Clawback Payments to Stabilize in CY 2018

The Centers for Medicare & Medicaid Services (CMS) announced the parameters that will guide calendar year (CY) 2018 individual and state costs for the Medicare Part D drug benefit. CMS projects a 3.94% increase in per capita Part D expenditures. After accounting for prior-year downward revisions, the annual percentage increase is 1.22%. This modest growth rate follows two years of double-digit increases, and is likely due to the slowing use of expensive specialty drugs (such as those for Hepatitis C).  

The release of the annual percentage increase, enrollment data for persons dually eligible for Medicare and Medicaid, and FFIS projections of Federal Medical Assistance Percentages (FMAPs) for fiscal year (FY) 2019, allow for preliminary estimates of state clawback costs for CY 2018. Based on the projections, CY 2018 clawbacks are estimated to cost states $11.3 billion, a 0.8% ($89 million) increase from CY 2017.