SACRAMENTO, Calif. -- The Kaiser Foundation Health Plan has agreed to pay the cost of the anti-impotence drug Viagra in California under a settlement reached with state regulators last week.

While Kaiser stopped paying for Viagra as of last April, it resumed payment when the drug was added to its formulary in September because Viagra couldn't be excluded unless authorized by the Department of Corporations, a spokesman said. As part of the agreement, Kaiser will pay the state $250,000 and resolve all grievances from members denied prescriptions for the drug from April to September.

Meanwhile, Kaiser's request to exclude Viagra from coverage still is pending with the Department of Corporations, which oversees health maintenance organizations in California.

A Kaiser spokesman explained that the HMO is seeking the exclusion because Viagra is a lifestyle drug.

Kaiser has received approval to exclude Viagra from its drug formulary in 12 other states and the District of Columbia; New York and Connecticut denied the exclusion. Besides California, regulators in Washington state also are considering Kaiser's exclusion application.