Officials Reconsider Lawsuit, ‘Clawback’ Formula Recalculated
California officials are re-evaluating a lawsuit to challenge the "clawback" provision of the Medicare prescription drug benefit, after the Bush administration on Thursday said it would recalculate the funding formula, the Sacramento Bee reports.
Under the "clawback" provision of the drug benefit, Medicare will assume the prescription drug costs for dual eligibles, but states will have to pay the federal government as much as 90% of the estimated amount that they would have spent on Medicaid coverage for medications for dual eligibles; the rate will decrease to 75% over time (California Healthline, 2/2).
The Bush administration said it was recalculating savings and reimbursement amounts using updated estimates of health care costs.
California would have lost $130 million over two years under the original calculation, but the administration of Gov. Arnold Schwarzenegger (R) said the state will save $60 million with the new calculation.
Schwarzenegger spokesperson Julie Soderlund said the administration is "still evaluating whether or not we feel it's appropriate to move forward with the lawsuit."
A spokesperson for Attorney General Bill Lockyer (D) said state attorneys will consult with the governor before deciding whether to pursue the lawsuit.
Also on Thursday, Schwarzenegger signed legislation (SB 1233) allowing the state to extend through May emergency prescription drug payments to residents dually eligible for Medicare and Medi-Cal benefits (Benson, Sacramento Bee, 2/10).
The bill will continue providing emergency drug coverage for dual eligibles for an additional 34 days. Schwarzenegger then will have the authority to enact two additional 30-day extensions through May 15, if necessary (Office of the Governor release, 2/9).
Additional information on the Medicare drug benefit is available online.