Respiratory Syncytial Virus (RSV) is a known cause of morbidity in premature infants, as well as those with bronchopulmonary dysplasia. OBJECTIVE: To measure the impact of a RSV prophylaxis program on pulmonary-related hospitalizations (PRH), average length-of-stay (ALOS), and cost/immunized member to a Medicaid managed care plan. METHODS: Through administrative claims we identified members at risk for RSV infection based on American Academy of Pediatrics (AAP) guidelines for RSV prophylaxis. Baselines were determined for PRH rate and ALOS for two seasons prior to intervention (N=452). We identified 205 high-risk infants eligible for prophylaxis. Physicians were mailed a list of their eligible (pre-authorized) members and AAP guidelines for palivizumab prophylaxis. Physicians were asked to treat according to clinical judgement. We then compared PRH, ALOS, and costs (PRH, drug, and administration) between prophylaxed (N= 69) and non-prophylaxed (N=136) high-risk children. PRH were defined based on ICD-9-CM discharge codes for RSV infection, bronchiolitis, pneumonia, bronchitis, asthma, and other abnormal respiratory conditions. Hospitalization costs were tallied at $1500/day. RESULTS: Overall PRH rate and ALOS were reduced from 35.2% and 12.9 days in the baseline period to 25.9% (p<0.1) and 8.1 days (p<0.05) respectively. Non-prophylaxed children consumed more resources (31.6% PRH, 8.7 ALOS) than prophylaxed children (14.5% PRH, 5.4 ALOS). Reductions from baseline PRH and ALOS were significant in the treatment group (p<0.05 for each). Drug and administration costs of $286,725 saved $467,571 in expected costs had baseline rates continued ($2281/ high-risk member, $6776/immunized member). CONCLUSIONS: Guideline dissemination and pre-authorizing RSV prophylaxis with palivizumab in a high-risk Medicaid population is an effective policy tool for reduction of associated PRH, ALOS, as well as costs.