FRANKFORT, Ky. (Oct. 21, 2004) -- First Health Services has been selected by Kentucky to serve as the Pharmacy Benefits Administrator (PBA) for the Kentucky Medicaid pharmacy program. The contract was awarded through the Finance and Administration Cabinet using the state’s competitive bid process.

"One of the key priorities for Governor Fletcher is to get control over the rising costs in our pharmacy program so we can provide better care to Kentucky’s Medicaid recipients," said Dr. James Holsinger, Secretary of the Cabinet for Health and Family Services. "The selection of Health First Services as Medicaid’s pharmacy benefits administrator is part of the Governor’s plan to modernize the state’s Medicaid program. This step will improve the administration of pharmacy benefits."

Teresa DiMarco, president of First Health Services, said, "We look forward to working with the Kentucky Medicaid program to help the state improve the pharmacy program for the patients, doctors and pharmacists that rely on it. We are honored at being selected to bring out integrated clinical management capabilities and innovative solutions to improve quality and reduce costs in the Kentucky Medicaid pharmacy program."

As the Pharmacy Benefits Administrator for the Kentucky Medicaid program, which currently serves approximately 670,000 recipients, who are poor, disabled or uninsured, First Health Services will use its online, real-time point-of-sale pharmacy management and claims processing system to provide Kentucky Medicaid with more flexibility in managing its pharmacy program. In addition, the company will provide integrated clinical management and advanced drug utilization review (DUR) services. The company will also administer the state’s Preferred Drug List (PDL) program and negotiate additional rebates with pharmaceutical manufacturers.

First Health now has contracts to develop, implement or administer Medicaid preferred drug list and rebate negation programs for 13 other states, including Tennessee, Ohio, Vermont, Maryland, Michigan, Virginia, South Carolina, Nevada, Minnesota, Montana, Missouri, New Hampshire and Hawaii. Preferred drug list and supplemental rebate programs are effective tools in helping states reduce pharmacy costs in a clinically appropriate manner.

First Health Services provides integrated clinical management services for public sector health care clients. First Health Services provides a full range of Medicaid fiscal agent, pharmacy benefit administration, healthcare management and quality assurance services. With the addition of Kentucky, First Health Services has pharmacy management contracts in 22 states with combined drug spending of more than $10 billion. The company is a wholly owned subsidiary of First Health Group Corp. (NASDAQ: FHCC), based in Downers Grove, Illinois.

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