OBJECTIVES: The objectives of this study were to encourage the replacement of long-acting benzodiazepines with appropriate doses of short-acting or intermediate-acting benzodiazepines or zolpidem and to reduce the number of potentially associated fractures in a population of elderly New Mexico Medicaid recipients. METHODS: The New Mexico Medicaid fee-for-service prescription claims database was reviewed to identify patients 65 years and older with 2 or more claims for long-acting benzodiazepines between October 1 and December 31, 2000. Educational letters, response forms and prescription profiles were mailed to the prescribers, pharmacies and consultant pharmacists of these patients. The database was reviewed from March 1 to May 31, 2001 to assess changes in prescribing patterns. Based on a previous epidemiologic study and Medicare reimbursement for hip fractures, a cost analysis was performed. RESULTS: A total of 182 patients were included in the intervention. Educational materials were mailed to 147 prescribers, 94 pharmacies and 12 consultant pharmacists for these patients on January 31, 2001. Sixty-four prescribers (44%), 30 pharmacies (32%) and 3 consultant pharmacists (25%) responded for 103 (57%) patients. Overall, 16% (n=29) of the remaining eligible patients were no longer receiving long-acting benzodiazepine therapy in the 3-month post-intervention period. Based on a previous epidemiologic study, 3 fractures were potentially prevented resulting in a cost savings of $24,256 to Medicaid/Medicare over a period of nine years. CONCLUSIONS: A change in patients' therapy and a potential cost savings to the Medicaid/Medicare programs was observed after the intervention.