Issue Brief 20-25
October 23, 2020

The Centers for Medicare & Medicaid Services (CMS) recently notified states of next year’s clawback multipliers, which are used to determine state cost-sharing payments to the federal government for the Medicare Part D prescription drug program. The CMS release states that the per-beneficiary monthly clawback charge will increase by 2.85% in calendar year (CY) 2021, the same increase announced earlier this year because no additional adjustments were required.

Of note, the Federal Medical Assistance Percentage (FMAP) affects the clawback multipliers. Since the end date of the COVID-19-related, temporary 6.2 percentage-point increase in the FMAP is unknown, CMS provided two multipliers for each state: with and without the FMAP increase. If the temporary FMAP increase runs through March 2021 (based on the current public health emergency [PHE] renewal), FFIS estimates that CY 2021 clawbacks will cost states $13 billion, a $1.7 billion (15.5%) increase from CY 2020. This estimate drops to $11.5 billion if the FMAP increase remains in effect for the entire calendar year, a $263 million (2.3%) increase from CY 2020.