States sue over Part D Rx costs

February 6, 2006

At least five states will appeal directly to the U.S. Supreme Court to block the federal government from billing them for millions of dollars for drugs for former Medicaid patients switched to Medicare Part D plans. Although Congress had assured states that the change would lower their drug costs by 10%, the states contend that a flaw in the financial formula is leading the federal government to overcharge them.

At least five states will appeal directly to the U.S. Supreme Court to block the federal government from billing them for millions of dollars for drugs for former Medicaid patients switched to Medicare Part D plans. Although Congress had assured states that the change would lower their drug costs by 10%, the states contend that a flaw in the financial formula is leading the federal government to overcharge them.