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§ 423.910 Requirements.
(a) General rule. Each of the 50 States and the District of Columbia is required to provide for payment to CMS a phased-down contribution to defray a portion of the Medicare drug expenditures for individuals whose projected Medicaid drug coverage is assumed by Medicare Part D.
(b) State contribution payment—
(1) Calculation of payment. The State contribution payment is calculated by CMS on a monthly basis, as indicated in the following chart. For States that do not meet state enrollment reporting requirement described in paragraph (d) of this section, the State contribution payment is calculated using a methodology determined by CMS.
Illustrative Calculation of State Phased-down Monthly Contribution for 2006
| Item | Illustrative Value | Source | |
|---|---|---|---|
| (i) | Gross per capita Medicaid expenditures for prescription drugs for 2003 for full-benefit dual eligibles not receiving drug coverage through a comprehensive Medicaid managed care plan, excluding drugs not covered by Part D | $2,000 | CY MSIS data |
| (ii) | Aggregate State rebate receipts in calendar year 2003 | $100,000,000 | CMS-64 |
| (iii) | Gross State Medicaid expenditures for prescription drugs in calendar year 2003 | $500,000,000 | CMS-64 |
| (iv) | Rebate adjustment factor | 0.2000 | (2) ÷ (3) |
| (v) | Adjusted 2003 gross per capita Medicaid expenditures for prescription drugs for full-benefit dual eligibles not in comprehensive managed care plans | $1,600 | (1) × [1 − (4)] |
| (vi) | Estimated actuarial value of prescription drug benefits under comprehensive capitated managed care plans for full-benefit dual eligibles for 2003 | $1,500 | To be Determined |
| (vii) | Average number of full-benefit dual eligibles in 2003 who did not receive covered outpatient drugs through comprehensive Medicaid managed care plans | 90,000 | CY MSIS data |
| (viii) | Average number of full-benefit dual eligibles in 2003 who received covered outpatient drugs through comprehensive Medicaid managed care plans | 10,000 | CY MSIS data |
| (ix) | Base year State Medicaid per capita expenditures for covered Part D drugs for full-benefit dual eligible individuals (weighted average of (5) and (6)) | $1,590 | [(7) × (5) + (8) × (6)] ÷ [(7) + (8)] |
| (x) | 100 minus Federal Medical Assistance Percentage (FMAP) applicable to month of State contribution (as a proportion) | 0.4000 | Federal Register |
| (xi) | Applicable growth factor (cumulative increase from 2003 through 2006) | 50.0% | NHE projections |
| (xii) | Number of full-benefit dual eligibles for the month | 120,000 | State submitted data |
| (xiii) | Phased-down State reduction factor for the month | 0.9000 | specified in statute |
| (xiv) | Phased-down State contribution for the month | $8,586,000 | 1 / 12 × (9) × (10) × [1 + (11)] × (12) × (13) |