DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland 21244-1850 
 
Center for Medicaid and State Operations 
 
              SMD #03-010 
 
December 15, 2003 
 
Dear State Medicaid Director: 
 
On Monday, December 8, President Bush signed the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003.  (P.L. 108-173.)  As part of this historic Act, Medicare 
beneficiaries will be able to receive discounts on their drug purchases by next spring.  
Furthermore, certain low-income beneficiaries will also receive up to $600 annually toward the 
purchase of prescription drugs.  The purpose of this letter is to transmit the data specifications 
that you must use to implement those provisions relating to the Medicare-endorsed prescription 
drug discount card and transitional assistance (TA) program.  The new law requires the Centers 
for Medicare and Medicaid Services (CMS) and the states to implement the discount card and 
TA program not later than June 8, 2004.  States need to begin preparations immediately to send 
CMS data test files beginning on January 5, but not later than February 14.    
 
The Act states that Medicare low-income beneficiaries with Medicaid prescription drug coverage 
(including those who receive prescription drug coverage through a section 1115 waiver) are 
excluded from participation in the discount card and TA.  The Act also requires that states 
provide CMS with the data we need in the format we stipulate to enable us to identify on a 
current basis which of the estimated 6 to 7 million dual eligibles in the United States will not be 
eligible for the discount card or TA. 
 
In early October, we solicited your views on the best way to provide CMS with the data we 
thought might be needed.  Forty-two states and the District of Columbia responded.  From the 
information received, we conducted a pilot test with six volunteer states using a very simple, 
small set of data specifications.  The data specifications, submittal requirements, and due dates 
that we have attached were designed with the input of those responding states and are based on 
the results of the pilot test. 
 
If you have technical questions about these data specifications, you can send an e-mail to 
State_Drug_Card@cms.hhs.gov beginning December 19.  For all other questions about the 
states role in the eligibility verification process, contact Richard Friedman, of my office, at 
(410) 786-4451 or rfriedman2@cms.hhs.gov.  Page 2  State Medicaid Director 
 
With the implementation deadline, it is essential that you and your staff work to meet the 
deadlines for your data submittals.  We have done everything we can to make this requirement as 
easy and non-burdensome as we can, and we are grateful for your help and cooperation to ensure 
the success of this interim program.   
 
            Sincerely, 
 
            /s/ 
 
            Dennis G. Smith 
            Director 
 
Attachment 
 
cc: 
Timothy P. Love 
Director, Office of Information Services 
 
CMS Regional Administrators 
 
CMS Associate Regional Administrators 
   for Medicaid and State Operations 
 
Kathryn Kotula 
Director, Health Policy Unit 
American Public Human Services Association 
 
Joy Wilson 
Director, Health Committee 
National Conference of State Legislatures 
 
Matt Salo 
Director of Health Legislation 
National Governors Association 
 
Brent Ewig 
Senior Director, Access Policy 
Association of State and Territorial Health Officials 
 
Jim Frogue 
Director, Health and Human Services Task Force  
American Legislative Exchange Council 
 
Trudi Matthews 
Senior Health Policy Analyst 
Council of State Governments  Attachment 
 
Data Specifications for State Data for  
Medicare Discount Card Eligibility Verification Process 
 
Header Input Record Format 
 
Data Field  Size  Format  Information 
State-CD  2  X(002)  State Code 
Filler  8  X(008)  Filler 
Month-CD  2  9(002)  Month Code for Reporting Month - Valid Codes 1 - 12 
Year-CD  4  9(004)  Year for Reporting Month - Valid years 2003 and 2004 
Return-Option  1  X(001)  Records Return A = All   F = Failed  Default is F  
Filler   23  X(023)  Filler 
 
State Input Record Format 
 
Data Field  Size  Format  Information 
Bene-SSN  9  9(009)  Beneficiary SSN  
Bene-HICN-RRB-IND  1  X(001)  Indicator for HICN or RRB  R or  H or Blank 
Bene-HICN  11  X(011)  HICN  CAN + BIC 
Filler  3  X(003)  Space to allow the RRB in the HICN position in the Record Format 
Bene-DOB  8  MMDDCCYY Month, Day, Century & Year of Beneficiary Birth   
Sex Code  1  X(001)  Beneficiary Sex  M, F or U 
Filler   7  X(007)  Filler 
 
Trailer Input Record Format 
 
Data Field  Size  Format  Information 
State-CD  2  X(002)  State Code 
Bene-Record-Cnt  8  9(008)  Total Number of Beneficiaries on File 
Month-CD  2  9(002)  Month Code for Reporting Month - Valid Codes 1 - 12 
Year-CD  4  9(004)  Year for Reporting Month - Valid years 2003 and 2004 
Filler   24  X(024)  Filler 
 
Send test files on CDs to:   
 
Division of Quality Coordination and Data Distribution 
Attn:  Robyn Thomas 
Mailstop N1-15-03 
7500 Security Blvd. 
Baltimore, MD  21244-1850 
 
Please enclose a cover letter indicating that this is a test file for the drug card program, and 
include the name and contact information for your technical contact.