States receive $4.3B to offset payments to Medicare for Part D costs

In an attempt to help states cope with paying the federal government to offset Medicare coverage costs for prescription drugs commonly referred to as "clawback payments," HHS Secretary Kathleen Sebelius announced $4.3 billion in relief to states on Thursday. 

The relief is possible due to federal medical assistance percentage (FMAP) payments granted through the American Recovery and Reinvestment Act (ARRA) of 2009, also known as the stimulus package. Such payments are temporary, and will only be applied for the period running from Oct. 1, 2008 through Dec. 31, 2010. The retroactive savings will be deducted from what states would have owed. 

The FMAP payments are "intended to offset some of the added expense to Medicare Part D of assuming drug costs for residents dually eligible for both" Medicare and Medicaid. 

"We believe today's action will help states as they struggle to maintain Medicaid and other budget priorities in these difficult economic times," Sebelius said. "This relief will help states continue to provide critical health care services to the nearly 60 million beneficiaries who depend upon it." 

To learn more:
- read this press release