Tennessee Medicaid spending slashed in 2006

April 2, 2007

TennCare, the Tennessee Medicaid program, reduced its overall pharmacy spending from $2.4 billion in 2005 to $1.2 billion in 2006, according to analysis by HealthLeaders-InterStudy.

TennCare, the Tennessee Medicaid program, reduced its overall pharmacy spending from $2.4 billion in 2005 to $1.2 billion in 2006, according to analysis by HealthLeaders-InterStudy. The study attributes the reduction to TennCare's implementation of drug limits, increased centralized management, and greater use of prior authorizations. In addition, in 2005 and 2006, TennCare joined a multi-state purchasing pool, instituted prescription limits, revamped the preferred drug list, put more drugs into its prior-authorization program, and focused heavily on generic drug use to drive down costs. Critics like the Tennessee Justice Center worry that the cuts are reducing healthcare access across the state and could force some rural hospitals to close.

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