Pharmaceutical Benefits Under State Medical Assistance Programs, 2003

National Pharmaceutical Council Pharmaceutical Benefits 2003
TABLE OF CONTENTS
INTRODUCTION......................................................................................................................................v
SECTION 1: THE MEDICARE PRESCRIPTION DRUG, MODERNIZATION,
AND IMPROVEMENT ACT OF 2003, DUAL ELIGIBLES, AND
IMPACT ON STATES .................................................................................................. 1-1
SECTION 2: THE MEDICAID PROGRAM ..................................................................................... 2-1
Medicaid Program Overview.................................................................................................... 2-3

- Total Medicaid Eligibles by Maintenance Assistance Status, 2001........................ 2-11
- Total Medicaid Eligibles by Age Group, 2001........................................................ 2-12
- Total Medicaid Eligibles by Basis of Eligibility, 2001 ........................................... 2-13
- Total Medicaid Eligibles by per 1000 Population, 2001 ........................................ 2-14
- Total Net U.S. Medical Assistance Expenditures by Type of Service ................... 2-15
- Federal Medical Assistance Percentages (FMAP), FY 2004 and FY 2005 ........... 2-16
- Medicaid Total Net Expenditures and Eligibles, 2001 ........................................... 2-17
- Total Medicaid Program Expenditures, 2002 ......................................................... 2-18
- Total SCHIP Expenditures, 2002 ........................................................................... 2-19
Medicaid Managed Care Enrollment ................................................................................... 2-21

- Medicaid Managed Care Enrollment, As of June 30, 2002..................................... 2-23
- Pharmaceutical Benefits Under Managed Care Plans ............................................ 2-24
- Medicaid Managed Care Enrollment Trends, 1998-2002 ....................................... 2-25
- Medicaid Managed Care Plan Type, As of June 30, 2002 ...................................... 2-26
- Medicaid Managed Enrollment by Plan Type, As of June 30, 2002....................... 2-27
- Medicaid Managed Care Enrollment by Payment Arrangement,
As of June 30, 2002 ............................................................................................... 2-28
Medicaid Managed Care Waivers.......................................................................................... 2-29

- Section 1915(b) Waivers, As of June 30, 2002 ....................................................... 2-33
- Section 1115 Research and Demonstration Waivers, As of June 30, 2002............. 2-35
- Pharmacy Plus Demonstrations Program Status, Pharmacy Waivers
Under 115 Authority................................................................................................ 2-36
SECTION 3: STATE CHARACTERISTICS ……………………………………………………….3-1
Sociodemographics
- Age Demographics, 2002 .......................................................................................... 3-5
- Race Demographics, 2002 ......................................................................................... 3-6
- Hispanic Demographics, 2002 .................................................................................. 3-7
- Insurance Status-Populations, 2002 .......................................................................... 3-8
- Insurance Status-Percentages, 2002 ........................................................................ 3-9
- Poverty Status-Populations, 2002 ........................................................................... 3-10
i
- Poverty Status-Percentages, 2002............................................................................ 3-11

- Employment Status, 2003........................................................................................ 3-12
Health Care Delivery System

− Medicaid/Medicare Certified Facilities ................................................................... 3-13
− Licensed Pharmacies................................................................................................ 3-14
− Physicians, 2001 ...................................................................................................... 3-16
− Other Providers ........................................................................................................ 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, 2002 ........................................... 4-7
− Drugs as a Percentage of Total Net Expenditures, 2000-2002 .................................. 4-8
− Share of Drug Expenditures by Category, 2002 ........................................................ 4-9
− Share of Prescriptions Processed, 2002 ................................................................... 4-11
− Medicaid Average Cost per Prescription, 2002 ....................................................... 4-13
Medicaid Drug Rebates ........................................................................................................... 4-15

− Medicaid Drug Rebates, 2002 ................................................................................. 4-17
− Medicaid Drug Rebate Trends, 1998-2002.............................................................. 4-18
− Medicaid Drug Rebate Trends, Annual Percent Change, 1997-2002...................... 4-19
− Rebates As Percent of Drug Expenditures, 2002..................................................... 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
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
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SECTION 5: STATE 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
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iv
INTRODUCTION
The 2003 edition of Pharmaceutical Benefits under State Medical Assistance Programs marks the 38th
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: Reports on the Medicare Modernization Act provisions, the dual eligibles it will
affect, and the overall impact on the States.
• 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 2002.
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 2003
NPC annual survey of State pharmacy program administrators. In addition, this section
provides Medicaid eligibility statistics from CMS for fiscal year 2001 and program
expenditure data for fiscal years 2001 and 2002. 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 2000 and FY 2001 and data on total
number of drug recipients for each State and the nation as a whole for the period 1996-2001.
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.
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Each year, finding and compiling current, relevant information for inclusion in the Compilation
presents a challenge. For example, each year CMS makes available on its website the Medical
Statistical Information System (MSIS) Statistical Reports for the most recent enrollment and
expenditure data available. The MSIS tables are used throughout several sections as a secondary data
source. This year, CMS released MSIS reports on federal Fiscal Year 2001. However, at the time of
publication, the FY 2001 information for Washington State was not yet available. FY 2000 data have
been substituted in their place. Additionally, Hawaii did not report for FY 2000 and FY 2001,
therefore, their FY 1999 numbers are used.
In addition, updated information for the Medicaid Waivers and Managed Care statistics have not been
released at this time. We believe that this remains an important aspect of State Medical Assistance
Programs and have included last year’s data in its place.
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:
• Eligibility and maintenance assistance status table;

• Eligibility and age table;
• New poverty tables including raw numbers and percentages;
• Enhanced employment tables;
• Additional information on the Pharmacy Plus Demonstration waivers under Section 1115
Authority;
• New listing for brand name products contacts in the State Profiles and Appendix A; and
• A new source for the registered nurses.
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 90 percent response rate to
the 2003 Survey. Unfortunately, not all States were able to submit revised/updated information. In
such instances, we have incorporated the most recently available data from other sources. However,
for these States, much of the information may reflect data that have been presented in previous
versions of the Compilation.
We would also like to thank Muse & Associates and their subcontractors, Compensation Solutions and
StateScape, for administering the survey, compiling the information, and analyzing the data. We hope
you continue to find the information contained in this compilation useful and, as always, we welcome
your suggestions and comments.
Gary Persinger
Vice President, Health Care Systems
National Pharmaceutical Council
vi
Section 1:
The Medicare Prescription
Drug, Improvement, and
Modernization Act of 2003:
Dual Eligibles and Impact
on the States
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BACKGROUND AND PURPOSE
The Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003
was passed by Congress and signed by the President in December 2003. MMA will have
a significant impact on Medicare beneficiaries and State Medicaid programs through
changes affecting those dually eligible for both Medicare and Medicaid. The purpose of
this section is to:
• Provide a concise summary of the key provisions affecting those dually eligible and the States.
• Provide details of the demographic and Medicaid expenditure characteristics of the dually
eligible, using data from ten states.
THE MEDICARE MODERNIZATION ACT OF 2003
The MMA1 has been described as the most significant expansion of the Medicare program since the
latter was originally enacted in 1965. It affects all aspects of Medicare and related programs. MMA
enacted:
• A new voluntary Medicare Prescription Drug Program, effective January 2006 [Medicare Part
D].
• A new Medicare Prescription Drug Discount Card Program as a transition to the Prescription
Drug Program, available from mid-2004 through December 2005.
• Prescription drug coverage currently provided by Medicaid to individuals who are dually
eligible for Medicaid and Medicare will be available only through Medicare Part D Plan
beginning in 2006, but states will be required to continue contributing toward the cost of this
coverage.
• Revisions to the Medicare provisions for Health Maintenance Organizations (HMOs), now
called the Medicare Advantage (MA) program [Medicare Part C].
• New payment provisions for drugs furnished by physicians [under Medicare

Part B].
• Dozens of other amendments affecting the existing Medicare program, including:

o Enhancements of services furnished in rural areas.
o Coverage of additional preventive screening tests (cardiovascular screening blood
tests; diabetes screening tests; an initial preventive screening examination; payment
improvements for mammography tests).
o Additional demonstration projects and studies, including a demonstration project for
the coverage of certain prescription drugs and biologicals.
o Authority to replace Medicare fiscal intermediaries and carriers with regular
government contractors.
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The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. Law No. 108-173
(December 8, 2003).
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o Detailed procedures for appealing Medicare coverage provisions and other

administrative decisions.
o Establishment of a unified center within CMS for the coordinated administration of
the Medicare HMO, drug, and beneficiary marketing and outreach programs.
• Various amendments to the Medicaid program, including exclusion of inpatient drugs

purchased by certain public hospitals and exclusion of prices negotiated under a Part D Plan,
from the “best price” calculation for the Medicaid drug rebate program.
• Reforms to the Hatch-Waxman patent procedure for introducing new generic drugs.
• Establishment of Health Savings Accounts and other tax amendments.
PROVISIONS OF MMA AFFECTING DUAL ELIGIBLES AND THE STATES
The Prescription Drug Program
A separate Medicare program. The prescription drug program will be a new, separate part of the
Medicare program (Part D). Enrolling in the program, and paying the required premiums, will be a
voluntary choice for most beneficiaries. However, a Medicare beneficiary must first be entitled to
Medicare Part A or enrolled in Medicare Part B in order to be eligible to enroll in a Part D Prescription
Drug Plan (PDP). A full-benefit dual eligible individual who fails to enroll in a drug plan may be
enrolled by CMS into a drug plan whose monthly premium does not exceed the amount of the
premium subsidy. If there is more than one such plan available, CMS will enroll the individual on a
random basis among all plans in the region. However, the individual will remain free to decline or
change this enrollment.
A covered Part D drug is defined as a drug that may be dispensed only with a prescription and that
meets the same tests for safety and efficacy under the Federal Food, Drug, and Cosmetic Act as apply
under the Medicaid drug rebate program. Also covered are approved biologicals, insulin and medical
supplies associated with insulin injections, and approved vaccines. However, drugs excluded from the
Medicaid drug rebate program are also excluded from Medicare Part D, except for smoking cessation
agents, which can be covered.
Enrolling in a Drug Plan. A beneficiary currently in the traditional Medicare fee-for-service program
will be able to enroll in a PDP. A beneficiary enrolled in a Medicare HMO, called a Medicare
Advantage (MA) Plan, will be able to enroll only in that Plan’s drug benefits program if it qualifies
under the new law (“an MA-PD Plan”); such a beneficiary will not be allowed to enroll in a fee-for-
service drug Plan unless the MA-Plan lacks qualified drug coverage.
CMS must ensure that there are at least two Drug Plans available in each area, offered by different
entities, and at least one of the Plans must be a PDP. The other may be an MA-PD Plan.
Premium and Cost-Sharing Subsidies for Low-Income Beneficiaries
The new law defines a subsidy eligible individual as an individual eligible for Medicare Part D drug
benefits who is enrolled in a PDP or an MA-PD Plan; has income below 150% of the Federal poverty
line; and whose resources for 2006 do not exceed three times the maximum amount of resources under
the SSI program (which is $2,000 in countable resources for an individual or $3,000 for a married
couple). Thus, the Part D resources limit would be $6,000 for an individual or $9,000 for a married
couple. These limits will be increased each year in multiples of $10 by the percentage increase in the
Consumer Price Index (“CPI”). For individuals with income below 135% of the Federal poverty level,
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the resources limit for 2006 is $10,000 for an individual, or $20,000 for a married couple, increased
annually in multiples of $10 by the CPI.
The new law defines a full-benefit dual eligible individual as a beneficiary who has qualified for
prescription drug benefits under a Medicare PDP, and who has been determined by the State Medicaid
program to be eligible for any category of full Medicaid benefits. This includes the “medically
needy,” once they have “spent down” their medical expenses to meet the Medicaid income and
resource levels.
When a dually eligible beneficiary has access to drug coverage under both a PDP under Medicare Part
C or D, and under the State’s Medicaid program, Medicare will be the primary payer and no Medicaid
benefits will be available for the drugs themselves or for any cost sharing for them, such as deductibles
and co-payments. However, a State Medicaid Plan may choose to continue to provide Medicaid
coverage in case of a drug that is not covered under a PDP and is covered by the Medicaid Plan.
CMS will notify a PDP of the exact status of each subsidy eligible individual enrolled in the Plan. The
Plan will reduce the beneficiary’s premiums, deductibles, and co-payments appropriately, and CMS
will periodically reimburse the Plan for such reductions.
Individuals with income below 135% of the Federal poverty line will be eligible for a subsidy of
100% of the premium for basic drug coverage. They will be subject to a drug deductible of zero.
Benefits will be payable for drug costs incurred above the initial coverage limit (the “doughnut hole”),
subject to reduced cost sharing, but no co-insurance will be due for full benefit dual eligibles who are
institutionalized. The reduced cost sharing for individuals who are not institutionalized will be $2 for
a generic drug or a multiple source drug and $5 for any other drug. However, individuals with income
not exceeding 100% of the Federal poverty line who are not institutionalized will be subject to a
reduced co-payment of $1 for a generic drug or a preferred multiple source drug, and $3 for any other
drug, increased annually in multiples of 5 cents and 10 cents, respectively, by the percentage increase
in annual aggregate Part D expenditures. There will be no cost sharing for the cost of drugs that
exceeds the out-of-pocket limit ($3600).
Other individuals with income below 150% of the federal poverty line will be entitled to a reduced
deductible of $50 for 2006, increased annually in multiples of $1 by the percentage increase in
aggregate Part D expenditures. They will also be entitled to a premium subsidy based on a sliding
scale ranging from 100% premium subsidy for individuals with income at or below 135% of the
Federal poverty line, to a premium subsidy of 0 for individuals at or above 150% of the Federal
poverty level. These individuals will also be entitled to a reduced annual deductible of $50. Benefits
will be payable for drug costs incurred above the initial coverage limit (the “doughnut hole”), subject
to reduced co-payment of 15% (instead of 25%).
Phased Down State Contribution
The costs States now incur for drugs for dual eligibles will be shifted to Medicare, but States must
continue to pay CMS a portion of those costs. The new law provides that this assumption of costs by
the Federal government be phased in gradually. To accomplish this phase-in, each State must pay to
CMS each month, beginning January 2006, an amount equal to the product of:
• the “Medicaid amount” for the State for that month;

• the total number of full-benefit dual eligible individuals for the State for that month; and
• the phase-in factor.
The “Medicaid amount” is 1/12 of the product of:
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• the base year Medicaid per capita expenditures for full benefit dual-eligibles; and
• a proportion equal to 100% minus the Federal medical assistance percentage (“FMAP”) (“the
matching rate”).
This product is increased each year (beginning with 2004 up to and including the year involved) by the
“growth factor.”
The “base year State Medicaid per capita expenditures” for covered Part D drugs for full-benefit
dual eligible individuals for a State is the weighted average of:
• the gross per capita Medicaid expenditures for prescription drugs for 2003; and
• the estimated actuarial value of prescription drug benefits under a capitated managed care plan
per full-benefit dual eligible individual for 2003.
The “growth factor” for 2004, 2005, and 2006 is the average annual percent change from the previous
year of the per capita amount of prescription drug expenditures as determined based on the most recent
National Health Expenditures for the years involved. For subsequent years, the growth factor is the
percentage change in aggregate annual expenditures for Part D drugs.
The “phase in factor” for a month is 90% in 2006; 88 1/3% in 2007; 86 2/3% in 2008; 85% in 2009;
83 1/3% in 2010; 81 2/3% in 2011; 80% for 2012; 78 1/3% for 2013; 76 2/3% for 2014; and 75%
thereafter.
MMA Medicaid Amendments Requiring State Medicaid Program Actions
A State Medicaid Plan must provide that the State Medicaid program will make eligibility
determinations for low-income beneficiaries who can qualify for premium and cost sharing subsidies
under a PDP Plan, as well as for any Medicare cost sharing, and will offer the individual any available
Medicaid benefit. The State’s administrative costs under this provision are treated as regular Medicaid
administrative costs and the Federal government will match these costs at the rate for Medicaid
administrative costs. The Commissioner of Social Security can also make eligibility determinations
when necessary.
CHARACTERISTICS OF DUALLY ELIGIBLE BENEFICARIES
The following analysis is based on detailed Medicaid Management Information System (MMIS) data
from ten States, for Federal Fiscal Year 2000. Medicaid Statistical Information System (MSIS) data
consists of four claims files and an eligibility file. The claims files are inpatient, long-term care,
prescription drug, and the “other” file. These files contain all claims paid during each fiscal quarter.
A copy of the data dictionary and a detailed overview of the MSIS files can be found at
http://cms.hhs.gov/medicaid/datasources.asp.
The data used in this analysis were obtained under strict confidentiality agreements with the States,
which prohibits their identification. The ten States are both programmatically and geographically
diverse, but comparisons of the ten States to all States using currently available data confirmed that the
ten States are reasonably representative of all States for FFY 2000.
Analytic File Development
Developing the analytical files involved several steps. To begin, we created a research file from the
MSIS data files that would permit us to differentiate dual and non-dual Medicaid eligibles. Next, all
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claims for these beneficiaries were extracted and placed in a temporary file. A list of recipient
identification numbers, which are unique to each individual, was compiled and unduplicated, creating
a single file of all recipients. The final step was to extract all claims for this unduplicated list of
recipients from the four claims files and the eligibility file and created a single record for each
individual. This resulted in a record that contained all Medicaid expenditures for those beneficiaries.
The analysis examines the demographic characteristics and expenditures patterns for dual eligibles and
then contrasts the dual eligibles with those not dually eligible.
The identification of dual eligibles proved challenging. The MSIS data base contains a “flag” for each
person that should indicate whether that person is dual eligible or not. In the process of developing
these estimates, we discovered that the flag in the Medicaid MSIS dataset that identifies dual eligible
beneficiaries is not reliable across all States. Specifically, there is a significant amount of variance in
the accuracy with which the flag in the eligibility dataset is coded by the States. For instance, in one
medium sized Southern State, we found no dual eligibles within the dataset using this indicator.
Knowing this information could not be true, we explored other ways to identify dual eligibles within
the dataset. Given this problem, we analyzed the MSIS data dictionary and datasets to determine other
methods to allow us to impute dual eligible status. This analysis showed that the eligibility file had no
other indicator that would determine if a person was dually eligible. For example, some persons over
65 on Medicaid are not eligible for Medicare, such as those elderly who did not work 40 quarters in
order to obtain Medicare eligibility. However, the claims file contains what are known as “crossover“
claims. These are claims that are filed with Medicaid for Medicare co-pay and deductible amounts.
After considerable exploratory analysis. We decided that the best way to proceed was to treat all those
persons that have cross over claims or have the dual eligible flag as dually eligible. This more
encompassing method is what we used to identify dual eligibles.
Gender and Age
Tables 1 and 2 include total patient counts and expenditures data for males versus females for both
dual and non-dual eligibles.
Table 1. Population by Gender and Eligibility Status*
Dual % Not
All % of All Eligible % Dual Not Dual Dual
Recipients Recipients Population Eligibles Eligibles Eligibles
Total Medicaid
Population 6,647,300 100% 1,002,400 15% 5,644,900 85%
Female 3,890,401 59% 657,562 66% 3,232,839 57%

Male 2,756,899 41% 344,838 34% 2,412,061 43%
*A small number of claims were missing information on gender and have been excluded from Table 1. Therefore, the
column totals for number of beneficiaries may differ slightly with those in other tables.
As shown in Table 1, the dual eligible population is 66 percent female and 34 percent male. By
comparison, the non-dual eligible population is 57 percent female and 43 percent male. In terms of
gender. the total Medicaid population is 59 percent female and 41 percent male, very similar to the
non-dual eligible population. However, even though dual eligibles constitute only 15 percent of the
total Medicaid population, they account for a disproportionate share (42 percent) of Medicaid program
expenditures (Table 2).
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Table 2. Medicaid Expenditures by Gender and Eligibility Status

% Not
% Dual Dual
% of Dual Eligible Eligibles Not Dual Eligibles
Total Paid Total Paid Paid Paid Eligibles Paid Paid
Total Medicaid Paid $21,942,055,818 100% $9,215,082,242 42% $12,726,973,576 58%
Female $13,338,032,842 59% $6,186,874,474 67% $7,151,158,368 56%

Male $8,604,022,976 41% $3,028,207,768 33% $5,575,815,208 44%
Further analysis of the data in Table 2 indicates that the male/female breakouts for expenditures are
virtually identical to the demographic splits (Table 1). Within each of the eligibility categories,
females account for the greatest proportions of Medicaid payments.
Table 3. Payments Per Capita by Gender

Average Per Capita by Gender
Not Dual
Dual Eligible Medicaid Not Dual Eligible
Gender Dual Eligible Per Capita Eligible Per
Paid Medicaid Paid
Capita
Female $6,186,874,474 $9,409 $7,151,158,368 $2,212

Male $3,028,207,768 $8,782 $5,575,815,208 $2,312
Total $9,215,082,242 $9,193 $12,726,973,576 $2,255
Average Medicaid payments per capita by gender are presented in Table 3. For the dual eligible
population, average expenditures per capita expenditure are 400 percent higher than for non-dual
eligibles. Within each group, average per capita spending is fairly similar for males and females.
Table 4. Population Percentages by Age and Eligibility Status

All % of All Dual Eligible % Dual Not Dual % Not Dual
Recipients Recipients Population Eligibles Eligibles Eligibles
Total Medicaid Population 6,558,236 100% 1,002,432 15% 5,555,804 85%
Age
Group 0 to 4 1,318,346 20% 885 0% 1,317,461 23%
5 to 12 1,514,904 23% 3,831 0% 1,511,073 27%
13 to 24 1,377,283 21% 18,579 2% 1,358,704 24%
25 to 44 1,072,332 16% 163,647 16% 908,685 16%
45 to 64 566,877 9% 227,877 23% 339,000 6%
Subtotal 64 5,849,742 88% 414,819 41% 5,434,923 96%
65 plus 708,494 11% 587,613 59% 120,881 2%
Table 4 shows the population distribution by age and eligibility status. For dual eligibles, 59 percent
of the population is 65 years of age or older. More importantly, 41 percent of the dual eligibles are
under 65 years of age. These are overwhelmingly disabled individuals. More interestingly, 17 percent
(120,881 of 708,494 beneficiaries) of the Medicaid population over 65 is not dually eligible. Many
individuals interested in the MMA provisions have incorrectly assumed that all Medicaid recipients
over 65 are dually eligible. Therefore, even if some of these individuals are incorrectly classified by
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Medicaid programs and/or may become eligible for Part D prescription drug coverage, States will
have aged beneficiaries remaining on their rolls. This occurs because many states have expanded their
Medicaid eligibility criteria and/or have elected to cover optional groups whose incomes and assets
exceed the criteria for dual eligibles.
Table 5. Medicaid Expenditures Percentages by Age and Eligibility Status

Not Dual % Not Dual
Total % of Dual Eligible % Dual Eligibles Eligibles
Medicaid Paid Total Paid Medicaid Paid Eligibles Paid Medicaid Paid Paid
Total Medicaid Paid 21,353,868,898 100% 9,215,343,151 43% 12,138,525,747 57%
Age
Group 0 to 4 2,116,168,842 10% 6,096,559 0% 2,110,072,283 17%
5 to 12 1,669,434,562 8% 20,577,970 0% 1,648,856,592 14%
13 to 24 2,809,026,255 13% 121,273,602 1% 2,687,752,653 22%
25 to 44 4,149,276,161 19% 1,317,227,181 14% 2,832,048,980 23%
45 to 64 4,087,134,021 19% 1,885,855,392 20% 2,201,278,629 18%
Subtotal 64 14,831,039,841 69% 3,351,030,704 36% 11,480,009,137 95%
65 plus 6,522,829,057 31% 5,864,312,447 64% 658,516,610 5%
Dual eligibles account for 43 percent of all Medicaid expenditures (Table 5). For dual eligibles, nearly
two-thirds, 64 percent, of Medicaid expenditures are for the elderly and 36 percent are for the
population under 65 years of age. By contrast, among non-dual eligibles, only 5 percent of
expenditures are for beneficiaries 65 years of age and older and 95 percent are for non-elderly
recipients. Of the approximately $6.5 billion in Medicaid program spending for the elderly, $659
million (10.1 percent) was spent on the population 65 and older who are not dually eligible.
Dual Eligible Expenditures by Type of Service

Tables 6 and 7 summarize total patient counts and Medicaid program payments by type of service for
dual and non-dual eligibles. Please note that, because an eligible beneficiary can receive more than
one service, patient counts may be duplicated. However in calculating the percentages, we used the
unduplicated totals (see Table 1).
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Table 6. Summary of Medicaid Data by Service Type and Eligible Status

Patient Count
% Dual Not Dual % Not Dual
Service Type Dual Eligible Eligible Eligible Eligible
Long Term
(NF/ICF/MR) 206,678 21% 54,567 1%
Prescription Drug 822,235 82% 3,213,848 57%
Inpatient 223,978 22% 690,048 12%
Other 652,018 65% 2,318,574 41%
Capitated Payments
HMO/HIO 74,397 7% 1,808,451 32%
Physicians 781,145 78% 3,212,998 57%
Outpatient Hospital 551,116 55% 2,062,036 37%
Clinic 267,253 27% 1,211,036 21%
Personal Care Svcs 68,607 7% 21,769 0%
Dental 125,120 12% 1,278,122 23%
Home Health 42,798 4% 49,310 1%
Targeted Case
Mgmt 27,651 3% 184,342 3%
Emergency Room 175,069 17% 1,194,406 21%
Lab and X-Ray 260,823 26% 1,325,548 23%
Capitated Payments
for PCCM 117,297 12% 1,971,936 35%
Private Duty
Nursing 1072 0% 2,472 0%
Members w/o
Claims 28,566 3% 491,756 9%
Total 1,002,400 100% 5,644,900 100%
Table 6 compares patterns of service utilization for the dual eligible and non-dual eligible populations.
As shown in Table 6, the utilization rates are higher for dual eligibles for almost all of the type of
service categories. The only exceptions are capitated payments, dental services, and use of emergency
rooms.2 Interestingly, prescription drugs are utilized by an overwhelming 82 percent of the dual
eligible population compared to just over half (57 percent) of the non-dual eligibles. Also of interest is
the fact that only 3 percent of dual eligibles did not have service claims compared to 9 percent of the
non-dual eligible population.
2
Please note that persons in capitation arrangements may have used other services, which are reported separately
from their membership in capitation plans. The MMIS reporting system we are using requires that States collect
and report managed care “encounters.” These records appear in the database but do not have the expenditure
fields completed since, by definition, managed care organizations do not charge separately for each service.
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Table 7. Summary of Medicaid Expenditures by Service Type and Eligibility Status

Medicaid Paid
% Dual Not Dual % Not Dual
Service Type Dual Eligible Eligible Eligible Eligible
Long Term
(NF/ICF/MR) $4,375,191,574 47% $1,170,665,993 10%
Prescription Drug $1,914,514,871 21% $1,518,678,388 13%
Inpatient $335,566,759 4% $2,449,561,265 20%
Other $1,035,967,616 11% $1,554,693,387 13%
Capitated Payments
HMO/HIO $193,803,464 2% $2,014,430,322 17%
Physicians $255,046,010 3% $1,013,919,106 8%
Outpatient Hospital $330,030,811 4% $908,154,113 7%
Clinic $174,616,069 2% $517,907,551 4%
Personal Care Svcs $334,877,197 4% $142,456,278 1%
Dental $29,430,515 0% $279,049,989 2%
Home Health $153,738,248 2% $100,913,904 1%
Targeted Case
Mgmt $33,920,739 0% $150,925,649 1%
Emergency Room $19,775,428 0% $127,124,720 1%
Lab and X-Ray $20,006,385 0% $89,964,175 1%
Capitated Payments
for PCCM $7,045,120 0% $68,025,641 1%
Private Duty
Nursing $1,812,345 0% $32,055,266 0%
Members w/o
Claims $0 0% $0 0%
Total $9,215,343,151 100% $12,138,525,747 100%
Table 7 illustrates the distribution of expenditures for both dual and non-dual eligibles. For the dual
eligible population, long-term care (nursing homes and ICFs/MR) and prescription drugs are the two
largest expenditures categories. Long-term care, for example, accounts for 47 percent of the monies
spent on dual eligibles. Prescription drugs comprise an additional 21 percent of the expenditures. By
comparison long-term care is only 10 percent and prescription drugs 13 percent of total expenditures
for the non-dual eligible population. These variations reflect the demographic characteristics of the
dual eligible population and the fact that Medicare is paying for certain sources (i.e., inpatient care) for
dual eligible beneficiaries.
Inpatient care ($2.4 billion) is the most expensive service type for non-dual eligibles. However, while
it accounts for 20 percent of expenditures, only 12 percent of the non-dual eligible population had
claims for inpatient care (Table 6). Conversely, for dual eligibles, 22 percent of the population had
claims for inpatient care but, in terms of expenditures, inpatient care comprised only 4 percent of their
total Medicaid program payments.
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Table 8. Summary of Medicaid Data by Drug Type and Dual Eligible Status
Patient Count Medicaid Paid
% % Not % % Not
Dual Dual Not Dual Dual Dual Not Dual Dual
AHFS 2 digit Eligible Eligible Eligible Eligible Dual Eligible Eligible Eligible Eligible
28 - Central
Nervous System
Drugs 694,111 69% 1,501,358 27% $698,194,103 36% $587,625,205 39%
24 -
Cardiovascular
Drugs 500,805 50% 295,794 5% $289,693,604 15% $109,044,722 7%
56 -
Gastrointestinal
Drugs 415,094 41% 388,738 7% $231,734,451 12% $119,202,951 8%
08 - Anti-
Infective Agents 544,750 54% 2,094,058 37% $122,658,237 6% $207,645,271 14%
68 - Hormones
And Synthetic
Substitutes 407,361 41% 717,795 13% $152,717,579 8% $121,689,014 8%
12 - Autonomic
Drugs 297,568 30% 701,771 12% $81,162,590 4% $59,301,825 4%
92 -
Unclassified
Therapeutic
Agents 120,405 12% 154,685 3% $78,521,356 4% $46,003,044 3%
20 - Blood
Formation And
Coagulation 139,717 14% 172,901 3% $40,782,856 2% $64,052,725 4%
40 - Electrolytic,
Caloric Balance 381,513 38% 229,361 4% $58,678,234 3% $21,098,611 1%
04 -
Antihistamine
Drugs 235,506 23% 908,566 16% $27,477,911 1% $48,917,940 3%
Other 524,159 52% 1,991,217 35% $132,893,950 7% $134,097,080 9%
No Rx Claims 180,197 18% 2,341,956 41% $0 0% $0 0%
Total 1,002,400 100% 5,644,900 100% $1,914,514,871 100% $1,518,678,388 100%
Table 8 summarizes drug utilization and cost data for the dual eligible and non-dual eligible
populations. Analysis of these data yields some interesting results. First, across all of the categories, a
significantly higher proportion of dual eligible beneficiaries compared to non-dual eligibles had drug
claims and a smaller proportion of dual eligible beneficiaries had no drug claims. Furthermore,
although dual eligibles comprise only 15 percent of the beneficiaries in the study, they account for
more than half (56 percent) of total drug expenditures.
For almost every drug category, expenditures for dual eligibles exceed those for non-dual eligible
beneficiaries, even where the actual number of dual eligible recipients is significantly smaller than the
number of non-dual eligible recipients. For example, expenditures for central nervous system (CNS)
drug are the highest expenditure category for both the dual and non-dual eligible population groups.
However, a much higher proportion of dual eligible beneficiaries had claims for CNS drugs than did
non-dual eligibles. Furthermore, despite the fact that more than twice as many non-dual eligible
beneficiaries had claims for CNS drugs, total expenditures for CNS drugs were more than $110
million higher for the dual eligible group.
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Conclusion
Overall, MMA will require that prudent States take a new look at their programs intended to manage
prescription drug spending. Beginning in 2006, states will no longer provide and manage drug
coverage for patients that currently represent, on average, about 50% of the State’s Medicaid spending
for drugs. This significant shift will require that States reassess available resources and the most cost-
efficient ways for employing those resources. Because of the substantial presence of the dual-eligible
population in current spending patterns for drugs, the cost benefit decisions among various strategies
are likely to change dramatically especially for those strategies that rely primarily on reducing drug
costs. The return on investments in efforts to improve care more broadly, such as disease
management, are likely to be increasingly attractive to States.
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Section 2:
The Medicaid Program
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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.
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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 services and any other ambulatory services offered by a
Federally-qualified health center 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 DHHS has determined
2-5
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
2-6
• 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 72.96%, depending on the State’s per capita income (see the 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 76.62%.
The percentages apply to State expenditures for assistance payments and medical services. Federal
statute provides separate Federal matching amounts for administrative costs. Cost sharing for
administrative expenditures vary with the services, i.e., 75% for training, 90% for designing,
developing or installing mechanized claims processing and information retrieval, etc. (Federal
Medicaid Law (Section 1903(a)(2) et seq.)).
In 2000, the Medicaid program enrolled 44.3 million eligible individuals with vendor payments for
medical care services totaling $168.3 billion. The vendor payments reported in the 2000 MSIS
Report do not include Disproportionate Share Hospital (DSH), Medicare premium payments made by
State Medicaid programs, and other Medicaid program expenditures. The CMS-64 Report, which
does include such expenditures, shows total net expenditures for 2000 of $195.2 billion. When
administrative costs are added to total net expenditures, total Medicaid program expenditures in 2000
were $205.7 billion.
2-10
Total Medicaid Eligibles by Maintenance Assistance Status, 20011
Receiving
Total Cash Medically Poverty 1115 MAS
State Eligibles Assistance Needy Related Other Demonstration Unknown
National Total 46,910,257 17,555,319 3,661,252 13,529,154 7,779,041 4,384,730 761
Alabama 780,434 282,756 0 373,733 36,442 87,503 0
Alaska 115,996 52,568 0 54,753 8,663 0 12
Arizona 808,386 380,272 0 241,905 156,460 29,749 0
Arkansas 550,668 147,990 21,122 186,090 53,291 142,162 13
California 8,495,030 3,974,456 863,850 413,616 1,299,265 1,943,842 1
Colorado 410,611 211,229 0 152,356 46,911 0 115
Connecticut 446,326 102,886 35,997 76,751 230,671 0 21
Delaware 133,079 89,121 0 11,384 15,909 16,665 0
District of Columbia 152,597 91,862 27,463 25,617 7,655 0 0
Florida 2,462,171 1,085,854 67,479 815,482 355,620 137,722 14
Georgia 1,328,379 536,171 10,277 541,038 240,893 0 0
Hawaii* 202,912 118,221 2,549 50,790 7,605 23,747 0
Idaho 172,348 26,466 0 96,160 49,722 0 0
Illinois 1,798,723 385,404 427,590 866,708 119,021 0 0
Indiana 825,556 319,863 0 313,072 192,621 0 0
Iowa 331,025 148,544 10,091 95,866 76,524 0 0
Kansas 291,837 94,061 20,127 123,446 54,203 0 0
Kentucky 762,871 334,192 39,893 316,906 71,880 0 0
Louisiana 886,518 345,766 9,498 430,313 100,941 0 0
Maine 277,843 81,088 1,360 75,760 55,759 63,876 0
Maryland 704,628 206,159 83,168 365,212 50,088 0 1
Massachusetts 1,125,607 324,129 22,332 422,318 119,755 237,073 0
Michigan 1,430,246 447,720 125,675 476,446 380,326 0 79
Minnesota 609,856 236,283 10,398 9,261 237,221 116,693 0
Mississippi 681,161 293,225 0 359,329 28,591 0 16
Missouri 1,032,047 390,531 0 299,010 148,868 193,638 0
Montana 101,966 42,887 8,790 22,934 27,334 0 21
Nebraska 249,079 59,977 40,691 117,093 31,069 0 249
Nevada 167,247 62,278 0 60,921 44,048 0 0
New Hampshire 108,562 24,877 10,979 48,437 24,269 0 0
New Jersey 923,697 419,211 5,078 330,854 168,554 0 0
New Mexico 423,543 140,380 0 206,321 67,217 9,625 0
New York 3,548,630 1,395,014 1,368,735 328,866 108,099 347,916 0
North Carolina 1,397,486 632,171 44,066 659,687 61,562 0 0
North Dakota 65,425 28,941 16,008 9,203 11,273 0 0
Ohio 1,660,463 479,253 0 329,421 851,618 0 171
Oklahoma 631,996 108,432 7,887 422,073 93,604 0 0
Oregon 594,679 128,859 8,302 168,341 123,016 166,152 9
Pennsylvania 1,647,440 678,978 116,515 526,543 325,404 0 0
Rhode Island 194,113 84,762 4,453 24,881 41,939 38,077 1
South Carolina 871,675 293,556 0 362,039 216,071 0 9
South Dakota 106,154 39,418 0 43,996 22,740 0 0
Tennessee 1,601,406 441,875 108,363 227,155 172,886 651,105 22
Texas 2,729,660 909,653 57,510 1,263,395 493,704 5,398 0
Utah 214,597 47,043 5,830 122,268 39,456 0 0
Vermont 154,991 32,425 12,064 47,404 14,649 48,445 4
Virginia 700,715 149,660 10,067 383,725 157,263 0 0
Washington** 916,838 257,453 13,421 298,026 347,937 0 1
West Virginia 351,489 141,306 4,916 180,978 24,289 0 0
Wisconsin 673,538 231,211 38,708 123,725 154,550 125,342 2
Wyoming 58,013 18,882 0 27,546 11,585 0 0
1
Eligibles are defined as individuals who were on the Medicaid roles at least one month during the year.
*Hawaii did not report MSIS data for FY 2000 or FY 2001. Their FY 1999 MSIS data are used in this table.
**MSIS data for FY 2001 have not yet been released for Washington. FY 2000 MSIS data are used in this table.
Source: CMS, MSIS Report, FY 2000 and FY 2001.
2-11
Total Medicaid Eligibles by Age Group, 20011

65 Years and
State Total Eligibles <21 Years 21-64 Years Older Age Unknown
National Total 46,910,257 25,798,743 15,947,857 5,060,539 103,118
Alabama 780,434 419,575 249,386 111,473 0
Alaska 115,996 78,373 30,761 6,862 0
Arizona 808,386 487,369 271,499 49,518 0
Arkansas 550,668 324,082 162,083 64,502 1
California 8,495,030 4,094,864 3,647,963 752,203 0
Colorado 410,611 243,120 119,729 47,761 1
Connecticut 446,326 240,064 145,949 60,313 0
Delaware 133,079 69,591 53,394 10,094 0
District of Columbia 152,597 83,343 55,159 14,095 0
Florida 2,462,171 1,375,744 765,418 321,008 1
Georgia 1,328,379 815,970 377,044 135,362 3
Hawaii* 202,912 97,259 85,142 20,511 0
Idaho 172,348 118,848 41,602 11,898 0
Illinois 1,798,723 1,111,280 535,863 151,580 0
Indiana 825,556 524,690 222,095 78,771 0
Iowa 331,025 182,275 107,195 41,555 0
Kansas 291,837 180,124 77,305 34,408 0
Kentucky 762,871 436,215 238,295 88,361 0
Louisiana 886,518 566,259 219,039 101,220 0
Maine 277,843 104,883 110,563 62,379 18
Maryland 704,628 429,301 209,135 66,192 0
Massachusetts 1,125,607 500,383 485,350 139,874 0
Michigan 1,430,246 858,526 441,977 129,743 0
Minnesota 609,856 330,451 212,508 66,888 9
Mississippi 681,161 413,084 174,377 93,700 0
Missouri 1,032,047 605,928 330,815 95,302 2
Montana 101,966 57,001 34,020 10,945 0
Nebraska 249,079 161,809 63,820 23,450 0
Nevada 167,247 96,160 52,107 18,980 0
New Hampshire 108,562 66,824 28,834 12,902 2
New Jersey 923,697 497,761 285,365 140,570 1
New Mexico 423,543 286,567 107,030 29,946 0
New York 3,548,630 1,660,024 1,315,242 470,330 103,034
North Carolina 1,397,486 766,160 449,720 181,606 0
North Dakota 65,425 33,884 21,255 10,286 0
Ohio 1,660,463 951,645 561,249 147,569 0
Oklahoma 631,996 426,288 141,887 63,821 0
Oregon 594,679 275,652 273,893 45,134 0
Pennsylvania 1,647,440 882,484 557,684 207,272 0
Rhode Island 194,113 99,308 71,779 23,023 3
South Carolina 871,675 510,230 281,829 79,582 34
South Dakota 106,154 68,539 25,816 11,799 0
Tennessee 1,601,406 740,012 707,585 153,809 0
Texas 2,729,660 1,743,786 632,870 353,003 1
Utah 214,597 140,676 61,889 12,031 1
Vermont 154,991 74,068 59,926 20,997 0
Virginia 700,715 410,269 189,426 101,020 0
Washington** 916,838 568,245 278,676 69,917 0
West Virginia 351,489 193,628 124,482 33,379 0
Wisconsin 673,538 359,417 235,553 78,568 0
Wyoming 58,013 36,705 16,274 5,027 7
1
Eligibles are defined as individuals who were on the Medicaid roles at least one month during the year.
2-12
Total Medicaid Eligibles by Basis of Eligibility, 20011
Blind/ Foster Care BOE

State Total Eligibles Aged Disabled Children Adults Children Unknown
National Total 46,910,257 4,400,601 7,657,411 22,438,138 11,546,609 866,692 806
Alabama 780,434 89,484 182,696 377,130 125,448 5,676 0
Alaska 115,996 6,403 11,443 70,446 25,920 1,772 12
Arizona 808,386 37,102 102,909 430,749 229,944 7,682 0
Arkansas 550,668 52,240 104,421 267,241 120,840 5,913 13
California 8,495,030 626,550 959,584 3,169,960 3,598,569 140,366 1
Colorado 410,611 46,708 65,407 202,166 79,337 16,878 115
Connecticut 446,326 59,510 58,579 234,953 84,401 8,862 21
Delaware 133,079 9,613 16,500 59,452 45,580 1,934 0
District of Columbia 152,597 9,957 31,334 71,667 35,007 4,632 0
Florida 2,462,171 248,466 478,847 1,190,510 503,789 40,545 14
Georgia 1,328,379 109,245 229,725 717,007 253,525 18,877 0
Hawaii* 202,912 18,824 21,616 85,074 73,338 4,060 -
Idaho 172,348 11,839 24,701 108,036 25,799 1,973 0
Illinois 1,798,723 112,455 282,956 952,915 368,149 82,248 0
Indiana 825,556 78,267 113,799 484,090 137,344 12,056 0
Iowa 331,025 41,128 57,426 157,333 65,498 9,640 0
Kansas 291,837 31,659 52,513 150,022 44,424 13,219 0
Kentucky 762,871 70,730 207,524 374,318 101,494 8,805 0
Louisiana 886,518 101,002 173,725 499,771 102,480 9,540 0
Maine 277,843 56,942 74,955 91,418 51,163 3,365 0
Maryland 704,628 54,654 114,951 386,346 132,309 16,367 1
Massachusetts 1,125,607 112,994 235,157 453,373 323,473 610 0
Michigan 1,430,246 100,156 288,790 744,902 255,755 40,564 79
Minnesota 609,856 64,108 83,579 309,972 142,313 9,884 0
Mississippi 681,161 74,018 159,306 369,654 74,943 3,224 16
Missouri 1,032,047 95,603 140,938 538,423 233,282 23,801 0
Montana 101,966 9,952 17,757 50,954 19,335 3,947 21
Nebraska 249,079 23,026 28,877 138,980 47,826 10,121 249
Nevada 167,247 17,920 29,993 79,283 35,217 4,834 0
New Hampshire 108,562 12,833 13,507 63,942 15,675 2,605 0
New Jersey 923,697 106,976 164,564 436,335 195,988 19,834 0
New Mexico 423,543 22,605 50,326 268,391 78,634 3,587 0
New York 3,548,630 385,586 684,658 1,573,767 825,201 79,418 0
North Carolina 1,397,486 180,515 234,304 685,285 281,193 16,189 0
North Dakota 65,425 10,242 9,672 29,750 14,026 1,735 0
Ohio 1,660,463 145,324 263,878 861,621 348,936 40,533 171
Oklahoma 631,996 62,350 76,638 397,586 88,507 6,915 0
Oregon 594,679 43,195 64,579 234,692 237,679 14,525 9
Pennsylvania 1,647,440 206,976 364,161 754,343 275,074 46,886 0
Rhode Island 194,113 19,137 36,402 84,191 48,834 5,548 1
South Carolina 871,675 78,673 120,088 444,607 220,606 7,692 9
South Dakota 106,154 9,894 16,042 61,743 16,704 1,771 0
Tennessee 1,601,406 88,350 324,191 682,755 493,266 12,822 22
Texas 2,729,660 362,522 351,509 1,526,365 458,079 31,185 0
Utah 214,597 11,855 26,386 119,196 50,579 6,581 0
Vermont 154,991 19,534 18,529 67,666 46,876 2,382 4
Virginia 700,715 97,093 137,282 359,463 92,498 14,334 45
Washington** 916,838 69,054 121,662 520,323 191,871 13,927 1
West Virginia 351,489 31,183 86,566 168,367 58,889 6,484 0
Wisconsin 673,538 61,165 133,983 299,529 160,354 18,505 2
Wyoming 58,013 4,984 8,476 32,076 10,638 1,839 0
1
Eligibles are defined as individuals who were on the Medicaid rolls at least one month during the year.
*Hawaii did not report MSIS data for FY 2000 or FY 2001. Their FY 1999 data are used in this table.
2-13
Total Medicaid Eligibles Per 1000 Population, 2001
Total State Total Eligibles per

State Population Eligibles* 1000 Populations
National Total 285,093,813 46,910,257 164.5
Alabama 4,466,440 780,434 174.7
Alaska 632,674 115,996 183.3
Arizona 5,297,684 808,386 152.6
Arkansas 2,692,041 550,668 204.6
California 34,533,054 8,495,030 246.0
Colorado 4,428,786 410,611 92.7
Connecticut 3,432,550 446,326 130.0
Delaware 795,576 133,079 167.3
District of Columbia 572,716 152,597 266.4
Florida 16,355,193 2,462,171 150.5
Georgia 8,394,795 1,328,379 158.2
Hawaii* 1,225,038 202,912 165.6
Idaho 1,321,309 172,348 130.4
Illinois 12,517,168 1,798,723 143.7
Indiana 6,126,470 825,556 134.8
Iowa 2,932,225 331,025 112.9
Kansas 2,700,453 291,837 108.1
Kentucky 4,067,336 762,871 187.6
Louisiana 4,466,001 886,518 198.5
Maine 1,284,691 277,843 216.3
Maryland 5,383,377 704,628 130.9
Massachusetts 6,399,869 1,125,607 175.9
Michigan 10,005,218 1,430,246 143.0
Minnesota 4,985,202 609,856 122.3
Mississippi 2,857,716 681,161 238.4
Missouri 5,636,220 1,032,047 183.1
Montana 905,954 101,966 112.6
Nebraska 1,719,000 249,079 144.9
Nevada 2,094,633 167,247 79.8
New Hampshire 1,258,974 108,562 86.2
New Jersey 8,504,114 923,697 108.6
New Mexico 1,829,110 423,543 231.6
New York 19,074,843 3,548,630 186.0
North Carolina 8,195,249 1,397,486 170.5
North Dakota 636,285 65,425 102.8
Ohio 11,385,833 1,660,463 145.8
Oklahoma 3,467,181 631,996 182.3
Oregon 3,472,629 594,679 171.2
Pennsylvania 12,298,363 1,647,440 134.0
Rhode Island 1,058,992 194,113 183.3
South Carolina 4,059,818 871,675 214.7
South Dakota 758,156 106,154 140.0
Tennessee 5,745,808 1,601,406 278.7
Texas 21,340,598 2,729,660 127.9
Utah 2,279,590 214,597 94.1
Vermont 612,923 154,991 252.9
Virginia 7,192,697 700,715 97.4
Washington** 5,992,760 916,838 153.0
West Virginia 1,801,641 351,489 195.1
Wisconsin 5,405,140 673,538 124.6
Wyoming 493,720 58,013 117.5
Source: U.S. Department of Commerce, Bureau of the Census, 2003; CMS, MSIS Report, FY 2000 & FY 2001.
2-14
Total Net U.S. Medical Assistance Expenditures

by Type of Service, FY 2001 & FY 2002
Percent Percent Percent

Service FY 2002 FY 2001
of Total of Total Change
Nursing Facility $47,466,264,432 19.3% $43,317,811,704 20.1% +9.6%
Inpatient Acute Care Hospital $43,690,502,629 17.8% $39,586,413,122 18.3% +10.4%
Pharmaceuticals $29,339,050,970 11.9% $24,656,812,921 11.4% +19.0%
HCBS Waivers $17,169,137,673 7.0% $14,864,788,473 6.9% +15.5%
ICF-Mentally Retarded $11,205,483,449 4.6% $10,686,809,919 5.0% +4.9%
Hospital Outpatient $9,245,799,624 3.8% $7,709,540,429 3.6% +19.9%
Physicians $7,559,242,098 3.1% $6,670,379,109 3.1% +13.3%
Clinic* $7,499,886,627 3.1% $6,689,968,278 3.1% +12.1%
Inpatient Mental Health Hospital $7,446,842,170 3.0% $6,862,423,184 3.2% +8.5%
Personal Care Services $6,037,450,986 2.5% $5,251,140,806 2.4% +15.0%
Home Health Care $2,766,480,497 1.1% $2,613,356,673 1.2% +5.9%
Dental $2,630,870,620 1.1% $2,193,475,415 1.0% +19.9%
Other Practitioners $1,413,870,565 0.6% $1,141,272,064 0.5% +23.9%
EPSDT $1,007,637,056 0.4% $935,836,328 0.4% +7.7%
Lab/X-ray $781,820,930 0.3% $660,398,684 0.3% +18.3%
Other** $50,437,280,350 20.5% $41,969,472,522 19.4% +20.2%
Total Expenditures $245,697,620,676 100%‡ $215,809,899,631 100.0%‡ +13.8%

‡ 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 2001
2-15
Federal Medical Assistance Percentage (FMAP),

FY 2004 and FY 2005
2004 FMAP 2004 Enhanced 2005 Enhanced
State 2004 FMAP (Q1-Q3)* FMAP** 2005 FMAP FMAP**
Alabama 70.75% 73.70% 79.53% 70.83% 79.58%
Alaska*** 58.39% 61.34% 70.87% 57.58% 70.31%
Arizona 67.26% 70.21% 77.08% 67.45% 77.22%
Arkansas 74.67% 77.62% 82.27% 74.75% 82.33%
California 50.00% 52.95% 65.00% 50.00% 65.00%
Colorado 50.00% 52.95% 65.00% 50.00% 65.00%
Connecticut 50.00% 52.95% 65.00% 50.00% 65.00%
Delaware 50.00% 52.95% 65.00% 50.38% 65.27%
District of Columbia*** 70.00% 72.95% 79.00% 70.00% 79.00%
Florida 58.93% 61.88% 71.25% 58.90% 71.23%
Georgia 59.58% 62.55% 71.71% 60.44% 72.31%
Hawaii 58.90% 61.85% 71.23% 58.47% 70.93%
Idaho 70.46% 73.91% 79.32% 70.62% 79.43%
Illinois 50.00% 52.95% 65.00% 50.00% 65.00%
Indiana 62.32% 65.27% 73.62% 62.78% 73.95%
Iowa 63.93% 66.88% 74.75% 63.55% 74.49%
Kansas 60.82% 63.77% 72.57% 61.01% 72.71%
Kentucky 70.09% 73.04% 79.06% 69.60% 78.72%
Louisiana 71.63% 74.58% 80.14% 71.04% 79.73%
Maine 66.01% 69.17% 76.21% 64.89% 75.42%
Maryland 50.00% 52.95% 65.00% 50.00% 65.00%
Massachusetts 50.00% 52.95% 65.00% 50.00% 65.00%
Michigan 55.89% 58.84% 69.12% 56.71% 69.70%
Minnesota 50.00% 52.95% 65.00% 50.00% 65.00%
Mississippi 77.08% 80.03% 83.96% 77.08% 83.96%
Missouri 61.47% 64.42% 73.03% 61.15% 72.81%
Montana 72.85% 75.91% 81.00% 71.90% 80.33%
Nebraska 59.89% 62.84% 71.92% 59.64% 71.75%
Nevada 54.93% 57.88% 68.45% 55.90% 69.13%
New Hampshire 50.00% 52.95% 65.00% 50.00% 65.00%
New Jersey 50.00% 52.95% 65.00% 50.00% 65.00%
New Mexico 74.85% 77.80% 82.40% 74.30% 82.01%
New York 50.00% 52.95% 65.00% 50.00% 65.00%
North Carolina 62.85% 65.80% 74.00% 63.63% 74.54%
North Dakota 68.31% 71.31% 77.82% 67.49% 77.24%
Ohio 59.23% 62.18% 71.46% 59.68% 71.78%
Oklahoma 70.24% 73.51% 79.17% 70.18% 79.13%
Oregon 60.81% 63.76% 72.57% 61.12% 72.78%
Pennsylvania 54.76% 57.71% 68.33% 53.84% 67.69%
Rhode Island 56.03% 58.98% 69.22% 55.38% 68.77%
South Carolina 69.86% 72.81% 78.90% 69.89% 78.92%
South Dakota 65.67% 68.62% 75.97% 66.03% 76.22%
Tennessee 64.40% 67.54% 75.08% 64.81% 75.37%
Texas 60.22% 63.17% 72.15% 60.87% 72.61%
Utah 71.72% 74.67% 80.20% 72.14% 80.50%
Vermont 61.34% 65.36% 72.94% 60.11% 72.08%
Virginia 50.00% 53.48% 65.00% 50.00% 65.00%
Washington 50.00% 52.95% 65.00% 50.00% 65.00%
West Virginia 75.19% 78.14% 82.63% 74.65% 82.26%
Wisconsin 58.41% 61.38% 70.89% 58.32% 70.82%
Wyoming 59.77% 64.27% 71.84% 57.90% 70.53%
* The Jobs and Growth Tax Relief and Reconciliation Act of 2003 (May 28, 2003) provides for a temporary increase in the FMAP. This increase is only
available for the last two quarters of FY 2003 and the first three quarters of FY 2004. More information is available at:
http://aspe.os.DHHS.gov/health/FMAP03-04temporaryincrease.html.
** 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 52.23% and for the
District of Columbia is 50.00%.
Source: Federal Register, November 15, 2002, Vol. 67, No. 221, pages 69223-69225; June 17, 2003, Vol. 68, No. 116, pages 35889-35890; and December
3, 2003, Vol. 68, No. 232, pages 67676-67678.
2-16
Medicaid Total Net Expenditures and Eligibles, 2001
Total Net Medical Total Average

State Assistance Expenditures Eligibles Per Eligible
National Total $215,809,899,631 46,910,257 $4,000
Alabama $2,875,372,953 780,434 $3,684
Alaska $576,586,201 115,996 $4,971
Arizona $2,665,261,328 808,386 $3,297
Arkansas $1,852,176,546 550,668 $3,364
California $23,870,521,004 8,495,030 $2,810
Colorado $2,142,029,851 410,611 $5,217
Connecticut $3,213,848,086 446,326 $7,201
Delaware $591,974,246 133,079 $4,448
District of Columbia $979,941,105 152,597 $6,422
Florida $8,557,796,303 2,462,171 $3,476
Georgia $5,037,084,881 1,328,379 $3,792
Hawaii* $634,781,970 202,912 $3,128
Idaho $693,205,598 172,348 $4,022
Illinois $7,764,611,352 1,798,723 $4,317
Indiana $4,008,812,857 825,556 $4,856
Iowa $1,666,923,701 331,025 $5,036
Kansas $1,686,410,544 291,837 $5,779
Kentucky $3,304,053,663 762,871 $4,331
Louisiana $4,201,982,590 886,518 $4,740
Maine $1,315,523,163 277,843 $4,735
Maryland $3,256,576,882 704,628 $4,622
Massachusetts $6,619,524,971 1,125,607 $5,881
Michigan $7,218,697,113 1,430,246 $5,047
Minnesota $3,835,870,579 609,856 $6,290
Mississippi $2,438,979,981 681,161 $3,581
Missouri $4,744,963,426 1,032,047 $4,598
Montana $482,357,404 101,966 $4,731
Nebraska $1,187,237,577 249,079 $4,767
Nevada $674,337,888 167,247 $4,032
New Hampshire $873,248,831 108,562 $8,044
New Jersey $7,123,653,988 923,697 $7,712
New Mexico $1,467,417,736 423,543 $3,465
New York $31,367,464,639 3,548,630 $8,839
North Carolina $6,150,681,587 1,397,486 $4,401
North Dakota $406,418,593 65,425 $6,212
Ohio $8,433,412,161 1,660,463 $5,079
Oklahoma $2,021,033,069 631,996 $3,198
Oregon $2,658,358,391 594,679 $4,470
Pennsylvania $10,908,343,146 1,647,440 $6,621
Rhode Island $1,187,880,819 194,113 $6,120
South Carolina $3,019,387,228 871,675 $3,464
South Dakota $464,455,469 106,154 $4,375
Tennessee $5,501,312,153 1,601,406 $3,435
Texas $11,583,679,558 2,729,660 $4,244
Utah $833,720,115 214,597 $3,885
Vermont $601,467,093 154,991 $3,881
Virginia $3,036,846,387 700,715 $4,334
Washington** $4,305,724,247 916,838 $4,696
West Virginia $1,548,398,817 351,489 $4,405
Wisconsin $3,976,142,914 673,538 $5,903
Wyoming $243,408,927 58,013 $4,196
Source: CMS, CMS-64 Report, FY 2001 and CMS-MSIS Report, FY 2000 & FY 2001.
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Total Medicaid Program Expenditures, 2002
Total Net Medical Administrative Total Program

State Assistance Expenditures Expenditures Expenditures
National Total $245,697,620,676 $11,865,503,019 $257,563,123,695
Alabama $3,093,270,640 $101,262,707 $3,194,533,347
Alaska $685,772,985 $53,525,999 $739,298,984
Arizona $3,541,598,721 $214,483,151 $3,756,081,872
Arkansas $2,237,817,554 $103,472,005 $2,341,289,559
California $26,890,540,967 $2,165,421,909 $29,055,962,876
Colorado $2,323,068,699 $89,593,331 $2,412,662,030
Connecticut $3,456,338,545 $145,108,698 $3,601,447,243
Delaware $634,046,351 $54,177,131 $688,223,482
District of Columbia $1,021,772,693 $60,012,057 $1,081,784,750
Florida $9,871,508,234 $528,381,789 $10,399,890,023
Georgia $6,241,211,454 $302,658,380 $6,543,869,834
Hawaii $740,007,314 $64,472,204 $804,479,518
Idaho $773,534,776 $62,662,990 $836,197,766
Illinois $8,809,060,004 $700,700,368 $9,509,760,372
Indiana $4,448,318,143 $181,277,188 $4,629,595,331
Iowa $2,575,146,342 $79,808,909 $2,654,955,251
Kansas $1,836,717,196 $119,768,351 $1,956,485,547
Kentucky $3,763,204,047 $100,440,133 $3,863,644,180
Louisiana $4,885,971,853 $136,430,738 $5,022,402,591
Maine $1,430,109,134 $59,837,086 $1,489,946,220
Maryland $3,613,476,100 $274,488,455 $3,887,964,555
Massachusetts $8,063,005,258 $317,224,866 $8,380,230,124
Michigan $7,562,053,407 -$163,622,489 $7,398,430,918
Minnesota $4,414,511,470 $247,714,024 $4,662,225,494
Mississippi $2,877,013,521 $87,664,878 $2,964,678,399
Missouri $5,360,607,640 $215,632,683 $5,576,240,323
Montana $571,456,455 $26,886,645 $598,343,100
Nebraska $1,339,132,070 $81,988,159 $1,421,120,229
Nevada $808,198,344 $56,128,326 $864,326,670
New Hampshire $1,016,094,814 $58,564,265 $1,074,659,079
New Jersey $7,745,877,997 $240,847,423 $7,986,725,420
New Mexico $1,776,811,688 $63,569,631 $1,840,381,319
New York $36,295,107,368 $1,181,722,131 $37,476,829,499
North Carolina $6,723,598,560 $302,125,603 $7,025,724,163
North Dakota $461,401,546 $22,525,872 $483,927,418
Ohio $9,658,040,587 $319,681,549 $9,977,722,136
Oklahoma $2,260,403,490 $167,112,579 $2,427,516,069
Oregon $2,571,560,664 $226,191,921 $2,797,752,585
Pennsylvania $12,130,925,035 $556,891,243 $12,687,816,278
Rhode Island $1,358,500,649 $62,877,169 $1,421,377,818
South Carolina $3,292,901,444 $133,484,748 $3,426,386,192
South Dakota $549,884,391 $15,675,093 $565,559,484
Tennessee $5,787,079,096 $245,058,264 $6,032,137,360
Texas $13,523,486,149 $706,759,839 $14,230,245,988
Utah $984,160,785 $78,087,725 $1,062,248,510
Vermont $660,731,979 $55,179,707 $715,911,686
Virginia $3,812,166,436 $187,346,225 $3,999,512,661
Washington $5,168,511,470 $490,873,523 $5,659,384,993
West Virginia $1,584,166,286 $73,009,703 $1,657,175,989
Wisconsin $4,193,175,197 $186,413,731 $4,379,588,928
Wyoming $274,565,128 $23,904,404 $298,469,532
Source: CMS, CMS-64 Report, FY 2002.
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Total SCHIP Expenditures, 2002
Medicaid SCHIP Non-Medicaid SCHIP

State Expenditures Expenditures Total Expenditure
National Total $1,330,657,305 $4,089,702,326 $5,420,359,631
Alabama $4,628,780 $64,702,498 $69,331,278
Alaska $27,348,249 $2,595,488 $29,943,737
Arizona $0 $167,950,645 $167,950,645
Arkansas $1,828,430 $81,548 $1,909,978
California $41,021,160 $647,354,640 $688,375,800
Colorado $0 $47,971,251 $47,971,251
Connecticut $3,447,029 $21,426,909 $24,873,938
Delaware $0 $4,015,741 $4,015,741
District of Columbia $6,269,076 $654,591 $6,923,667
Florida $65,139,446 $323,338,927 $388,478,373
Georgia $0 $148,512,336 $148,512,336
Hawaii $5,596,585 $20,389 $5,616,974
Idaho $16,772,010 $1,230,699 $18,002,709
Illinois $37,305,573 $18,558,488 $55,864,061
Indiana $66,035,063 $16,226,253 $82,261,316
Iowa $16,277,396 $22,540,225 $38,817,621
Kansas $0 $49,811,709 $49,811,709
Kentucky $60,261,647 $30,841,566 $91,103,213
Louisiana $78,484,723 $3,679,622 $82,164,345
Maine $15,623,419 $7,610,776 $23,234,195
Maryland $166,152,918 $17,228,837 $183,381,755
Massachusetts $72,181,353 $20,491,319 $92,672,672
Michigan $25,640,047 $31,334,653 $56,974,700
Minnesota $50,263 $99,462,784 $99,513,047
Mississippi $5,296,814 $78,458,940 $83,755,754
Missouri $83,252,095 $2,240,727 $85,492,822
Montana $0 $14,935,804 $14,935,804
Nebraska $16,028,217 $594,989 $16,623,206
Nevada $0 $31,433,945 $31,433,945
New Hampshire $276,736 $5,748,840 $6,025,576
New Jersey $44,305,712 $344,167,314 $388,473,026
New Mexico $16,902,487 $223,065 $17,125,552
New York $11,633,119 $560,001,709 $571,634,828
North Carolina $0 $117,820,812 $117,820,812
North Dakota $966,615 $3,880,893 $4,847,508
Ohio $175,369,794 $5,979,799 $181,349,593
Oklahoma $37,014,987 $1,008,907 $38,023,894
Oregon $0 $22,796,830 $22,796,830
Pennsylvania $0 $152,372,663 $152,372,663
Rhode Island $18,831,033 $32,810,550 $51,641,583
South Carolina $47,604,923 $5,289,436 $52,894,359
South Dakota $8,746,215 $2,624,039 $11,370,254
Tennessee $4,877,111 $481,001 $5,358,112
Texas $7,340,202 $735,462,302 $742,802,504
Utah $0 $32,706,432 $32,706,432
Vermont $0 $3,443,510 $3,443,510
Virginia $807,958 $59,375,598 $60,183,556
Washington $0 $12,319,513 $12,319,513
West Virginia $2,773 $32,518,236 $32,521,009
Wisconsin $34,000,865 $79,059,901 $113,060,766
Wyoming $0 $4,304,677 $4,304,677
Source: CMS, CMS-21 (SCHIP) Report, 2002.
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2-20
MEDICAID MANAGED CARE ENROLLMENT

Since 1981, when Congress authorized States to implement Section 1915(b) and Section 1115
Medicaid waivers to increase access to managed care and test innovative health care financing and
delivery options, enrollment in Medicaid managed care has grown considerably, although the trend
appears to be leveling off. Over the past ten years, managed care enrollment as a percentage of total
Medicaid enrollment has increased by 310 percent (i.e., from 14.4% to 59.1%). In 2003, 59.1% of all
Medicaid beneficiaries were enrolled in some type of managed care program. As of June 30, 2003, all
but three States (Alaska, Mississippi, and Wyoming) were enrolling Medicaid beneficiaries in some
type of managed care plan.
Figure 2-1: Managed Care Enrollment as a Percentage of Total Medicaid Enrollment
100%
80% 46.4% 44.4% 44.2% 43.2% 42.4% 40.9%

52.2%
59.9%
76.8% 70.6%
60% 85.6%
40%
53.6% 55.6% 55.8% 56.8% 57.6% 59.1%
47.8%
20% 29.4%
40.1%
23.2%
14.4%
0%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Managed Care Fee for Service
Source: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2003. 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.
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• Medicaid-only Managed Care Organization (Mcaid-MCO): a MCO that provides

comprehensive services to Medicaid beneficiaries, but not commercial or Medicare
enrollees.
• Prepaid Health Plan (PHP): an entity that provides less than comprehensive
services on an at-risk basis or one that provides any benefit package on a non-risk
basis.
• Primary Care Case Management (PCCM): a provider (usually a physician,
physician group practice, or an entity employing or having other arrangements with
such physicians, but sometimes also including nurse practitioners, nurse-midwives,
or physician assistants) who contracts to locate, coordinate, and monitor covered
primary care (and sometimes additional services). This category includes those PHPs
that act as PCCMs.
• “Other” Managed Care Arrangement: An entity where the plan is not considered
a PCCM, PHP, Comprehensive MCO, Medicaid-only MCO, or HIO.
The most utilized of these plans are Comprehensive MCOs and Prepaid Health Plans.
Table 2-1: Medicaid Managed Care Plans
Number of Plans Number of Enrollees

Health Insuring Organization (HIO) 5 531,349
Commercial Managed Care Organization (COM-MCO) 164 9,920,954
Medicaid-only Managed Care Organization (Mcaid-MCO) 120 6,848,585
Primary Care Case Management (PCCM) 42 6,142,646
Prepaid Health Plan (PHP) 136 10,498,301
Other 44 195886
Total 511 34,107,721*
*This table provides duplicated figures by plan type. The total number of enrollees includes 8,844,848 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, 2003. DHHS, CMS, Center for Medicaid
& State Operations.
The following tables provide an overview of Medicaid managed care enrollment at the State level.
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Medicaid Managed Care Enrollment, As of June 30, 2003
Rank Based on
Medicaid Medicaid Managed Percent in Percent in
State Enrollment Care Enrollment Managed Care Managed Care
National Total 42,740,719 25,262,873 59.11%
Alabama 760,527 404,797 53.23% 37
Alaska 95,335 0 0.00% 50
Arizona 901,655 808,506 89.67% 6
Arkansas 557,074 374,067 67.15% 24
California 6,272,109 3,258,787 51.96% 39
Colorado 330,499 262,263 79.35% 12
Connecticut 405,064 294,331 72.66% 15
Delaware 121,676 86,709 71.26% 17
District of
Columbia 128,185 85,370 66.60% 26
Florida 2,214,058 1,354,025 61.16% 33
Georgia 1,448,645 1,212,639 83.71% 9
Hawaii 179,522 141,399 78.76% 13
Idaho 156,935 101,257 64.52% 31
Illinois 1,580,944 137,682 8.71% 48
Indiana 707,168 502,401 71.04% 18
Iowa 266,737 243,954 91.46% 5
Kansas 246,186 141,119 57.32% 36
Kentucky 663,002 611,878 92.29% 4
Louisiana 861,846 505,434 58.65% 35
Maine 249,738 148,151 59.32% 34
Maryland 681,096 466,688 68.52% 21
Massachusetts 915,114 572,835 62.60% 32
Michigan 1,322,261 1,314,810 99.44% 2
Minnesota 552,779 362,349 65.55% 28
Mississippi 720,304 0 0.00% 50
Missouri 950,694 425,161 44.72% 44
Montana 80,378 55,372 68.89% 20
Nebraska 197,378 142,377 72.13% 16
Nevada 164,033 74,923 45.68% 42
New Hampshire 91,261 13,407 14.69% 47
New Jersey 782,309 525,864 67.22% 23
New Mexico 404,497 261,015 64.53% 30
New York 3,645,834 1,914,794 52.52% 38
North Carolina 1,074,616 749,152 69.71% 19
North Dakota 53,806 35,515 66.01% 27
Ohio 1,515,712 436,146 28.77% 46
Oklahoma 498,031 338,859 68.04% 22
Oregon 425,627 330,874 77.74% 14
Pennsylvania 1,492,095 1,192,031 79.89% 11
Puerto Rico 957,298 857,310 89.56% 7
Rhode Island 178,543 119,257 66.79% 25
South Carolina 862,175 71,195 8.26% 49
South Dakota 93,208 90,733 97.34% 3
Tennessee 1,304,794 1,304,794 100.00% 1
Texas 2,559,248 1,065,945 41.65% 45
Utah 187,823 162,364 86.45% 8
Vermont 131,051 85,751 65.43% 29
Virgin Islands 16,125 0 0.00% 50
Virginia 583,999 262,961 45.03% 43
Washington 1,059,865 854,861 80.66% 10
West Virginia 296,220 151,515 51.15% 40
Wisconsin 739,431 349,246 47.23% 41
Wyoming 56,209 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, 2003. DHHS, CMS, Center for Medicaid & State Operations.
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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 Contractual
Connecticut Managed Care Plan Contractual
Delaware State N/A
District of Columbia District of Columbia Government None
Florida Managed Care Plan Contractual
Georgia N/A N/A
Hawaii Both Guidelines
Idaho N/A N/A
Illinois Managed Care Plan Contractual
Indiana Managed Care Plan Statutes
Iowa State None
Kansas Both Statutes, regulations, contractual
Kentucky Both Contractual
Louisiana N/A N/A
Maine State N/A
Maryland Both Regulations
Massachusetts Managed Care Plan 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 Managed Care Plan Guidelines
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 Both Contractual
Oregon Managed Care Plan Contractual
Pennsylvania Managed Care Plan Contractual
Rhode Island Managed Care Plan Regulations
South Carolina Managed Care Plan Contractual
South Dakota N/A N/A
Tennessee* Managed Care Plan Statutes
Texas State N/A
Utah State Regulations
Vermont State None
Virginia Managed Care Plan 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 2003 NPC Survey.
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Medicaid Managed Care Enrollment Trends, 1999-2003

State 1999 2000 2001 2002 2003
National Total 17,756,603 18,786,137 20,773,813 23,117,668 25,262,873
Alabama 377,952 325,059 350,485 405,090 404,797
Alaska 0 0 0 0 0
Arizona 363,662 442,254 527,674 697,171 808,506
Arkansas 232,123 222,261 257,662 336,111 374,067
California 2,540,902 2,525,406 2,870,514 3,191,168 3,258,787
Colorado 216,357 254,232 247,181 278,095 262,263
Connecticut 230,217 229,995 239,829 280,106 294,331
Delaware 68,869 75,535 83,422 87,465 86,709
District of Columbia 75,499 78,864 79,673 80,300 85,370
Florida 912,045 1,016,641 1,184,506 1,267,998 1,354,025
Georgia 638,082 806,009 878,140 1,043,154 1,212,639
Hawaii 120,246 121,581 127,779 132,787 141,399
Idaho 31,184 32,338 37,913 58,284 101,257
Illinois 158,888 137,622 136,497 130,988 137,682
Indiana 331,363 376,066 433,014 484,116 502,401
Iowa 176,487 182,251 206,751 227,495 243,954
Kansas 95,868 108,093 118,209 130,162 141,119
Kentucky 324,447 464,191 489,711 500,987 611,878
Louisiana 44,741 48,802 56,542 206,992 505,434
Maine 23,720 57,151 96,051 110,922 148,151
Maryland 347,937 385,687 421,355 451,307 466,688
Massachusetts 575,186 583,324 616,241 628,832 572,835
Michigan 1,130,608 1,063,557 1,023,264 1,208,803 1,314,810
Minnesota 268,360 291,365 322,640 368,186 362,349
Mississippi* 200,347 218,431 297,916 0 0
Missouri 276,628 304,499 378,771 413,361 425,161
Montana 69,738 42,312 46,995 52,209 55,372
Nebraska 122,006 140,199 150,840 163,772 142,377
Nevada 36,945 37,945 47,518 60,823 74,923
New Hampshire 5,812 4,432 6,200 9,206 13,407
New Jersey 356,956 371,641 459,087 523,904 525,864
New Mexico 208,528 199,297 212,456 243,069 261,015
New York 659,569 691,422 728,709 1,099,900 1,914,794
North Carolina 689,104 598,852 674,133 722,089 749,152
North Dakota 23,886 23,962 25,540 30,808 35,515
Ohio 244,888 239,460 277,617 378,476 436,146
Oklahoma 193,902 279,205 299,272 338,819 338,859
Oregon 308,798 312,064 360,926 378,739 330,874
Pennsylvania 1,004,601 975,211 1,037,374 1,140,211 1,192,031
Puerto Rico 764,068 828,021 898,171 865,285 857,310
Rhode Island 85,900 104,041 111,624 117,024 119,257
South Carolina 23,149 32,149 41,716 64,272 71,195
South Dakota 50,220 67,835 79,641 85,868 90,733
Tennessee 1,312,969 1,323,319 1,426,622 1,430,966 1,304,794
Texas 352,062 606,238 753,613 839,798 1,065,945
Utah 118,601 119,200 128,898 154,784 162,364
Vermont 65,692 55,605 78,181 82,261 85,751
Virgin Islands 0 0 0 0 0
Virginia 292,214 280,978 291,767 323,863 262,961
Washington 706,202 800,481 766,366 829,625 854,861
West Virginia 111,532 90,631 122,230 144,911 151,515
Wisconsin 187,543 210,423 266,577 317,106 349,246
Wyoming 0 0 0 0 0
State Medicaid enrollment includes individuals enrolled in State health care reform programs that expand eligibility beyond traditional Medicaid
eligibility standards.
*As of 2002, HealthMacs no longer participates in the Medicaid program in Mississippi.
Sources: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 1999; 2000; 2001; 2002 and 2003. DHHS, CMS, Center
for Medicaid & State Operations.
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Medicaid Managed Care Plan Type, As of June 30, 2003

Commercial Medicaid-only
State HIO MCO MCO PCCM PHP Other
National Total 5 164 120 42 136 44
Alabama 0 0 0 2 1 0
Alaska - - - - - -
Arizona 0 2 26 0 1 0
Arkansas 0 0 0 1 1 0
California 5 24 0 2 11 5
Colorado 0 0 1 1 9 1
Connecticut 0 2 2 0 0 0
Delaware 0 1 0 0 0 0
District of Columbia 0 0 4 0 1 0
Florida 0 9 2 1 2 2
Georgia 0 0 0 1 2 0
Hawaii 0 2 1 0 2 1
Idaho 0 0 0 1 0 0
Illinois 0 4 1 0 0 0
Indiana 0 0 3 2 0 0
Iowa 0 3 0 1 1 0
Kansas 0 0 1 1 0 1
Kentucky 0 0 1 1 1 0
Louisiana 0 0 0 1 0 0
Maine 0 0 0 1 0 0
Maryland 0 0 6 0 0 1
Massachusetts 0 2 2 1 1 6
Michigan 0 9 9 0 20 0
Minnesota 0 6 3 0 0 1
Mississippi - - - - - -
Missouri 0 3 4 0 0 1
Montana 0 0 0 1 0 0
Nebraska 0 1 0 1 0 1
Nevada 0 2 0 0 0 0
New Hampshire 0 1 0 0 0 0
New Jersey 0 1 4 0 0 0
New Mexico 0 3 0 0 0 0
New York 0 14 15 6 1 17
North Carolina 0 1 0 2 0 0
North Dakota 0 1 0 1 0 0
Ohio 0 4 2 0 0 2
Oklahoma 0 3 2 0 0
Oregon 0 4 9 1 18 0
Pennsylvania 0 2 9 1 28 1
Puerto Rico 0 3 0 0 2 0
Rhode Island 0 3 0 0 0 0
South Carolina 0 0 1 0 1 0
South Dakota 0 0 0 1 1 0
Tennessee 0 5 3 0 2 1
Texas 0 10 2 2 1 0
Utah 0 0 0 3 13 0
Vermont 0 0 0 1 0 0
Virgin Islands - - - - - -
Virginia 0 6 1 1 0 0
Washington 0 6 2 1 14 1
West Virginia 0 2 0 1 0 0
Wisconsin 0 28 3 0 2 2
Wyoming - - - - - -
HIO=Health Insuring Organization; Commercial MCO=Commercial Managed Care Organization; Medicaid-only MCO=Medicaid-only
Managed Care Organization; PCCM=Primary Care Case Management; PHP=Prepaid Health Plan.
Source: Medicaid Managed Care Enrollment Report: Summary Statistics as of June 30, 2003. DHHS, CMS, Center for Medicaid & State
Operations.
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Medicaid Managed Care Enrollment by Plan Type,

As of June 30, 2003
Commercial Medicaid-only
State HIO MCO MCO PCCM PHP Other
National Total 531,349 9,920,954 6,848,585 6,142,646 10,468,301 195,886
Alabama - - - 401,393 391,912 -
Alaska - - - - - -
Arizona - 68,404 740,102 - 64,021 -
Arkansas - - - 325,886 374,067 -
California 531,349 2,676,278 0 28,002 255,281 3,610
Colorado - - 70,150 82,488 274,174 758
Connecticut - 225,057 69,274 - - -
Delaware - 86,709 - - - -
District of Columbia - - 85,370 - 2,898 -
Florida - 463,173 203,728 667,114 90,281 18,268
Georgia - - - 840,630 1,215,029 -
Hawaii - 94,051 45,756 - 550 1,497
Idaho - - - 101,257 - -
Illinois - 119,225 18,457 - - -
Indiana - - 246,488 255,913 - -
Iowa - 64,365 - 73,332 243,954 -
Kansas - - 60,891 80,186 - 61
Kentucky - - 128,679 375,890 611,878 -
Louisiana - - - 505,434 - -
Maine - - - 148,151 - -
Maryland - - 466,542 - - 146
Massachusetts - 103,554 165,162 304,119 324,207 1,195
Michigan - 450,816 374,781 - 1,319,096 -
Minnesota - 345,968 16,381 - - 825
Mississippi - - - - - -
Missouri - 113,616 311,545 - - 168
Montana - - - 55,372 - -
Nebraska - 30,712 - 35,109 - 142,377
Nevada - 74,923 - - - -
New Hampshire - 13,407 - - - -
New Jersey - 43,672 482,192 - - -
New Mexico - 261,015 - - - -
New York - 968,577 875,494 20,961 6,979 18,313
North Carolina - 11,314 - 749,152 - -
North Dakota - 821 - 34,694 - -
Ohio - 151,026 284,662 - - 458
Oklahoma - - 181,451 160,591 - -
Oregon - 45,333 175,469 9,110 550,413 -
Pennsylvania - 230,556 820,601 135,000 970,455 153
Puerto Rico - 857,310 - - 857,310 -
Rhode Island - 119,257 - - - -
South Carolina - - 53,793 - 17,402 -
South Dakota - - - 71,424 90,733 -
Tennessee - 979,682 450,012 - 1,304,794 227
Texas - 450,054 270,931 332,820 277,613 -
Utah - - - 74,422 371,482 -
Vermont - - - 85,751 - -
Virgin Islands - - - - - -
Virginia - 198,288 64,673 80,796 - -
Washington - 392,203 78,752 3,917 853,226 184
West Virginia - 47,783 - 103,732 - -
Wisconsin - 233,805 107,249 - 546 7,646
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.
2-27
Medicaid Managed Care Enrollment by Payment Arrangement,

As of June 30, 2003
State FEE-FOR-SERVICE (FFS) Fully Capitated (FUL) Partially Capitated (PAR)
National Total 6,188,187 27,704,547 214,987
Alabama 401,393 391,912
Alaska
Arizona 872,527
Arkansas 325,886 374,067
California 28,002 3,466,518
Colorado 82,488 333,171 11,911
Connecticut 294,331
Delaware 86,709
District of Columbia 85,370 2,898
Florida 685,372 757,192
Georgia 840,630 1,215,029
Hawaii 141,854
Idaho 101,257
Illinois 137,682
Indiana 255,913 246,488
Iowa 73,332 308,319
Kansas 80,186 60,952
Kentucky 375,890 740,557
Louisiana 505,434
Maine 148,151
Maryland 466,688
Massachusetts 304,119 594,118
Michigan 2,144,693
Minnesota 825 362,349
Mississippi
Missouri 425,329
Montana 55,372
Nebraska 177,486 30,712
Nevada 74,923
New Hampshire 13,407
New Jersey 525,864
New Mexico 261,015
New York 6,105 1,862,384 21,835
North Carolina 749,152 11,314
North Dakota 34,694 821
Ohio 436,146
Oklahoma 181,451 160,591
Oregon 9,110 771,215
Pennsylvania 135,000 2,021,415 350
Puerto Rico 1,714,620
Rhode Island 119,257
South Carolina 53,793 17,402
South Dakota 71,424 90,733
Tennessee 2,734,715
Texas 332,820 998,598
Utah 133,950 311,954
Vermont 85,751
Virgin Islands
Virginia 80,796 262,961
Washington 3,917 1,324,365
West Virginia 103,732 47,783
Wisconsin 349,246
Wyoming
Individual State totals will not sum to total managed care enrollment (page 2-5) because State totals include individuals enrolled in more than one
plan type including dental, mental, and long-term care.
Operations.
2-28
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 2-33 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.
2-29
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, Arkansas,
California, Delaware, Hawaii, Kentucky, Maryland, Massachusetts, Minnesota, Missouri, New York,
Oklahoma, Oregon, Rhode Island, Tennessee, Vermont and Wisconsin. Refer to the table on page 2-
33 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.
2-30
As of September 24, 2003, 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.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) establishes a
new Part D that provides a prescription drug benefit to all Medicare beneficiaries beginning in 2006.
When the new benefit begins, states with Pharmacy Plus waivers may want to eliminate or
substantially revise them because Medicare will be providing prescription drug coverage to seniors
now covered by Pharmacy Plus.
Refer to the table on page 2-36 for a complete status of the Pharmacy Plus Demonstrations Program.
2-31
2-32
Section 1915(b) Waivers, As of June 30, 2002
1915(b)
Statutes
State Program(s) Approved Utilized Implemented Expiration
st
Alabama Patient 1 1, 3, 4 01/1/97 12/26/02
Alaska None -- -- --
Arizona None -- -- --
Non-Emergency Transportation 1, 4 3/1/98 8/22/03
Arkansas
Primary Care Physician 1 11/1/96 12/17/04
CALOPTIMA 1, 4 10/1/95 7/29/03
Central Coast Alliance for Health 1, 4 1/1/96 6/2/03
Health Plan of San Mateo 1, 4 11/30/87 8/26/04
Hudman 4 4/24/92 7/15/03
Managed Care Network 1, 2, 4 3/1/97 5/18/03
Medi-Cal Mental Health Care Field Test 4 4/1/95 7/29/03
Medi-Cal Specialty Mental Health Services
4 11/19/02
California Consolidation 3/15/95
Partnership Health Plan of California 1, 4 5/1/94 2/10/03
Primary Care Case Management Program 1, 4 8/1/84 2/4/04
Sacramento Geographic Managed Care 1, 2, 4 4/1/94 11/10/02
San Diego Geographic Managed Care 1, 2, 4 10/17/98 10/10/03
Santa Barbara Health Initiative 1, 4 9/1/83 1/11/03
Selective Provider Contracting Program 4 9/21/82 10/31/02
Two-Plan Model Program 1, 2, 4 1/23/96 11/8/03
Managed Care Program 1, 2 5/1/83 4/14/03
Colorado
Mental Health Capitation Program 1, 3, 4 7/1/95 4/9/03
Connecticut HUSKY A 1, 4 10/1/95 5/30/04
Delaware None -- -- --
District of
DC Medicaid Managed Care Program 1, 2, 4 9/23/03
Columbia 4/1/94
Managed Health Care 1, 2, 4 10/1/92 9/26/04
Florida Prepaid Mental Health Plan 1, 4 3/1/96 6/30/03
Statewide Inpatient Psychiatric Program 4 4/1/99 12/31/03
Georgia Better Health Care 1 10/1/93 3/14/03
Georgia Non-Emergency Transportation Broker Program 4 10/1/97 9/7/03
Preadmission Screening and Annual Resident Review
(PASARR) 1, 4 11/1/94 4/8/03
Hawaii None -- -- --
Idaho Healthy Connections 1, 2 10/1/93 9/21/04
Illinois None -- -- --
Indiana Hoosier Healthwise 1 7/1/94 4/23/03
Iowa Iowa Plan for Behavioral Health 1, 3, 4 1/1/99 2/28/03
KMMC: HealthConnect Kansas 1, 2, 4 1/1/84 10/4/02
Kansas
KMMC: HealthWave 19 1, 2, 4 12/1/95 10/4/02
Kentucky Human Service Transportation 1, 4 6/1/98 3/7/03
Louisiana Community Care 1 6/1/92 3/25/03
Maine None -- -- --
Maryland None -- -- --
2-33
1915(b)
Statutes
State Program(s) Approved Utilized Implemented Expiration
Massachuse None -- -- --
Comprehensive Health Care 1, 2, 4 7/1/97 9/24/04
Michigan
Specialty Community Mental Health Services Programs 1, 4 10/1/98 3/13/03
Minnesota Consolidated Chemical Dependency Treatment Fund 1, 4 1/1/88 3/23/03
Mississippi None -- -- --
Missouri MC+ Managed Care/1915(b) 1, 2, 4 9/1/95 3/14/04
Montana Passport to Health 1, 2 1/1/94 4/24/04
Nebraska Nebraska Health Connection Combined Waiver Program 1, 2, 3, 4 7/1/95 10/31/02
Nevada None -- -- --
New None -- -- --
New Jersey New Jersey Care 2000+ 1915(b) 1, 2 10/1/00 9/30/02
New SALUD! 1,4 7/1/97 10/21/02
New York Non-Emergency Transportation 1, 4 7/1/96 11/14/02
ACCESS II /III1915(b) 1 7/1/98 11/08/02
North
Carolina Access 1915(b) 1 4/1/91 11/08/02
Carolina
Health Care Connection 1915(b) 1 7/1/96 11/08/02
North None -- -- --
Ohio PremierCare 1, 2, 4 7/1/01 6/30/03
Oklahoma None -- -- --
Oregon Transportation Program 4 9/1/94 7/25/03
Pennsylvani Family Care Network 1 2/1/94 6/16/04
a HealthChoices 1, 2, 3, 4 2/1/97 6/16/04
Puerto Rico None -- -- --
Rhode None -- -- --
South None -- -- --
South Prime 1 9/1/93 9/28/02
Tennessee None -- -- --
Lonestar Select I 4 9/1/94 9/3/04
Lonestar Select II 4 3/10/95 3/4/04
Texas NorthSTAR 1, 2, 4 11/5/03
11/1/99
STAR 1, 2, 3, 4 8/1/93 8/31/03
STAR Plus 1, 2, 3, 4 1/1/98 8/31/04
Choice of Health Care Delivery 1, 2, 4 7/1/82 7/23/03
Utah Non-Emergency Transportation 1, 4 7/1/01 9/18/04
Prepaid Mental Health Program 4 7/1/91 12/26/03
Vermont None -- -- --
Medallion 1, 2 3/1/92 3/24/04
Virginia
Medallion II 1, 4 1/1/96 12/26/02
Healthy Options 1, 4 10/1/93 2/24/03
Washington
The Integrated Mental Health Services 1, 4 7/1/93 11/4/04
West Mountain Health Trust 1, 4 9/1/96 12/22/04
Virginia Physician Assured Access System 1 6/1/92 4/27/04
Wisconsin None -- -- --
Wyoming None -- -- --
Source: 2002 National Summary of State Medicaid Managed Care Programs. Program Descriptions as of June 30, 2002.
Centers for Medicare and Medicaid Services, Center for Medicaid & State Operations.
2-34
Section 1115 Research and Demonstration Waivers

As of June 30, 2002
State Program Implemented Expiration
Arizona Arizona Health Care Cost Containment System (AHCCCS) 10/1/82 9/30/06
Arkansas ARKids First 9/1/97 9/30/05
Altamed Health Senior Buencare 11/01/98 11/24/02
Center For Elders Independence 4/1/95 11/24/02
California On Lok Senior Health Services 11/1/83 11/24/02
Senior Care Action Network 1/1/85 7/31/03
Sutter Senior Care 5/1/94 11/24/02
Delaware Diamond State Health Plan 1/1/96 3/15/04
Hawaii Hawaii QUEST 8/1/94 3/31/03
Kentucky Kentucky Health Care Partnership Program 11/1/97 11/1/02
Maryland HealthChoice 6/2/97 5/31/05
Massachusetts Mass Health 7/1/97 6/30/05
MinnesotaCare Program for Families and Children 7/1/95 6/30/05
Minnesota
Prepaid Medical Assistance Program 7/1/85 6/30/05
Missouri MC+ Managed Care/1115 9/1/98 3/1/04
Partnership Plan – Family Health Plus 9/04/01 3/31/03
New York
Partnership Plan Medicaid Managed Care Program 10/1/97 3/31/03
Oklahoma SoonerCare 1/1/96 12/31/03
Oregon Oregon Health Plan 2/1/94 1/31/05
Rhode Island Rite Care 8/1/94 7/31/05
Tennessee TennCare 1/1/94 6/30/07
Vermont Vermont Health Access 1/1/96 12/31/03
BadgerCare (SCHIP) 7/01/99 3/31/04
Wisconsin
Wisconsin Partnership Program 1/1/96 12/31/02
Source: 2002 National Summary of State Medicaid Managed Care Programs. Program Descriptions as of June 30, 2002. Centers
for Medicare and Medicaid Services, Center for Medicare & State Operations.
2-35
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
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 24, 2003.
2-36
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 2002 American
Community Survey conducted by the U.S. Bureau of the Census. It is the only 2002 age breakout
on a State-by-State basis that the Bureau had released while data collection for the 2003
Compilation was ongoing. Unfortunately, the approximately 5 million individuals residing in
“group quarters” were not included. Hence, the total population figure (and the corresponding
figures for each State) presented in this table is lower than the population total in the table
showing insurance status.
The data on insurance status was compiled from the March 2003 Supplement to the Current
Population Survey, a collaborative effort by the Census Bureau and BLS. Hence, the estimates on
the number of Medicare and Medicaid beneficiaries differ slightly from those published by CMS.
In addition, more detailed data on poverty, also compiled from The March 2003 Supplement to the
Current Population Survey have been included in this year’s Compilation.
HRSA’s Bureau of Health Professions, Division of Nursing is responsible for conducting the
National Sample Survey of Registered Nurses. This survey is the Nation’s most extensive and
comprehensive source of nursing statistics. The most recent iteration of this survey, which is
conducted every four years, is the 2000 version. Unfortunately, these data are somewhat out-of-
date. We, therefore, turned to another source, The Area Resource File (ARF), for data on the
number of requested nurses. However, as is often the case, data from different sources are not
exactly the same. The Area Resource File, 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. Hence, the nursing numbers included in 2003 Compilation are lower than those
presented last year.
3-3
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, 2002*

Total Percent Ages Percent Percent Percent
State Population 19 and under Ages 20-44 Ages 45-64 Ages 65+
National Total 280,540,330 28.2% 36.2% 23.6% 12.0%
Alabama 4,370,221 27.8% 35.3% 24.1% 12.9%
Alaska 624,252 33.2% 35.2% 25.6% 6.1%
Arizona 5,346,616 30.0% 35.6% 21.9% 12.6%
Arkansas 2,634,848 28.0% 34.4% 24.2% 13.4%
California 34,292,871 30.0% 38.0% 21.6% 10.3%
Colorado 4,403,659 28.4% 38.2% 24.1% 9.3%
Connecticut 3,350,345 27.9% 34.1% 24.8% 13.1%
Delaware 782,221 26.3% 37.0% 24.0% 12.8%
District of Columbia 535,632 21.5% 42.8% 23.8% 12.0%
Florida 16,318,656 25.8% 33.3% 24.1% 16.8%
Georgia 8,326,251 29.6% 39.1% 22.1% 9.2%
Hawaii 1,208,537 26.7% 35.3% 24.7% 13.3%
Idaho 1,308,320 31.1% 34.4% 23.6% 10.9%
Illinois 12,279,027 28.7% 36.8% 23.0% 11.4%
Indiana 5,980,881 28.7% 36.0% 23.4% 11.9%
Iowa 2,832,392 26.8% 34.5% 24.7% 14.1%
Kansas 2,634,122 28.7% 35.4% 23.2% 12.7%
Kentucky 3,978,103 25.8% 36.9% 25.2% 12.0%
Louisiana 4,347,642 29.9% 35.4% 23.3% 11.3%
Maine 1,259,547 24.3% 34.6% 27.2% 13.8%
Maryland 5,321,993 28.3% 36.3% 24.4% 11.0%
Massachusetts 6,210,578 25.4% 37.3% 24.4% 13.0%
Michigan 9,797,198 28.6% 35.3% 24.1% 11.9%
Minnesota 4,882,303 28.1% 36.7% 23.9% 11.3%
Mississippi 2,775,227 30.0% 35.4% 22.9% 11.7%
Missouri 5,505,963 27.7% 35.4% 24.1% 12.8%
Montana 884,587 27.0% 32.7% 27.2% 13.1%
Nebraska 1,677,978 28.5% 35.3% 23.3% 12.8%
Nevada 2,139,794 28.9% 36.6% 23.6% 10.9%
New Hampshire 1,238,917 26.8% 36.0% 25.7% 11.4%
New Jersey 8,395,357 27.3% 35.6% 24.4% 12.6%
New Mexico 1,818,718 30.1% 34.4% 23.4% 12.1%
New York 18,571,545 26.9% 36.7% 23.9% 12.5%
North Carolina 8,063,874 27.7% 37.0% 23.7% 11.6%
North Dakota 610,245 26.4% 35.3% 24.3% 14.1%
Ohio 11,122,112 28.1% 35.1% 24.0% 12.8%
Oklahoma 3,379,515 28.2% 35.1% 24.0% 12.8%
Oregon 3,444,153 27.0% 35.4% 25.2% 12.3%
Pennsylvania 11,897,522 26.0% 34.0% 25.0% 14.9%
Rhode Island 1,030,762 24.7% 37.1% 24.2% 14.0%
South Carolina 3,971,899 26.8% 36.4% 25.1% 11.7%
South Dakota 731,963 29.0% 33.9% 23.4% 13.7%
Tennessee 5,644,716 27.0% 36.1% 24.8% 12.0%
Texas 21,215,494 31.4% 37.3% 21.8% 9.6%
Utah 2,275,861 34.5% 38.7% 18.4% 8.4%
Vermont 595,826 25.4% 34.8% 27.4% 12.5%
Virginia 7,063,247 27.4% 37.2% 24.5% 10.9%
Washington 5,930,307 27.9% 36.7% 24.5% 10.8%
West Virginia 1,758,096 24.3% 33.4% 27.3% 15.0%
Wisconsin 5,285,604 27.5% 35.7% 24.3% 12.5%
Wyoming 484,833 27.7% 33.9% 26.7% 11.6%
This information was taken from the 2002 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 2002.
*Sum of percentages may not equal 100 percent due to rounding.
Source: U.S. Department of Commerce, Bureau of the Census, 2002 American Community Survey.
3-5
Race Demographics, 2002*

Percent
Total Percent Percent Percent Indicated 2
State Population White Black Other** or More Races
National Total 280,540,330 75.8% 12.0% 9.9% 2.9%
Alabama 4,370,221 71.0% 25.6% 1.8% 1.7%
Alaska 624,252 69.3% 3.0% 19.5% 8.5%
Arizona 5,346,616 74.9% 2.8% 18.8% 4.8%
Arkansas 2,634,848 80.0% 15.8% 2.5% 1.9%
California 34,292,871 63.3% 6.1% 26.7% 5.3%
Colorado 4,403,659 82.9% 3.7% 10.9% 3.1%
Connecticut 3,350,345 81.9% 9.2% 7.0% 2.3%
Delaware 782,221 75.2% 18.8% 4.4% 2.0%
Florida 16,318,656 77.6% 15.1% 5.4% 2.7%
Georgia 8,326,251 65.2% 28.3% 5.2% 1.7%
Hawaii 1,208,537 24.5% 1.8% 48.9% 25.8%
Idaho 1,308,320 91.6% 0.3% 6.0% 2.6%
Illinois 12,279,027 74.7% 14.4% 9.0% 2.4%
Indiana 5,980,881 87.4% 8.1% 2.9% 1.9%
Iowa 2,832,392 93.4% 2.0% 3.1% 1.8%
Kansas 2,634,122 85.9% 5.9% 5.9% 2.6%
Kentucky 3,978,103 89.9% 6.7% 1.8% 1.7%
Louisiana 4,347,642 63.7% 32.3% 3.0% 1.1%
Maine 1,259,547 96.9% 0.4% 1.6% 1.2%
Maryland 5,321,993 64.6% 27.1% 6.3% 2.4%
Massachusetts 6,210,578 84.4% 5.9% 8.2% 2.1%
Michigan 9,797,198 80.2% 13.9% 4.0% 2.2%
Minnesota 4,882,303 88.6% 3.7% 6.3% 1.7%
Mississippi 2,775,227 60.8% 37.0% 1.5% 0.8%
Missouri 5,505,963 84.8% 11.0% 2.4% 1.9%
Montana 884,587 90.2% 0.5% 7.0% 2.6%
Nebraska 1,677,978 89.7% 3.7% 4.5% 2.7%
Nevada 2,139,794 77.8% 6.3% 11.8% 5.8%
New Hampshire 1,238,917 95.8% 0.8% 2.3% 1.4%
New Jersey 8,395,357 72.3% 13.0% 12.9% 2.4%
New Mexico 1,818,718 69.8% 1.6% 24.9% 5.3%
New York 18,571,545 68.6% 15.9% 13.2% 3.3%
North Carolina 8,063,874 71.9% 21.2% 5.2% 1.9%
North Dakota 610,245 91.9% 0.8% 5.9% 1.6%
Ohio 11,122,112 85.0% 11.2% 2.4% 1.6%
Oklahoma 3,379,515 76.5% 7.2% 9.4% 7.4%
Oregon 3,444,153 86.7% 1.5% 8.6% 3.7%
Pennsylvania 11,897,522 85.3% 9.8% 3.6% 1.5%
Rhode Island 1,030,762 84.7% 4.5% 8.7% 2.7%
South Carolina 3,971,899 67.1% 29.6% 2.3% 1.2%
South Dakota 731,963 94.3% 0.7% 3.1% 2.0%
Tennessee 5,644,716 80.1% 16.1% 2.7% 1.3%
Texas 21,215,494 73.1% 10.9% 13.9% 3.2%
Utah 2,275,861 90.2% 0.8% 6.6% 2.9%
Vermont 595,826 96.5% 0.6% 1.7% 1.3%
Virginia 7,063,247 72.7% 19.4% 6.0% 2.4%
Washington 5,930,307 80.9% 3.3% 11.7% 4.8%
West Virginia 1,758,096 95.2% 3.0% 0.8% 1.1%
Wisconsin 5,285,604 88.5% 5.3% 4.6% 1.8%
Wyoming 484,833 92.2% 0.6% 4.7% 3.1%
This information was taken from the 2002 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.
** Percent Other includes American Indian and Alaska Native, Asian, Native Hawaiian and other Pacific Islander, and other.
3-6
Hispanic Demographics, 2002
State Total Population Hispanic Population Percent Hispanic

National Total 280,540,330 37,872,475 13.5%
Alabama 4,370,221 86,450 2.0%
Alaska 624,252 25,156 4.0%
Arizona 5,346,616 1,452,223 27.2%
Arkansas 2,634,848 92,400 3.5%
California 34,292,871 11,647,324 34.0%
Colorado 4,403,659 801,801 18.2%
Connecticut 3,350,345 334,926 10.0%
Delaware 782,221 40,625 5.2%
District of Columbia 535,632 51,068 9.5%
Florida 16,318,656 2,969,016 18.2%
Georgia 8,326,251 502,157 6.0%
Hawaii 1,208,537 87,769 7.3%
Idaho 1,308,320 111,295 8.5%
Illinois 12,279,027 1,663,514 13.5%
Indiana 5,980,881 231,613 3.9%
Iowa 2,832,392 87,447 3.1%
Kansas 2,634,122 184,148 7.0%
Kentucky 3,978,103 65,532 1.6%
Louisiana 4,347,642 106,445 2.4%
Maine 1,259,547 8,870 0.7%
Maryland 5,321,993 253,012 4.8%
Massachusetts 6,210,578 451,811 7.3%
Michigan 9,797,198 336,104 3.4%
Minnesota 4,882,303 157,540 3.2%
Mississippi 2,775,227 31,985 1.2%
Missouri 5,505,963 112,698 2.0%
Montana 884,587 17,398 2.0%
Nebraska 1,677,978 101,573 6.1%
Nevada 2,139,794 458,223 21.4%
New Hampshire 1,238,917 20,756 1.7%
New Jersey 8,395,357 1,198,470 14.3%
New Mexico 1,818,718 783,315 43.1%
New York 18,571,545 2,997,676 16.1%
North Carolina 8,063,874 434,048 5.4%
North Dakota 610,245 7,403 1.2%
Ohio 11,122,112 225,447 2.0%
Oklahoma 3,379,515 185,361 5.5%
Oregon 3,444,153 306,244 8.9%
Pennsylvania 11,897,522 388,046 3.3%
Rhode Island 1,030,762 96,510 9.4%
South Carolina 3,971,899 104,814 2.6%
South Dakota 731,963 10,404 1.4%
Tennessee 5,644,716 132,687 2.4%
Texas 21,215,494 7,191,546 33.9%
Utah 2,275,861 220,283 9.7%
Vermont 595,826 4,803 0.8%
Virginia 7,063,247 363,544 5.1%
Washington 5,930,307 480,917 8.1%
West Virginia 1,758,096 12,211 0.7%
Wisconsin 5,285,604 205,397 3.9%
Wyoming 484,833 32,470 6.7%
This information was taken from the 2002 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
2002.
3-7
Insurance Status - Populations, 2002*
Total Medicaid Medicare Military Privately Not

State Population Population Population Insurance Insured Insured
National Total 285,933,000 33,246,000 38,448,000 10,063,000 198,973,000 43,574,000
Alabama 4,440,000 459,000 754,000 171,000 3,143,000 564,000
Alaska 635,000 92,000 53,000 81,000 399,000 119,000
Arizona 5,442,000 666,000 792,000 363,000 3,555,000 916,000
Arkansas 2,692,000 396,000 487,000 203,000 1,644,000 440,000
California 35,159,000 4,985,000 3,777,000 1,046,000 22,891,000 6,398,000
Colorado 4,476,000 331,000 501,000 299,000 3,211,000 720,000
Connecticut 3,383,000 314,000 544,000 82,000 2,610,000 356,000
Delaware 798,000 86,000 112,000 30,000 608,000 79,000
District of Columbia 572,000 103,000 75,000 12,000 373,000 74,000
Florida 16,429,000 1,764,000 3,020,000 820,000 10,666,000 2,843,000
Georgia 8,426,000 863,000 869,000 309,000 5,924,000 1,354,000
Hawaii 1,224,000 128,000 173,000 104,000 899,000 123,000
Idaho 1,300,000 136,000 162,000 44,000 903,000 233,000
Illinois 12,504,000 1,180,000 1,618,000 142,000 9,086,000 1,767,000
Indiana 6,100,000 458,000 850,000 98,000 4,628,000 797,000
Iowa 2,903,000 275,000 436,000 75,000 2,314,000 277,000
Kansas 2,684,000 216,000 377,000 194,000 2,084,000 280,000
Kentucky 4,046,000 471,000 641,000 342,000 2,828,000 548,000
Louisiana 4,447,000 694,000 602,000 208,000 2,703,000 820,000
Maine 1,269,000 204,000 229,000 55,000 885,000 144,000
Maryland 5,458,000 355,000 653,000 211,000 4,203,000 730,000
Massachusetts 6,471,000 769,000 890,000 145,000 4,772,000 644,000
Michigan 9,910,000 1,158,000 1,279,000 89,000 7,494,000 1,158,000
Minnesota 5,054,000 489,000 586,000 118,000 4,158,000 397,000
Mississippi 2,787,000 559,000 387,000 108,000 1,703,000 465,000
Missouri 5,585,000 594,000 745,000 192,000 4,253,000 646,000
Montana 906,000 108,000 157,000 62,000 618,000 139,000
Nebraska 1,704,000 167,000 237,000 69,000 1,312,000 174,000
Nevada 2,121,000 127,000 265,000 85,000 1,464,000 418,000
New Hampshire 1,266,000 78,000 164,000 41,000 1,015,000 125,000
New Jersey 8,605,000 789,000 1,241,000 106,000 6,378,000 1,197,000
New Mexico 1,840,000 313,000 294,000 86,000 1,047,000 388,000
New York 19,283,000 2,964,000 2,617,000 278,000 12,635,000 3,042,000
North Carolina 8,162,000 942,000 1,190,000 449,000 5,393,000 1,368,000
North Dakota 633,000 56,000 94,000 35,000 481,000 69,000
Ohio 11,282,000 1,061,000 1,554,000 213,000 8,640,000 1,344,000
Oklahoma 3,477,000 411,000 511,000 205,000 2,280,000 601,000
Oregon 3,510,000 438,000 488,000 126,000 2,475,000 511,000
Pennsylvania 12,189,000 1,187,000 2,033,000 235,000 9,311,000 1,380,000
Rhode Island 1,056,000 165,000 161,000 16,000 763,000 104,000
South Carolina 3,997,000 607,000 678,000 183,000 2,701,000 500,000
South Dakota 744,000 74,000 102,000 38,000 570,000 85,000
Tennessee 5,672,000 1,091,000 734,000 212,000 3,883,000 614,000
Texas 21,529,000 2,425,000 2,339,000 762,000 12,738,000 5,556,000
Utah 2,310,000 219,000 192,000 60,000 1,743,000 310,000
Vermont 619,000 112,000 86,000 14,000 438,000 66,000
Virginia 7,118,000 496,000 891,000 716,000 5,203,000 962,000
Washington 6,001,000 782,000 684,000 301,000 4,214,000 850,000
West Virginia 1,751,000 299,000 360,000 80,000 1,107,000 255,000
Wisconsin 5,476,000 545,000 701,000 124,000 4,298,000 538,000
Wyoming 488,000 45,000 65,000 26,000 334,000 86,000
*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, 2003 Annual Social and Economic Supplement,
March 2003.
3-8
Insurance Status - Percentages, 2002*
% Covered by % Covered by
Total % Covered by % Covered by Military Private
State Population Medicaid Medicare Insurance Insurance % Not Insured
National Total 285,933,000 11.6% 13.4% 3.5% 69.6% 15.2%
Alabama 4,440,000 10.3% 17.0% 3.9% 70.8% 12.7%
Alaska 635,000 14.5% 8.3% 12.8% 62.8% 18.7%
Arizona 5,442,000 12.2% 14.6% 6.7% 65.3% 16.8%
Arkansas 2,692,000 14.7% 18.1% 7.5% 61.1% 16.3%
California 35,159,000 14.2% 10.7% 3.0% 65.1% 18.2%
Colorado 4,476,000 7.4% 11.2% 6.7% 71.7% 16.1%
Connecticut 3,383,000 9.3% 16.1% 2.4% 77.2% 10.5%
Delaware 798,000 10.8% 14.0% 3.8% 76.2% 9.9%
District of Columbia 572,000 18.0% 13.1% 2.1% 65.2% 12.9%
Florida 16,429,000 10.7% 18.4% 5.0% 64.9% 17.3%
Georgia 8,426,000 10.2% 10.3% 3.7% 70.3% 16.1%
Hawaii 1,224,000 10.5% 14.1% 8.5% 73.4% 10.0%
Idaho 1,300,000 10.5% 12.5% 3.4% 69.5% 17.9%
Illinois 12,504,000 9.4% 12.9% 1.1% 72.7% 14.1%
Indiana 6,100,000 7.5% 13.9% 1.6% 75.9% 13.1%
Iowa 2,903,000 9.5% 15.0% 2.6% 79.7% 9.5%
Kansas 2,684,000 8.0% 14.0% 7.2% 77.6% 10.4%
Kentucky 4,046,000 11.6% 15.8% 8.5% 69.9% 13.5%
Louisiana 4,447,000 15.6% 13.5% 4.7% 60.8% 18.4%
Maine 1,269,000 16.1% 18.0% 4.3% 69.7% 11.3%
Maryland 5,458,000 6.5% 12.0% 3.9% 77.0% 13.4%
Massachusetts 6,471,000 11.9% 13.8% 2.2% 73.7% 10.0%
Michigan 9,910,000 11.7% 12.9% 0.9% 75.6% 11.7%
Minnesota 5,054,000 9.7% 11.6% 2.3% 82.3% 7.9%
Mississippi 2,787,000 20.1% 13.9% 3.9% 61.1% 16.7%
Missouri 5,585,000 10.6% 13.3% 3.4% 76.2% 11.6%
Montana 906,000 11.9% 17.3% 6.8% 68.2% 15.3%
Nebraska 1,704,000 9.8% 13.9% 4.0% 77.0% 10.2%
Nevada 2,121,000 6.0% 12.5% 4.0% 69.0% 19.7%
New Hampshire 1,266,000 6.2% 13.0% 3.2% 80.2% 9.9%
New Jersey 8,605,000 9.2% 14.4% 1.2% 74.1% 13.9%
New Mexico 1,840,000 17.0% 16.0% 4.7% 56.9% 21.1%
New York 19,283,000 15.4% 13.6% 1.4% 65.5% 15.8%
North Carolina 8,162,000 11.5% 14.6% 5.5% 66.1% 16.8%
North Dakota 633,000 8.8% 14.8% 5.5% 76.0% 10.9%
Ohio 11,282,000 9.4% 13.8% 1.9% 76.6% 11.9%
Oklahoma 3,477,000 11.8% 14.7% 5.9% 65.6% 17.3%
Oregon 3,510,000 12.5% 13.9% 3.6% 70.5% 14.6%
Pennsylvania 12,189,000 9.7% 16.7% 1.9% 76.4% 11.3%
Rhode Island 1,056,000 15.6% 15.2% 1.5% 72.3% 9.8%
South Carolina 3,997,000 15.2% 17.0% 4.6% 67.6% 12.5%
South Dakota 744,000 9.9% 13.7% 5.1% 76.6% 11.4%
Tennessee 5,672,000 19.2% 12.9% 3.7% 68.5% 10.8%
Texas 21,529,000 11.3% 10.9% 3.5% 59.2% 25.8%
Utah 2,310,000 9.5% 8.3% 2.6% 75.5% 13.4%
Vermont 619,000 18.1% 13.9% 2.3% 70.8% 10.7%
Virginia 7,118,000 7.0% 12.5% 10.1% 73.1% 13.5%
Washington 6,001,000 13.0% 11.4% 5.0% 70.2% 14.2%
West Virginia 1,751,000 17.1% 20.6% 4.6% 63.2% 14.6%
Wisconsin 5,476,000 10.0% 12.8% 2.3% 78.5% 9.8%
Wyoming 488,000 9.2% 13.3% 5.3% 68.4% 17.6%
*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, 2003 Annual Social and Economic Supplement,
March 2003.
3-9
Poverty Status - Populations, 2002
Population Population Population Population

Total Below 100% Below 135% Below 150% Below 200%
State Population FPL* FPL* FPL* FPL*
National Total 285,317,000 34,570,000 52,736,000 61,054,000 87,028,000
Alabama 4,432,000 640,000 979,000 1,094,000 1,490,000
Alaska 632,000 56,000 89,000 106,000 153,000
Arizona 5,424,000 735,000 1,120,000 1,305,000 1,791,000
Arkansas 2,690,000 532,000 695,000 808,000 1,086,000
California 35,068,000 4,605,000 7,092,000 8,406,000 11,563,000
Colorado 4,470,000 436,000 670,000 779,000 1,159,000
Connecticut 3,377,000 279,000 434,000 518,000 763,000
Delaware 796,000 73,000 112,000 130,000 197,000
Florida 16,391,000 2,058,000 3,297,000 3,818,000 5,438,000
Georgia 8,413,000 939,000 1,434,000 1,650,000 2,511,000
Hawaii 1,219,000 138,000 194,000 225,000 330,000
Idaho 1,296,000 147,000 235,000 292,000 437,000
Illinois 12,495,000 1,594,000 2,269,000 2,566,000 3,630,000
Indiana 6,086,000 552,000 908,000 1,097,000 1,730,000
Iowa 2,899,000 267,000 447,000 530,000 783,000
Kansas 2,681,000 269,000 407,000 496,000 725,000
Kentucky 4,033,000 571,000 849,000 976,000 1,370,000
Louisiana 4,445,000 777,000 1,137,000 1,336,000 1,688,000
Maine 1,265,000 170,000 245,000 280,000 408,000
Maryland 5,419,000 400,000 608,000 706,000 1,057,000
Massachusetts 6,469,000 648,000 977,000 1,134,000 1,563,000
Michigan 9,897,000 1,152,000 1,715,000 1,919,000 2,861,000
Minnesota 5,044,000 325,000 540,000 668,000 1,016,000
Mississippi 2,785,000 513,000 780,000 891,000 1,127,000
Missouri 5,581,000 551,000 864,000 1,012,000 1,487,000
Montana 902,000 122,000 202,000 244,000 331,000
Nebraska 1,700,000 181,000 289,000 328,000 474,000
Nevada 2,114,000 188,000 357,000 430,000 657,000
New Hampshire 1,264,000 73,000 117,000 147,000 242,000
New Jersey 8,585,000 681,000 1,060,000 1,237,000 1,862,000
New Mexico 1,837,000 328,000 475,000 540,000 747,000
New York 19,224,000 2,690,000 3,868,000 4,434,000 6,115,000
North Carolina 8,146,000 1,165,000 1,711,000 2,003,000 2,801,000
North Dakota 632,000 73,000 113,000 130,000 194,000
Ohio 11,253,000 1,099,000 1,727,000 2,054,000 3,034,000
Oklahoma 3,473,000 489,000 761,000 875,000 1,232,000
Oregon 3,503,000 380,000 638,000 761,000 1,059,000
Pennsylvania 12,168,000 1,152,000 1,902,000 2,209,000 3,238,000
Rhode Island 1,055,000 116,000 175,000 200,000 276,000
South Carolina 3,989,000 568,000 824,000 963,000 1,290,000
South Dakota 743,000 85,000 131,000 153,000 234,000
Tennessee 5,655,000 839,000 1,236,000 1,368,000 1,934,000
Texas 21,482,000 3,362,000 5,066,000 5,710,000 8,348,000
Utah 2,308,000 228,000 395,000 452,000 655,000
Vermont 616,000 61,000 99,000 115,000 164,000
Virginia 7,108,000 702,000 986,000 1,113,000 1,739,000
Washington 5,988,000 657,000 1,075,000 1,194,000 1,678,000
West Virginia 1,747,000 293,000 438,000 520,000 720,000
Wisconsin 5,463,000 467,000 786,000 893,000 1,300,000
Wyoming 488,000 44,000 72,000 90,000 151,000
*FPL- Federal Poverty Level
Source: U.S. Department of Commerce, Bureau of the Census, Current Population Survey, 2003 Annual Social and
Economic Supplement, March 2003.
3-10
Poverty Status - Percentages, 2002
Percent Percent Percent Percent

Total Below 100% Below 135% Below 150% Below 200%
State Population FPL* FPL* FPL* FPL*
National Total 285,317,000 12.1% 22.1% 21.4% 30.5%
Alabama 4,432,000 14.5% 14.1% 24.7% 33.6%
Alaska 632,000 8.8% 20.6% 16.7% 24.2%
Arizona 5,424,000 13.5% 25.8% 24.1% 33.0%
Arkansas 2,690,000 19.8% 20.2% 30.0% 40.4%
California 35,068,000 13.1% 15.0% 24.0% 33.0%
Colorado 4,470,000 9.8% 12.9% 17.4% 25.9%
Connecticut 3,377,000 8.3% 14.0% 15.3% 22.6%
Delaware 796,000 9.1% 23.4% 16.3% 24.7%
Florida 16,391,000 12.6% 17.0% 23.3% 33.2%
Georgia 8,413,000 11.2% 15.9% 19.6% 29.8%
Hawaii 1,219,000 11.3% 18.2% 18.5% 27.1%
Idaho 1,296,000 11.3% 18.2% 22.5% 33.7%
Illinois 12,495,000 12.8% 14.9% 20.5% 29.1%
Indiana 6,086,000 9.1% 15.4% 18.0% 28.4%
Iowa 2,899,000 9.2% 15.2% 18.3% 27.0%
Kansas 2,681,000 10.1% 21.0% 18.5% 27.0%
Kentucky 4,033,000 14.2% 25.6% 24.2% 34.0%
Louisiana 4,445,000 17.5% 19.4% 30.1% 38.0%
Maine 1,265,000 13.4% 11.2% 22.2% 32.2%
Maryland 5,419,000 7.4% 15.1% 13.0% 19.5%
Massachusetts 6,469,000 10.0% 17.3% 17.5% 24.2%
Michigan 9,897,000 11.6% 10.7% 19.4% 28.9%
Minnesota 5,044,000 6.5% 28.0% 13.2% 20.1%
Mississippi 2,785,000 18.4% 15.5% 32.0% 40.5%
Missouri 5,581,000 9.9% 22.4% 18.1% 26.7%
Montana 902,000 13.5% 17.0% 27.0% 36.7%
Nebraska 1,700,000 10.6% 16.9% 19.3% 27.9%
Nevada 2,114,000 8.9% 9.2% 20.3% 31.1%
New Hampshire 1,264,000 5.8% 12.4% 11.6% 19.1%
New Jersey 8,585,000 7.9% 25.9% 14.4% 21.7%
New Mexico 1,837,000 17.9% 20.1% 29.4% 40.7%
New York 19,224,000 14.0% 21.0% 23.1% 31.8%
North Carolina 8,146,000 14.3% 17.9% 24.6% 34.4%
North Dakota 632,000 11.6% 15.3% 20.6% 30.7%
Ohio 11,253,000 9.8% 21.9% 18.3% 27.0%
Oklahoma 3,473,000 14.1% 18.2% 25.2% 35.5%
Oregon 3,503,000 10.9% 15.6% 21.7% 30.2%
Pennsylvania 12,168,000 9.5% 16.5% 18.2% 26.6%
Rhode Island 1,055,000 11.0% 20.7% 18.9% 26.2%
South Carolina 3,989,000 14.3% 17.6% 24.2% 32.3%
South Dakota 743,000 11.5% 21.9% 20.5% 31.5%
Tennessee 5,655,000 14.8% 23.6% 24.2% 34.2%
Texas 21,482,000 15.6% 17.1% 26.6% 38.9%
Utah 2,308,000 9.9% 16.1% 19.6% 28.4%
Vermont 616,000 9.9% 13.9% 18.7% 26.7%
Virginia 7,108,000 9.9% 17.9% 15.7% 24.5%
Washington 5,988,000 11.0% 25.1% 19.9% 28.0%
West Virginia 1,747,000 16.8% 14.4% 29.8% 41.2%
Wisconsin 5,463,000 8.6% 14.7% 16.3% 23.8%
Wyoming 488,000 9.0% 22.1% 18.4% 30.9%
*FPL- Federal Poverty Level
Source: U.S. Department of Commerce, Bureau of the Census, Current Population Survey, 2003 Annual Social and Economic Supplement, March 2003.
3-11
Employment Status, 2003*
Total Civilian Population Unemployment

State Population Labor Force Unemployed Rate
221,168,000
National Total
146,510,000 8,774,000 6.0%
Alabama 3,442,000 2,147,000 125,000 5.8%
Alaska 459,000 332,000 27,000 8.0%
Arizona 4,131,000 2,690,000 151,000 5.6%
Arkansas 2,071,000 1,265,000 78,000 6.2%
California 26,490,000 17,460,000 1,177,000 6.7%
Colorado 3,440,000 2,478,000 150,000 6.0%
Connecticut 2,680,000 1,803,000 99,000 5.5%
Delaware 625,000 417,000 18,000 4.4%
District of Columbia 454,000 302,000 21,000 7.0%
Florida 13,211,000 8,164,000 420,000 5.1%
Georgia 6,431,000 4,414,000 207,000 4.7%
Hawaii 944,000 618,000 27,000 4.3%
Idaho 1,013,000 693,000 37,000 5.4%
Illinois 9,583,000 6,330,000 422,000 6.7%
Indiana 4,679,000 3,188,000 163,000 5.1%
Iowa 2,286,000 1,612,000 72,000 4.5%
Kansas 2,049,000 1,434,000 77,000 5.4%
Kentucky 3,153,000 1,956,000 120,000 6.2%
Louisiana 3,348,000 2,037,000 134,000 6.6%
Maine 1,039,000 693,000 35,000 5.1%
Maryland 4,181,000 2,904,000 131,000 4.5%
Massachusetts 5,028,000 3,416,000 198,000 5.8%
Michigan 7,706,000 5,042,000 368,000 7.3%
Minnesota 3,896,000 2,923,000 145,000 5.0%
Mississippi 2,138,000 1,312,000 83,000 6.3%
Missouri 4,352,000 3,021,000 170,000 5.6%
Montana 714,000 475,000 22,000 4.7%
Nebraska 1,318,000 976,000 39,000 4.0%
Nevada 1,686,000 1,141,000 59,000 5.2%
New Hampshire 1,005,000 719,000 31,000 4.3%
New Jersey 6,619,000 4,375,000 257,000 5.9%
New Mexico 1,401,000 897,000 57,000 6.4%
New York 14,891,000 9,315,000 589,000 6.3%
North Carolina 6,328,000 4,230,000 273,000 6.5%
North Dakota 490,000 346,000 14,000 4.0%
Ohio 8,771,000 5,915,000 363,000 6.1%
Oklahoma 2,646,000 1,696,000 96,000 5.7%
Oregon 2,770,000 1,859,000 152,000 8.2%
Pennsylvania 9,663,000 6,170,000 344,000 5.6%
Rhode Island 844,000 573,000 30,000 5.3%
South Carolina 3,142,000 2,003,000 136,000 6.8%
South Dakota 576,000 425,000 15,000 3.6%
Tennessee 4,501,000 2,909,000 169,000 5.8%
Texas 16,047,000 10,910,000 738,000 6.8%
Utah 1,660,000 1,184,000 67,000 5.6%
Vermont 494,000 351,000 16,000 4.6%
Virginia 5,532,000 3,773,000 154,000 4.1%
Washington 4,697,000 3,140,000 237,000 7.5%
West Virginia 1,442,000 787,000 48,000 6.1%
Wisconsin 4,224,000 3,078,000 174,000 5.6%
Wyoming 387,000 278,000 12,000 4.4%
*This information was compiled from the U.S. Department of Labor, Bureau of Labor Statistics News Release on State and
Regional Unemployment, 2003 Annual Averages, released on February 27, 2004. 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, February 27, 2004.
3-12
Medicaid/Medicare Certified Facilities, 2003
Skilled Nursing ICF-MR Home Health Rural Health

State Hospitals Facilities Facilities Agencies Clinics
National Total* 5,988 14,926 6,606 7,163 3,401
Alabama 122 225 7 140 61
Alaska 24 14 0 15 6
Arizona 89 134 13 62 6
Arkansas 108 199 41 174 72
California 437 1,256 1,109 604 244
Colorado 84 194 3 129 37
Connecticut 46 252 120 83 0
Delaware 10 37 2 14 0
District of Columbia 14 20 126 15 0
Florida 235 689 107 421 148
Georgia 176 333 13 97 102
Hawaii 27 41 17 14 0
Idaho 47 77 66 49 42
Illinois 216 673 309 298 197
Indiana 157 489 562 161 50
Iowa 119 359 130 180 127
Kansas 150 263 37 131 172
Kentucky 116 296 14 108 105
Louisiana 214 285 480 228 52
Maine 41 120 21 31 46
Maryland 65 233 4 45 0
Massachusetts 112 468 7 114 0
Michigan 176 394 1 212 158
Minnesota 147 404 225 223 68
Mississippi 105 164 13 60 128
Missouri 137 477 20 160 248
Montana 64 100 2 46 40
Nebraska 94 177 4 62 76
Nevada 41 42 19 45 6
New Hampshire 30 70 1 36 19
New Jersey 106 356 9 52 0
New Mexico 53 71 44 58 10
New York 249 669 720 198 9
North Carolina 139 420 330 169 111
North Dakota 50 83 66 30 64
Ohio 211 929 421 351 16
Oklahoma 151 256 68 186 48
Oregon 62 121 1 59 36
Pennsylvania 246 723 194 279 44
Rhode Island 15 95 5 21 1
South Carolina 76 178 132 71 90
South Dakota 67 90 1 47 56
Tennessee 152 305 83 138 37
Texas 499 1,011 909 1,045 338
Utah 48 80 14 47 15
Vermont 16 42 1 12 18
Virginia 109 244 21 156 52
Washington 101 249 14 61 104
West Virginia 66 121 61 65 64
Wisconsin 140 365 37 123 59
Wyoming 29 33 2 38 19
*National total does not include certified facilities in Puerto Rico and U.S. territories.
Source: OSCAR Report 10. Facility Counts: Active Providers. CMS, Center for Medicaid and State Operations, December
9, 2003.
3-13
Licensed Pharmacies (As of June 30, 2003)*
Hospital/ Independent Out-of-State or

Total Institutional Community Chain Pharmacies Non-Resident
State Pharmacies Pharmacies Pharmacies (Four or More) Pharmacies
National Total 78,505 8,729 20,249 15,835 11,756
Alabama 1,873 165 744 578 361
Alaska 158 (G) 17 (H) 264
Arizona 1,872 149 204 1,033 257
Arkansas 745 186 415 330 182
California 6,204 602 202
Colorado 1,083 424
Connecticut 605 (D) 50 (D) 168 (D) 437 (D) 277 (D)
Delaware 165 11 31 134 258
District of Columbia 123 13 27 61 0
Florida 6,567 2,097 4,098 (A) (A) 341
Georgia 3,689 205 (P) (P)
Hawaii 224 162
Idaho 639 69 255 (A, E) 231
Illinois 2,451 342 2,183 (A) (A) 296
Indiana 1,367 205 371
Iowa 1,242 130 (F) 791 (A, F) (A) 301
Kansas 802 172 630 (A) 332
Kentucky 1,514 138 475 749 176
Louisiana 1,818 179 573 541 353
Maine 290 42 187
Maryland 1,425 (I) 66 155 689 296
Massachusetts 1,048 (J) 158 250 740 0
Michigan 2547 150
Minnesota 1,471 138 537 545 280
Mississippi 962 130 220
Missouri 1,543 (K) 173 646 661 371
Montana 317 99 153
Nebraska 487 255 (L)
Nevada 731 268
New Hampshire 269 32 39 177 245
New Jersey 2,489
New Mexico 612 61 298 (A) 283
New York 4,518 493 (Q) 1,993 2,029 91
North Carolina 2,062 (F) 161 561 968 259
North Dakota 530 43 149 32 249
Ohio 2,953 (N) 219 559 1,581 328
Oklahoma 1,304 81 (D) 860 (A) (A) 343
Oregon 1,119 122 310 457 242
Pennsylvania 3,148 291 0
Rhode Island 191 20 41 5 227
South Carolina 1,132 346
South Dakota 507 44 130 89 254
Tennessee 1,852 405 508 822 117
Texas 5,753 (B) 847 1,720 2,430 289
Utah 280 99 415 (A) A 246
Vermont 155 18 139 0
Virginia 1,515 426
Washington 1,588 228 (C) 345 747 268
West Virginia 544 308
Wisconsin 1,286 0
Wyoming 134 (F) 29 276
*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: 2003-2004 National Association of Boards of Pharmacy, Survey of Pharmacy Law.
3-14
LEGEND
A — Chains included in independent community pharmacies figure.

B — Also licenses 873 nuclear, public health, clinic, ambulatory surgical center, and HMO pharmacies.
C — Includes 121 hospital, 23 nursing home, 18 home infusion, 8 nuclear, 40 HMO, and 18 other pharmacies.
D — Approximately.
E — Plus 22 limited service and 61 parenteral admixture pharmacies.
F — In-state.
G — Includes 21 wholesalers drug distributors.
H — Drug rooms.
I — Total includes other areas not listed: clinic, correctional, HMO, nursing home, IV, nuclear, research, and other.
89 pharmacies have waiver (specialty) permits. Board issued 582 distributor permits.
J — Total also includes home IV and mail-order pharmacies.
K — Includes the following pharmacy categories: 30 long-term care, 17 home health, 8 radiopharmaceutical, 2 renal
dialysis, 1 sterile pharmaceuticals, 2 consultants pharmacies.
L — Nebraska “registers” out-of-state pharmacies.
N — Includes 263 nuclear, clinic, fluid therapy, mail-order, specialty, and pharmacies serving nursing homes only.
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.
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, 2001/2003
# FTE # FTE
Registered Registered Nurses* Pharmacists** Pharmacists**
State Nurses* per 1,000 population (Licensed by State) per 1,000 population
National Total 962,195 3.4 356,201 1.2
Alabama 17,143 3.8 6,006 1.3
Alaska 2,339 3.7 632 1.0
Arizona 13,058 2.5 7,832 1.4
Arkansas 9,898 3.7 3,680 1.4
California 85,878 2.5 31,133 0.9
Colorado 12,034 2.7 5,586 1.2
Connecticut 9,930 2.9 4,454 1.3
Delaware 2,971 3.7 1,287 1.6
District of Columbia 5,011 8.7 1,564 2.8
Florida 56,078 3.4 20,052 1.2
Georgia 28,447 3.4 10,474 1.2
Hawaii 3,470 2.8 1,556 1.2
Idaho 3,599 2.7 1,569 1.1
Illinois 45,501 3.6 13,151 1.0
Indiana 21,436 3.5 8,480 1.4
Iowa 12,404 4.2 5,034 1.7
Kansas 9,102 3.4 3,584 1.3
Kentucky 16,213 4.0 5,008 1.2
Louisiana 17,274 3.9 5,890 1.3
Maine 5,265 4.1 1,267 1.0
Maryland 16,623 3.1 7,153 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 6,023 1.2
Mississippi 12,356 4.3 3,483 1.2
Missouri 23,650 4.2 7,149 1.3
Montana 3,205 3.5 1,503 1.6
Nebraska 7,249 4.2 2,664 1.5
Nevada 5,084 2.4 8,359 3.7
New Hampshire 4,206 3.3 1,920 1.5
New Jersey 28,082 3.3 16,245 1.9
New Mexico 5,258 2.9 2,434 1.3
New York 72,057 3.8 18,448 1.0
North Carolina 32,695 4.0 9,669 1.2
North Dakota 3,175 5.0 2,132 3.4
Ohio 43,869 3.9 14,476 1.3
Oklahoma 10,827 3.1 4,750 1.4
Oregon 11,674 3.4 4,091 1.1
Pennsylvania 48,786 4.0 17,219 1.4
Rhode Island 2,850 2.7 1,788 1.7
South Carolina 14,942 3.7 5,221 1.3
South Dakota 3,829 5.1 1,429 1.9
Tennessee 20,777 3.6 7,397 1.3
Texas 65,056 3.0 21,245 1.0
Utah 5,446 2.4 2,171 0.9
Vermont 1,656 2.7 830 1.3
Virginia 23,152 3.2 8,605 1.2
Washington 15,440 2.6 6,955 1.1
West Virginia 9,307 5.2 2,973 1.6
Wisconsin 16,878 3.1 5,737 1.0
Wyoming 1,666 3.4 997 2.0
*FTE- Full-time equivalent employees as of 2001
**As of June 30, 2003
Source: USDHHS, HRSA, Bureau of Health Professions, National Center for Health Workforce Information & Analysis,
Area Resource File, February 2003. 2003-2004 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 2001 2002 % Change 2001-2002

National Total $24,656,812,921 $29,339,050,970 19.0%
Alabama $386,876,131 $452,269,953 16.9%
Alaska $55,754,050 $70,708,412 26.8%
Arizona $2,573,205 $3,725,371 44.8%
Arkansas $241,558,369 $273,257,660 13.1%
California $2,984,162,770 $3,591,537,830 20.4%
Colorado $166,000,664 $189,717,036 14.3%
Connecticut $304,780,286 $357,919,257 17.4%
Delaware $81,156,928 $97,750,161 20.4%
District of Columbia $63,504,500 $66,129,208 4.1%
Florida $1,475,766,739 $1,717,652,527 16.4%
Georgia $735,944,558 $873,703,133 18.7%
Hawaii $74,869,859 $88,256,904 17.9%
Idaho $102,975,196 $119,177,013 15.7%
Illinois $884,018,166 $1,293,435,797 46.3%
Indiana $561,642,082 $631,637,846 12.5%
Iowa $234,716,795 $285,467,642 21.6%
Kansas $185,017,060 $213,778,616 15.5%
Kentucky $592,096,755 $652,904,065 10.3%
Louisiana $585,388,809 $714,107,841 22.0%
Maine $191,785,942 $220,420,714 14.9%
Maryland $244,203,084 $297,291,733 21.7%
Massachusetts $797,859,072 $958,972,520 20.2%
Michigan $584,670,445 $674,222,281 15.3%
Minnesota $265,726,228 $310,174,144 16.7%
Mississippi $493,177,297 $567,313,801 15.0%
Missouri $675,647,147 $790,853,387 17.1%
Montana $72,577,455 $83,587,410 15.2%
Nebraska $170,897,014 $207,782,737 21.6%
Nevada $61,500,721 $86,929,536 41.3%
New Hampshire $91,703,067 $99,682,997 8.7%
New Jersey $651,442,945 $694,669,924 6.6%
New Mexico $57,995,801 $73,877,785 27.4%
New York $2,986,292,455 $3,660,427,024 22.6%
North Carolina $984,653,306 $1,100,822,176 11.8%
North Dakota $44,067,986 $52,495,878 19.1%
Ohio $1,099,697,768 $1,333,992,298 21.3%
Oklahoma $171,188,873 $285,068,869 66.5%
Oregon $228,670,426 $279,029,096 22.0%
Pennsylvania $692,665,382 $718,210,352 3.7%
Rhode Island $102,708,476 $125,187,888 21.9%
South Carolina $438,897,100 $451,846,044 3.0%
South Dakota $51,748,770 $62,382,937 20.5%
Tennessee $681,454,847 $905,405,421 32.9%
Texas $1,325,987,804 $1,591,064,713 20.0%
Utah $117,170,006 $140,275,267 19.7%
Vermont $104,250,880 $114,157,870 9.5%
Virginia $417,689,526 $458,953,342 9.9%
Washington $458,332,414 $541,963,790 18.2%
West Virginia $259,638,952 $277,039,990 6.7%
Wisconsin $382,272,975 $442,718,195 15.8%
Wyoming $31,435,835 $39,094,579 24.4%
*Rebates have not been subtracted from these figures.
Source: CMS, CMS-64 Report, FY 2001 and FY 2002.
4-5
Ranking Based on Drug Expenditures*
% of 2002 National
2002 2002 Medicaid Drug 2001 2001
State Payments Ranking Expenditures Payments Ranking
National Total $29,339,050,970 $24,656,812,921
New York $3,660,427,024 1 12.5% $2,986,292,455 1
California $3,591,537,830 2 12.2% $2,984,162,770 2
Florida $1,717,652,527 3 5.9% $1,475,766,739 3
Texas $1,591,064,713 4 5.4% $1,325,987,804 4
Ohio $1,333,992,298 5 4.5% $1,099,697,768 5
Illinois $1,293,435,797 6 4.4% $884,018,166 7
North Carolina $1,100,822,176 7 3.8% $984,653,306 6
Massachusetts $958,972,520 8 3.3% $797,859,072 8
Tennessee $905,405,421 9 3.1% $681,454,847 11
Georgia $873,703,133 10 3.0% $735,944,558 9
Missouri $790,853,387 11 2.7% $675,647,147 12
Pennsylvania $718,210,352 12 2.4% $692,665,382 10
Louisiana $714,107,841 13 2.4% $585,388,809 15
New Jersey $694,669,924 14 2.4% $651,442,945 13
Michigan $674,222,281 15 2.3% $584,670,445 16
Kentucky $652,904,065 16 2.2% $592,096,755 14
Indiana $631,637,846 17 2.2% $561,642,082 17
Mississippi $567,313,801 18 1.9% $493,177,297 18
Washington $541,963,790 19 1.8% $458,332,414 19
Virginia $458,953,342 20 1.6% $417,689,526 21
Alabama $452,269,953 21 1.5% $386,876,131 22
South Carolina $451,846,044 22 1.5% $438,897,100 20
Wisconsin $442,718,195 23 1.5% $382,272,975 23
Connecticut $357,919,257 24 1.2% $304,780,286 24
Minnesota $310,174,144 25 1.1% $265,726,228 25
Maryland $297,291,733 26 1.0% $244,203,084 27
Iowa $285,467,642 27 1.0% $234,716,795 29
Oklahoma $285,068,869 28 1.0% $171,188,873 33
Oregon $279,029,096 29 1.0% $228,670,426 30
West Virginia $277,039,990 30 0.9% $259,638,952 26
Arkansas $273,257,660 31 0.9% $241,558,369 28
Maine $220,420,714 32 0.8% $191,785,942 31
Kansas $213,778,616 33 0.7% $185,017,060 32
Nebraska $207,782,737 34 0.7% $170,897,014 34
Colorado $189,717,036 35 0.6% $166,000,664 35
Utah $140,275,267 36 0.5% $117,170,006 36
Rhode Island $125,187,888 37 0.4% $102,708,476 39
Idaho $119,177,013 38 0.4% $102,975,196 38
Vermont $114,157,870 39 0.4% $104,250,880 37
New Hampshire $99,682,997 40 0.3% $91,703,067 40
Delaware $97,750,161 41 0.3% $81,156,928 41
Hawaii $88,256,904 42 0.3% $74,869,859 42
Nevada $86,929,536 43 0.3% $61,500,721 45
Montana $83,587,410 44 0.3% $72,577,455 43
New Mexico $73,877,785 45 0.3% $57,995,801 46
Alaska $70,708,412 46 0.2% $55,754,050 47
Dist. of Columbia $66,129,208 47 0.2% $63,504,500 44
South Dakota $62,382,937 48 0.2% $51,748,770 48
North Dakota $52,495,878 49 0.2% $44,067,986 49
Wyoming $39,094,579 50 0.1% $31,435,835 50
Arizona $3,725,371 51 0.0% $2,573,205 51
Source: CMS, HCFA-64 Report, FY 2001 and FY 2002.
4-6
Drugs as a Percentage of Total Net Expenditures, 2002
Total Medicaid
Net Medical Assistance Total Drug % of Total
State Expenditures Expenditures* Net Expenditures
National Total $245,697,620,676 $29,339,050,970 11.9%
Alabama $3,093,270,640 $452,269,953 14.6%
Alaska $685,772,985 $70,708,412 10.3%
Arizona $3,541,598,721 $3,725,371 0.1%
Arkansas $2,237,817,554 $273,257,660 12.2%
California $26,890,540,967 $3,591,537,830 13.4%
Colorado $2,323,068,699 $189,717,036 8.2%
Connecticut $3,456,338,545 $357,919,257 10.4%
Delaware $634,046,351 $97,750,161 15.4%
District of Columbia $1,021,772,693 $66,129,208 6.5%
Florida $9,871,508,234 $1,717,652,527 17.4%
Georgia $6,241,211,454 $873,703,133 14.0%
Hawaii $740,007,314 $88,256,904 11.9%
Idaho $773,534,776 $119,177,013 15.4%
Illinois $8,809,060,004 $1,293,435,797 14.7%
Indiana $4,448,318,143 $631,637,846 14.2%
Iowa $2,575,146,342 $285,467,642 11.1%
Kansas $1,836,717,196 $213,778,616 11.6%
Kentucky $3,763,204,047 $652,904,065 17.3%
Louisiana $4,885,971,853 $714,107,841 14.6%
Maine $1,430,109,134 $220,420,714 15.4%
Maryland $3,613,476,100 $297,291,733 8.2%
Massachusetts $8,063,005,258 $958,972,520 11.9%
Michigan $7,562,053,407 $674,222,281 8.9%
Minnesota $4,414,511,470 $310,174,144 7.0%
Mississippi $2,877,013,521 $567,313,801 19.7%
Missouri $5,360,607,640 $790,853,387 14.8%
Montana $571,456,455 $83,587,410 14.6%
Nebraska $1,339,132,070 $207,782,737 15.5%
Nevada $808,198,344 $86,929,536 10.8%
New Hampshire $1,016,094,814 $99,682,997 9.8%
New Jersey $7,745,877,997 $694,669,924 9.0%
New Mexico $1,776,811,688 $73,877,785 4.2%
New York $36,295,107,368 $3,660,427,024 10.1%
North Carolina $6,723,598,560 $1,100,822,176 16.4%
North Dakota $461,401,546 $52,495,878 11.4%
Ohio $9,658,040,587 $1,333,992,298 13.8%
Oklahoma $2,260,403,490 $285,068,869 12.6%
Oregon $2,571,560,664 $279,029,096 10.9%
Pennsylvania $12,130,925,035 $718,210,352 5.9%
Rhode Island $1,358,500,649 $125,187,888 9.2%
South Carolina $3,292,901,444 $451,846,044 13.7%
South Dakota $549,884,391 $62,382,937 11.3%
Tennessee $5,787,079,096 $905,405,421 15.6%
Texas $13,523,486,149 $1,591,064,713 11.8%
Utah $984,160,785 $140,275,267 14.3%
Vermont $660,731,979 $114,157,870 17.3%
Virginia $3,812,166,436 $458,953,342 12.0%
Washington $5,168,511,470 $541,963,790 10.5%
West Virginia $1,584,166,286 $277,039,990 17.5%
Wisconsin $4,193,175,197 $442,718,195 10.6%
Wyoming $274,565,128 $39,094,579 14.2%
Source: CMS, CMS-64 Report, FY 2002.
4-7
Drugs as a Percentage of Total Net Expenditures, 2000-2002*
State 2000 2001 2002

National Total 10.5% 11.4% 11.9%
Alabama 12.4% 13.5% 14.6%
Alaska 9.3% 9.7% 10.3%
Arizona 0.1% 0.1% 0.1%
Arkansas 13.1% 13.0% 12.2%
California 11.7% 12.5% 13.4%
Colorado 7.4% 7.7% 8.2%
Connecticut 8.5% 9.5% 10.4%
Delaware 12.6% 13.7% 15.4%
District of Columbia 6.7% 6.5% 6.5%
Florida 18.1% 17.2% 17.4%
Georgia 13.4% 14.6% 14.0%
Hawaii 9.6% 11.8% 11.9%
Idaho 14.2% 14.9% 15.4%
Illinois 10.8% 11.4% 14.7%
Indiana 13.3% 14.0% 14.2%
Iowa 12.0% 14.1% 11.1%
Kansas 11.7% 11.0% 11.6%
Kentucky 15.3% 17.9% 17.3%
Louisiana 14.8% 13.9% 14.6%
Maine 14.4% 14.6% 15.4%
Maryland 6.8% 7.5% 8.2%
Massachusetts 11.0% 12.1% 11.9%
Michigan 5.9% 8.1% 8.9%
Minnesota 7.0% 6.9% 7.0%
Mississippi 18.6% 20.2% 19.7%
Missouri 15.1% 14.2% 14.8%
Montana 13.4% 15.0% 14.6%
Nebraska 13.7% 14.4% 15.5%
Nevada 8.4% 9.1% 10.8%
New Hampshire 10.3% 10.5% 9.8%
New Jersey 9.9% 9.1% 9.0%
New Mexico 4.0% 4.0% 4.2%
New York 8.4% 9.5% 10.1%
North Carolina 14.7% 16.0% 16.4%
North Dakota 9.1% 10.8% 11.4%
Ohio 11.8% 13.0% 13.8%
Oklahoma 10.2% 8.5% 12.6%
Oregon 8.0% 8.6% 10.9%
Pennsylvania 5.7% 6.3% 5.9%
Rhode Island 7.8% 8.6% 9.2%
South Carolina 13.1% 14.5% 13.7%
South Dakota 11.2% 11.1% 11.3%
Tennessee 5.5% 12.4% 15.6%
Texas 10.6% 11.4% 11.8%
Utah 12.5% 14.1% 14.3%
Vermont 16.6% 17.3% 17.3%
Virginia 14.2% 13.8% 12.0%
Washington 10.0% 10.6% 10.5%
West Virginia 15.6% 16.8% 17.5%
Wisconsin 10.6% 9.6% 10.6%
Wyoming 12.6% 12.9% 14.2%
*Percentages are based on figures that have not had rebates subtracted from them.
Source: CMS, HCFA-64 Report, FY 2000 - FY 2002.
4-8
Share of Drug Expenditures by Category, 2002
Hormones and
Central Nervous Cardiovascular Anti-Infective Gastrointestinal Synthetic
State System Drugs Drugs Agents Drugs Substitutes
National Total $11,110,878,554 $3,309,235,175 $3,123,794,684 $2,220,293,730 $2,450,336,932
Alabama $162,427,968 $58,939,919 $53,191,197 $19,724,615 $47,715,140
Alaska $40,138,250 $6,871,390 $8,258,256 $8,448,493 $5,749,324
Arizona* - - - - -
Arkansas $104,327,247 $28,178,010 $34,062,548 $17,516,577 $25,063,050
California $1,326,623,035 $496,583,694 $340,238,011 $299,960,881 $408,010,804
Colorado $83,397,713 $18,457,938 $14,225,625 $19,891,233 $15,025,084
Connecticut $160,777,341 $40,992,549 $32,005,763 $30,864,193 $24,067,812
Delaware $33,137,878 $8,754,892 $14,857,621 $7,558,824 $7,523,594
District of Columbia $16,566,443 $8,980,540 $15,878,461 $2,293,635 $4,126,743
Florida $567,979,172 $187,207,113 $287,185,968 $128,405,638 $126,663,957
Georgia $293,303,215 $94,504,922 $116,609,831 $37,372,052 $73,825,742
Hawaii $34,086,249 $13,717,144 $7,463,253 $3,648,598 $8,519,468
Idaho $51,034,605 $7,528,366 $12,505,892 $8,638,278 $8,818,138
Illinois $350,382,552 $122,510,875 $119,743,795 $81,780,842 $91,373,328
Indiana $261,850,680 $56,525,273 $52,568,049 $43,805,799 $49,950,818
Iowa $133,389,066 $26,919,865 $25,133,166 $17,166,772 $23,699,984
Kansas $92,620,891 $18,956,370 $14,404,125 $16,375,484 $16,126,439
Kentucky $246,745,840 $76,276,780 $59,717,916 $47,258,191 $57,303,474
Louisiana $215,776,810 $77,561,164 $98,070,631 $50,354,434 $58,436,886
Maine $102,697,707 $32,706,097 $15,813,854 $20,571,791 $23,502,715
Maryland $155,536,684 $34,300,423 $25,569,033 $22,383,011 $18,483,071
Massachusetts $430,570,903 $92,069,851 $97,049,019 $71,551,884 $65,280,437
Michigan $340,976,049 $73,768,758 $39,031,663 $45,338,916 $48,709,565
Minnesota $168,448,868 $22,183,423 $20,695,558 $24,111,242 $22,047,764
Mississippi $163,971,736 $74,830,740 $57,550,451 $38,835,119 $47,224,420
Missouri $345,195,541 $88,695,064 $76,038,064 $40,234,018 $69,509,901
Montana $34,810,221 $6,010,486 $5,521,773 $7,116,556 $6,146,901
Nebraska $81,936,002 $16,357,515 $16,977,505 $18,138,100 $15,440,716
Nevada $38,425,453 $9,365,878 $9,266,546 $5,789,204 $6,733,244
New Hampshire $50,011,843 $8,064,813 $6,784,686 $7,427,069 $7,511,020
New Jersey $233,071,337 $84,618,207 $76,763,184 $55,305,576 $43,057,935
New Mexico $29,130,298 $9,205,694 $5,923,305 $8,455,563 $9,789,382
New York $1,140,536,063 $421,174,650 $582,777,416 $263,380,736 $292,497,125
North Carolina $378,957,583 $131,377,542 $110,556,228 $122,152,344 $91,412,449
North Dakota $24,261,002 $4,805,781 $3,723,614 $4,123,091 $4,136,352
Ohio $548,273,256 $136,785,856 $117,486,151 $133,074,736 $106,110,103
Oklahoma $104,495,550 $29,741,991 $25,469,725 $16,950,080 $22,005,051
Oregon $167,833,786 $19,501,122 $17,189,123 $12,676,327 $18,126,559
Pennsylvania $277,892,318 $76,953,109 $50,334,104 $66,460,266 $52,304,661
Rhode Island $54,554,473 $15,629,844 $10,756,138 $12,760,847 $9,079,709
South Carolina $166,326,864 $65,363,553 $58,789,210 $26,958,237 $48,429,827
South Dakota $24,744,099 $4,278,404 $5,738,550 $5,566,752 $4,721,494
Tennessee $498,494,118 $126,602,215 $39,685,343 $80,012,408 $63,222,119
Texas $534,365,292 $170,623,922 $188,773,209 $105,134,911 $144,900,535
Utah $66,525,169 $9,033,014 $11,164,654 $10,721,510 $10,004,484
Vermont $15,204,207 $1,996,150 $4,094,728 $1,825,472 $3,386,327
Virginia $169,780,908 $56,516,797 $34,656,425 $49,598,408 $33,627,141
Washington $240,264,995 $52,602,760 $42,461,101 $42,712,396 $44,968,562
West Virginia $114,111,323 $35,490,850 $27,406,002 $15,554,339 $28,201,869
Wisconsin $219,043,257 $46,738,020 $29,955,583 $40,886,751 $34,911,470
Wyoming $15,866,694 $2,375,842 $3,672,631 $3,421,531 $2,854,239
* Data not reported for Arizona. Arizona has an 115 waiver for which special rules apply.
Source: CMS, State Drug Utilization Data, FY 2002
4-9
Share of Drug Expenditures by Category, 2002 (con't.)
Unclassified
Therapeutic Autonomic Blood Formation
State Agents Drugs and Coagulation Other Total
National Average $1,359,408,404 $1,310,216,943 $990,931,837 $3,558,911,926 $29,434,008,185
Alabama $22,738,666 $25,079,219 $14,344,026 $73,878,759 $478,039,509
Alaska $3,581,523 $3,755,322 $5,983,211 $7,629,178 $90,414,947
Arizona* - - - - -
Arkansas $13,863,613 $14,761,594 $12,118,144 $36,775,275 $286,666,058
California $157,970,901 $120,211,219 $209,658,251 $346,042,559 $3,705,299,355
Colorado $10,839,480 $9,701,591 $3,878,876 $20,711,072 $196,128,612
Connecticut $14,860,816 $13,959,149 $9,952,330 $36,195,541 $363,675,494
Delaware $4,793,777 $4,361,417 $2,059,247 $12,024,599 $95,071,849
Florida $93,146,712 $79,021,471 $65,139,602 $214,181,262 $1,748,930,895
Georgia $35,344,409 $51,251,712 $23,350,249 $135,189,926 $860,752,058
Hawaii $5,739,678 $3,682,979 $3,725,363 $9,623,486 $90,206,218
Idaho $4,702,849 $4,537,192 $2,090,222 $10,675,638 $110,531,180
Illinois $51,201,123 $49,711,098 $42,312,778 $125,591,419 $1,034,607,810
Indiana $30,428,285 $34,113,121 $30,588,581 $88,424,694 $648,255,300
Iowa $14,503,456 $14,515,299 $4,634,670 $30,708,063 $290,670,341
Kansas $8,882,991 $10,341,541 $2,710,267 $22,665,160 $203,083,268
Kentucky $32,858,754 $44,179,459 $16,546,274 $92,326,826 $673,213,514
Louisiana $28,664,540 $37,300,313 $22,766,784 $126,322,534 $715,254,096
Maine $11,567,546 $13,021,181 $7,032,641 $23,157,560 $250,071,092
Maryland $12,230,384 $9,621,667 $12,500,270 $27,905,071 $318,529,614
Massachusetts $39,070,997 $34,788,062 $25,993,252 $93,515,983 $949,890,388
Michigan $36,673,123 $28,611,197 $21,000,992 $78,003,615 $712,113,878
Minnesota $14,145,281 $12,275,238 $10,275,040 $28,487,965 $322,670,379
Mississippi $26,530,965 $26,109,283 $10,028,232 $71,978,643 $517,059,589
Missouri $39,157,120 $42,009,219 $27,370,560 $107,787,109 $835,996,596
Montana $4,849,421 $3,999,013 $1,873,361 $8,043,097 $78,370,829
Nebraska $8,345,459 $9,248,417 $4,526,460 $26,832,410 $197,802,584
Nevada $4,479,913 $4,540,225 $3,355,258 $10,558,557 $92,514,278
New Hampshire $4,030,559 $5,036,489 $1,726,064 $11,498,389 $102,090,932
New Jersey $33,208,357 $28,777,427 $31,413,603 $82,236,456 $668,452,082
New Mexico $4,858,911 $3,660,437 $2,321,704 $10,427,651 $83,772,945
New York $164,083,098 $144,160,697 $128,216,711 $448,781,131 $3,585,607,627
North Carolina $52,831,364 $47,151,722 $34,051,151 $154,246,658 $1,122,737,041
North Dakota $2,190,494 $2,402,271 $1,200,697 $6,203,497 $53,046,799
Ohio $61,882,420 $73,814,087 $31,269,079 $171,884,121 $1,380,579,809
Oklahoma $15,423,385 $14,719,001 $12,077,645 $32,175,743 $273,058,171
Oregon $11,165,553 $10,626,003 $3,269,333 $17,340,074 $277,727,880
Pennsylvania $36,543,215 $37,155,760 $28,115,340 $81,438,693 $707,197,466
Rhode Island $5,349,865 $4,968,045 $2,243,417 $12,019,287 $127,361,625
South Carolina $23,527,729 $22,180,993 $12,869,914 $73,393,454 $497,839,781
South Dakota $2,662,003 $3,005,290 $2,132,526 $8,156,411 $61,005,529
Tennessee $42,907,863 $35,886,456 $11,623,384 $74,216,876 $972,650,782
Texas $71,446,566 $79,465,180 $47,090,505 $281,968,505 $1,623,768,625
Utah $5,777,363 $5,309,763 $1,236,279 $15,712,079 $135,484,315
Vermont $1,538,173 $1,484,182 $910,603 $4,175,415 $34,615,257
Virginia $21,636,958 $22,121,039 $14,515,501 $57,867,501 $460,320,678
Washington $25,745,981 $22,298,725 $12,901,679 $54,928,168 $538,884,367
West Virginia $14,341,914 $16,315,461 $3,412,406 $35,444,231 $290,278,395
Wisconsin $23,072,206 $21,426,205 $9,215,035 $47,029,239 $472,277,766
Wyoming $1,985,352 $1,787,344 $1,242,658 $4,431,617 $37,637,908
* Data not reported for Arizona. Arizona has an 1115 waiver for which special rules apply.
Source: CMS, State Drug Utilization Data, FY 2002.
4-10
Share of Prescriptions Processed, 2002
Hormones and
Central Nervous Cardiovascular Anti-Infective Gastrointestinal Synthetic
State System Drugs Drugs Agents Drugs Substitutes
National Average 161,232,219 72,443,028 44,093,996 32,548,275 49,926,307
Alabama 2,941,431 1,474,573 1,048,966 502,468 1,071,095
Alaska 538,815 180,198 117,690 97,338 140,539
Arizona* - - - - -
Arkansas 1,603,598 760,062 702,941 271,296 565,683
California 15,214,602 7,876,231 4,083,588 3,385,060 5,529,844
Colorado 1,339,641 511,136 301,986 254,879 446,353
Connecticut 2,021,686 847,007 256,096 352,779 521,491
Delaware 488,341 174,105 163,401 86,189 151,233
Florida 8,038,952 4,449,917 2,573,795 1,684,045 2,578,311
Georgia 4,836,548 2,272,159 2,201,615 798,841 1,726,279
Hawaii 460,387 280,308 85,657 131,081 164,060
Idaho 730,380 186,130 241,834 90,662 219,364
Illinois 5,998,874 3,043,522 2,011,538 1,612,006 2,087,064
Indiana 4,105,446 1,344,857 1,021,660 961,743 1,083,084
Iowa 2,042,876 676,484 526,890 289,881 574,214
Kansas 1,283,667 478,864 292,629 224,830 403,111
Kentucky 3,958,848 1,798,630 1,260,103 1,031,820 1,255,859
Louisiana 3,565,125 1,748,774 1,618,788 627,664 1,234,697
Maine 1,816,121 992,273 346,253 307,138 669,930
Maryland 2,040,489 771,138 235,643 276,028 437,447
Massachusetts 6,184,586 2,193,033 1,121,462 871,999 1,597,184
Michigan 5,334,314 1,975,384 749,240 804,253 1,233,184
Minnesota 2,002,604 505,679 313,581 461,421 449,417
Mississippi 2,383,531 1,565,659 1,009,586 446,750 917,779
Missouri 4,817,043 2,017,339 1,126,028 822,151 1,473,030
Montana 524,752 149,104 123,537 95,044 154,526
Nebraska 1,273,870 419,270 399,375 343,820 369,585
Nevada 506,986 207,748 116,449 70,849 154,274
New Hampshire 782,217 221,431 135,110 168,121 180,316
New Jersey 3,019,679 1,720,151 565,815 618,302 871,468
New Mexico 514,776 232,761 120,054 123,271 264,285
New York 14,908,099 8,342,535 4,737,922 3,717,304 5,014,585
North Carolina 5,676,633 3,110,086 1,789,714 1,261,734 2,123,893
North Dakota 354,179 138,692 90,114 53,653 117,790
Ohio 8,874,351 3,367,729 2,171,902 2,251,991 2,532,337
Oklahoma 1,359,234 619,655 469,747 253,620 454,955
Oregon 2,482,014 536,975 271,375 274,184 497,490
Pennsylvania 4,061,265 1,930,258 844,456 920,012 1,260,625
Rhode Island 759,101 288,310 107,145 155,871 178,022
South Carolina 2,488,867 1,551,714 956,429 414,746 1,121,193
South Dakota 328,166 113,324 132,161 61,797 110,042
Tennessee 8,328,542 3,188,238 663,010 1,211,895 1,650,584
Texas 8,145,506 2,954,622 4,157,104 1,525,126 2,404,342
Utah 985,750 205,220 259,890 170,618 248,371
Vermont 233,990 44,219 73,282 24,002 63,883
Virginia 2,658,974 1,275,731 549,649 755,313 763,085
Washington 3,607,572 1,292,270 681,200 772,019 1,140,120
West Virginia 1,978,691 838,280 608,930 296,680 625,931
Wisconsin 3,167,088 1,321,310 496,952 541,168 945,241
Wyoming 225,374 57,548 85,788 40,063 63,362
*Data not reported for Arizona. Arizona has an 1115 waiver for which special rules apply.
4-11
Share of Prescriptions Processed, 2002 (con't)
Unclassified
Therapeutic Autonomic Blood Formation
State Agents Drugs and Coagulation Other Total
National Average 12,417,152 28,118,352 8,829,418 109,663,158 519,271,905
Alabama 236,233 593,690 176,967 2,577,154 10,622,577
Alaska 32,981 84,604 21,891 216,774 1,430,830
Arizona* - - - - -
Arkansas 147,559 304,771 78,382 1,211,543 5,645,835
California 1,251,287 2,391,533 1,171,076 9,602,912 50,506,133
Colorado 102,310 246,770 78,758 763,212 4,045,045
Connecticut 123,141 286,590 118,220 953,334 5,480,344
Delaware 39,794 100,817 17,248 332,518 1,553,646
Florida 814,906 1,488,860 462,674 5,505,188 27,596,648
Georgia 386,418 1,116,911 277,778 4,310,917 17,927,466
Hawaii 68,661 80,472 24,987 314,766 1,610,379
Idaho 45,247 110,953 22,090 335,525 1,982,185
Illinois 475,449 1,227,016 444,852 5,101,759 22,002,080
Indiana 265,303 693,573 221,927 2,856,633 12,554,226
Iowa 119,840 312,212 102,265 1,048,931 5,693,593
Kansas 86,239 209,318 62,517 706,425 3,747,600
Kentucky 350,628 828,775 218,980 3,124,789 13,828,432
Louisiana 283,139 799,945 225,964 3,561,044 13,665,140
Maine 139,597 319,159 82,503 836,581 5,509,555
Maryland 120,094 241,386 123,481 845,278 5,090,984
Massachusetts 350,189 882,646 224,809 2,622,424 16,048,332
Michigan 359,466 673,362 278,304 2,470,691 13,878,198
Minnesota 98,300 273,845 73,086 908,532 5,086,465
Mississippi 255,373 450,278 142,959 2,095,665 9,267,580
Missouri 334,079 848,195 263,580 3,036,239 14,737,684
Montana 36,544 92,105 19,000 260,368 1,454,980
Nebraska 84,578 209,544 64,395 978,024 4,142,461
Nevada 46,298 100,059 19,587 262,239 1,484,489
New Hampshire 42,495 110,132 31,078 421,656 2,092,556
New Jersey 303,410 504,862 182,297 2,056,526 9,842,510
New Mexico 42,822 87,788 34,673 415,945 1,836,375
New York 1,383,908 3,156,479 756,500 12,587,023 54,604,355
North Carolina 527,568 1,035,032 280,164 4,328,993 20,133,817
North Dakota 23,616 52,035 19,627 214,883 1,064,589
Ohio 605,376 1,656,240 489,554 6,456,527 28,406,007
Oklahoma 131,804 278,564 51,310 851,206 4,470,095
Oregon 97,919 260,718 65,043 738,907 5,224,625
Pennsylvania 371,915 710,505 424,057 2,555,642 13,078,735
Rhode Island 50,658 111,718 34,459 372,418 2,057,702
South Carolina 228,975 458,400 129,353 2,036,447 9,386,124
South Dakota 25,509 59,709 19,269 243,295 1,093,272
Tennessee 416,508 848,942 296,281 3,008,859 19,612,859
Texas 587,114 1,735,053 384,211 9,091,697 30,984,775
Utah 63,353 132,311 29,355 486,901 2,581,769
Vermont 20,430 35,855 4,869 99,712 600,242
Virginia 215,740 438,542 166,555 1,879,125 8,702,714
Washington 220,230 573,523 157,276 1,919,907 10,364,117
West Virginia 149,046 344,864 70,280 1,116,604 6,029,306
Wisconsin 217,841 480,948 159,848 1,586,155 8,916,551
Wyoming 16,068 39,162 10,642 140,407 678,414
*Data not reported for Arizona. Arizona has an 1115 waiver for which special rules apply.
4-12
Medicaid Average Cost Per Prescription, 2002*
Drug Prescriptions Average

State Payments Processed Prescription Cost
National Average $29,434,008,185 519,271,905 $56.68
Alabama $478,039,509 10,622,577 $45.00
Alaska $90,414,947 1,430,830 $63.19
Arizona** - - -
Arkansas $286,666,058 5,645,835 $50.77
California $3,705,299,355 50,506,133 $73.36
Colorado $196,128,612 4,045,045 $48.49
Connecticut $363,675,494 5,480,344 $66.36
Delaware $95,071,849 1,553,646 $61.19
District of Columbia $61,792,674 917,509 $67.35
Florida $1,748,930,895 27,596,648 $63.37
Georgia $860,752,058 17,927,466 $48.01
Hawaii $90,206,218 1,610,379 $56.02
Idaho $110,531,180 1,982,185 $55.76
Illinois $1,034,607,810 22,002,080 $47.02
Indiana $648,255,300 12,554,226 $51.64
Iowa $290,670,341 5,693,593 $51.05
Kansas $203,083,268 3,747,600 $54.19
Kentucky $673,213,514 13,828,432 $48.68
Louisiana $715,254,096 13,665,140 $52.34
Maine $250,071,092 5,509,555 $45.39
Maryland $318,529,614 5,090,984 $62.57
Massachusetts $949,890,388 16,048,332 $59.19
Michigan $712,113,878 13,878,198 $51.31
Minnesota $322,670,379 5,086,465 $63.44
Mississippi $517,059,589 9,267,580 $55.79
Missouri $835,996,596 14,737,684 $56.73
Montana $78,370,829 1,454,980 $53.86
Nebraska $197,802,584 4,142,461 $47.75
Nevada $92,514,278 1,484,489 $62.32
New Hampshire $102,090,932 2,092,556 $48.79
New Jersey $668,452,082 9,842,510 $67.91
New Mexico $83,772,945 1,836,375 $45.62
New York $3,585,607,627 54,604,355 $65.67
North Carolina $1,122,737,041 20,133,817 $55.76
North Dakota $53,046,799 1,064,589 $49.83
Ohio $1,380,579,809 28,406,007 $48.60
Oklahoma $273,058,171 4,470,095 $61.09
Oregon $277,727,880 5,224,625 $53.16
Pennsylvania $707,197,466 13,078,735 $54.07
Rhode Island $127,361,625 2,057,702 $61.90
South Carolina $497,839,781 9,386,124 $53.04
South Dakota $61,005,529 1,093,272 $55.80
Tennessee $972,650,782 19,612,859 $49.59
Texas $1,623,768,625 30,984,775 $52.41
Utah $135,484,315 2,581,769 $52.48
Vermont $34,615,257 600,242 $57.67
Virginia $460,320,678 8,702,714 $52.89
Washington $538,884,367 10,364,117 $52.00
West Virginia $290,278,395 6,029,306 $48.14
Wisconsin $472,277,766 8,916,551 $52.97
Wyoming $37,637,908 678,414 $55.48
**Data not reported for Arizona. Arizona has an 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 the Department of Health and Human Services (HHS) for States to
receive Federal funding for outpatient drugs dispensed to Medicaid patients. (For a detailed account
of the debate and genesis of various provisions see Robert Betz’s analysis of the Medicaid Best Price
Law and its effect on pharmaceutical manufacturers’ pricing policies.*∗)
The requirement for rebate agreements does not apply to the dispensing of a single-source or
innovator multiple-source drug if the State has determined that the drug is essential, rated 1-A by the
FDA, and prior authorization is obtained for the exception. Existing rebate agreements qualify under
the law if the State agrees to report all rebates to HHS and the agreement provides for a minimum
aggregate rebate of 10% of the State’s expenditures for the manufacturer’s products.
OBRA ‘90 was amended by the Veterans Health Care Act of 1992 which also required a drug
manufacturer to enter into discount pricing agreements with the Department of Veterans Affairs and
with covered entities funded by the Public Health Service in order to have its drugs covered by
Medicaid. The Medicaid rebate law, as amended, is included as Appendix C.
The drug rebate program is administered by CMS’ Center for Medicaid and State Operations
(CMSO). Currently, the rebate for covered outpatient drugs is as follows:
• For all innovator products, reimbursement requires: (1) a rebate that is the greater of 15.1
percent of the average manufacturer’s price (AMP) or the difference between the AMP and
the manufacturer’s “best price,” and (2) an additional rebate for any price increase for a
product that exceeds the increase in the Consumer Price Index (CPI-U) for all items since the
fall of 1990. AMP is the average price paid by wholesalers for products distributed to the
retail class of trade. The best price is the lowest price offered to any other customer,
excluding Federal Supply Schedule prices, prices to State 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, 2002
Allocation of
State Drug Rebate Monies1 Total Rebates2 Federal Share2
National Total $5,917,504,760 $3,407,724,441
Alabama Medicaid Drug Budget $84,994,286 $59,956,556
Alaska Medicaid General $14,347,654 $8,232,684
Arizona* - - -
Arkansas Medicaid Drug Budget $56,688,398 $41,263,780
California Medicaid Drug Budget $946,651,118 $501,389,213
Colorado General Fund $39,054,140 $19,757,318
Connecticut General Fund $62,627,160 $31,353,041
Delaware Medicaid General $16,990,455 $8,583,285
District of Columbia Medicaid General $11,445,790 $8,012,876
Florida Medicaid Drug Budget $353,649,807 $200,302,136
Georgia Medicaid General $205,469,531 $121,227,024
Hawaii Medicaid Drug Budget $15,267,796 $8,601,876
Idaho Medicaid General $22,939,130 $16,291,370
Illinois Medicaid Drug Budget $190,316,986 $95,869,844
Indiana General Fund $126,512,101 $78,488,107
Iowa General Fund $50,092,788 $31,591,633
Kansas Medicaid General $29,755,595 $17,938,406
Kentucky General Fund $133,330,557 $93,351,276
Louisiana Medicaid Drug Budget $113,729,749 $80,081,323
Maine Medicaid Drug Budget $47,395,300 $31,642,678
Maryland Medicaid General $54,261,949 $27,263,281
Massachusetts Medicaid General $191,118,385 $95,707,811
Michigan General Fund $172,522,597 $97,412,881
Minnesota General Fund $62,655,474 $31,327,739
Mississippi Medicaid General $115,221,421 $87,844,768
Missouri Medicaid Drug Budget $147,281,505 $90,586,777
Montana General Fund $15,955,235 $11,659,478
Nebraska Medicaid Drug Budget $47,855,128 $28,770,955
Nevada General Fund $13,547,604 $6,803,437
New Hampshire General Fund $20,888,707 $10,500,160
New Jersey Medicaid Drug Budget $127,373,014 $63,850,343
New Mexico General Fund $13,274,387 $9,695,612
New York General Fund $663,973,100 $331,986,551
North Carolina Medicaid General $207,064,443 $127,702,769
North Dakota Medicaid Drug Budget $11,651,682 $8,159,556
Ohio Medicaid General $263,267,258 $154,748,494
Oklahoma Medicaid General $51,471,649 $36,251,483
Oregon General Fund $54,474,938 $32,343,683
Pennsylvania Outpatient Appropriation $154,338,235 $84,595,091
Rhode Island General Fund $26,213,636 $13,749,052
South Carolina Medicaid Drug Budget $98,272,773 $68,818,366
South Dakota Medicaid Drug Budget $12,056,925 $8,004,147
Tennessee Medicaid General $180,613,885 $114,942,676
Texas Medicaid Drug Budget $305,110,523 $184,019,819
Utah General Fund $36,756,960 $25,760,249
Vermont Medicaid General $24,488,863 $15,514,120
Virginia General Fund, Medicaid General $76,776,155 $39,595,957
Washington General Fund $100,874,789 $51,143,700
West Virginia Medicaid General $48,976,536 $36,864,639
Wisconsin Medicaid General $89,226,751 $52,764,907
Wyoming Medicaid Drug Budget $8,681,912 $5,401,514
*Does not apply for Arizona. Arizona has an 1115 waiver for which special rules apply.
Sources: 1As reported by State drug program administrators in the 2003 NPC Survey.
2
CMS, CMS-64 Report, FY 2002, includes reported state supplemental rebates for CA, FL, MD, and MI.
4-17
Medicaid Drug Rebate Trends, 1998-2002
State 1998 1999 2000 2001 2002

National Total $2,469,136,949 $3,338,497,983 $3,980,646,518 $4,948,222,331 $5,917,504,760
Alabama $36,537,095 $49,785,076 $60,984,826 $76,624,463 $84,994,286
Alaska $5,026,624 $7,050,981 $8,594,014 $11,337,883 $14,347,654
Arizona* - - - - -
Arkansas $22,518,230 $37,931,853 $40,814,931 $45,744,406 $56,688,398
California $362,808,597 $539,928,783 $600,895,711 $786,113,991 $946,651,118
Colorado $20,424,896 $25,151,080 $28,832,989 $34,264,574 $39,054,140
Connecticut $32,128,587 $38,656,394 $49,164,014 $61,916,192 $62,627,160
Delaware $7,096,836 $9,787,444 $13,780,359 $17,042,045 $16,990,455
Florida $150,733,077 $195,512,719 $248,637,014 $297,362,792 $353,649,807
Georgia $64,320,077 $95,237,778 $91,886,605 $110,087,285 $205,469,531
Hawaii $5,992,722 $8,378,292 $10,947,632 $14,363,603 $15,267,796
Idaho $8,614,444 $11,901,778 $13,984,004 $18,841,154 $22,939,130
Illinois $100,811,862 $121,540,781 $143,590,170 $170,733,612 $190,316,986
Indiana $50,710,861 $62,691,135 $84,453,135 $103,148,144 $126,512,101
Iowa $25,265,390 $32,369,409 $36,040,216 $42,602,101 $50,092,788
Kansas $19,852,439 $26,878,486 $31,022,023 $39,731,568 $29,755,595
Kentucky $57,082,387 $72,676,810 $93,688,165 $104,759,238 $133,330,557
Louisiana $65,994,910 $76,147,317 $84,800,897 $115,254,842 $113,729,749
Maine $19,650,719 $30,032,364 $31,598,262 $41,847,632 $47,395,300
Maryland $25,017,660 $32,311,299 $42,081,781 $34,263,429 $54,261,949
Massachusetts $89,011,664 $140,102,747 $146,225,538 $180,517,139 $191,118,385
Michigan $72,526,027 $75,674,128 $75,687,945 $111,716,756 $172,522,597
Minnesota $31,058,740 $37,389,033 $43,228,324 $54,548,714 $62,655,474
Mississippi $39,983,265 $49,332,307 $61,260,326 $88,481,567 $115,221,421
Missouri $66,460,159 $84,620,799 $110,025,619 $133,927,028 $147,281,505
Montana $7,378,206 $9,290,653 $10,985,923 $13,359,968 $15,955,235
Nebraska $16,545,572 $21,609,490 $31,004,940 $30,219,685 $47,855,128
Nevada $5,143,136 $7,727,267 $4,863,879 $16,330,579 $13,547,604
New Hampshire $9,676,461 $12,956,727 $15,073,211 $13,934,765 $20,888,707
New Jersey $70,992,525 $90,472,488 $105,535,091 $124,127,231 $127,373,014
New Mexico $10,670,766 $7,972,600 $8,901,456 $12,110,896 $13,274,387
New York $251,273,382 $356,088,488 $470,317,992 $543,984,948 $663,973,100
North Carolina $81,211,796 $111,326,116 $140,047,825 $207,551,841 $207,064,443
North Dakota $4,990,065 $5,954,387 $6,503,601 $8,780,182 $11,651,682
Ohio $110,484,575 $148,477,399 $171,685,793 $217,702,350 $263,267,258
Oklahoma $23,329,251 $31,992,100 $37,135,809 $40,177,945 $51,471,649
Oregon $14,433,179 $21,360,688 $32,056,386 $34,991,037 $54,474,938
Pennsylvania $95,692,149 $119,340,064 $118,989,849 $129,265,110 $154,338,235
Rhode Island $11,041,552 $14,440,971 $19,223,034 $21,467,002 $26,213,636
South Carolina $39,156,574 $55,971,288 $73,052,676 $95,438,155 $98,272,773
South Dakota $5,070,643 $5,971,015 $7,198,848 $9,405,933 $12,056,925
Tennessee** $840 $22,434,760 $41,302,450 $102,644,077 $180,613,885
Texas $145,635,499 $185,695,267 $222,314,531 $268,557,241 $305,110,523
Utah $9,988,037 $15,145,126 $21,889,639 $21,949,963 $36,756,960
Vermont $8,868,263 $10,579,999 $17,869,053 $22,045,277 $24,488,863
Virginia $51,079,391 $67,715,512 $75,630,717 $79,484,868 $76,776,155
Washington $39,191,376 $54,331,249 $69,782,396 $91,250,830 $100,874,789
West Virginia $26,753,285 $35,941,495 $46,762,149 $52,402,218 $48,976,536
Wisconsin $40,776,543 $51,869,264 $66,358,433 $79,554,207 $89,226,751
Wyoming $3,025,632 $4,364,795 $4,720,686 $5,809,366 $8,681,912
*Does not apply for Arizona. Arizona has an 1115 waiver for which special rules apply.
Source: CMS, HCFA-64 Report, FY 1998-FY 2002.
4-18
Medicaid Drug Rebate Trends

Annual Percent Change, 1997-2002
% Change % Change % Change % Change % Change

State 97-98 98-99 99-00 00-01 01-02
National Total 11.6% 35.2% 19.2% 24.3% 19.6%
Alabama -22.5% 36.3% 22.5% 25.6% 10.9%
Alaska 2.6% 40.3% 21.9% 31.9% 26.5%
Arizona* - - - - -
Arkansas -8.1% 68.4% 7.6% 12.1% 23.9%
California 17.9% 48.8% 11.3% 30.8% 20.4%
Colorado 20.5% 23.1% 14.6% 18.8% 14.0%
Connecticut 17.6% 20.3% 27.2% 25.9% 1.1%
Delaware 21.3% 37.9% 40.8% 23.7% -0.3%
District of Columbia 6.5% 18.0% 10.0% 13.4% 9.6%
Florida 17.3% 29.7% 27.2% 19.6% 18.9%
Georgia 7.6% 48.1% -3.5% 19.8% 86.6%
Hawaii 28.8% 39.8% 30.7% 31.2% 6.3%
Idaho 2.9% 38.2% 17.5% 34.7% 21.8%
Illinois 18.4% 20.6% 18.1% 18.9% 11.5%
Indiana 16.2% 23.6% 34.7% 22.1% 22.7%
Iowa 16.1% 28.1% 11.3% 18.2% 17.6%
Kansas 68.3% 35.4% 15.4% 28.1% -25.1%
Kentucky -4.7% 27.3% 28.9% 11.8% 27.3%
Louisiana 20.8% 15.4% 11.4% 35.9% -1.3%
Maine 7.7% 52.8% 5.2% 32.4% 13.3%
Maryland -27.6% 29.2% 30.2% -18.6% 58.4%
Massachusetts 21.9% 57.4% 4.4% 23.5% 5.9%
Michigan -2.1% 4.3% 0.0% 47.6% 54.4%
Minnesota -2.6% 20.4% 15.6% 26.2% 14.9%
Mississippi 7.7% 23.4% 24.2% 44.4% 30.2%
Missouri 21.7% 27.3% 30.0% 21.7% 10.0%
Montana 8.9% 25.9% 18.2% 21.6% 19.4%
Nebraska 10.8% 30.6% 43.5% -2.5% 58.4%
Nevada -4.6% 50.2% -37.1% 235.8% -17.0%
New Hampshire 10.1% 33.9% 16.3% -7.6% 49.9%
New Jersey 6.4% 27.4% 16.6% 17.6% 2.6%
New Mexico -20.2% -25.3% 11.7% 36.1% 9.6%
New York 25.5% 41.7% 32.1% 15.7% 22.1%
North Carolina 18.8% 37.1% 25.8% 48.2% -0.2%
North Dakota 7.3% 19.3% 9.2% 35.0% 32.7%
Ohio 31.2% 34.4% 15.6% 26.8% 20.9%
Oklahoma 12.3% 37.1% 16.1% 8.2% 28.1%
Oregon 4.2% 48.0% 50.1% 9.2% 55.7%
Pennsylvania -17.2% 24.7% -0.3% 8.6% 19.4%
Rhode Island 9.1% 30.8% 33.1% 11.7% 22.1%
South Carolina 13.0% 42.9% 30.5% 30.6% 3.0%
South Dakota 2.6% 17.8% 20.6% 30.7% 28.2%
Tennessee** - - 84.1% 148.5% 76.0%
Texas 11.5% 27.5% 19.7% 20.8% 13.6%
Utah 19.3% 51.6% 44.5% 0.3% 67.5%
Vermont 7.4% 19.3% 68.9% 23.4% 11.1%
Virginia 12.9% 32.6% 11.7% 5.1% -3.4%
Washington 2.3% 38.6% 28.4% 30.8% 10.5%
West Virginia 2.6% 34.3% 30.1% 12.1% -6.5%
Wisconsin 9.8% 27.2% 27.9% 19.9% 12.2%
Wyoming 12.9% 44.3% 8.2% 23.1% 49.4%
*Does not apply to Arizona. Arizona has an 1115 waiver for which special rules apply.
**Tennessee did not report data for 1997.
Source: CMS, CMS-64 Report, FY 1997 – FY 2002.
4-19
Rebates as Percent Drug Expenditures, 2002
Rebates as % Drug
State Drug Expenditures Rebates Expenditure
National Total $29,339,050,970 $5,917,504,760 20.2%
Alabama $452,269,953 $84,994,286 18.8%
Alaska $70,708,412 $14,347,654 20.3%
Arizona* $3,725,371 - -
Arkansas $273,257,660 $56,688,398 20.7%
California $3,591,537,830 $946,651,118 26.4%
Colorado $189,717,036 $39,054,140 20.6%
Connecticut $357,919,257 $62,627,160 17.5%
Delaware $97,750,161 $16,990,455 17.4%
District of Columbia $66,129,208 $11,445,790 17.3%
Florida $1,717,652,527 $353,649,807 20.6%
Georgia $873,703,133 $205,469,531 23.5%
Hawaii $88,256,904 $15,267,796 17.3%
Idaho $119,177,013 $22,939,130 19.2%
Illinois $1,293,435,797 $190,316,986 14.7%
Indiana $631,637,846 $126,512,101 20.0%
Iowa $285,467,642 $50,092,788 17.5%
Kansas $213,778,616 $29,755,595 13.9%
Kentucky $652,904,065 $133,330,557 20.4%
Louisiana $714,107,841 $113,729,749 15.9%
Maine $220,420,714 $47,395,300 21.5%
Maryland $297,291,733 $54,261,949 18.3%
Massachusetts $958,972,520 $191,118,385 19.9%
Michigan $674,222,281 $172,522,597 25.6%
Minnesota $310,174,144 $62,655,474 20.2%
Mississippi $567,313,801 $115,221,421 20.3%
Missouri $790,853,387 $147,281,505 18.6%
Montana $83,587,410 $15,955,235 19.1%
Nebraska $207,782,737 $47,855,128 23.0%
Nevada $86,929,536 $13,547,604 15.6%
New Hampshire $99,682,997 $20,888,707 21.0%
New Jersey $694,669,924 $127,373,014 18.3%
New Mexico $73,877,785 $13,274,387 18.0%
New York $3,660,427,024 $663,973,100 18.1%
North Carolina $1,100,822,176 $207,064,443 18.8%
North Dakota $52,495,878 $11,651,682 22.2%
Ohio $1,333,992,298 $263,267,258 19.7%
Oklahoma $285,068,869 $51,471,649 18.1%
Oregon $279,029,096 $54,474,938 19.5%
Pennsylvania $718,210,352 $154,338,235 21.5%
Rhode Island $125,187,888 $26,213,636 20.9%
South Carolina $451,846,044 $98,272,773 21.7%
South Dakota $62,382,937 $12,056,925 19.3%
Tennessee $905,405,421 $180,613,885 19.9%
Texas $1,591,064,713 $305,110,523 19.2%
Utah $140,275,267 $36,756,960 26.2%
Vermont $114,157,870 $24,488,863 21.5%
Virginia $458,953,342 $76,776,155 16.7%
Washington $541,963,790 $100,874,789 18.6%
West Virginia $277,039,990 $48,976,536 17.7%
Wisconsin $442,718,195 $89,226,751 20.2%
Wyoming $39,094,579 $8,681,912 22.2%
*Does not apply to Arizona. Arizona has an 1115 waiver for which special rules apply.
Source: CMS, CMS-64 Report, FY 2002
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 None - Introductory letter
Connecticut Pharmacy and Therapeutic Committee (2004) Quarterly Introductory letter
Delaware DUR Board advises Bi-Monthly Introductory letter
District of Columbia N/A - Introductory letter
Florida Pharmacy and Therapeutic Committee - Introductory letter
Georgia Yes Quarterly Introductory letter
Hawaii None - Introductory letter, Formulary kit
Idaho Pharmacy Committee Weekly Introductory letter, Formulary kit
Illinois None - Contact First DataBank
Indiana DUR Board advises Monthly Electronic form
Iowa DUR Board advises Monthly Introductory letter
Kansas DUR Board advises 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 Committee Quarterly Introductory letter
Michigan Pharmacy and Therapeutics Committee Quarterly State form, Introductory letter
Minnesota Drug Formulary Committee Quarterly Introductory letter
Mississippi Pharmacy and Therapeutics Committee Bi-Monthly Introductory letter
Missouri DUR Board & Prior Authorization Committee Quarterly AMPC format dossier
Montana DUR Board advises Monthly Introductory letter
Nebraska None - Introductory letter
Nevada DUR Board Quarterly Introductory letter
New Hampshire None - Information packet
New Jersey None - Introductory letter
New Mexico None - Contact First DataBank
New York Pharmacy Advisory Committee Quarterly Introductory letter
North Carolina Medical Care Advisory Committee - Introductory letter, Package insert
North Dakota None - Manufacturer’s preference
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
Rhode Island None - Introductory letter
South Carolina None - Formulary packet
South Dakota None - Introductory letter
Tennessee* TennCare Pharmacy Advisory Committee Quarterly Introductory letter
Texas None - State form
Utah DUR Board Monthly Introductory letter, FDA information
Vermont DUR Committee Bi-Monthly Introductory letter
Virginia Pharmacy Liaison Committee Quarterly Introductory letter
Washington Pharmacy and Therapeutics Committee Quarterly AMCP format dossier
West Virginia Medical Services Fund Advisory Council Quarterly Introductory product packet
Introductory letter, First DataBank
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 2003 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 Not Covered Not Covered
Nebraska Not Covered Not Covered Not Covered
Nevada Not Covered Not Covered Not Covered
New Hampshire Not Covered Not Covered Not Covered
New Jersey Not Covered Not Covered Not Covered
New Mexico Not Covered Not Covered Not Covered
New York Not Covered Not Covered Not Covered
North Carolina Not Covered Not Covered Not Covered
North Dakota Not Covered Not Covered Not Covered
Ohio Not Covered Not Covered Not Covered
Oklahoma Not Covered Not Covered Not Covered
Oregon 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 Covered Covered Covered as DME
Alaska Covered Covered as DME Covered Not Covered
Arizona* - - - -
Arkansas Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
California Covered Covered Covered Covered
Colorado Covered DME DME DME
Connecticut Covered Covered Covered Covered
Delaware Covered Covered Covered Covered
District of Columbia Covered Covered Covered Not Covered
Florida Covered Covered Covered Covered
Georgia Covered 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 Covered Covered with Restrictions Covered
Indiana Covered Covered Covered Covered
Iowa Covered Not Covered Not Covered Not Covered
Kansas Covered Covered as DME Covered as DME Covered as DME
Kentucky Covered Not Covered Covered Not Covered
Louisiana Covered Covered Covered Covered
Maine Covered Covered Covered 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 Not Covered Covered Not Covered
Mississippi Covered Not Covered Not Covered Not Covered
Missouri Covered Covered Covered Covered
Montana Covered Not Covered Not Covered Not Covered
Nebraska Covered, PA Required Covered as DME Covered (med. necess.) 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 Covered as DME Covered as DME Covered as DME
North Dakota Covered Covered Covered Covered
Ohio Covered Covered as DME Covered as DME Covered as DME
Oklahoma Covered Covered as DME Covered as DME Covered as DME
Oregon Covered Covered as DME Covered 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 Covered with Restrictions Covered
Vermont Covered Covered Covered Covered
Virginia Covered Covered Covered Covered
Washington Covered Covered Covered Covered
West Virginia Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Wisconsin Covered Covered Covered Covered
Wyoming Covered Covered Covered Covered
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 as DME Covered as DME
Alaska Not Covered Covered Not Covered
Arizona* - - -
Arkansas Not Covered Not Covered Not Covered
California Covered PA Required Not Covered
Colorado DME PA Required Not Covered
Connecticut Covered Covered with Restrictions Covered with Restrictions
Delaware Covered Covered Covered with Restrictions
District of Columbia Not Covered Covered with Restrictions Covered with Restrictions
Florida Covered with Restrictions Covered Not 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 Not Covered
Illinois Covered Covered with Restrictions Covered with Restrictions
Indiana Covered Covered Covered
Iowa Not Covered Not Covered Not Covered
Kansas Covered as DME Covered as DME Covered with Restrictions
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 Not Covered Covered Covered
Mississippi Not Covered Covered Covered
Missouri Covered Covered Covered
Montana Not Covered Not Covered Not Covered
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 Covered as DME Covered Covered
North Dakota Not Covered Covered Not Covered
Ohio Covered as DME Covered Covered
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 Not Covered Not Covered
Tennessee* Covered Covered Covered
Texas Not Covered Not Covered Not Covered
Utah Covered Covered as DME Covered as DME
Vermont Covered Covered Covered
Virginia Covered Covered Covered
Washington Covered Covered Covered
West Virginia Covered with Restrictions Covered as DME Not Covered
Wisconsin Covered Covered Covered
Wyoming Covered Covered as DME Covered as DME
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 PDP PDP PDP
Alaska PP PDP PDP
Arizona* - - -
Arkansas PP PDP PDP
California PP PDP PDP
Colorado PP PDP PDP
Connecticut PP PP PP
Delaware PDP PDP PDP
District of Columbia PP PDP PDP
Florida PDP and PP PDP PDP
Georgia PP PDP PDP
Hawaii PDP and PP PDP PDP
Idaho PP PDP PDP
Illinois PDP and PP PDP PDP
Indiana PDP and PP PDP and PP PDP and PP
Iowa PDP and PP - -
Kansas PP PDP PDP
Kentucky PDP and PP PDP PDP
Louisiana PDP and PP - -
Maine PDP PDP PDP
Maryland PDP and PP PDP PDP
Massachusetts PDP and PP PDP PDP
Michigan PP PDP PDP
Minnesota PP PDP and PP PDP
Mississippi PP PDP PDP
Missouri PDP PDP PDP
Montana PP PDP PDP
Nebraska PP PDP PDP
Nevada PP PDP PDP
New Hampshire PP PDP PDP
New Jersey PP PDP PDP
New Mexico PDP and PP PDP and PP PDP and PP
New York PP PDP Included in facility rate
North Carolina PDP and PP PDP PDP
North Dakota PDP and PP PDP and PP PDP and PP
Ohio PP PDP PDP
Oklahoma PP PDP and PP PDP and PP
Oregon PP PP PP
Pennsylvania PDP PDP PDP
Rhode Island PP PDP PDP
South Carolina PP PDP PDP
South Dakota PP PP PP
Tennessee* PP PDP PDP
Texas PP PP PP
Utah PDP and PP PDP PDP
Vermont PP PP PP
Virginia PDP and PP PDP and PP PDP and PP
Washington PP PDP PDP
West Virginia PDP and 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 EPSDT, VCP Yes
Alaska EPSDT, CHIP, VCP Yes
Arizona* - -
Arkansas VCP Yes
California VCP Yes
Colorado EPSDT No
Connecticut CHIP No
Delaware VCP No
District of Columbia EPSDT No
Florida VCP Yes
Georgia EPSDT, VCP Yes
Hawaii EPSDT, CHIP, VCP Yes
Idaho ESPDT, CHIP, VCP, State Vaccine Program Yes
Illinois VCP No
Indiana EPSDT, CHIP, VCP Yes
Iowa EPSDT, VCP Yes
Kansas CHIP, 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 EPSDT, CHIP, 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 EPSDT, VCP Yes, LTC
New Mexico EPSDT, CHIP, VCP 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, Physician Payment (adults) No
South Carolina VCP Yes
South Dakota VCP Yes
Tennessee* EPSDT, VCP No
Texas EPSDT, CHIP, VCP Yes
Utah EPSDT, CHIP, VCP Yes
Vermont EPSDT Yes
Virginia VCP Yes
Washington EPSDT Yes
West Virginia CHIP, VCP Yes
Wisconsin VCP Yes
Wyoming EPSDT, CHIP, VCP No
^ Early and Periodic Screening, Diagnostic and Treatment (EPSDT), Children Health Insurance Program (CHIP), Vaccines for
Children Program (VCP), or other.
LTC = Long Term Care
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 Not Covered
California Limited Coverage Limited Coverage Limited Coverage Covered with Restrictions
Colorado Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Connecticut Covered Not Covered Covered Not Covered
Delaware Covered Covered Covered Covered
District of Columbia Not Covered Covered with Restrictions Not Covered Not Covered
Florida Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
Georgia Not Covered 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 PA Required Covered Not Covered Covered
Indiana Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Iowa Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
Kansas Not Covered Covered Limited Coverage 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 Not Covered Not Covered Not Covered Not Covered
Massachusetts Limited Coverage Limited Coverage Limited Coverage Not Covered
Michigan Limited Coverage Limited Coverage Not Covered Limited Coverage
Minnesota Limited Coverage Limited Coverage Limited Coverage Covered
Mississippi Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Missouri Limited Coverage Limited Coverage Limited Coverage Not Covered
Montana Covered with Restrictions Covered with Restrictions Not Covered Covered with Restrictions
Nebraska Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
Nevada Covered Covered Covered Covered
New Jersey Covered Covered Limited Coverage Limited Coverage
New Mexico Covered Covered Covered Covered
New York Limited Coverage Limited Coverage Limited Coverage Limited Coverage
North Carolina Covered Limited Coverage Limited Coverage Not Covered
North Dakota Covered with Restrictions Covered Not Covered Covered with Restrictions
Ohio Selective Coverage Selective Coverage Selective Coverage Selective Coverage
Oklahoma Limited Coverage Not Covered Not Covered Covered with Restrictions
Oregon Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Pennsylvania Covered with Restrictions Covered Covered with Restrictions Covered
Rhode Island Covered Covered with Restrictions Covered with Restrictions Not Covered
South Carolina Covered with Restrictions Covered with Restrictions Covered with Restrictions Not Covered
South Dakota Not Covered Not Covered Not Covered Not Covered
Tennessee* Covered Covered Not Covered Not Covered
Texas Covered Covered Covered Covered
Utah Limited Coverage Limited Coverage Limited Coverage Not Covered
Vermont PA Required PA Required PA Required PA Required
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 with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Connecticut Covered with Restrictions Covered with Restrictions Not Covered Covered
Delaware Covered Covered Not Covered Covered
District of Columbia Covered with Restrictions Not Covered Not Covered Not Covered
Florida Not Covered Covered with Restrictions Covered with Restrictions Covered with Restrictions
Georgia Not Covered Not Covered Not Covered Not Covered
Hawaii Covered Limited Coverage N/A Limited Coverage
Idaho Not Covered Not Covered Not Covered Not Covered
Illinois PA Required Not Covered Not Covered PA Required
Indiana Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Iowa Not Covered Not Covered Not Covered Covered with Restrictions
Kansas Not Covered Covered Not Covered Covered with Restrictions
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 Not Covered Limited Coverage Not Covered
Massachusetts Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Michigan Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Minnesota Limited Coverage Limited Coverage Limited Coverage Limited Coverage
Mississippi Limited Coverage Not Covered Limited Coverage Limited Coverage
Missouri Limited Coverage Not Covered Not Covered Limited Coverage
Montana Covered with Restrictions Covered with Restrictions Not Covered Not Covered
Nebraska Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Nevada Covered Covered Not Covered Covered with Restrictions
New Jersey Not Covered Not Covered Not Covered Covered
New Mexico Covered Covered Not Covered Covered with Restrictions
New York Limited Coverage Not Covered Limited Coverage Limited Coverage
North Carolina Not Covered Not Covered Not Covered Not Covered
North Dakota Covered Covered Not Covered Not Covered
Ohio Selective Coverage Selective Coverage Selective Coverage Selective Coverage
Oklahoma Limited Coverage Not Covered Not Covered Not Covered
Oregon Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
Pennsylvania Not covered Covered with Restrictions Covered Covered
Rhode Island Covered Not Covered Not Covered Covered with Restrictions
South Carolina Covered with Restrictions Covered with Restrictions Covered with Restrictions Covered with Restrictions
South Dakota Not Covered Not Covered Not Covered Not Covered
Tennessee* Covered Covered Not Covered Covered
Texas Covered Covered Not Covered Covered
Utah Not Covered Not Covered Limited Coverage Limited Coverage
Vermont PA Required PA Required PA Required PA Required
Washington Limited Coverage Limited Coverage Limited Coverage Limited Coverage
West Virginia Limited Coverage Not Covered Limited Coverage Limited Coverage
Wisconsin Covered with Restrictions Not Covered Covered with Restrictions Covered with Restrictions
Wyoming Not Covered Covered Covered Covered
PA= Prior Authorization
4-30
Prior Authorization Process and Procedures

State PA Procedure Prior Authorization Committee Members Meetings
Alabama Yes Pharmacy & Therapeutics 9 Quarterly
Alaska Yes No - -
Arizona* - - - -
Arkansas Yes DUR Board 9 Quarterly
California Yes No - -
Colorado Yes No - -
Connecticut Yes - - -
Delaware Yes No - -
District of Columbia Yes N/A N/A N/A
Florida Yes No - -
Georgia Yes N/A N/A N/A
Hawaii Yes No - -
Idaho Yes Pharmacy Committee 5 Weekly
Illinois Yes Committee on Drugs and Therapeutics Varies Quarterly
Indiana Yes No - -
Iowa Yes DUR Board 10 Monthly
Kansas Yes No - -
Kentucky Yes Pharmacy and Therapeutics Advisory Committee 14 Bi-monthly
Louisiana Yes Pharmaceutical and Therapeutics Committee 21 Quarterly
Maine Yes No - -
Maryland Yes No - -
Massachusetts Yes No - -
Michigan Yes No - -
Minnesota Yes Drug Formulary Committee 9 Quarterly
Mississippi Yes Pharmacy and Therapeutics Committee 12 Bi-monthly
Missouri Yes Prior Authorization Committee 9 Quarterly
Montana Yes DUR Board 5 Monthly
Nebraska Yes No - -
Nevada Yes No - -
New Hampshire Yes Pharmacy and Therapeutics Advisory Committee 12 Quarterly
New Jersey Yes No - -
New Mexico Yes No - -
New York Yes Pharmacy and Therapeutics Committee 11 Quarterly
North Carolina Yes No - -
North Dakota Yes No - -
Ohio Yes No - -
Oklahoma Yes No - -
Oregon Yes DUR Board 12 Quarterly
Pennsylvania Yes No - -
Rhode Island Yes No - -
South Carolina Yes No - -
South Dakota Yes No - -
Tennessee* Yes No - -
Texas Yes No - -
Utah Yes DUR Board 12 Monthly
Vermont Yes No - -
Virginia Yes No - -
Washington Yes Drug Utilization Review Team 16 Daily
West Virginia Yes Pharmaceutical and Therapeutics Committee 11 Quarterly
Wisconsin Yes 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. 1,550 94%
Arizona* - - -
Arkansas M.D. 155,00 72%
California M.D., R.Ph. 2,400,000 90%
Colorado M.D. 32,000 87%
Connecticut M.D., R.Ph. N/A N/A
Delaware M.D. 36,000 90%
District of Columbia M.D., R.Ph. 9,000 70%
Florida M.D., R.Ph., Pharm. Tech. 440,000 78%
Georgia M.D., R.Ph. 104,000 92%
Hawaii M.D., R.Ph. N/A 99%
Idaho M.D., R.Ph. 24,500 77%
Illinois M.D., R.Ph. 500,000 20%
Indiana M.D., Other Providers N/A N/A
Iowa M.D., R.Ph. 56,000 93%
Kansas M.D., R.Ph. N/A N/A
Kentucky M.D., R.Ph. 285,000 58%
Louisiana M.D. 171,000 95%
Maine M.D. 65,000 82%
Maryland M.D., R.Ph 5,300 99%
Massachusetts M.D. 137,000 67%
Michigan M.D. 120,000 95%
Minnesota M.D., R.Ph., Pharm. Tech. N/A N/A
Mississippi M.D. 216,000 90%
Missouri M.D., R.Ph., Physician Extender 35,000 N/A
Montana M.D., R.Ph., Pharm. Tech. 16,000 70%
Nebraska M.D., R.Ph. 24,000 40%
Nevada M.D. - -
New Hampshire M.D. 870 88%
New Jersey R.Ph., DME Supplier 351,000 97%
New Mexico M.D., R.Ph., Pharm. Tech. 1,300 N/A
New York Ordering Provider 180,000 100%
North Carolina M.D. N/A N/A
North Dakota M.D., R.Ph., Pharm. Tech. N/A N/A
Ohio M.D. 120,000 Most
Oklahoma M.D., R.Ph. 117,000 59%
Oregon M.D. 43,000 66%
Pennsylvania M.D., Other Licensed Prescriber N/A N/A
Rhode Island M.D., R.Ph. N/A N/A
South Carolina M.D. 37,700 60%
South Dakota M.D., R.Ph. 28 100%
Tennessee* M.D. 450,000 66%
Texas M.D., R.Ph., Other Licensed Provider 3,000 75%
Utah M.D. 12,000 50%
Vermont M.D. N/A 99%
Virginia M.D., R.Ph. 50,000 64%
Washington R.Ph., Pharm. Tech. N/A 80%
West Virginia M.D., R.Ph. 160,000 78%
Wisconsin R.Ph. 182,000 97%
Wyoming M.D., R.Ph., Pharm. Tech. 8,200 81%
4-32
Prior Authorization Process and Procedures (Con’t)

State Reviewer Review Time Response Vehicle
Alabama R.N., M.D., R.Ph. 24 hours Phone, fax, mail, e-mail
Alaska R.N., R.Ph., Pharm. Tech. 24 hours Phone, fax
Arizona* - - -
Arkansas Voice Response 1-3 minutes Voice response system
California R.Ph. One business day Fax or telephone inquiry system
Colorado Pharm. Tech. 24 hours Phone, fax
Connecticut R.Ph. 2 hours Fax, POS system
Delaware R.Ph. 1 working day Mail
District of Columbia R.Ph., Pharm. Tech. Minutes to 24 hours Phone, fax
Florida R.Ph., Pharm. Tech. 30 minutes-24 hours Phone, fax, mail
Georgia PBM 24 hours or less Phone, mail
Hawaii Pharm. Tech., L.P.N. 24 hours Fax
Idaho M.D., R.Ph., Pharm. Tech. 24 hours or less Phone, fax, mail
Illinois M.D., R.Ph. 4-8 hours Automated phone
Indiana Medicaid Director or designee 10 days Phone, letter
Iowa R.Ph. 24 hours or less Phone, 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, mail
Mississippi R.N., R.Ph., Pharm. Tech. 6 hours Phone, fax, mail
Missouri M.D., R.Ph., Pharm. Tech. < 5 minutes Phone, fax, mail
Montana M.D., R.Ph., Pharm. Tech. 24 hours or less Mail
Nebraska M.D., R.Ph., Pharm, Tech. 24 hours Phone, fax, mail
Nevada R.Ph., Pharm. Tech. 24 hours Phone
New Hampshire R.Ph., Pharm. Tech. 24 hours Phone, fax with written follow-up of denials
New Jersey R.N., R.Ph., First Health Minutes Phone
New Mexico R.Ph. 24 hours Phone
New York Voice interactive system Processed during call PA issued to prescriber by phone
North Carolina ACS (PBM) 24 hours Phone, fax, e-mail
North Dakota R.Ph. 24 hours Fax
Ohio R.Ph., Pharm. Tech. Immediate Phone
Oklahoma R.Ph., Pharm. Tech, Pharm. Intern 24 hours Fax, mail
Oregon R.Ph., Pharm. Tech. 24 hours or less Phone, fax
Pennsylvania R.N., M.D. Immediately to 24 hours Phone
Rhode Island R.Ph., Pharm. Tech. Immediately to 24 hours Online adjudication or verbally
South Carolina R.Ph., First Health Per OBRA ‘90 guidelines Phone, fax
South Dakota R.Ph. 24 hours Phone, fax, mail, e-mail
Tennessee* R.Ph. Same day Fax
Texas R.Ph. 72 hours Phone, fax
Utah Nurse 8-12 hours Phone, fax, mail
Vermont R.N. 24 hours Phone, mail
Virginia M.D., R.Ph., Pharm. Tech. Less than 3 minutes Phone, fax, mail
M.D., Drug Utilization Review
Washington <24 hours Phone, fax; denial through mail
Team**
West Virginia R.Ph. 3 minutes to 2 hours Phone, fax
Wisconsin R.Ph., Done electronically Immediate Online
Wyoming ACS Clinical Supervisor 24 hours Phone, fax, mail, e-mail
**Reviewer also includes Medical Claims Examiner.
4-33
Prior Authorization
Analgesics,
State Anabolic Steroids Antipyretics, NSAIDs Anorectics
Alabama Covered Covered, PA Required Covered
Alaska Covered Covered, PA Required Not Covered
Arizona* - - -
Arkansas Covered 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 Not Covered, PA Required
District of Columbia Not Covered Partial Coverage, PA Required Partial Coverage, PA Required
Florida Covered, PA Required Covered Not Covered
Georgia Covered, PA Required Covered, PA Required Not covered
Hawaii Covered, PA Required Covered, PA Required Covered, PA Required
Idaho Partial Coverage, PA Required Partial Coverage, PA Required Not Covered
Illinois N/A Covered Not Covered
Indiana** N/A N/A N/A
Iowa Covered Covered, PA Required Not Covered
Kansas Covered Covered Partial Coverage, PA Required
Kentucky Covered, PA Required Covered, PA Required Covered, PA Required
Louisiana Covered Covered, PA Required Partial Coverage
Maine Covered, 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 Partial Coverage, PA Required Not Covered
Mississippi Covered Covered, PA Required Not Covered
Missouri Partial Coverage Partial Coverage Not Covered
Montana Covered Partial Coverage, PA Required Partial Coverage, PA Required
Nebraska Covered Partial Coverage, PA Required Not Covered
Nevada Partial Coverage Covered Not Covered
New Hampshire Covered Covered, PA Required Covered, PA Required
New Jersey Partial Coverage Covered PA for ADD Diagnosis
New Mexico Covered Covered Covered, PA Required
New York Covered Covered Not Covered
North Carolina Covered Covered Covered
North Dakota Covered Covered, PA Required Partial Coverage, PA Required
Ohio Not Covered Covered Not Covered
Oklahoma Not Covered Covered, PA Required Partial Coverage, PA Required
Oregon Covered, PA Required Covered Not Covered
Pennsylvania Covered Covered Not Covered
Rhode Island Covered Covered Covered, PA Required
South Carolina Covered Covered Not Covered
South Dakota Covered Covered Covered
Tennessee* Covered Covered, PA Required Covered
Texas Covered Covered Covered
Utah Not Covered Covered, PA Required Not Covered
Washington Covered, PA Required Covered, PA Required Not Covered
West Virginia Covered Partial Coverage, PA Required 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 = Prior Authorization
4-34
Prior Authorization (con’t)

Anxiolytics, Prescribed
State Antihistamines Sedatives, and Hypnotics Cold Medications
Alabama Covered, PA Required Covered Partial Coverage
Alaska Covered Covered Not Covered
Arizona* - - -
Arkansas Partial Coverage, PA Required Covered Partial Coverage
Colorado Covered Covered Covered, PA Required
Connecticut Covered Covered Covered
Delaware Covered Covered Covered
District of Columbia Covered Covered Covered
Florida Covered Covered Partial Coverage
Georgia Covered Covered, PA Required Partial Coverage
Hawaii Partial Coverage, PA Required Covered N/A
Idaho Partial Coverage, PA Required Covered Partial Coverage
Illinois Partial Coverage Partial Coverage Not Covered
Iowa Covered, PA Required Covered Covered
Kansas Covered Partial Coverage, PA Required Partial Coverage
Kentucky Covered, PA Required Covered, PA Required Covered, PA Required
Louisiana Covered, PA Required Covered, PA Required Partial Coverage
Maine Covered, PA Required Covered, PA Required Not Covered
Maryland Covered Covered Covered
Massachusetts Partial Coverage, PA Required Partial Coverage, PA Required Partial Coverage
Michigan Covered Covered Partial Coverage
Minnesota Covered, PA Required Covered Covered
Mississippi Covered, PA Required Covered Partial Coverage
Missouri Partial Coverage Covered, PA Required Partial Coverage
Montana Partial Coverage, PA Required Partial Coverage, PA Required Partial Coverage
Nebraska Covered, PA Required Partial Coverage Covered
Nevada Covered Covered Covered
New Hampshire Covered Covered Covered
New Jersey Covered Covered Covered
New York Partial Coverage, PA Required Covered Partial Coverage
North Carolina Covered Covered Covered
North Dakota Covered, PA Required Covered Not Covered
Ohio Partial Coverage, PA Required Covered Partial Coverage, 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
Washington Covered, PA Required Covered, PA Required Covered, PA Required
West Virginia Covered Partial Coverage Partial Coverage
Wisconsin Covered, PA Required 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, PA Required Covered Not Covered
Alaska Covered, PA Required Covered Not Covered
Arizona* - - -
Arkansas Covered Covered, PA Required Partial Coverage, PA Required
Colorado Covered, PA Required Covered, PA Required Covered, PA Required
Connecticut Covered Covered Not Covered
Delaware Covered, PA Required Covered Covered, PA Required
District of Columbia Partial Coverage, PA Required Partial Coverage, PA Required Covered
Florida Covered Covered Covered
Georgia Covered, PA Required Covered Not Covered
Hawaii Covered, PA Required Covered Covered, PA Required
Idaho Partial Coverage, PA Required Partial Coverage, PA Required Not Covered
Illinois Covered Covered Covered
Iowa Covered, PA Required Covered, PA Required Not Covered
Kansas Covered, PA Required Covered Partial Coverage
Kentucky Covered, PA Required Covered, PA Required Not Covered
Louisiana Covered, PA Required Covered, PA Required Covered
Maine Covered, PA Required Covered, PA Required Covered, PA Required
Maryland Covered, PA Required Covered Covered
Massachusetts Covered, PA Required Partial Coverage, PA Required Not Covered
Michigan Covered Covered Partial Coverage, PA Required
Minnesota Covered Covered, PA Required Covered
Mississippi Covered Covered, PA Required Covered
Missouri Partial Coverage Partial Coverage, PA Required Not Covered
Montana Partial Coverage, PA Required Covered Partial Coverage, PA Required
Nebraska Covered, PA Required Covered, PA Covered Not Covered
Nevada Partial Coverage, PA Required Covered Covered
New Hampshire Covered Covered, PA Required Covered
New Jersey Partial Coverage Covered Partial Coverage
New York Covered, PA Required Partial Coverage Covered
North Carolina Covered, PA Required Covered Covered, PA Required
North Dakota Covered Covered, PA Required Covered
Ohio Not Covered Partial Coverage, PA Required Partial Coverage, 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, PA Required Not Covered
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 Partial Coverage, PA Required Covered Not Covered
Washington Covered, PA Required Covered, PA Required Not Covered
West Virginia Partial Coverage, PA Required Partial Coverage, PA Required Partial Coverage, PA Required
Wisconsin Covered PA Required Covered Covered
Wyoming Covered Covered, PA Required on PPIs Not Covered
**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 Contracted Jun-95
Arizona* - - - -
Arkansas Pamela Ford, P. D. 501-683-4120 Contracted Mar-97
California Vic Walker, R.Ph., B.C.P.P. 916-552-9500 Contracted Aug-95
Colorado Catherine Traugott 303-866-2468 Contracted Dec-98
Connecticut James Zakszewski, R.Ph. 860-424-4961 Contracted Sep-96
Delaware Cynthia Denemark, R.Ph. 302-453-8453 Contracted Feb-94
District of Columbia Donna Bovell, R.Ph. 202-442-5988 In-House Sep-96
Florida Linda Barnes 850-487-4441 Contracted Jul-93
Georgia Jean Cox, R.Ph. 404-657-7241 In-House Oct-00
Hawaii Kathleen Kang-Kaulupali 808-692-8065 In-House 1997
Idaho Tamara Eide, Pharm.D., B.C.P.S. 208-364-1821 Contracted Jan-98
Illinois Marvin Hazelwood 217-524-5565 In-House Jan-93
Indiana Karen Clifton 317-232-4307 Contracted Mar-96
Iowa Julie Kuhle, R.Ph. 515-270-0713 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, P.D. 225-342-9768 Contracted Apr-66
Maine Jude Walsh 207-287-1815 Contracted Dec-95
Maryland Judith Geisler, P.D. 410-767-1455 Contracted Jan-93
Massachusetts Paul L. Jeffrey 617-210-5319 Contracted Oct-95
Michigan Debera Eggleston, M.D. 517-335-5181 Contracted Jul-00
Minnesota Mary Beth Reinke, Pharm.D., R. Ph. 651-215-1239 In-House Feb-96
Mississippi Judith P. Clark, R.Ph. 601-359-5253 Contracted Oct-93
Missouri Jayne Zemmer 573-751-1612 In-House Feb-93
Montana Mark Eichler, R.Ph. 406-443-4020 Contracted Sep-94
Nebraska Beth Wilson 402-420-1500 Contracted Apr-95
Nevada Dionne Coston, R.N. 702-684-3775 Contracted 2003
New Hampshire Lisè Farrand 603-271-4419 Contracted Jul-95
New Jersey Edward Vaccaro, R.Ph. 609-588-2726 In-House Oct-96
New Mexico Neal Solomon, M.P.H., R.Ph. 505-827-3174 Both Oct-93
New York Lydia Kosinski, R.Ph. 518-474-6866 In-House Mar-95
North Carolina Sharman Leinwand, R.Ph., M.P.H. 919-857-4034 Contracted Oct-96
North Dakota Brendan K. Joyce, Pharm.D., R. Ph. 701-328-1544 In-House Jul-96
Ohio Jan Lawson 614-466-9698 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 N/A - Contracted Jun-93
Rhode Island Paula Avarista, R.Ph. 401-4642-6390 Contracted Dec-94
South Carolina Caroline Sojourner, R.Ph. 803-898-2876 Contracted Nov-00
South Dakota Michael Jockheck, R.Ph. 605-773-6439 In-House 1996
Tennessee* Jeffrey G. Stockard, D.Ph. 615-532-3107 Contracted Jul-01
Texas Barbara Dean 512-491-1101 In-House Feb-95
Utah Duane Parke 801-538-6452 In-House 1994
Vermont Scott Strenio, M.D. 802-741-7975 Contracted Nov-93
Virginia Javier Menendez, R.Ph. 804-783-2196 Contracted Jul-94
Washington Nicole Nguyen, Pharm.D. 360-725-1757 In-House Mar-96
West Virginia Vicki M. Cunningham, R.Ph. 304-588-1700 Contracted Mar-95
Wisconsin Michael Mergener, R.Ph., Ph.D. 608-258-3348 Contracted 2001
Wyoming Debra Devereuax, R.Ph. 307-766-6750 Contracted Oct-95
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, 30 day supply per Rx
Alaska Yes 30 day supply per Rx, maximum number units for 50 classes and 40 narcotics
Arizona* - -
Arkansas Yes 31 day supply per Rx; 3 Rx per month (extension to 6); 5 refills per Rx within 6 months
California Yes 6 Rx per month, maximum 100 day supply for most medications
Colorado Yes 30 day quantity supply per Rx; 100 day supply for maint. meds. Other limits for stadol & oxycontin
Connecticut Yes 240 units or 30 day supply, 5 refills per RX except 12 month limit on oral contraceptives
Delaware Yes 34 day supply or 100 unit doses per Rx (whichever is greater)
District of Columbia Yes 30 day supply per Rx, 3 refills per Rx within 4 mths. Max/min quantities for certain meds
Florida Yes 4 brand name Rxs per month (with exceptions)
Georgia Yes 31 day supply per Rx; 5 (adult)/6 (child) Rx per month; Per Rx limit: $2999.99 (potential override)
Hawaii Yes 30 day supply or 100 unit doses 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
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 5 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; 5 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.
New Hampshire Yes 30 day supply, 90 day supply on maintenance medications
New Jersey Yes 34 day supply or 100 unit doses per Rx, 5 refills within 6 months
New Mexico No 34 day supply, except contraceptives (100 days)
New York Yes 5 refills per Rx; annual limit on number of Rx and OTC drugs avail. (potential override)
North Carolina Yes 34 day supply per Rx, with exceptions; 6 Rx per month
North Dakota Yes 34 day supply per Rx; max 12 refills per script; Limits on refills by Class
Ohio No -
Oklahoma Yes 3 Rx 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 No -
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
Utah Yes 7 Rx per month, 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; 5 refills per Rx with quantity limits on some drugs
Wisconsin Yes 34 day supply per Rx with exceptions, maximum 11 refills during 12-month period
Wyoming 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 B; AWP-14%, G; AWP-20% $0.50 - $5.00
California $4.05 AWP-10% $1.00
Colorado $4.00; $1.89 for Institutions AWP-13.5% or WAC+18%, whichever is lowest; $3.00
AWP-35% (for generics)
Connecticut $3.30 AWP-12% $1.50
Delaware $3.65 AWP-14; AWP-16% (LTC)% None
DC $4.50 AWP-10% $1.00
Florida $4.23-$4.73 (LTC) AWP-13.25%; WAC+7% None
Georgia $4.63 + $0.50 (for generics) AWP-10% G/P: $0.50, B/NP: $0.50 - $3.00
Hawaii $4.67 AWP-10.5% None
Idaho $4.94 ($5.54 for unit dose) AWP-12% None
Illinois G: $5.10, B: $4.00 B: AWP-11%, G: AWP-20% $1.00
Indiana $4.90 B: AWP-13.5%, G: AWP-20% $0.50 - $3.00
Iowa $4.26 AWP-12% $0.50-$3.00
Kansas $3.40 B: AWP-15%, 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/recipient/pharm./month
Maryland $3.69-$5.65 Lowest of :WAC+9%, direct+9%, AWP-11% $2.00 for Brand not on PDL
Massachusetts $3.50 - $5.00 WAC+6% B: $3.00, G: $1.00
Michigan $3.77 AWP-13.5% (1-4 stores), AWP-15.1% (5+stores) $1.00 (adults)
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 $3.73 - $4.07 AWP-10%, WAC+30%, AAC for injectables None
New Mexico $3.65 AWP-12.5% None (except $2.00 for CHIP and
working disabled)
New York B: $3.50 G: $4.50 AWP-12% G: $0.50, B: $2.00
North Carolina B: $4.00 G: $5.60 AWP-10% G: $1.00, B: $3.00
North Dakota $5.10 AWP-10% $3.00 (Brand)
Ohio $3.70 WAC + 9% None
Oklahoma $4.15 AWP-12.0% $1.00 - $2.00
Oregon Retail: $3.50 Inst./NF: $3.80 AWP-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% B: $3.00, G: $1.00
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 - $2.00
Wisconsin $4.88 (to a maximum $40.11) AWP-12% $1.00-$3.00, max
$5/recip/pharm/mo
Wyoming $5.00 AWP-11% $2.00
WAC = Wholesalers Acquisition Cost; AWP = Average Wholesale Price; EAC = Estimated Acquisition Cost; AAC= Actual Acquisition Cost;
G = Generic; B = Brand Name; OP = Outpatient; LTC = Long Term Care; P = Preferred; NP = Non-Preferred; 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 Brand medically necessary and reason for medical necessity
Arizona* - - -
Arkansas Yes Yes MedWatch form for prior authorization
California Yes Yes Medically necessary and other products unavailable at MAC rate
Colorado Yes Yes Prior authorization with medical necessity
Connecticut No Yes -
Delaware Yes Yes MedWatch form for prior authorization
District of Columbia Yes No Brand medically necessary plus prior authorization
Florida Yes Yes MedWatch form and prior authorization request
Georgia Yes Yes Prior authorization
Hawaii Yes Yes Prior authorization
Idaho Yes Yes Failure of 2 generics plus MedWatch form
Illinois Yes Yes Prior authorization request by M.D. or R.Ph.
Indiana Yes Yes Brand medically necessary, prior authorization
Iowa Yes Yes Brand medically necessary, MedWatch form and prior authorization
Kansas Yes Yes Dispense as written
Kentucky Yes Yes Brand necessary, brand medically necessary, PA on some drugs
Louisiana Yes Yes Brand necessary, brand medically necessary
Maine Yes Yes Prior authorization
Maryland Yes Yes Brand medically necessary and reason for medical necessity
Massachusetts Yes Yes Dispense as written, brand medically necessary, prior authorization
Michigan Yes Yes Brand medically necessary and prior authorization
Minnesota Yes Yes Dispense as written. No pre-printed DAW allowed.
Mississippi Yes No Brand medically necessary or prior authorization for brand multi-source
Missouri Yes Yes Prior authorization and MedWatch form
Montana Yes No Brand necessary, prior authorization
Nebraska Yes Yes Medically necessary
Nevada No No Brand medically necessary
New Hampshire Yes Yes Brand medically necessary
New Jersey Yes No Brand medically necessary
New Mexico Yes Yes Medically 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
Oregon Yes Yes Brand medically necessary and documentation of generic intolerance
Pennsylvania Yes Yes Brand necessary, brand medically necessary, plus prior authorization
Rhode Island Yes No Brand medically necessary with medical justification
South Carolina Yes Yes Brand medically necessary w/cert. by prescriber and P.A.
South Dakota Yes Yes Brand medically necessary
Tennessee* Yes Yes -
Texas Yes Yes Dispense as written, medically necessary, brand medically necessary
Utah Yes Yes Dispense as written, medically necessary, brand medically necessary
Vermont Yes Yes Dispense as written
Virginia No Yes Dispense as written
Washington Yes Yes Medically necessary, brand medically necessary
West Virginia Yes No Brand medically necessary (hand written by prescriber)
Wisconsin No Yes Brand medically necessary
Wyoming Yes Yes Brand medically necessary
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 No No
Alaska No Yes No
Arizona* - - -
Arkansas $2.00 Yes Yes
California No No Yes
Colorado No No No
Connecticut $0.50 Yes No
Delaware No Yes No
District of Columbia No Yes Yes
Florida No Yes No
Georgia $0.50 Yes (brand PA required) No
Hawaii No - No
Idaho No Yes No
Illinois No No Yes
Indiana No Yes Yes
Iowa No Yes Yes
Kansas No No No
Kentucky No Yes Yes
Louisiana No No No
Maine No Yes No
Maryland Yes Yes Yes
Massachusetts No Yes No
Michigan No No No
Minnesota No Yes Yes
Mississippi No Yes No
Missouri No Yes Yes
Montana No Yes No
Nebraska No No No
Nevada No Yes No
New Hampshire No Yes No
New Jersey No Yes No
New Mexico No No No
New York $1.00 Yes No
North Carolina No Yes Yes
North Dakota No No No
Ohio No No No
Oklahoma No Yes No
Oregon No Yes No
Pennsylvania No Yes No
Rhode Island No Yes No
South Carolina No Yes No
South Dakota $10.00 No No
Tennessee* Yes Yes Yes
Texas No Yes No
Utah No Yes Yes
Vermont No Yes No
Virginia No Yes No
Washington No Yes No
West Virginia No Yes No
Wisconsin No Yes No
Wyoming No Yes No
4-43
Counseling Requirements and Payment for Cognitive Services
Medicaid Payment
State Patient Counseling Required1 for Cognitive Services2
Alabama All Yes (Clozaril case management)
Alaska All No
Arizona All -
Arkansas All No
California All No
Colorado Medicaid Only No
Connecticut Medicaid Only No
Delaware All No
District of Columbia Medicaid Only, New Prescriptions No
Florida All Yes (HIV, mental health, diabetes, hypertension)
Georgia All No
Hawaii Medicaid Only No
Idaho All No
Illinois All No
Indiana All No
Iowa All No
Kansas All No
Kentucky All No
Louisiana All No
Maine All No
Maryland Medicaid Only, New Prescriptions No
Massachusetts All No
Michigan All No
Minnesota All Yes (Clozaril monitoring)
Mississippi All Yes
Yes (diabetes, asthma, heart failure, and depression
Missouri All
education)
Montana All No
Nebraska All No
Nevada All No
New Hampshire All No
New Jersey All Yes
New Mexico All No
New York All No
North Carolina All No
North Dakota All No
Ohio All No
Oklahoma All No
Oregon All No
Pennsylvania All No
Rhode Island All No
South Carolina Medicaid Only No
South Dakota All No
Tennessee All No
Texas All No
Utah All No
Vermont All No
Virginia All No
Washington All Yes (emergency contraceptive counseling)
West Virginia All No
Wisconsin All Yes
Wyoming All No
Source: 12002-2003 National Association of Boards of Pharmacy Law, Survey of Pharmacy Law; 2 As reported by State drug
program administrators in the 2003 NPC Survey.
4-44
Prescription Price Updating
State Contact Telephone Updated

Alabama Beverly Churchwell 334-242-5034 Biweekly
Alaska Dave Campana 907-334-2425 Weekly
Arizona* - - -
Arkansas First DataBank 650-588-5454 Weekly
California EDS Federal Corp. 916-636-1000 Monthly
Colorado Martha Warner 303-866-3176 Weekly
Connecticut James Heuschkel 860-424-5347 Weekly
Delaware Dan Cohn 302-453-8453 Weekly
District of Columbia Glenn Sharp 804-965-7447 Monthly
Florida First DataBank 650-588-5454 Weekly
Georgia Express Scripts 952-837-5326 Weekly
Hawaii First DataBank 800-633-3453 Weekly
Idaho Katie Ayad 208-364-1970 Biweekly
Illinois First DataBank 650-588-5454 Weekly
Indiana First DataBank 650-588-5454 Weekly
Iowa Sherry Swanson 515-327-0950 Weekly
Kansas Mary H. Obley 785-296-8406 Weekly
Kentucky Unisys Provider Services 502-226-1140 Weekly
Louisiana Maggie Vick, Unisys Corp. 225-237-3251 Weekly
Maine Jude Walsh 207-287-1815 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 Judith P. Clark, R.Ph. 601-359-5253 Weekly
Missouri First DataBank 650-588-5454 Weekly
Montana First DataBank 650-588-5454 Weekly
Nebraska First DataBank 650-588-5454 Weekly
Nevada First DataBank 650-588-5454 Monthly
New Hampshire First Health Services Corp. 800-884-2822 Weekly
New Jersey First DataBank 650-588-5454 Weekly
New Mexico Neil Solomon, M.P.H., R.Ph. 505-874-3174 Weekly
New York Carl Cioppa, Pharm.D.. 518-474-9219 Monthly
North Carolina Sharon Greeson, R.Ph.. 919-816-4475 Weekly
North Dakota Brendan K. Joyce, Pharm.D., R.Ph. 701-328-1544 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. 401-462-6390 Biweekly
South Carolina First DataBank 650-588-5454 Weekly
South Dakota Mark Petersen, R.Ph. 605-773-3495 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 Christine Dapkiewicz 802-879-4450 Biweekly
Virginia Javier Menendez, R.Ph. 804-786-2196 Weekly
Washington Tom Zuchlewski 360-725-1837 Weekly
West Virginia Becky Garrigan 770-352-8592 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 1
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

2001 2002**
Expenditures Recipients Expenditures Recipients
TOTAL $392,482,787 464,695 $452,269,953
RECEIVING CASH ASSISTANCE TOTAL $282,959,267 214,351

Aged $38,349,615 26,574
Blind/Disabled $227,824,175 126,146
Child $9,041,169 45,067
Adult $7,744,308 16,564
MEDICALLY NEEDY, TOTAL $0 -

Aged $0 -
Blind/Disabled $0 -
Child $0 -
Adult $0 -
POVERTY RELATED, TOTAL $44,308,667 201,784

Aged $711,972 619
Blind/Disabled $830,003 695
Child $41,406,319 190,910
Adult $1,360,373 9,560
TOTAL OTHER EXPENDITURES/RECIPIENTS* $65,214,853 48,560

*Total other expenditures/recipients includes foster care children, 1115 demonstration participants, other recipients, and unknown.
** 2002 data on expenditures and number of recipients by maintenance assistance status and basis of eligibility are unavailable.
1
The State of Alabama did not respond to the 2003 NPC Survey. Using CMS data and other source materials, we have, to the extent possible, updated the Profile and
the tables in other sections of the Compilation. Users should check with the Alabama Medicaid program to assess the accuracy and currency of the information
included.
Alabama-1
Source: CMS, MSIS Report, FY 2001 and CMS-64 Report, FY 2002.

C. ADMINISTRATION
Formulary/Prior Authorization
Alabama Medicaid Agency.
Formulary: Open formulary with preferred drug list.
D. PROVISIONS RELATING TO DRUGS Prior authorization required for non-preferred drugs.
Anti-psychotics and HIV/AIDs drugs are exempted
from the prior authorization requirements. (For
Benefit Design additional information see: www.medicaid.state.al.us.
Drug Benefit Product Coverage: Products covered:
prescribed insulin, disposable needles used for Prior Authorization: State currently has a formal
insulin; and syringe combinations for insulin prior authorization procedure. Review by Medicaid’s
(considered OTC). Products covered as DME: blood Medical Director required for appeal of prior
glucose test strips; urine ketone test strips; total authorization decisions.
parenteral nutrition; and interdialytic parenteral
nutrition. Prior authorization required for: Retin A, Prescribing or Dispensing Limitations
Accutane, Dipyridamole. Products not covered:
cosmetics; fertility drugs; experimental drugs; drugs Prescription Refill Limit: 30 day supply, maximum of
for anorexia or weight gain; hair growth products; five refills.
and DESI drugs.
Over-the-Counter Product Coverage: Products Drug Utilization Review

covered if prescribed by a physician: allergy, asthma
and sinus products; analgesics; cough and cold PRODUR system implemented in July 1996. State
preparations; digestive products; prenatal vitamins; currently has a DUR Board with a quarterly review.
hemorrhoidal products. Partial coverage for: topical
products. Products not covered: smoking deterrent
products and feminine products.
Dispensing Fee: $5.40.
Therapeutic Category Coverage: Therapeutic
categories covered: anabolic steroids; anoretics;
Ingredient Reimbursement Basis: AWP-10%, WAC
antibiotics; anticoagulants; anticonvulsants;
+ 9.2%.
antidepressants; antidiabetic agents; antilipemic
agents; anxiolytics, sedatives, and hypnotics; cardiac
Prescription Charge Formula: Medicaid pays for
drugs; chemotherapy agents; estrogens; hypotensive
prescribed legend and non-legend drugs authorized
agents; misc. GI drugs; sympathominetics
under the program based upon and shall not exceed
(adrenergic) and thyroid agents. Partial coverage for:
the lowest of:
anti-psychotics; prescribed cold medications; and
contraceptives. Prior authorization required for: 1. The Maximum Allowable Cost (MAC) of the
analgesics, antipyretics, and (brand name) NSAIDs; drug plus a dispensing fee,
antihistamine drugs (adult only); ENT anti-
inflammatory agents; growth hormones; and 2. The Estimated Acquisition Cost (EAC) of the
nutritional supplements. Therapeutic categories not drug plus a dispensing fee, or
covered: prescribed smoking deterrents. 3. The provider’s usual and customary charge to
the public for the drug.
Coverage of Injectables: Injectable medicines
reimbursable through the Prescription Drug Program Maximum Allowable Cost: State imposes Federal
when used in physician offices, home health care, Upper Limits as well as State-specific limits on
and extended care facilities. generic drugs. Override requires “Brand Medically
Necessary” in the physician’s own handwriting.
Vaccines: Vaccines reimbursable as part of the
EPSDT service and the Vaccines for Children Incentive Fee: None.
Program. Adult vaccines are available through the
Health Department. Patient Cost Sharing: Tiered copayment.
Unit Dose: Unit dose packaging reimbursable. Drug Ingredient Cost Copayment
$0.00 to $10.00 $0.50
$10.01 to $25.00 $1.00
Alabama-2
$25.01 to $50.00 $2.00

$50.01 or more $3.00
Exemptions: No copayment amount is to be collected
by the pharmacy or paid by the recipient for New Brand Name Products Contact
recipients under age 18, pregnant or living in nursing
Louise F. Jones
facilities.
334/242-5039
Cognitive Services: Clozaril care management fee of
Prescription Price Updating
$3.00.
Beverly R. Churchwell, Administrator
E. USE OF MANAGED CARE Alabama Medicaid Agency
501 Dexter Avenue
Does not use MCOs to deliver services to Medicaid P.O. Box 5624
recipients. Montgomery, AL 36103-5424
T: 334/242-5034
F. STATE CONTACTS F: 334/353-7014
E-mail: bchurchwell@medicaid.state.al.us
State Drug Program Administrator

Medicaid Drug Rebate Contact
Louise F. Jones
Pharmacy Program Manager Gladys Gray, Associate Director
Alabama Medicaid Agency Alabama Medicaid Agency
501 Dexter Avenue 501 Dexter Avenue
P.O. Box 5624 P.O. Box 5624
Montgomery, AL 36103-5624 Montgomery AL 36103-5624
T: 334/242-5039 T: 334/242-2327
F: 334/353-7014 F: 334/353-7014
E-mail: lljones@medicaid.state.al.us E-mail: ggray@medicaid.state.al.us
Internet address: www.medicaid.state.al.us
Claims Submission Contact
Prior Authorization Contact Cyndi Crocket, Supervisor
Louise F. Jones EDS
334/242-5039 301 Technacenter Dr.
Montgomery, AL 36117
334/215-0111
DUR Contact
Louise Jones Medicaid Managed Care Contact
334/242-5039
Kim Davis-Allen, Director
Managed Care
Medicaid DUR Board Alabama Medicaid Agency
John Searcy, M.D. 501 Dexter Avenue
Jimmy Jackson, R.Ph. Montgomery, AL 36103-5624
Johnny Brooklere, R.Ph. 334/242-5011
John E. Brandon, M.D.
Kathy B. Portner, M.D. Mail Order Pharmacy Program
Richard Freeman, M.D.
Gary Magouirk, M.D. None
Roger Lander, Pharm.D. (Vice-chair) Disease Management Program/Initiative
Frank Skinner, R.Ph. Contact
W. Thomas Geary, Jr., M.D. (Chair)
Steven Rostand, M.D. Mary H. Finch
Margaret Thrower, Pharm.D. Associate Medical Director
Rob Colburn, R.Ph. Alabama Medicaid Agency
Jefferson Underwood, III, M.D. 501 Dexter Avenue
Montgomery, AL 36103-5624
Alabama-3
334/242-5610
Alabama-4
Alabama Medicaid Agency Officials Medical Association of State of Alabama

Marsha D. Raulerson, M.D.
Mike Lewis
1205 Belleville Avenue
Commissioner
Brewton, AL 36426-1304
Alabama Medicaid Agency
251/867-3609
501 Dexter Avenue
P.O. Box 5624
Wilburn Smith, Jr., M.D.
2023 Normandie Drive
T: 334/242-5600
F: 334/242-0556
334/281-2633
E-mail: Almedicaid@medicaid.state.al.us
Internet address: www.medicaid.state.al.us
Cary J. Kuhlmann, Executive Director
Medical Association of the State of Alabama
John Searcy, M.D.
P.O. Box 1900-C
Medical Director
Alabama Medicaid Agency
334/263-6441
501 Dexter Avenue
P.O. Box 5624
Alabama Nursing Home Association
Mr. Louis E. Cottrell, Jr., Executive Director
334/242-5619
4156 Carmichael Road
Title XIX Medical Care Advisory Committee 334/271-6214
Alabama State Government Representatives Alabama State Medical Association
Dr. Milissa Mauser-Galvin Roosevelt McCorvey, M.D.
Executive Director, Department of Senior Services 3088 Rosa L. Parks Avenue
P.O. Box 301851 Montgomery, AL 36105
Montgomery, AL 36130-1851 334/262-0259
334/242-5743
J.A. Powell, M.D.
Bill Fuller, Commissioner 2212 Mallard Lane SE
Alabama Department of Human Resources Decatur, AL 35602
50 Ripley Street, 2nd Floor 256/340-1068
334/242-1160 Alabama Chap. Am. Academy of Family Physicians
Holly Midgley, Executive Vice President
Kathy Sawyer, Commissioner P.O. Box 1900
Alabama Department of Health and Mental 19 South Jackson Street
Retardation Montgomery, AL 36102-1900
P.O. Box 301410 334/263-6441
334/242-3107 Alabama Pharmacy Association
William S. Eley, II, Executive Director
Donald Williamson, M.D. 1211 Carmichael Road
State Health Officer Montgomery, AL 36106
P.O. Box 303017 334/271-4222
Montgomery, AL 36130-3017 Page Dunlap
334/206-5200 P.O. Box 354
Hartselle, AL 35640
Steve Shivers 256/773-5421
Alabama Department of Rehabilitation Services
2129 East South Boulevard Alabama Chap. American Academy of Pediatrics
Montgomery, AL 36116-2455 Karin Scott, Executive Director
334/281-8780 735 Montgomery Highway, Suite 323
Birmingham, AL 35216
205/824-0888
Alabama-5
Alabama Dietetic Association Alabama State Nurses Association

Gayle Mask Karen Pakkala, Executive Director
Alabama Department of Public Health 360 North Hill Street
RSA Tower, Suite 1300 Montgomery, AL 36104-3658
P.O. Box 303017 334/262-8321
334/206-2922 Consumer Representatives
Lawrence F. Gardella
Alabama Hospital Association Senior Staff Attorney
J. Michael Horsley, President Montgomery Regional Office
East Station Legal Services Corporation of Alabama
P.O. Box 210759 600 Bell Building, 207 Montgomery Street
Montgomery, AL 36121 Montgomery, AL 36104
334/272-8781 334/832-4570
Jody Pigg, CEO Bill Chandler

Baptist Health Services General Director
P.O. Box 11010 Montgomery YMCAs
Montgomery, AL 36111-0010 P.O. Box 2336
334/273-4404 Montgomery, AL 36102-2336
334/269-4362
Alabama Optometric Association
Teresa Easterling
Amanda Jones, Executive Director
325 Spigener Road
400 South Union Street, Suite 435
Titus, AL 36080
334/567-5020
334/834-1057
Linda McWilliams
Alabama Association of Home Health Agencies
Top of Alabama Regional Council of Governments
Melane Golson
(TARCOG)
Office of Executive Director
115 Washington Street, SE
P.O. Box 40
Huntsville, AL 35801
205/533-3330
334/395-9949
Rogene W. Parris
Alabama Primary Health Care Association
2061 Fire Pink Court
Al Fox, Executive Director
6008 East Shirley Lane, Suite A
205/987-0338
334/271-7068
Louise Pittman
3355 Lexington Road
Alabama Academy of Ophthalmology
Leigh Jones
334/264-8780
P.O. Box 11455
334/269-9900 Pharmacy and Therapeutics Committee
Assisted Living Association of Alabama A. Z. Holloway, M.D.

Frank Holden, President Richard Freeman, M.D.
400 S. Union Street, Suite 235 Ben Main, R.Ph.
Montgomery, AL 36104 Gary Magouirk, M.D.
334/262-5523 David Herrick, M.D.
Jackie Feldman, M.D.
Alabama Hospice Organization Melanie Smith, R.Ph.
David Stone, Executive Director Mary McIntyre, M.D.
P.O. Box 1835 Jefferson Underwood, III, M.D.
Calera, AL 35040 Rob Colburn, R.Ph.
205/668-0460
Alabama-6
Executive Officers of State Medical and Alabama Independent Drugstore Association (AIDA)
Pharmaceutical Societies Sharon Taylor, Executive Director
400 Interstate Park Drive
Medical Association of the State of Alabama (MASA)
Suite 401
Cary Kuhlmann
Executive Director
T: 334/213-2432
19 S. Jackson Street
F: 334/213-2406
P.O. Box 1900
E-mail: Sharon@aidarx.org
Internet address: www.aidarx.org
T: 334/954-2500
F: 334/269-5200
Alabama Hospital Association
E-mail: cary@masalink.org
Tom Cooper, CEO
Internet address: www.masalink.org
500 North East Blvd.
Alabama Osteopathic Medical Association
T: 334/272-8781
E. Jason Hatfield, D.O.
F: 334/270-9527
Secretary -Treasurer
E-mail: tcooper@alaha.org
P.O. Box 1857
Internet address: www.alaha.org
U.S. Highway 43
Winfield, AL 35594
T: 205/487-7556
F: 205/487-7559
Internet address: www.aloma.org
Alabama State Medical Association

Joel Powell, M.D., President
1408 5th Avenue, SE, Suite 1
Decatur, AL 35601
T: 256/340-9445
F: 256/350-0499
Alabama Pharmacy Association (APA)

William S. Eley, II
Executive Director
1211 Carmichael Way
T: 334/271-4222
F: 334/271-5423
E-mail: aparx@aparx.org
Internet address: www.aparx.org
State Board of Pharmacy

Jerry Moore
Executive Director
1 Perimeter Park South, Suite 425 S
T: 205/967-0130
F: 205/967-1009
E-mail: jmoore@albop.com
Internet address: www.albop.com
Alabama-7
ALASKA

Disabled Disabled
Prescribed Drugs
Physician Services
Dental Services
B. DRUG PAYMENTS AND RECIPIENTS

2001 2002**
Expenditure Recipients Expenditure Recipients
TOTAL $64,923,574 65,278 $70,708,412
RECEIVING CASH ASSISTANCE TOTAL $52,946,651 33,640

Aged $9,954,837 4,747
Blind/Disabled $33,634,846 8,964
Child $1,778,759 9,519
Adult $7,578,209 10,410

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

Aged $6,244 8
Blind/Disabled $368 2
Child $4,319,775 20,919
Adult $976,703 4,846
TOTAL OTHER EXPENDITURES/RECIPTENTS* $6,673,833 5,863
*Total Expenditures/Recipients includes foster care children, 1115 demonstration participants, other recipients, and unknown.
**2002 data on expenditures and number of recipients by maintenance assistance status and basis of eligibility are unavailable.
Alaska-1
C. ADMINISTRATION Formulary/Prior Authorization

Department of Health and Social Services, Division of Formulary: No formulary. Preferred drug list (PDL)
Medical Assistance. managed by restrictions on use, therapeutic
substitution, preferred products, and physician
D. PROVISIONS RELATING TO DRUGS profiling.
Benefit Design Prior Authorization: State currently has a formal prior

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

Dave Campana, R.Ph.
Cognitive Services: Does not pay for cognitive
907/334-2425
services.
Patient Cost Sharing: $2.00 copayment for branded Prescription Price Updating
and generic products.
Dave Campana, R.Ph.
907/334-2425
E. USE OF MANAGED CARE
Does not use MCOs to deliver services to Medicaid Amanda Burger
recipients. Division of Medical Assistance
4501 Business Park Blvd., Suite 24
F. STATE CONTACTS Anchorage, AK 99503
T: 907/334-2409
F: 907/561-1684
Medicaid Drug Program Administrator E-mail: amanda.burger@health.state.ak.us
Dave Campana, R.Ph.
Pharmacy Program Manager Claims Submission Contact
Division of Medical Assistance
Linda Walsh
4501 Business Park Blvd., Suite 24
Systems Administrator
Anchorage, AK 99503
T: 907/334-2425
4501 Business Park Blvd, Suite 24
F: 907/561-1684
Anchorage, AK 99503
E-mail: david_campana@health.state.ak.us
T: 907/334-2441
F: 907/561-1684
Health and Social Services Department E-mail: linda_walsh@health.state.ak.us
Officials
Joel Gilbertson, Commissioner Disease Management Program/Initiative
Department of Health and Social Services Contact
P.O. Box 110601
Pam Muth
Juneau, AK 99811-0601
Deputy Director
T: 907/465-3030
F: 907/465-3068
4501 Business Park Blvd, Suite 24
E-mail: joel_gilbertson@health.state.ak.us
Anchorage, AK 99503
907/334-2400
Dwayne Peeples, Director
E-mail: pam_muth@health.state.ak.us
Division of Medical Assistance, DHSS
P.O. Box 110660
Juneau, AK 99811-0660 Mail Order Pharmacy Benefit
T: 907/465-3355
Yes, for Medicaid recipients living in rural areas.
F: 907/465-2204
E-mail: dwayne_peeples@health.state.ak.us
Alaska DUR Committee
Prior Authorization Contact Dave Campana, R.Ph.
Anchorage, AK 99503
Dave Campana, R.Ph.
907/334-2425
Richard Reem, M.D.
Fairbanks, AK 99701-3639
DUR Contact
Heide Brainerd, P.H.
Dave Campana, R.Ph.
Anchorage, AK
907/334-2425
Arthur Hansen, D.D.S.
Fairbanks, AK 99712
Alaska-3
Greg Polston, M.D.

Fairbanks, AK.
Charlene Hampton, R.Ph.

Anchorage, AK
Alexander von Hafften, M.D.

Anchorage, AK
Executive Officers of State Medical and

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
Internet address: www.do-online.org/aoawesternregion
Alaska Pharmaceutical Association

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

Barbara Roche
Licensing Examiner
P.O. Box 110806
Juneau, AK 99811-0806
T: 907/465-2589
F: 907/465-2974
E-mail: barbara_roche@dced.state.ak.us
Internet address: www.dced.state.ak.us/occ/ppha.htm
Alaska State Hospital and Nursing Home Association

Rod L. Betit
President/CEO
426 Main Street
Juneau, AK 99801
T: 907/586-1790
F: 907/463-3573
E-mail: rbetit@ashnha.com
Internet address: www.ashnha.com
Alaska-4
ARIZONA
ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM
(AHCCCS - PRONOUNCED "ACCESS")
AHCCCS FEATURES Primary Care Physicians as Gatekeepers

The Arizona Health Care Cost-Containment System AHCCCS legislation provided that all members must
(AHCCCS) is a Title XIX (Medicaid) 1115 Research be under the care and supervision of a primary care
and Demonstration Waiver project, jointly funded by physician who assumed the role of gatekeeper. A
the federal government and the State of Arizona. statewide network of primary care physicians was
Begun in October 1982, it serves as a model for established to perform the gatekeeping function for
providing medical services to the indigent in a the system.
managed care system rather than through fee-for-
service arrangements. Typically, Medicaid programs
have incorporated the traditional hallmarks of the Prepaid Capitated Financing
U.S. health care system: namely, independent
providers and fee-for-service reimbursement. In It was the intent of the AHCCCS legislation that
contrast, organized health plans and capitation mark health plans and their providers offer all covered
the 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. AHCCS
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
Gatekeepers The statewide competitive aspect of the bid process
• Prepaid Capitated Financing for selecting providers and offering prepaid capitated
• Competitive Bidding Process services is the most unique feature of the AHCCCS
• Cost Sharing model. A competition of this magnitude had never
• Limitations on Freedom-of-Choice been attempted in any other State. The AHCCCS
• Capitation of the State by the Federal administration believes competitive bidding for
Government health care service contracts, as opposed to
conventional negotiation processes, provides
Arizona-1
accessible cost-effective delivery of health care for the State to monitor health care costs on a careful
without sacrificing quality performance. and continuous basis.
The AHCCCS administration issues an invitation to IMPLEMENTATION OF AHCCCS

qualified health plans once every five years.
Qualified health plans may bid to offer the full range AHCCCS is based on plans that have been tested, in
of AHCCCS services in one or more counties. part, on smaller scales in different areas of the
country. By combining a number of key mechanisms
Cost Sharing on a statewide basis, AHCCCS represents a novel
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 co-payment schedule was
developed for this purpose, and the medically needy
participate in coinsurance cost sharing. It is expected Provider Participation
that the imposition of nominal co-payments will
ensure optimal effectiveness in the area of service Providers may participate in AHCCCS in 2 different
utilization. The co-payment schedule accomplishes ways. First, they may contract with prepaid capitated
three objectives: curtailment of over-utilization; plans as either full or partial benefit providers.
enhancement of patient dignity; and service
utilization by members for truly needed health care. The second mode of participation is on a capped fee-
There is no co-payment for drugs and medication, for-service basis. Here, providers agree to accept
prenatal care including all obstetrical visits, members capped fee payments as payments in full for services
in long care facilities and for visits scheduled by the provided on a FFS basis.
primary care physician or practitioner, and not at the
request of the member.
Functions of the AHCCCS Administration
Limitations On Freedom-of-Choice The Arizona Health Care Containment System

Administration (AHCCCSA) contracts with full
The fifth major item for containing costs is a benefit capitated health plans to serve AHCCCS
restriction on provider/physician selection by members through a network of providers.
AHCCCS members. Unlike conventional delivery
models, Arizona does not rely on fee-for-service
Contracting Health Plans
arrangements. The goal is to have the State
completely blanketed with prepaid capitated
Under the Contracting Health Plan arrangement,
arrangements. Members are linked to selected or
plans are defined in terms of explicit groups of
assigned plans for definite durations of time.
providers organized as entities that are more formal.
Freedom-of-choice is permitted to the extent
These consortia, or formal entities, are capable of
practicable for members to select the particular group
providing the full range of AHCCCS benefits within
with which to enroll, as well as the primary care
a defined service area for all AHCCCS members who
physician within the selected group. Capped fee-for-
elect to join the plans, up to a predetermined
service health service arrangements are used as a last
capacity. This is the dominant mode of operation
resort, and only in areas not covered by prepaid
within AHCCCS -- with two or more competing
capitated plans.
plans wherever possible.
CAPITATION BY THE FEDERAL The Contracting Health Plans are delivery systems,
GOVERNMENT not simply insurance plans, but they need not be
Health Maintenance Organizations by any legal or
The State of Arizona will itself be capitated by the conventional definition of the term. The AHCCCS
Federal Government and therefore will be at financial legislation provides for the creation of provider
risk for containing health care costs. Capitation rates consortia for the purpose of participation in the
will be established according to sound actuarial program. The Contracting Health Plan may be a
principles, and will represent no more than 95 loosely organized system, but it must be capable of
percent of the estimated cost of services delivered in providing the full range of AHCCCS benefits to a
Arizona under conventional fee-for-service defined population at a capitation rate.
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
and Regulations; manages the health plan bidding AHCCCS Contracted Health Plans
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. 602/264-1232
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 602/778-1800
operations.
CIGNA Community Choice
The AHCCCS Administration has overall 11001 North Black Canyon Highway
responsibility for the following activity areas: Phoenix, AZ 85029
602/371-2621
• Eligibility Oversight
• Procurement of Health Plans DES/CMDP
• Quality Management CMDP-942-C
• Health Plan Oversight Century Plaza Building, 10th Floor
• Provider, Member Call Center 3225 North Central Avenue
• Grievances and Complaints Phoenix, AZ 85012
• Fee-for-Service for IHS 602/351-2245
AHCCCS became effective December 1, 1981, and Family Health Plan of NE Arizona
services commenced October 1, 1982. Services 258 Justin Drive
include: inpatient, outpatient, laboratory, x-ray, P.O. Box 2069
prescription drugs, medical supplies, prosthetic Cottonwood, AZ 86326
devices, emergency dental care including extractions 928/448-3585
and dentures, treatment of eye conditions and
EPSDT. Health Choice Arizona
Suite 260
Though AHCCCS was a three-year experiment that 1600 West Broadway
was to end in October 1985, the Federal government Tempe, AZ 85282-1136
continues to extend funding for the program. In 480/968-6866
1988, AHCCCS received a five-year extension from
the Federal government and in 1993, it received an Maricopa Health Plan
additional one-year extension. In 1994, AHCCCS 2502 East University Drive
received a three-year extension and in 1998, it Phoenix, AZ 85034
received a one-year extension. Since then, AHCCCS 602/344-8700
has received additional extensions. Currently,
AHCCCS is operating under a five year waiver Mercy Care Plan
extension that will expire on September 30, 2006. Suite 400
Some 20 years after it first began, AHCCCS has 2800 North Central
grown in numbers from the first wave of 180,000 Phoenix, AZ 85004
enrollees to more than 963,000 beneficiaries, (Oct. 602/263-3000
2003) 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 Health Plan/Community Connection Maricopa Long Term Care Plan

1209 South 7th Avenue Suite 125
Phoenix, AZ 85007 2502 East University Drive
602/824-3700 Phoenix, AZ 85034
602/344-8700
Pima Health System
Suite A-200 Mercy Care Plan
5055 East Broadway Suite 400
Tucson, AZ 85711 2800 North Central
602/512-5500 Phoenix, AZ 85004
602/263-3000
University Family Care
575 East River Road Pima Long Term Care
Tucson, AZ 85704 Pima Health System
888/708-2930 Suite A-200, 5055 East Broadway
Tucson, AZ 85711
Phoenix Area Indian Health Services (IHS) 520/512-5500
Two Renaissance Square
40 N. Central Avenue Pinal/Gila LTC
Phoenix, AZ 85004-5036 P.O. Box 2140
602/364-5039 971 North Pinal Parkway
Florence, AZ 85232-2140
Tucson Area Indian Health Services (IHS) 520/868-6775
7900 South J. Stock Road
Tucson, AZ 85746 Yavapai County LTC
520/295-2405 Yavapai County Department of Medical Assistance
595 White Spar Road
Navajo Area Indian Health Services (IHS) Prescott, AZ 86303
P.O. Box 9020 520/771-3560
Window Rock, AZ 86515-9020
928/871-5811 AHCCCS FFS (ALTCS)
Ventilator Dependent
ALTCS Contractor List Office of Medical Management
602/417-4370
Arizona Physicians IPA
Suite A
242 West 28th Street STATE CONTACTS
Yuma, AZ 85364
520/783-5691 AHCCCS Officials
Cochise Health Systems Phyllis Biedess, Director

Cochise County Health & Social Services AHCCCS
1415 West Melody Lane, Building A 801 E. Jefferson Street
Bisbee, AZ 85603-4249 Phoenix, AZ 85034
520/432-9600 T: 602/417-4680
F: 602/252-6536
DES/DDD E-mail: PXBiedess@ahcccs.state.az.us
1789 West Jefferson, 4th Floor Internet address: www.ahcccs.state.az.us
Phoenix, AZ 85007
602/542-0419 Dell Swan
Pharmacy Program Administrator
Evercare Select AHCCCS
314 N. 3rd Avenue 801 East Jefferson Street
Phoenix, AZ 85013 MD 4100
602/331-5100 Phoenix, AZ 85034
612/417-4000
E-mail: dwswan@ahcccs.state.az.us
Arizona-4

Arizona Medical Association, Inc.
Chic Older
Executive Vice President
810 West Bethany Home Road
Phoenix, AZ 85013
T: 602/246-8901
F: 602/242-6283
E-mail: chicolder@azmedassn.org
Internet address: www.azmedassn.org
Arizona Pharmacy Association

Kathy Boyle
Executive Director
1845 E. Southern Ave.
Tempe, AZ 85282-5831
T: 480/838-3385
F: 480/838-3557
E-mail: azpa@azpharmacy.org
Internet address: www.azpharmacy.org
Arizona Osteopathic Medical Association

Amanda Weaver
Executive Director
5150 N. 16th St., Suite A-122
Phoenix, AZ 85016
T: 602/266-6699
F: 602/266-1393
E-mail: mweaver@az-osteo.org
Internet address: www.az-osteo.org
Arizona Board of Pharmacy

Hal Wand
Executive Director
4425 W. Olive Avenue, Suite 140
Glendale, AZ 85302
T: 623/463-2727
F: 623/934-0583
E-mail: info@azsbp.com
Internet address: www.pharmacy.state.az.us
Arizona Hospital and Healthcare Association

John R. Rivers, FACHE
President/CEO
2901 North Central Avenue
Suite 900
Phoenix, AZ 85012
T: 602/445-4300
F: 602/445-4299
E-mail: jrivers@azha.org
Internet address: www.azha.org
Arizona-5
Arizona-6
ARKANSAS

Disabled Disabled
Prescribed Drugs
Physician Services
Dental Services

2001 2002**
Expended Recipients Expended Recipients
TOTAL $248,392,084 321,920 $273,257,660
RECEIVING CASH ASSISTANCE, TOTAL $142,811,387 111,016

Aged $18,083,097 13,278
Blind/Disabled $117,036,376 68,665
Child $4,248,875 19,495
Adult $3,443,039 9,578
MEDICALLY NEEDY, TOTAL $7,660,175 13,964

Aged $130,249 203
Child $1,664,186 5,912
Adult $3,143,757 5,813

Aged $370,667 367
Blind/Disabled $917,628 673
Child $18,932,809 88,224
Adult $1,373,429 11,379
*Total Other Expenditures/Recipients includes foster care children, 1115 demonstration participants, other recipients, and unknown.
Arkansas-1

Department of Human Services, Division of Medical Formulary: State covers outpatient drugs whose
Services, Pharmacy Program. manufacturers have signed a rebate agreement with
CMS. General exclusions include:
D. PROVISIONS RELATING TO DRUGS
1. Agents used for hair growth.
Benefit Design 2. Vitamin products except prescription prenatal
vitamins.
Drug Benefit Product Coverage: Products covered
3. Drugs determined by the FDA to be ineffective
with restrictions: prescribed insulin; disposable
(DESI drugs).
needles and syringe combinations used for insulin.
Products not covered: blood glucose test strips; urine 4. Sedatives and hypnotics in the benzodiazepine
ketone test strips; total parenteral nutrition, category (partial coverage).
interdialytic parenteral nutrition; cosmetics; fertility
5. Compounded prescriptions (mixtures of two or
drugs; experimental drugs; and vitamins (other than
more ingredients). States are not allowed to
prenatal vitamins for pregnant women). Prior
have state codes such as 99999-9999-99. All
authorization required for: nitroglycerin patches;
drugs reimbursed by the State must be traced by
agents for impotence; Synagis; Respigam; Xenical-
NDC code and appear on the utilization report.
hyper lipidemia; Remicade; Regranex; Kineret;
Enbrel; Xolair; and Humira. Prior Authorization: State currently has a prior
authorization procedure. Beneficiaries have a right to
Over-the-Counter Product Coverage: Products appeal prior authorization decisions. Physician must
covered: digestive products (H2 antagonist). Limited submit letter explaining medical necessity leading to
coverage for: allergy, asthma and sinus products; the request for the medication.
analgesics; cough and cold preparations (under 21
years and long-term care limited needs); digestive
products (non-H2 antagonist); feminine products; Prescribing or Dispensing Limitations
and topical products. Products not covered: smoking
deterrent products. Prescription Refill Limit: 5 refills within 6 months
are allowed. New Rx required every 6 months.
categories covered: anabolic steroids; antibiotics; Monthly Quantity Limit: 31-day supply.
anticoagulants; anticonvulsants; anti-depressants;
antidiabetic agents; antilipemic agents; anti- Monthly Prescription Limit: Three prescriptions per
psychotics; anxiolytics, sedatives, and hypnotics; month per recipient, except unlimited for certified
cardiac drugs; chemotherapy agents; contraceptives; LTC recipients and recipients under 21 years old.
ENT anti-inflammatory agents; estrogens; growth Others can receive extension of three more per
hormones; hypotensive agents; sympathominetics month.
(adrenergic); and thyroid agents. Prior authorization
required for: analgesics, antipyretics, NSAIDs; Drug Utilization Review
antihistamine drugs; misc. GI drugs; prescribed
smoking deterrents. Therapeutic categories not PRODUR system implemented in March 1997. State
covered: anorectics. currently has a DUR Board with a quarterly review.
Coverage of Injectables: Injectable medicines are

reimbursable through the Prescription Drug Program Pharmacy Payment and Patient Cost Sharing
facilities, and through physician payment when used Dispensing Fee: $5.51 effective 7/1/99. Effective
in physicians offices. 3/1/02, non-MAC generics receive an additional
$2.00 dispensing fee.
Vaccines: Vaccines reimbursable as part of the
Vaccines for Children Program. Ingredient Reimbursement Basis: EAC = AWP-14%
(Brand), AWP-20% (Generic).
Prescription Charge Formula: Legend drugs: lower
of the EAC plus a dispensing fee or CFA/state upper
Arkansas-2
limit plus a dispensing fee. Total charge may not F. STATE CONTACTS
exceed provider’s charge to the self-paying public.
Maximum Allowable Costs: State imposes Federal Medicaid Drug Program Administrator
Upper Limits as well as State-specific limits on Suzette Bridges, P.D., Administrator
generic drugs. State-specific MAC list contains 800 Pharmacy Program
drugs (see www.medicaid.ar.us). Override requires Division of Medical Services
physician documentation on MedWatch form as to Dept. of Human Services
why the generic cannot be dispensed. P.O. Box 1437, Slot S 415
Little Rock, AR 72203-1437
Incentive Fee: $2.00 additional dispensing fee on T: 501/683-4120
non-MAC generics. F: 501/683-4124
E-mail: suzette.bridges@medicaid.state.ar.us
Patient Cost Sharing: Effective 9/1/92, for each
prescription reimbursed, the Medicaid recipient is Prior Authorization Contact
responsible for paying a copayment based on the
following: Suzette Bridges, P.D.
501/683-4120
State Payment Copay
DUR Contact
$10.00 or less $0.50 Pamela Ford, P.D.
Pharmacist II
$10.01 to $25.00 $1.00 Division of Medical Services
Dept. of Human Services
$25.01 to $50.00 $2.00 P.O. Box 1437, Slot S 415
$50.01 or more $3.00 T: 501/683-4120
F: 501/683-4124
ArKids $5.00 E-mail: pamela.ford@medicaid.state.ar.us
Services to individuals under 18, pregnant women,

DUR Board
nursing home residents, emergency services, family
planning services, and services provided by an HMO Steve Bryant, P.D.
to its enrollees are excluded from the Medicaid copay Jason B. Hawkins, P.D.
policy. Benji Post, P.D.
Debbie Hayes
Cognitive Services: Does not pay for cognitive Ann Blaylock, A.P.N.
services. Thomas Lewellen, D.O.
Michael N. Moody, M.D.
Laurence Miller, M.D.
E. USE OF MANAGED CARE
New Brand Name Products Contact
An estimated 275,000 Medicaid recipients are
enrolled with Primary Care Physicians and Suzette Bridges, P.D.
approximately 70,000 children are enrolled in 501/683-4120
ArKids. Pharmaceutical benefits are provided
through the State. Prescription Price Updating
First DataBank
1111 Bay Hill Drive
San Bruno, CA 94066
T: 650/588-5454
F: 650/588-4003
Arkansas-3
Medicaid Drug Rebate Contacts Executive Officers of State Medical and

Audits: Suzette Bridges, P.D., 501/683-4120
Arkansas Hospital Association
Dispute Resolution: Dana Boyer James R. Teeter
Rebate Analyst President/CEO
EDS 419 Natural Resources Drive
500 President Clinton Ave, Suite 400 Little Rock, AR 72205
Little Rock, AR 72201 T: 501/224-7878
T: 501/374-6608 F: 501/224-0519
F: 501/372-2971 E-mail: aha@arkhospital.org
E-mail: dana.boyer@mediciad.state.ar.us Internet Address: www.arkhospitals.org

Arkansas Pharmacists Association
John Herzog, Account Manager Mark Riley
EDS Executive Director
500 President Clinton Ave, Suite 400 417 S. Victory Street
Little Rock, AR 72201 Little Rock, AR 72201-2932
T: 501/374-6608 T: 501/372-5250
F: 501/372-2971 F: 501/372-0546
E-mail: john.herzog@medicaid.state.ar.us E-mail: mriley@arpharmacists.org
Internet address: www.arpharmacists.org
Medicaid Managed Care Contact
Arkansas State Board of Pharmacy
Kellie Phillips Charles S. Campbell
Program Administrator Executive Director
Medical Assistance 101 E. Capitol, Suite 218
Division of Medicaid Services Little Rock, AR 72201
Dept. of Human Services T: 501/682-0190
P.O. Box 1437, Slot 410 F: 501/682-0195
Little Rock, AR 72203 E-mail: charlie.campbell@mail.state.ar.us
T: 501/682-8306 Internet address: www.state.ar.us/asbp
F: 501/682-1197
E-mail: kellie.phillips@medicaid.state.ar.us Arkansas Osteopathic Medical Association
Ed Bullington
Executive Director
Mail Order Pharmacy Benefit 412 Union Station
None 1400 West Markham
Little Rock, AR 72201
Department of Human Services Officials T: 501/374-8900
F: 501/374-8959
Kurt Knickrehm, Director E-mail: osteomed@ipa.net
Department of Human Services Internet address: www.arkosteomed.org
P.O. Box 1437, Slot 201
Little Rock, AR 72203-1437 Arkansas Medical Society
T: 501/682-8650 Ken LaMastus
F: 501/682-6836 Executive Vice President
E-mail: kurt.knickrehm@state.ar.us P.O. Box 55088
Internet Address: www.accessarkansas.org/dhs Little Rock, AR 72215
T: 501/224-8967
Roy Jeffus, Director F: 501/224-6489
Division of Medical Services E-mail: klamastus@arkmed.org
P.O. Box 1437, Slot 1100 Internet address: www.arkmed.org
T: 501/682-1671
F: 501/682-1197
E-mail: roy.jeffus@medicaid.state.ar.us
Arkansas-4
CALIFORNIA

Disabled Disabled
Prescribed Drugs
Physician Services
Dental Services
Note: Certain classifications of aliens in the above categories are eligible only for emergency and pregnancy-related benefits.

2001 2002**
TOTAL $2,808,298,437 2,486,910 $3,591,537,830
RECEIVING ASSISTANCE, TOTAL $2,143,413,178 1,334,480

Aged $479,791,420 266,911
Blind/Disabled $1,547,024,854 579,572
Children $39,100,804 299,830
Adult $77,496,100 188,167
MEDICALLY NEEDY, TOTAL $423,154,155 279,326

Aged $198,544,758 120,346
Blind/Disabled $198,371,267 53,459
Children $11,503,750 68,297
Adults $14,734,380 37,224

Aged $14,257,426 11,923
Disabled $32,358,484 10,485
Children $5,572,729 51,243
Adults $2,198,979 29,596
*Total Other Expenditures/ Recipients include foster care children, demonstration participants, other recipients, and unknown.
Source: CMS, MSIS Report, FY 2001and CMS-64 Report, FY 2002.
California-1
Under the Health and Human Services Agency with Formulary: The Medi-Cal List of Contract Drugs is a
direct administration by the Department of Health preferred drug list. It contains over 600 drugs, in
Services. differing strengths and dosage forms, listed
generically. Patients can get prior authorization for
The Department of Health Services Pharmaceutical unlisted drugs or for listed drugs that are restricted to
Unit of the Medi-Cal Policy Division monitors the specific use(s), if medically justified. Manufacturers
full scope and quality of pharmaceutical benefits frequently petition Medi-Cal to add drugs to the List
covered under the provisions of the California of Contract Drugs. Based on Medi-Cal’s five criteria
Medical Assistance Program. (safety, efficacy, misuse potential, essential need, and
cost), a drug may be added to the list by contractual
D. PROVISIONS RELATING TO DRUGS agreement with the manufacturer to provide the State
a negotiated rebate. The Medi-Cal website at:
http://www.dhs.ca.gov/mcs/mcpd/MBB/contracting/h
Benefit Design tml/faqpage.htm has details of how the drug
contracting process works.
Drug Benefit Product Coverage: The Medi-Cal
pharmacy benefit covers practically all FDA- Examples of general limitations and exclusions
approved drugs, including both legend and over-the- (other uses require prior authorization):
counter products. There are very few drugs or
classes of drugs that are non-benefits. Non-benefits 1. CNS stimulants, e.g., amphetamines and
include common household remedies; non-legend methylphenidate, are restricted to attention
analgesics and cough/cold medications, except when deficit disorder in individuals between 4 and 16
specifically listed; multivitamin preparations, except years of age.
certain pre-natal and pediatric products; cosmetics;
2. Diazepam is restricted to use in cerebral palsy,
fertility drugs; and experimental drugs. Most other
athetoid states, and spinal cord degeneration.
products are potential benefits.
3. Most non-steroidal anti-inflammatory agents are
In general, products that are listed on the Medi-Cal restricted to use for arthritis.
List of Contract Drugs do not require prior
4. Some antibiotics have diagnostic and/or age
authorization. Those not on the List of Contract
restrictions.
Drugs do require prior authorization.
5. Acyclovir capsules are restricted to herpes
Physician-administered drugs: The Medi-Cal List of genitalis, immunocompromised, and herpes
Contract Drugs applies to drugs dispensed from zoster (shingles) patients.
pharmacies to patients. Drugs administered directly
6. Codeine Combinations: payment to a pharmacy
in a physician's, dentist's, or podiatrist's office are not
for ASA or APAP with codeine 30 mg is limited
bound by the List of Contract Drugs.
to a maximum dispensing quantity of 45 tablets
or capsules and a maximum of 3 claims for the
Coverage of Injectables: Injectable medicines are
same beneficiary in any 75-day period.
when used in home health care and extended care 7. Enteral nutritional supplements or replacements
facilities and through physician payment when used are covered, subject to prior authorization, if
in physician offices. used as a therapeutic regimen to prevent serious
disability or death in patients with medically
Vaccines: Vaccines are reimbursable by schedule as diagnosed conditions that preclude the full use of
part of the Vaccines for Children Program. Vaccines regular foodstuffs.
for adults are covered through the prescription drug
8. Cancer, AIDS, and DESI Drugs: Any
program or as administered in a physician's office.
antineoplastic drug approved by FDA for the
treatment of cancer and any drug approved by
FDA for the treatment of AIDS or AIDS-related
condition is covered through the Medi-Cal List
of Contract Drugs; most DESI drugs rated less-
than-effective by FDA are not covered.
California-2
Prior Authorization: State currently has a formal Hospital Discharge Medications: Quantities
prior authorization procedure. furnished as discharge medications are limited to no
more than a 10-day supply. Charges are incorporated
The patient’s physician or pharmacist may request in the hospital’s claims for inpatient services.
prior authorization from the field office Medi-Cal
consultant for approval of unlisted drugs or for listed
drugs that are restricted to specific use(s). This is
done by completing a Treatment Authorization
Prospective DUR system implemented in August
Request (TAR) form. Providers may appeal prior
1995. State currently has a DUR Board with a
authorization decisions within 60 days of notification
quarterly review.
to the local field office and then to field services
headquarters if necessary. Beneficiaries also have the
ability to request a hearing to review the denial and Pharmacy Payment and Patient Cost Sharing
must do so within 90 days of notification.
Dispensing Fee: $4.05, effective 8/85.
TARs may be approved for: covered items or
services not included on the Medi-Cal List of Ingredient Reimbursement Basis: EAC = AWP-10%
Contract Drugs (including special circumstance such
as the need to override multiple source drug price Prescription Charge Formula: Reimbursement is
ceilings or minimum quantity/ frequency of billing based on the lowest of:
limitations); and for patients exceeding the 6 Rx per
month limit. Statewide mail and fax requests are 1. Estimated Acquisition Cost (EAC) + dispensing
accepted in the Stockton and Los Angeles Medi-Cal fee, less $0.50 for most patients, or less $0.10 for
Field Offices. Requests must include adequate nursing home patients.
information and justification. Authorization may 2. Federal Upper Limit (FUL) + dispensing fee,
only be given for the lowest cost item or service that less $0.50 for most patients, or less $0.10 for
meets the patient’s medical needs. nursing home patients.
3. State Maximum Allowable Ingredient Cost
Beneficiary or Prescriber Prior Authorization: On a (MAIC) + dispensing fee, less $0.50 for most
case by case basis, the Dept. of Health Services patients, or less $0.10 for nursing home patients.
restricts, through the requirements of prior 4. Pharmacy’s usual price to general public, less
authorization, the availability of designated $0.50 for most patients, or less $0.10 for nursing
prescription drugs to certain beneficiaries or home patients.
prescribers found by the Department to abuse those
benefits. Maximum Allowable Cost: State Maximum
Allowable Ingredient Costs (MAICs) are established
Prescribing or Dispensing Limitations for about 50 multi-source items. Override requires
“Medically Necessary” or unavailability of drug
Prescription Refill Limit: A prescription refill can be products at or below MAC. List is periodically
dispensed as authorized by prescriber. An exception revised and price limits changed to reflect current
is allowed for refill of a reasonable quantity when market conditions.
prescriber is unavailable (pursuant to California law).
Fee is to be pro-rated so that total fee (for partial Incentive Fee: None.
quantity and balance of the prescription after
prescriber is contacted) does not exceed the fee for Patient Cost Sharing: $1.00 copayment for branded
the same prescription when refilled as a routine and generic products.
service.
Cognitive Services: Does not pay for cognitive
Monthly Quantity Limit: This is flexible, but should services, but this is under consideration.
be consistent with the medical needs of the patient.
Limited to 100 days’ supply on most drugs. Many
maintenance drugs are subject to minimum quantity
or maximum frequency of billing controls.
Monthly Prescription Limit: Limited to 6 per month
without prior authorization. The limit does not apply
to family planning drugs, patients in nursing
facilities, or to AIDS or cancer drugs.
California-3
E. USE OF MANAGED CARE Health Net of California

3400 Data Drive, 1st Floor West
Approximately 3,300,000 Medicaid recipients were Rancho Cordova, CA 95670
enrolled in MCOs in FY 2001. Recipients receive
pharmaceutical benefits through the State and Health Plan of San Joaquin
managed care plans. Certain psychiatric drugs 1550 W. Fremont Street, Suite 200
(antipsychotics, lithium, MAO inhibitors) and some Stockton, CA 95203-2643
anti-parkinson drugs are carved out of managed care.
Most AIDS drugs are no longer carved out of Inland Empire Health Plan
managed care. PO Box 19026
San Bernardino, CA 92423-9026
Access Dental Plan, Inc. Kern Health Systems
555 University Ave, Suite 182 Kern Family Health Care
Sacramento, CA 95825 1600 Norris Road
Bakersfield, CA 93308
AIDS Healthcare Foundation
6255 W. Sunset Blvd., 16th Floor Kaiser Foundation Health Plan, Inc.
Los Angeles, CA 90028-7403 393 E. Walnut, 5th Floor
Pasadena, CA 91188-8324
Alameda Alliance for Health
1240 South Loop Road Kaiser Foundation
Alameda, CA 94502 Health Plan, Inc.
Northern California Region
Altamed Health Services Corp. 1800 Harrison Street, 9th Floor
512 South Indiana Street P.O. Box 12916
Los Angeles, CA 90063 Oakland, CA 94612-2998
American Health Guard LA Care Health Plan
30 East Santa Clara, Suite D 555 W. Fifth Street, 19th Floor
Arcadia, CA 91006 Los Angeles, CA 90013-3036
Blue Cross of California Molina Healthcare Inc
5151-A Camino Ruiz A Professional Corporation
Camarillo, CA 93012 One Golden Shore Drive
Long Beach, CA 90802
Center for Elders Independence
1955 San Pablo Ave On Lok Senior Health Services
Oakland, CA 94612 1333 Bush Street
San Francisco, CA 94109
Community Health Group
740 Bay Blvd. Orange County Organized Health System
Chula Vista, CA 91910 Cal Optima
1120 West La Veta Ave., 5th Floor
County of Contra Costa Orange, CA 92868-4220
Contra Costa Health Plan
595 Center Avenue, Suite 100 San Francisco Health Authority
Martinez, CA 94553 San Francisco Health Plan
568 Howard Street, Fifth Floor
Delta Dental Plan of CA San Francisco, CA 94105
1115 International Drive, Bldg. C
Rancho Cordova, CA 95670 San Francisco City & County Public Health
Family Mosaic Project
Health Net Dental, Inc. 1309 Evans Avenue
125 Technology Drive, Suite 100 San Francisco, CA 94124
Irvine, CA 92618
California-4
San Mateo Health Commission F. STATE CONTACTS

Health Plan of San Mateo
701 Gateway Blvd., Suite 400
South San Francisco, CA 94080 State Drug Program Administrator
J. Kevin Gorospe, Pharm.D.
Santa Barbara Regional Health Authority Chief, Medi-Cal Pharmacy Policy Unit
Santa Barbara Health Initiative California Department of Health Services
110 Castilian Drive Medi-Cal Policy Division
Goleta, CA 93117-3028 1501 Capitol Ave.
P.O. Box 997413, MS 4604
Santa Clara Family Health Plan Sacramento, CA 95899-7413
210 E Hacienda Ave T: 916/552-9500
Campbell, CA 95008-6617 F: 916/552-9563
E-mail: kgorospe@dhs.ca.gov
Santa Cruz -Monterey Internet Address: http://www.dhs.ca.gov
Managed Care Commission
Central Coast Alliance for Health New Brand Name Products Contact
375 Encinal Street, Suite A
Santa Cruz, CA 95060 J. Kevin Gorospe, Pharm.D.
916/552-9500
Scan Health Plan
Senior Care Action Network Prior Authorization Contact
3780 Kilroy Airport Way, Suite 100 J. Kevin Gorospe, Pharm.D.
Long Beach, CA 90806-2460 916/552-9500
Sharp Health Plan DUR Contact

4305 University Avenue, Suite 200
San Diego, CA 92105 Vic Walker, R.Ph. B.C.P.P
Senior Consulting Pharmacist
Solano-Napa County Commission on Medical Care Medi-Cal Policy Division
Partnership Health Plan of California 1501 Capitol Ave.
360 Campus Lane, Suite 100 P.O. Box 997413, MS 4604
Suisun City, CA 94585 Sacramento, CA 95899-7413
T: 916/552-9500
Sutter Senior Care F: 916/552-9563
1234 U Street E-mail: vwalker@dhs.ca.gov
Sacramento, CA 95818
Medi-Cal Drug Utilization Review Board (DUR
UCSD Healthcare Board)
200 West Arbor Dr.
San Diego, CA 92103-8501 Timothy E. Albertson, M.D., Ph.D.
University of California-Davis
Universal Care Pulmonary/Critical Care Medicine
1600 E. Hill Street 4301 X Street, Professional Bldg., Room 2120
Signal Hill, CA 90755-3612 Sacramento, CA 95817
Watts Health Foundation, Inc. Craig Jones, M.D.

United Health Plan Director, Division of Allergy/Immunology
3405 West Imperial Highway, Suite 628 Department of Pediatrics
Inglewood, CA 90303 LA County/USC Medical Center
24725 Avenida Asoleada
Western Dental Services Calabasas, CA 91302
530 South Main Street, 6th Floor
Orange, CA 92863 Janeen G. McBride, R.Ph.
Rx America
Western Health Advantage 1500 South Anaheim Blvd.
1331 Garden Highway Suite 100 Anaheim, CA 92815-0017
California-5
Kenneth Schell, Pharm.D. Disease Management Program/Initiative

Pharmacy Services Contact
Clinical Operations Manager
Kaiser Permanente Vic Walker, R.Ph., B.C.P.P., 916/552-9500
10990 San Diego Mission Road
San Diego, CA 92108
Mail Order Drug Benefit
Stephen M. Stahl, M.D., Ph.D. State currently has a mail order pharmacy capability
Clinical Neuroscience Research Center in the Medi-Cal program. All fee-for-service
8899 University Center Lane, Ste. 130 beneficiaries are entitled to participate.
San Diego, CA 92122
Andrew L. Wong, M.D. Health and Welfare Agency Officials

Chief of Rheumatology S. Kimberly Belshé
University of California - Los Angeles Secretary
14445 Olive View - UCLA Medical Center California Health and Human Services Agency
Sylmar, CA 91342 1600 9th Street, Suite 460
Prescription Price Updating T: 916/654-3454
F: 916/654-3343
EDS Federal Corp. E-mail address: www.chhs.ca.gov
P. O. Box 13029
Sacramento, CA 95813-4029 Stan Rosenstein
916/636-1000 Deputy Director
Medical Care Services
California Department of Health Services
1501 Capitol Ave., P.O. Box 997413, MS 4000
Craig Miller Sacramento, CA 95899-7413
Chief, Medi-Cal Rebate and Vision Section T: 916/ 440-7800
Medi-Cal Policy Division F: 916/ 440-7805
1501 Capitol Ave. E-mail: srosenst.dhs.ca.gov
P.O. Box 997413, MS 4604
T: 916/552-9500 Medi-Cal Contract Drug Advisory Committee
F: 916/552-9563 William B. Ness, M.D.
E-mail: cmiller2@dhs.ca.gov 65 North 14th Street
San Jose, CA 95112
Bruce K. Uyeda, Pharm.D.
EDS Federal Corp. 1076 Mercy Street
P.O. Box 13029 Mountain View, CA 94041-1915
916/636-1000 Adrian M. Wong, Pharm.D.
Internet Address: www.medi-cal.ca.gov 17 Warren Drive
San Francisco, CA 94131
Medicaid Managed Care Contact
Richard H. White, M.D.
Ronald Sanui, Pharm D. U.C. Davis Medical Center
Pharmaceutical Consultant II Division of General Medicine
Medi-Cal Managed Care Division Primary Care Center, Room 3107
1501 Capitol Ave. 2221 Stockton Blvd.
P.O. Box 997413, MS 4404 Sacramento, CA 95817
916-449-5138 Shirley Ann Floyd
E-mail: rsanui@dhs.ca.gov Blue Cross of California
131 Chester Ave., Suite A
Bakersfield, CA 93301
California-6

Pharmaceutical Associations/Boards
California Medical Association
Jack C. Lewin, M.D.
CEO and Executive Vice-President
1201 J Street
916/444-5532
Internet address: www.cmanet.org
Osteopathic Physicians & Surgeons of California

Kathleen S. Creason
Executive Director
1900 Point West Way, Suite 188
T: 916/561-0724
F: 916/561-0728
E-mail: opsc@opsc.org
California Pharmacists’ Association

Carlo Michelotti, R.Ph., M.P.H.
Chief Executive Officer
1112 I Street, Suite 300
T: 916/444-7811
F: 916/444-7929
E-mail: cpha@cpha.com
Internet address: www.calpharm.com
State Board of Pharmacy

Patricia F. Harris
Executive Officer
400 R Street, Suite 4070
T: 916/445-5014
F: 916/327-6308
Internet address: www.pharmacy.ca.gov
California Healthcare Association

C. Duane Dauner
President
1215 K Street, Suite 800
T: 916/443-7401
F: 916/552-7596
E-mail: info@calhealth.org
Internet address: www.calhealth.org
California-7
California-8
COLORADO

Disabled Disabled
Prescribed Drugs
Physician Services
Dental Services

2001 2002**
TOTAL $177,115,553 143,169 $189,717,036
RECEIVING CASH ASSISTANCE, TOTAL $117,978,722 76,243

Aged $38,858,494 18,832
Blind/Disabled $71,297,760 26,703
Child $2,406,437 15,586
Adult $5,416,031 15,092

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

Aged $101,358 129
Child $3,695,461 27,041
Adult $1,287,236 10,184

*Total Other Expenditures/Recipients includes foster care children, 1115 demonstration participants, other recipients, and unknown.
**2002 data on expenditures and number of recipients by maintenance assistance status and basis of eligibility are unavailable
Colorado-1
C. ADMINISTRATION Vaccines: Vaccines reimbursable as part of the

EPSDT Program.
Colorado Department of Health Care Policy and
Financing administers the drug program. Eligibility Unit Dose: Unit dose packaging not reimbursable.
is determined by 63 County Departments of Social
Services, and the Department.
Formulary/Prior Authorization
D. PROVISIONS RELATING TO DRUGS Formulary: Open formulary.
Benefit Design Prior Authorization: State currently has a formal

prior authorization procedure. There is an appeal
Drug Benefit Product Coverage: Products covered: process and re-review when appealing coverage of an
prescribed insulin. Products covered with restriction: excluded product and prior authorization decisions.
total parenteral nutrition (prior authorization).
Products not covered: cosmetics; DESI drugs; Prescribing or Dispensing Limitations
fertility drugs; prescribed vitamins (except prenatal);
interdialytic parental nutrition products; and Monthly Quantity Limit: New prescriptions for
experimental drugs. Disposable needles and syringe chronic or acute conditions are prescribed at the
combinations used for insulin; blood glucose test discretion of the physician. Normal quantity limit is
strips; and urine ketone test strips are considered a 30-day supply. However, reasonable amounts for
DME and do not fall under the State’s drug benefit. more than a 30-day supply for chronic conditions are
recommended. Maximum supply is 100 days for
Over-the-Counter Product Coverage: Products maintenance medication.
covered with restriction (i.e., must be deemed
medically necessary): allergy, asthma, and sinus Other Limits: Stadol: limit of 4 bottles per month.
products; analgesics; cough and cold preparations; Oxycontin: 2 tablet (any strength) per day limit
digestive products; feminine products; topical without prior authorization.
products; and smoking deterrent products (prior
authorization).
categories covered: antibiotics; anticoagulants; PRODUR system implemented in December 1998.
anticonvulsants; antidepressants; antidiabetic agents; DUR Board meets semiannually.
antilipemic agents; antihistamines; anxiolytics,
sedatives, and hypnotics; cardiac drugs; Lock-In Review Procedures: The Department
chemotherapy agents (given in home); receives computer processed printouts designed to
contraceptives; ENT anti-inflammatory agents; discover over-utilization of drugs prescribed by
estrogens; hypotensive agents; and thyroid agents. physicians, dispensed by vendors, and received by
Prior authorization required for: anabolic steroids; eligible recipients.
analgesics, antipyretics, NSAIDs; anti-psychotics
(prior authorization required for clozoril); prescribed
cough and cold medications; growth hormones; misc.
GI drugs; sympathominetics (adrenergic); vitamins;
Dispensing fee: $4.00 as of July 1, 2001.
acne products; leukocyte stimulants; LHRH/GnRH;
Institutional pharmacies receive a dispensing fee
injectables; plasma products; Epoetin; fluoride
equal to $1.89. Dispensing physicians shall not
preparations; antisera; Oxycontin; erectile
receive a dispensing fee unless their offices or sites
dysfunction; sympathominetics (adrenergie); and
of practice are located more than 25 miles from the
prescribed smoking deterrents. Products not
nearest participating pharmacy. In the latter case,
covered: anoretics.
physicians receive a fee equal to $1.89.
Ingredient Reimbursement Basis: EAC = AWP-
13.5% or WAC (wholesaler acquisition cost) + 18%.
AWP-35% for generics. Other: FUL, State Mac,
facilities, and through physician payment when used
usual and customary.
in physician offices. Prior authorization is required
for self-administration at home.
Prescription Charge Formula: Benefit drugs shall be
reimbursed at the lesser of the Medicaid allowable
Colorado-2
reimbursement charge, or the provider’s usual and difference in ingredient cost to the pharmacy. The
customary charge or whatever is accepted from any pharmacy will be paid MAC plus a dispensing fee or
third party, discounts, rebates, etc. reimbursement charges, whichever is lower.
The Medicaid allowable reimbursement charge is the High volume Estimated Acquisition Cost (EAC):
sum of the ingredient cost of the drug dispensed and Reimbursement for single source drugs or certain
the provider’s dispensing fee. multiple source drugs which are most frequently
prescribed will be based upon average wholesale
Ingredient cost for retail pharmacies (estimated prices (AWP) minus 13.5%, or direct manufacturers’
acquisition cost) is the price of the drug actually prices for package sizes containing quantities greater
dispensed as defined below or the MAC or the high than 100 dosage units or less if not available in
volume EAC, whichever is less. 100’s.
The ingredient cost for institutional and government Basis for inclusion in the high volume estimated
pharmacies is defined as the actual cost of acquisition acquisition cost list includes but is not limited to:
for the drug dispensed or the MAC, or the high
volume EAC, whichever is less. (1) Single source manufacturers;
(2) High volume Medicaid recipient utilization;
Maximum Allowable Cost: State imposes Federal
Upper Limits as well as State-specific limits on (3) Interchangeability problems with multiple source
generic drugs. Override requires prior authorization drugs;
with explanation of medical necessity (Med Watch
form). (4) Package sizes in excess of 100.
Drug Pricing: The Department will maintain a drug-

The State MAC is the maximum ingredient cost
pricing file that will be updated at least monthly. The
allowed by the Department for certain multiple-
average wholesale price of a drug as determined by
source drugs. The establishment of a MAC is
the Department, MAC, and high volume EAC, will
subject, but not limited to, the following
be the basis for setting the prices in the drug pricing
considerations:
file.
(1) Multiple manufacturers;
The Department will determine the average
(2) Broad wholesale price span; wholesale price that will be placed in the drug-
(3) Availability of drugs to retailers at the selected pricing file as follows:
cost;
(1) The average wholesale price as it appears in the
(4) High volume of Medicaid recipient utilization; Red Book, its supplements, and Medi-Span will be
(5) Bioequivalence or interchangeability. the first source. However, if there is a difference
between the two published average wholesale prices,
When Federal MAC limits for multiple source drugs the Department will set the price as the published
are announced, they will be adopted if they are less amount which is the closest to the lowest average
than State MACs or if no State MACs exist. price charged by two drug wholesalers doing
business in Colorado.
The ingredient cost of any drug subject to MAC shall
be limited to MAC or wholesale price as determined (2) If there is a price change which does not appear
by the Department, whichever is less. Exceptions immediately in the Red Book, its supplements, or in
that will allow reimbursement greater than MAC for Medi-Span, then the Department will set the average
a drug entity are obtained through a prior wholesale price by averaging the wholesale prices of
authorization mechanism. An exception will be three drug wholesalers doing business in Colorado,
granted if the patient’s response to the generic drug is until the price is published in the Red Book, its
not therapeutic, an allergic reaction is involved, or supplements, or in Medi-Span.
any similar situation exists.
(3) If the prices or changes do not appear in the
If a recipient requests a brand name for a prescription publications or the wholesalers’ records, then the
that is subject to MAC, then he/she may pay the distributors’ or manufacturers’ prices will be adjusted
ingredient cost difference between the MAC and to the wholesale pricing level and used in the drug
brand name drug. The recipient must sign the pricing file as the price of the drug.
prescription stating that he/she is willing to pay the
Colorado-3
If the difference between the pharmacist’s invoice 600 South Cherry Street, Suite 800
purchase price and the average wholesale price which Denver, CO 80222
appears in the Red Book, its supplements, or Medi- 303/355-6707
Span exceeds 18%, then the Department may adopt a
lower price after a survey is conducted to determine Community Health Plan of the Rockies
the validity of the published prices. The price from 400 South Colorado Boulevard, Suite 300
the distributor or manufacturer will be adjusted the Denver, CO 80222
same as in 3 above. 303/355-3220
Special Note: The Maximum Allowable Cost shall be
United Healthcare
determined by the Division of Medical Assistance,
6251 Greenwood Plaza Boulevard, Suite 200
based upon professional determination of a quality
Englewood, CO 80111-4910
product available at the least expense possible.
303/267/3594
Exceptions to the above are:
- Shelf package size oral liquid medications, in pint F. STATE CONTACTS
size only, or smaller package size when not packaged
in pint size.
Medicaid Drug Program Administrator
- Shelf package size oral tablet and capsule
medications in quantities of 100 only or smaller Martha Warner
when not available in package size of 100. Pharmacy Supervisor
Department of Health Care Policy and Financing
- Prescriptions for less than minimum amounts will 1570 Grant Street
be denied reimbursement of the professional fee Denver, CO 80203
unless the physician notified the Department in T: 303/866-3176
writing of the medical need for amounts less than a F: 303/866-2573
30-day supply. Medical consultation determines the E-mail: martha.warner@state.co.us
decision.
Incentive Fee: None. DUR Contact
Patient Cost Sharing: $3.00 Catherine Travgott

Pharmacist
Cognitive Services: Does not pay for cognitive Department of Health Care Policy and Financing
services. 1570 Grant Street
Denver, CO 80203
T: 303/866-2468
E. USE OF MANAGED CARE F: 303/866-2578
E-mail: Catherine.travgott@state.co.us
Over 260,000 Medicaid recipients were enrolled in
managed care in FY 2001. Recipients receive
New Brand Names Products Contact
pharmaceutical benefits through the Managed Care
Organization. Catherine Travgott
303/866-2468
Managed Care Organizations
Total Long-Term Care Prescription Price Updating
303 East 17th Avenue, Suite 650
Martha Warner
Denver, CO 80203
303/866-3176
303/896-4664
Kaiser Permanente
10350 East Dakota Avenue
Denver, CO 80905
303/344-7250
Rocky Mountain HMO
2775 Crossroads Boulevard
Grand Junction, CO 81506
800/843-0719
Colorado Access
Colorado-4
Medicaid Drug Rebate Contacts Health Care Policy & Financing Department
Officials
Vince Sherry
Drug Rebate Manager Karen K. Reinertson
Department of Health Care Policy and Financing Executive Director
1570 Grant Street Department of Health Care Policy and Financing
Denver, CO 80203 1570 Grant Street
T: 303/866-5408 Denver, CO 80203-1818
F: 303/866-2573 T: 303/866-2993
E-mail: vince.sherry@state.co.us F: 303/866-4411
E-mail: Karen.reinertson@state.co.us
Internet Address: www.chcpf.state.co.us
ACS, Inc. Vivianne M. Chavmont, Director
600 17th Street Medical Assistance Office
Suite 600 North Department of Healthcare Policy and Financing
Denver, CO 80202 1570 Grant Street
T: 800/237-0757 Denver, CO 80203
F: 303/534-0439 303/866-3058
Medicaid Managed Care Contact Medical Services Board

Katie Brookler Michael Oliva, President
Managed Care Manager Julie Reiskin, Vice President
Department of Health Care Policy and Financing Mary Ellen Faules
1570 Grant Street Joan M. Johnson
Denver, CO 80203 Wendal Phillips
T: 303/866-2416 Joe Rall
F: 303/866-2573 Maguerite Salazar
E-mail: katie.brookler@state.co.us Steve Tool
Mathew Dunn, M.D.
Jeremy Schupbach, Coordinator
Disease Management/Patient Education
Programs
Medical Advisory Council
Disease/Medical State: Schizophrenia
Program Name: Schizophrenia with Co-Morbid Donald W. Schiff, M.D.
Conditions Pilot Program 600 Front Range Road
Program Manager: Gloria Johnson Littleton, CO 80120
Sponsor: Eli Lilly and Company 303/837-2745
Disease/Medical State: Diabetes Molly A. Markert

Program Name: Diabetes Disease Management Pilot 11060 E. Wesley Pl.
Program Aurora, CO 80014
Program Manager: Gloria Johnson 303/756-7234
Sponsor: Eli Lilly and Company
Mary Jo Jacobs, M.D.
7425 E. Kenyon Ave.
Disease Management/Patient Education Denver, CO 80237
Contact 303/694-2878
Katie Brookler, 303/866-2416 Walter Daniels, D.D.S.
1633 Filmore Street
Mail Order Pharmacy Program Denver, CO 80206
303/388-0989
None
Rodney Fair, O.D.
105 Bridge Street
Brighton, CO 80601
303/659-3036
Douglas Clinkscales
Colorado-5
Denver Health and Hospitals Val Kalnins, R.Ph., Executive Director

777 Bannock Street 6825 E. Tennessee Avenue, Suite 440
Denver, CO 80204 Denver, CO 80224-1662
303/426-7253 T: 303/756-3069
F: 303/756-3649
Cathy Corcoran E-mail: val@copharm.org
15920 W. 66th Place Internet address: www.copharm.org
Golden, CO 80403
303/861-6256 Colorado Society of Osteopathic Medicine
Marie Kowalsky
Ernestine Kotthoff-Burrell Executive Director
6098 S. Iola Ct.

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Pharmaceutical Benefits Under State Medical Assistance Programs, 2003

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Pharmaceutical Benefits Under State Medical Assistance Programs, 2003

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National Pharmaceutical Council Pharmaceutical Benefits 2003

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

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

Medicaid Managed Care Enrollment ................................................................................... 2-21

Medicaid Managed Care Waivers.......................................................................................... 2-29

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

- Poverty Status-Percentages, 2002............................................................................ 3-11

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 PROFILES ........................................................................................................ 5-1

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

• Eligibility and maintenance assistance status table;

BACKGROUND AND PURPOSE

THE MEDICARE MODERNIZATION ACT OF 2003

• New payment provisions for drugs furnished by physicians [under Medicare

• Dozens of other amendments affecting the existing Medicare program, including:

o Detailed procedures for appealing Medicare coverage provisions and other

• Various amendments to the Medicaid program, including exclusion of inpatient drugs

• Establishment of Health Savings Accounts and other tax amendments.

PROVISIONS OF MMA AFFECTING DUAL ELIGIBLES AND THE STATES

The Prescription Drug Program

Premium and Cost-Sharing Subsidies for Low-Income Beneficiaries

Phased Down State Contribution

• the “Medicaid amount” for the State for that month;

The “Medicaid amount” is 1/12 of the product of:

MMA Medicaid Amendments Requiring State Medicaid Program Actions

CHARACTERISTICS OF DUALLY ELIGIBLE BENEFICARIES

Analytic File Development

Gender and Age

Table 1. Population by Gender and Eligibility Status*

Female 3,890,401 59% 657,562 66% 3,232,839 57%

Table 2. Medicaid Expenditures by Gender and Eligibility Status

Female $13,338,032,842 59% $6,186,874,474 67% $7,151,158,368 56%

Table 3. Payments Per Capita by Gender

Female $6,186,874,474 $9,409 $7,151,158,368 $2,212

Table 4. Population Percentages by Age and Eligibility Status

Table 5. Medicaid Expenditures Percentages by Age and Eligibility Status

Dual Eligible Expenditures by Type of Service

Table 6. Summary of Medicaid Data by Service Type and Eligible Status

Table 7. Summary of Medicaid Expenditures by Service Type and Eligibility Status

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