State Phased-Down Billing

The Medicare Prescription Drug Improvement and Modernization Act of 2003 (Medicare Modernization Act or
MMA) established the Medicare Part D prescription drug benefit effective January 2006. At that time, Medicare
became the primary payer for most prescription drugs for full-benefit dually eligible beneficiaries. However,
the MMA established the phased-down state contribution process, in which states are responsible for making
monthly payments to CMS, representing a portion of the expenditures for beneficiaries whose Medicaid drug coverage has been assumed by Medicare Part D.

The 2021 version of the State Phased-Down (SPD) Billing Guide (PDF) updates information and instructions for states on operations concerning the state phased-down contribution process, including:

• Relationship between state reporting and the SPD contribution amount
• SPD Contribution Billing
• State Itemized Liability Report
• Offset Against State Medicaid Grant Award
• Methods States May Use to Pay the SPD Contribution Amount
• Fedwire Procedures
• Pay.gov

Send an email to DPBCStateBuy-in@cms.hhs.gov for SPD contribution billing inquiries and requests.

Phased-Down State Contribution Per Capita Rates

CY 2023 Quarter 4 (Oct-Dec) Phased-Down State Contribution Rates Memorandum

CY 2023 Quarters 1-3 (April-Sep) Phased-Down State Contribution Rates Memorandum

State Medicaid Director Letter on CY 2022 Jan-Sep Claw Back Phased-Down State Contribution Amounts

State Medicaid Director Letter on CY 2021 Oct-Dec Claw Back Phased-Down State Contribution Amounts

State Medicaid Director Letter on CY 2021 Jan-Sep Claw Back Phased-Down State Contribution Amounts (PDF)

State Medicaid Director Letter on CY 2020 Oct-Dec Claw Back Phased-Down State Contribution Amounts (PDF)

Want regular email updates? Sign up by visiting this link.

We’re always looking for ways to improve the experience and usability of our webpages. If you’ve Feedback or issues to report, please contact us at MMCOWeb@cms.hhs.gov.