Administration's New ARRA Relief to States on "Clawback" Medicaid Funds to Cover Dual Eligibles Will Help States Struggling with Medicaid Budgets

The HHS Secretary in a February 18th call to state governors along with a March 5th letter to State Medicaid Directors announced that it would provide $4.3 billion in fiscal relief to states by applying ARRA increased FMAP to the so-called clawback payments states pay to the federal government as required by the Medicare Prescription Drug Improvement and Modernization Act of 2003 that added Medicare cost of assuming drug costs for dually eligible Medicare/Medicaid beneficiaries. This temporary adjustment in the clayback payments will be applied from October 1, 2008 through December 31, 2010. The announcement includes a state-by-state table of newly calculated savings to state matching funds.