care pharmacies receive highest dispensing
fee once per month per NDC.
Unit Dose: Unit dose packaging reimbursable.
Alaska-2
Ingredient Reimbursement Basis: EAC = AWP-5%. DUR Contact

Dave Campana, R.Ph.
Maximum Allowable Cost: State imposes Federal
907/334-2425
Upper Limits on generic drugs. Override requires
“Medically Necessary” and the reason of necessity. New Brand Name Products Contact
Dave Campana, R.Ph.
Incentive Fee: None.
907/334-2425
Cognitive Services: Does not pay for cognitive
services.
Dave Campana, R.Ph.
Patient Cost Sharing: $2.00 copayment for branded 907/334-2425
and generic products.
Medicaid Drug Rebate Contact
E. USE OF MANAGED CARE Amanda Burger
Division of Medical Assistance
Does not use MCOs to deliver services to Medicaid 4501 Business Park Blvd., Suite 24
recipients. Anchorage, AK 99503
T: 907/334-2409
F: 907/561-1684
F. STATE CONTACTS E-mail: amanda.burger@health.state.ak.us
Medicaid Drug Program Administrator Claims Submission Contact

Dave Campana, R.Ph. Dave Campana, R.Ph.
Pharmacy Program Manager 907/334-2425
Division of Health Care Services
Disease Management Program/Initiative
4501 Business Park Blvd., Suite 24
Contact
Anchorage, AK 99503
T: 907/334-2425 Doug Jones
F: 907/561-1684 Acting Deputy Director
E-mail: david_campana@health.state.ak.us Division of Medical Assistance
Internet Address: www.hss.state.ak.us/dhcs 4501 Business Park Blvd, Suite 24
Anchorage, AK 99503
Health and Social Services Department
907/334-2400
Officials
E-mail: doug_jones@health.state.ak.us
Joel Gilbertson, Commissioner
Department of Health and Social Services Mail Order Pharmacy Benefit
P.O. Box 110601
Yes, for all Medicaid recipients.
Juneau, AK 99811-0601
T: 907/465-3030
Alaska DUR Committee
F: 907/465-3068
E-mail: joel_gilbertson@health.state.ak.us Dave Campana, R.Ph.
Anchorage, AK
Jerry Fuller, Director
Division of Medical Assistance, DHSS Heide Brainerd, R.Ph.
P.O. Box 110660 Anchorage, AK
Juneau, AK 99811-0660
T: 907/465-3030 Greg Polston, M.D.
F: 907/465-3068 Fairbanks, AK.
E-mail: jerry_fuller@health.state.ak.us
Charlene Hampton, R.Ph.
Prior Authorization Contact Anchorage, AK
Dave Campana, R.Ph.
Alexander von Hafften, M.D.
907/334-2425
Anchorage, AK
Alaska-3
Medical Care Advisory Committee Alaska Pharmacists Association

Nancy Davis, Executive Director
David Alexander, M.D. (Chair)
4107 Laurel Street, Suite 101
Anchorage, AK
Anchorage, AK 99508-5334
T: 907/563-8880
Gary Givens, R.Ph.
F: 907/563-7880
Anchorage, AK
E-mail: akphrmcy@alaska.net
Internet address: www.alaskapharmacy.org
Angela Gonzalez
Anchorage, AK
Alaska State Board of Pharmacy
Sher Zinn
Deborah Kiley, FNP
Licensing Examiner
Anchorage, AK
P.O. Box 110806
Juneau, AK 99811-0806
Karen Sidell
T: 907/465-2589
Bethel, AK
F: 907/465-2974
E-mail: sher_zinn@commerce.state.ak.us
Lavada “Sam” Bush
Internet address: www.dced.state.ak.us/occ/ppha.htm
Fairbanks, AK
Alaska State Hospital and Nursing Home Association
Marie Darlin
Rod L. Betit
Juneau, AK
President/CEO
426 Main Street
Brenda Knapp
Juneau, AK 99801
Juneau, AK
T: 907/586-1790
F: 907/463-3573
Kathy Dillard
E-mail: rodbetit@msn.com
Kodiak, AK
Internet address: www.ashnha.com
Marilyn Mories
Palmer, AK
David Gilbreath
Soldotna,AK
Jerry Fuller (Commissioner’s designee non-voting)

Pharmaceutical Societies
Alaska State Medical Association
Jim Jordan, Executive Director
4107 Laurel Street
Anchorage, AK 99508
T: 907/562-0304
F: 907/561-2063
E-mail: asma@alaska.net
Alaska Osteopathic Medical Association

Holly Macriss
AOA Northwest Regional Manager
1900 Point West Way, Suite 188
Sacramento, CA 95815-4705
T: 800/891-0333
F: 916/564-5105
E-mail: hmcriss@osteopathic.org
Alaska-4
ARIZONA
ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM
(AHCCCS - PRONOUNCED "ACCESS")
• Capitation of the State by the Federal
AHCCCS FEATURES Government.
The Arizona Health Care Cost-Containment System Primary Care Physicians as Gatekeepers
(AHCCCS), Arizona’s Medicaid program, is a Title
XIX (Medicaid) 1115 Research and Demonstration AHCCCS legislation provided that all members must
Waiver project, jointly funded by the federal be under the care and supervision of a primary care
government and the State of Arizona. Begun in physician who assumed the role of gatekeeper. A
October 1982, it serves as a model for providing statewide network of primary care physicians was
medical services to the indigent in a managed care established to perform the gatekeeping function for
system rather than through fee-for-service the system.
arrangements. Typically, Medicaid programs have
incorporated the traditional hallmarks of the U.S. Prepaid Capitated Financing
health care system: namely, independent providers
and fee-for-service reimbursement. In contrast, It was the intent of the AHCCCS legislation that
organized health plans and capitation mark the health plans and their providers offer all covered
AHCCCS model. services to groups of members within a geographical
area for a fixed price, for a definite period. The law
In traditional Medicaid programs, the States assume allowed for the establishment of a statewide bidding
responsibility for contracting with individual process to accomplish this. Services are provided on
pharmacies and reimbursing them. In the AHCCCS a county-by-county basis, by prepaid health plans.
model however, the State contracts, instead, with pre- Providers may bid on a prepaid capitated basis for
paid health plans, HMOs and HMO-like entities. covered services to be provided within a particular
These plans are paid on a capitation basis and are county. The law allows for expansion and
responsible for providing all of the services covered contraction of bids to achieve the best possible
by the program. Thus, with the exception of system. In the event there are insufficient bids for a
behavioral health drugs which are carved out of given area, the legislation permits capped fee-for-
managed care, the delivery of pharmacy services is service arrangements. It is intended, however, that
the responsibility of each prepaid plan. capped fee-for-service will be authorized as a last
resort only.
GENERAL INFORMATION
In essence, AHCCCS prepaid health plans (PHPs),
The Arizona Health Care Cost Containment System health maintenance organizations (HMOs), and other
(AHCCCS), developed in Senate Bill 1001, was types of organized health delivery systems charge a
passed by the Legislature and signed by the Governor fixed fee per individual enrolled (i.e., a capitation
in November 1981. It contained six major rate) and assume responsibility for providing a broad
mechanisms for restraining health care costs at the array of health care services to members. The plan or
same time ensuring that appropriate levels of quality contractor is then “at risk” to deliver the necessary
health care services are provided to eligible persons services within the capitated amount. AHCCCS
in a dignified fashion. The goal of these 6 items was receives Federal, State, and county funds to operate,
to contribute to the establishment of health care plus some monies from Arizona’s tobacco tax.
financing that is less expensive than conventional
fee-for-service systems. The six mechanisms were: Competitive Bidding Process
• Primary Care Physicians Acting as
The statewide competitive aspect of the bid process
Gatekeepers
for selecting providers and offering prepaid capitated
• Prepaid Capitated Financing services is the most unique feature of the AHCCCS
• Competitive Bidding Process model. A competition of this magnitude had never
• Cost Sharing been attempted in any other State. The AHCCCS
• Limitations on Freedom-of-Choice administration believes competitive bidding for
health care service contracts, as opposed to
Arizona-1
conventional negotiation processes, provides for the State to monitor health care costs on a careful
accessible cost-effective delivery of health care and continuous basis.
without sacrificing quality performance.
IMPLEMENTATION OF AHCCCS
The AHCCCS administration issues an invitation to
qualified health plans once every five years. AHCCCS is based on plans that have been tested, in
Qualified health plans may bid to offer the full range part, on smaller scales in different areas of the
of AHCCCS services in one or more counties. country. By combining a number of key mechanisms
on a statewide basis, AHCCCS represents a novel
Cost Sharing health care model. The purpose of this section is to
present a discussion of how the key concepts
The fourth major device for containing costs in the embodied in the AHCCCS legislation will be
AHCCCS model is a provision for cost sharing by implemented and rendered operational.
users. A statewide copayment schedule was
developed for this purpose, and the medically needy Provider Participation
participate in coinsurance cost sharing. It is expected
that the imposition of nominal copayments will Providers may participate in AHCCCS in 2 different
ensure optimal effectiveness in the area of service ways. First, they may contract with prepaid capitated
utilization. The copayment schedule accomplishes plans as either full or partial benefit providers.
three objectives: curtailment of over-utilization;
enhancement of patient dignity; and service The second mode of participation is on a capped fee-
utilization by members for truly needed health care. for-service basis. Here, providers agree to accept
There is no copayment for drugs and medication, capped fee payments as payments in full for services
prenatal care including all obstetrical visits, members provided on a FFS basis.
in long care facilities and for visits scheduled by the
primary care physician or practitioner, and not at the Functions of the AHCCCS Administration
request of the member.
The Arizona Health Care Containment System
Limitations On Freedom-of-Choice Administration (AHCCCSA) contracts with full
benefit capitated health plans to serve AHCCCS
The fifth major item for containing costs is a members through a network of providers.
restriction on provider/physician selection by
AHCCCS members. Unlike conventional delivery Contracting Health Plans
models, Arizona does not rely on fee-for-service
arrangements. The goal is to have the State Under the Contracting Health Plan arrangement,
completely blanketed with prepaid capitated plans are defined in terms of explicit groups of
arrangements. Members are linked to selected or providers organized as entities that are more formal.
assigned plans for definite durations of time. These consortia, or formal entities, are capable of
Freedom-of-choice is permitted to the extent providing the full range of AHCCCS benefits within
practicable for members to select the particular group a defined service area for all AHCCCS members who
with which to enroll, as well as the primary care elect to join the plans, up to a predetermined
physician within the selected group. Capped fee-for- capacity. This is the dominant mode of operation
service health service arrangements are used as a last within AHCCCS -- with two or more competing
resort, and only in areas not covered by prepaid plans wherever possible.
capitated plans.
The Contracting Health Plans are delivery systems,
CAPITATION BY THE FEDERAL not simply insurance plans, but they need not be
GOVERNMENT Health Maintenance Organizations by any legal or
conventional definition of the term. The AHCCCS
The State of Arizona will itself be capitated by the legislation provides for the creation of provider
Federal government and therefore will be at financial consortia for the purpose of participation in the
risk for containing health care costs. Capitation rates program. The Contracting Health Plan may be a
will be established according to sound actuarial loosely organized system, but it must be capable of
principles, and will represent no more than 95 providing the full range of AHCCCS benefits to a
percent of the estimated cost of services delivered in defined population at a capitation rate.
Arizona under conventional fee-for-service
arrangements. Capitation provides a key incentive
Arizona-2
The Organizational Role of AHCCCS (Additional information about AHCCCS can be

Administration found on the agency’s website at
www.ahcccs.state.az.us)
The AHCCCS Administration has been charged with
the general implementation and monitoring of the MEDICAL PLANS AND
AHCCCS program. ADMINISTRATORS
The AHCCCS Administration develops the Rules AHCCCS Contracted Health Plans
and Regulations; manages the health plan bidding
processes; awards the contracts; provides technical Arizona Physicians IPA, Inc.
assistance to providers for the purpose of forming 3141 North 3rd Avenue
consortia to contract with AHCCCS; and monitors Phoenix, AZ 85013
the overall operation of the program. 800/445-1683
The Operational Role of the AHCCCS Care1st Health Plan of Arizona, Inc.
Administration 2355 E. Camelback Rd.
Suite 300
Organizationally, the AHCCCS Administration Phoenix, AZ 85016
assumes responsibility for the oversight of every day 866/560-4042
operations.
Health Choice Arizona
The AHCCCS Administration has overall Suite 260
responsibility for the following activity areas: 1600 West Broadway
Tempe, AZ 85282-1136
• Eligibility Oversight T: 480/968-6866
• Procurement of Health Plans F: 800/322-8670
• Quality Management
• Health Plan Oversight Maricopa Health Plan
• Provider, Member Call Center 2502 East University Drive
• Grievances and Complaints Phoenix, AZ 85034
• Fee-for-Service for IHS 800/582-8686
AHCCCS became effective December 1, 1981, and Mercy Care Plan

services commenced October 1, 1982. Services Suite 400
include: inpatient, outpatient, laboratory, x-ray, 2800 North Central
prescription drugs, medical supplies, prosthetic Phoenix, AZ 85004
devices, emergency dental care including extractions T: 602/263-3000
and dentures, treatment of eye conditions and F: 800/624-3879
EPSDT.
Phoenix Health Plan/Community Connection
Though AHCCCS was a three-year experiment that 7878 North 16th Street, Suite 105
was to end in October 1985, the Federal government Phoenix, AZ 85020
continues to extend funding for the program. In 800/747-7997
1988, AHCCCS received a five-year extension from
the Federal government and in 1993, it received an Pima Health System
additional one-year extension. In 1994, AHCCCS Suite A-200
received a three-year extension and in 1998, it 5055 East Broadway
received a one-year extension. Since then, AHCCCS Tucson, AZ 85711
has received additional extensions. Currently, 800/423-3801
AHCCCS is operating under a five year waiver
extension that will expire on September 30, 2006. University Family Care
Some 20 years after it first began, AHCCCS has 575 East River Road
grown in numbers from the first wave of 180,000 Tucson, AZ 85704
enrollees to approximately 1 million beneficiaries, 888/708-2930
(Oct. 1, 2004) representing 18 percent of Arizona’s
population. AHCCCS has also become a model as
managed care is increasingly by being implemented
in other States’ Medicaid programs.
Arizona-3
Phoenix Area Indian Health Services (IHS) Yavapai County LTC

Two Renaissance Square Yavapai County Department of Medical Assistance
40 N. Central Avenue 6717 East Second Street
Phoenix, AZ 85004-5036 Prescott, AZ 86314
602/364-5039 520/771-3560
Tucson Area Indian Health Services (IHS)

7900 South J. Stock Road STATE CONTACTS
Tucson, AZ 85746
520/295-2405 AHCCCS Officials
Navajo Area Indian Health Services (IHS) Anthony D. Rodgers, Director

P.O. Box 9020 AHCCCS
Window Rock, AZ 86515-9020 801 E. Jefferson Street
928/871-5811 Phoenix, AZ 85034
T: 602/417-4111
Long-Term Care Contractor List F: 602/252-6536
E-mail: anthony.rodgers@ahcccs.state.az.us
Cochise Health Systems Internet address: www.ahcccs.state.az.us
Cochise County Health & Social Services
1415 West Melody Lane, Building A Dell Swan
P.O. Box 4249 Pharmacy Program Administrator
Bisbee, AZ 85603-4249 AHCCCS
800/285-7485 701 East Jefferson Street
MD 8000
DES/DDD Phoenix, AZ 85034
1789 West Jefferson, 4th Floor 602/417-4726
Phoenix, AZ 85007 E-mail: dwswan@ahcccs.state.az.us
866/229-5553
Evercare Select Pharmaceutical Societies
314 N. 3rd Avenue, Suite 100 Arizona Medical Association
Phoenix, AZ 85013 Chic Older
800/293-0039 Executive Vice President
810 West Bethany Home Road
Maricopa Long Term Care Plan Phoenix, AZ 85013
2502 East University Drive T: 602/246-8901
Phoenix, AZ 85034 F: 602/242-6283
800/852-8686 E-mail: chicolder@azmedassn.org
Internet address: www.azmedassn.org
Mercy Care Plan
Suite 400 Arizona Pharmacy Association
2800 North Central Kathy Boyle
Phoenix, AZ 85004 Executive Director
800/624-3879 1845 E. Southern Ave.
Tempe, AZ 85282-5831
Pima Long Term Care T: 480/838-3385
Pima Health System F: 480/838-3557
5055East Broadway E-mail: azpa@azpharmacy.org
Suite A-200 Internet address: www.azpharmacy.org
Tucson, AZ 85711
800/423-3801
Pinal/Gila LTC
P.O. Box 2140
971 Jason Lopez Circle
Florence, AZ 85232-2140
800/624-3879
Arizona-4
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Pharmaceutical Benefits

Under State Medical

©2005 by the National Pharmaceutical

SECTION 1: ESTIMATES OF MEDICAID EXPENDITURES AND RECIPIENTS:

SECTION 2: THE MEDICAID PROGRAM ..................................................................................... 2-1

Medicaid Program Overview.................................................................................................... 2-3

Medicaid Managed Care Enrollment ................................................................................... 2-27

Medicaid Managed Care Waivers.......................................................................................... 2-35

SECTION 3: STATE CHARACTERISTICS ……………………………………………………….3-1

Health Care Delivery System

SECTION 4: PHARMACY PROGRAM CHARACTERISTICS..................................................... 4-1

Medicaid Drug Program ........................................................................................................... 4-3

Medicaid Drug Rebates ........................................................................................................... 4-15

Medicaid Drug Coverage ........................................................................................................ 4-21

Pharmacy Payment and Patient Cost Sharing...................................................................... 4-39

SECTION 5: STATE PHARMACY PROGRAM PROFILES ......................................................... 5-1

SECTION 6: STATE PHARMACY ASSISTANCE PROGRAMS .................................................. 6-1

• Data on Medicaid eligibles by gender and race/ethnicity;

BACKGROUND AND PURPOSE

OBJECTIVES OF THIS SECTION

Fiscal Expenditures Percent Recipients Percent

CMS-37s and 64s

Fiscal Year 37s 64s MSIS

Factors Leading to Year-to-Year Variation in State Estimates

How Good are the Estimates?

Se rvice FY 2000* FY 2001* FY 2002* FY 2003* FY 2004** FY 2005**

Total Expenditures*** $195,156,897,787 $215,809,899,631 $245,697,620,676 $259,895,896,495 $289,800,000,000 $316,200,000,000

*Source: CMS-64 Reports

Se rvice FY 1999* FY 2000* FY 2001* FY 2002* FY 2003** FY 2004** FY 2005**

*Source: CMS Medicaid Statistical Information System

* Data from CM S-37 reports filed with CM S by the States.

*Source: Data from M edicaid Statistical Information System 2000 to 2002.

National Total $19,898,312 $23,764,447 $28,408,182 $33,794,521 $39,601,058 $44,308,084

*Source: Data from M edicaid Statistical Information System.

S tate FY 1999* FY 2000* FY 2001* FY 2002* FY 2003** FY 2004** FY 2005**

*Source: Data from Medicaid Statistical Information System.

MEDICAID PROGRAM OVERVIEW

• TB-related services for TB infected persons;

CHARACTERISTICS OF BENEFITS PROVIDED

Inpatient Hospital Services

Outpatient Hospital Services

Rural Health Clinic Services

Other Laboratory and X-Ray Services

Nursing Facility Services

Early and Periodic Screening, Diagnostic and Treatment Services

• Appropriate immunizations. (If it is determined at the time of screening that

Family Planning Services

Home Health Services

Personal Support Services

retarded, or institution for mental disease. Services are authorized by a physician in

Pediatric Nurse Practitioner and Family Nurse Practitioner Services

Federally Qualified Health Center and Other Ambulatory Services

AMOUNT AND DURATION OF SERVICES

MEDICAID PAYMENT FOR SERVICES

Total Medicaid Eligibles by Maintenance Assistance Status, 20021

Source: CMS, MSIS Report, FY 2002.

Total Medicaid Eligibles by Age Group, 20021

Se rvice FY 2000* FY 2001* FY 2002* FY 2003* FY 2004 FY 2005

Se rvice FY 1999* FY 2000* FY 2001* FY 2002* FY 2003 FY 2004 FY 2005**

S tate FY 1999* FY 2000* FY 2001* FY 2002* FY 2003 FY 2004 FY 2005**