Author: Sam Fish | Posted: 26. February 2010 05:15

The U.S. Department of Health and Human Services (HHS) announced on February 18 that states will get a much needed $4.3 billion in fiscal relief due to a new interpretation of Medicare/Medicaid provisions in the American Recovery and Reinvestment Act of 2009 (ARRA) and the Medicare Modernization Act of 2003 (MMA). The new interpretation of the ARRA and the MMA was strongly advocated by many states. The MMA created the Medicare Part D program, offering prescription drug coverage to Medicare recipients, including those also eligible for Medicaid, switching the states’ historical responsibility for covering prescription drugs for millions of Medicare/Medicaid “duals” from Medicaid to Medicare Part D. A “clawback” provision in the MMA made States compensate the Centers for Medicare and Medicaid Services (CMS) for this switch going forward using the “state share” under Medicaid in each state. The ARRA boosted the federal share and cut the state share under Medicaid in each state for the period October 1, 2008 through December 31, 2010. HHS Secretary Kathleen Sebelius informed all governors on February 18 of her department’s new legal analysis of the ARRA and MMA provisions, retroactive to October 1, 2008, slashing the “clawback” for all states by $4.3 billion over the five quarter period, for California by $675 million, for North Carolina by $152 million, and for Massachusetts by $132 million.