Medicaid

• Medicaid is a government medical care program that serves low-income people who could not otherwise afford traditional health insurance. Medicaid is funded at the federal level, but is administered by state agencies. As such, federal Medicaid regulations are implemented differently in each state.
  
  

Formularies and Generics

• Each state Medicaid agency can set its own "formulary," a list of preferred drugs that are eligible for maximum reimbursement, as well as drugs that will not be covered under the state's Medicaid plan. Medicaid also sets a "Federal Upper Limit" for drug reimbursement that limits the amount it will pay for a drug to the cost of an available generic medication.
  
  

Prescription Pads and Dispensing

• Federal Medicaid regulations require that health-care professionals use tamper-resistant prescription pads when writing prescriptions that a Medicaid recipient gets filled on her own. Each state sets its own guidelines for prescription pads, which must contain features, such as backgrounds or watermarks, that make them difficult to forge, copy, or alter. Some states also have rules to prevent fraudulent reimbursement claims. In Florida, prescriptions for Medicaid patients must either be removed from its original package and placed into a prescription vial, or the manufacturer's label must be removed and a mark placed on the container.