Governor Announces New Hampshire Joins Other States in Challenging Medicare "Clawback" Provision

From The Office of Governor John Lynch

CONCORD - Gov. John Lynch announced that New Hampshire today joined 14 other states in challenging the new Medicare prescription drug law's "clawback" provision."

The states are challenging the constitutionality of the clawback provision and are asking the U.S. Supreme Court to take up the case. The plaintiff states are Texas, Kentucky, Maine, Missouri, and New Jersey. New Hampshire joined Arizona, Alaska, Connecticut, Kansas, Mississippi, Ohio, Oklahoma, South Carolina and Vermont in filing the amicus brief.

"Federal officials are taking credit for adding a prescription drug benefit to Medicare, but sending part of the bill for this new benefit to the states. That is wrong, and we believe that it is unconstitutional," Gov. Lynch said. "The federal government can't have it both ways. Federal officials created this program; it is their responsibility to pay for it."

The states had provided prescription drug coverage for some low-income seniors through Medicaid. Under the new federal prescription drug law, the federal government is now offering prescription drug coverage to all seniors, including so-called dual eligibles, people eligible for both federal Medicare and state Medicaid coverage.

Right now, the state is continuing to provide emergency assistance to dual eligibles because of problems with the implementation of the federal prescription drug benefit.

While the federal government is claiming that it has taken over providing prescription drug coverage to dual eligibles, it is actually sending a bill to the states for those costs, the so-called clawback provision.

For a number of years, New Hampshire has worked to control the growth in state prescription drug costs by negotiating aggressively with pharmaceutical companies and taking other measures. In contrast, the federal government's prescription drug program is barred from negotiating for the best possible prices.

The federal government is charging New Hampshire a "clawback" of $27.6 million. Adding to the difficulties with the program, the federal government doesn't send its bills until after the state budget has been completed and the fiscal year has started - making it difficult for states to plan.

"With this program, states have lost all ability to control prescription drugs costs; we are just expected to pay the bills. I am concerned $27.6 million that the federal government is charging New Hampshire will grow," Gov. Lynch said. "Federal officials chose to create this program, they should figure out how to pay for it - not pass down the burden to state officials."

Legislative leaders of both parties in New Hampshire have expressed deep concerns about the clawback provision. The budget the legislature originally passed prohibited the state from paying the clawback money unless ordered to by a court. The legislature repealed the provision when the federal government threatened to withhold funding for Medicaid.

Gov. Lynch praised New Hampshire lawmakers for the strong concerns they have raised about the clawback provision.

A copy of the amicus brief is availble as a PDF.