Part D Clawback Payments to Decline -6% in CY 2014

The Medicare Modernization Act (MMA, P.L. 108-173) that established the Medicare Part D prescription drug program requires states to make cost-sharing payments to the federal government, commonly known as the “clawback.” As required by the MMA, the Centers for Medicare & Medicaid Services (CMS) must notify states by October 15 of their clawback charges for the coming year. The recent CMS release indicates that the per-beneficiary monthly clawback charge to states will decline by -6.07% in calendar year (CY) 2014, a result of the first-ever negative annual percentage increase in per capita Part D drug expenditures and the annual statutory reduction in the state share. While all states will experience a reduction in their clawback multiplier, the degree will vary based on changes in a state’s Medicaid matching rate.