Indiana Proposes Medicaid Cuts and Preferred Drug List

January 28, 2002 Indiana Proposes Medicaid Cuts and Preferred Drug List Indiana Governor Frank L. O'Bannon is trying to cut the state contribution to Medicaid by $251 million, or about 10 percent, over the next two years. State officials made a first round of cuts in the fall of 2001, reducing payments to hospitals, nursing homes and pharmacies by about 5 percent. The nursing homes and drugstores filed suit to block the cuts.  At a forum in January 2002, state officials unveiled a Medicaid balanced budget plan with two dozen options for further cuts. Prescription drug spending for Medicaid . . .