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In recent years, many state Medicaid programs have implemented preferred drug lists (PDL) to control pharmaceutical costs by generating supplemental rebate revenues and directing providers to the most cost-effective treatments. Two states, Michigan and Vermont, sought approval from the Centers for Medicare and Medicaid Services for supplemental rebates for their Medicaid fee-for-service programs in 2002. Behavioral health medications were largely excluded from PDLs and other managed care initiatives implemented by state Medicaid programs because of significant opposition to any impact on this "vulnerable" population. In November 2001, the Vermont Medicaid program implemented the Vermont Health Access Pharmacy Benefit Management Program, a PDL designed to promote cost-effective use of medications. Despite the potential cost savings resulting from implementation of a PDL, behavioral health providers and advocates in the state of Vermont opposed the implementation of the managed care initiative for beneficiaries with severe mental illness, and after January of 2002, Vermont's program was changed to exempt beneficiaries meeting the "severe and persistent mental illness" (SPMI) criteria from prior authorization (PA) for behavioral health medications not on the Medicaid PDL. The SPMI exemption was phased out by June 30, 2006.

journal of managed care pharmacy

Cost and Utilization of Behavioral Health Medications Associated with Rescission of an Exemption for Prior Authorization for Severe and Persistent Mental Illness in the Vermont Medicaid Program