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FL to get $282M refund

By Carol Gentry and Jim Saunders
2/19/2010 © Health News Florida

Congratulations, Florida! You're getting a refund of $282.5 million in overpayments to Medicare, thanks to a recalculation of drug premiums for low-income elderly and disabled patients. 

It couldn't have come at a better time, with state lawmakers facing a Medicaid budget shortfall that could top $1 billion next year, said Lori Parham, state director for AARP.

This will provide some "needed fiscal relief'' and may reduce the threat of cuts to programs such as home- and community-based care for seniors. "Given the conversations (in the Legislature), everything seems to be on the table,'' Parham said.

The U.S. Department of Health and Human Services is giving other states refunds, too, a total of $4.3 billion. HHS' Centers for Medicare and Medicaid Services says the states are getting back some of the money they paid as their share of Medicare drug-plan premiums for the so-called "dual eligibles," who have incomes so low they qualify for Medicaid. Medicare is a federal program, but Medicaid is jointly financed by the states and federal government. 

The refunds were made possible by the American Recovery and Reinvestment Act of 2009, also called the "stimulus." It gave a temporary boost to the amount the states receive from the federal government to help pay for their Medicaid programs. In Florida, the federal share jumped from about 55 percent to just shy of 68 percent, according to a presentation to lawmakers by the Agency for Health Care Administration.

The states won't get their refunds per se, said CMS press officer Mary Kahn, but rather in reduced premium payments for the dual eligibles, called the "clawback."

Under the Medicare Prescription Drug Improvement and Modernization Act of 2003, which established the drug benefit, Medicare assumed responsibility for paying drug-plan premiums for the dual eligibles. Before, state Medicaid programs had covered the cost of prescriptions for the duals.

The reduction in clawback payments will be retroactive to October 2008, HHS said. It will continue at least through through December 2010 and, if President Obama's budget passes as proposed, through June 2011.

For more information, see the HHS web site.