Managed Care

Most people enrolled in Medicaid and all people enrolled in the Children’s Health Insurance Program receive prescription drug benefits through the managed care delivery model.

Drug Rebates

In order to receive federal funds for out-patient prescription claims, all drugs on the Texas Medicaid formulary must be made by a drug manufacturer that participates in the CMS Drug Rebate Program. In return for having their drugs covered by state Medicaid programs, the manufacturer agrees to pay rebates according to their state and federal contracts. Funds received from manufacturers through the noted rebate programs are used to supplement Medicaid funds received from both the federal and state governments and offset the costs of the Medicaid Program.

Drug Utilization Review Board

The Texas Drug Utilization Review Board meets quarterly in Austin to develop criteria and standards impacting the Texas Medicaid formulary. The board also develops recommendations for the Texas preferred drug list, suggests clinical prior authorizations for outpatient prescription drugs, recommends educational interventions for Medicaid providers, and reviews drug utilization across the Medicaid program.


The website includes a collection of reports about the Medicaid outpatient pharmacy benefit.


A comprehensive list of documents and forms.