Implementation of a pharmacy benefit to a managed Medicaid population

This paper describes an evaluation of per member per month costs, preauthorization processes, drug utilization, and provider and member educational efforts after one year of managing the pharmaceutical benefit of a former Medicaid population. During TennCare's inaugural year, HMO per member per month pharmacy costs decreased, prior authorization request and call activity decreased, and drug marketshares aligned toward formulary agents. Provider and member acceptance of the restrictive formulary grew as consistent interaction with the HMO became patient-specific.