OBJECTIVES:   To evaluate the budget impact of adding a new assay and prostate cancer (Pca) detection index to conventional prostate-specific antigen (PSA) blood test for detecting Pca. METHODS:   Access Hybritech p2PSA is a precursor form of PSA. It is a new assay and being tested for use with PSA and free PSA to calculate a Pca detection index to determine the relative risk of Pca. The index is in development for U.S. market pending Food and Drug Administration approval. We constructed two budget impact models using PSA cutoff values of 2 ng/ml (Model1) and 4 ng/ml (Model2) for recommending biopsy in a hypothetical health plan with 100,000 male members aged 50 to 75 years old. Probabilities of positive PSA test results and cancer detection were derived from the published literature as well as a simulation study of the Pca detection index. We calculated the budgetary impact after introducing the Pca detection index on the one-year expected total costs for Pca detection. Sensitivity analysis was performed to examine the robustness of results. RESULTS:   After introducing the Pca detection index, the number of cancer cases detected decreased by 50 and 30, in Model1 and Model2, respectively. The savings on total costs for the individuals with a positive PSA test were $284,151 in Model1, and $109,387 in Model2. The budget impacts on total costs for the individuals with a negative test were $22,127 (Model1) and $8,518 (Model2). The savings on expected one-year cost for Pca detection were $262,024 (or $0.22 per-member-per-month (PMPM)) in Model1, $100,869 (or $0.08 PMPM) in Model2. CONCLUSIONS:   The model with PSA cutoff > 2 ng/ml produced higher cost savings than the model with cutoff > 4 ng/ml. However, a small short-term reduction in the number of positive PSA tests was also observed.