NC to get federal Medicaid relief

Gov. Bev Perdue applauded the decision by the Obama Administration and Health and Human Services Secretary Kathleen Sebelius to provide North Carolina with $152 million in financial relief.

The federal government will provide a temporary reduction in the costs to states associated with the federal Medicare Part D drug program.

“This decision by the Obama Administration and Secretary Sebelius couldn’t have come at a better time to help our state continue to provide critical health services,” said Perdue.

Health and Human Services Secretary Kathleen Sebelius announced the funding as part of a nationwide action to provide some budget relief to states made possible by the American Recovery and Reinvestment Act (ARRA).

ARRA temporarily increased the amount states receive from the federal government to help pay for their Medicaid programs. The increase was to the federal share of Medicaid costs, referred to as federal medical assistance percentage payments (FMAP).

HHS will apply the ARRA increased FMAP to so-called clawback payments. The clawback payment is the amount states pay to the federal government as required by the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA). It is intended to offset some of the added expense to Medicare Part D of assuming drug costs for residents dually eligible for both programs. Prior to MMA, state Medicaid programs covered prescription drug costs for these beneficiaries.

This temporary adjustment in the clawback payments will be applied for the period October 1, 2008 through December 31, 2010. In his 2011 budget, President Obama calls for the FMAP increase established in ARRA to be extended through June 30, 2011.

“It’s clear the Obama Administration understand the financial challenges states are facing during this economic crisis. Now it is time for Congress to extend this relief through the end of the fiscal year,” said Perdue.