Clawback Payments Could Increase $2.6 Billion in CY 2023

The Centers for Medicare & Medicaid Services (CMS) announced the parameters that will guide calendar year (CY) 2023 individual and state costs for the Medicare Part D drug benefit. CMS projects a 5.8% increase in per capita Part D expenditures. However, after accounting for prior-year revisions, the annual increase is 5.08%.

In addition to the Part D expenditure growth, states may see even higher clawback costs in CY 2023 due to the possible termination of the temporary 6.2 percentage-point increase in the Federal Medical Assistance Percentage (FMAP) implemented in response to the COVID-19 public health emergency (PHE).

If the temporary FMAP increase expires after September 2022 (based on the current PHE renewal), FFIS estimates that CY 2023 clawbacks will cost states almost $16.4 billion, a 19% ($2.6 billion) increase from CY 2022.