DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
Center for Medicaid, CHIP and Survey & Certification 
 
CMCS Informational Bulletin 
  
 
DATE:  September 30, 2011 
 
     
FROM:  Cindy Mann  
  Director 
  Center for Medicaid, CHIP and Survey & Certification (CMCS) 
 
SUBJECT:  Medicaid Cost Sharing  FY 2012 Update to Nominal Cost Sharing 
 
and 
 
Calendar Year (CY) 2011 October through December and Calendar Year 
(CY) 2012 January through September Phased-down State Contribution 
Final Per-Capita Rates  
 
This Informational Bulletin provides information regarding the FY2012 Medicaid nominal cost 
sharing amounts, as well as the phased-down State contribution full dual-eligible per capita 
Medicaid drug payment amount for October through December 2011 and January through 
September 2012.  
 
Medicaid Cost Sharing  FY 2012 Update to Nominal Cost Sharing 
 
Per section 1916(h) of the Social Security Act, the Centers for Medicare & Medicaid Services 
(CMS) is required to update the Medicaid nominal cost sharing amounts for each Federal fiscal 
year beginning on October 1.  As described at 42 CFR 447.54, the following updated amounts, 
effective October 1, 2011, are calculated based on the change in the medical care component of 
the consumer price index for all urban consumers (CPI-U).  The net change in CPI-U from 
September 2009 to September 2010 is 3.4 percent.  The maximum copayment amounts were 
rounded up to the next highest 5-cent increment without considering any rounding adjustment in 
the prior year. 
 
FY 2012 Maximum Nominal Copayment Amounts 
State payment for service  FY 2012 Maximum copayment 
$10 or less  $0.65 
$10.01 to $25  $1.30 
$25.01 to $50  $2.55 
$50.01 or more  $3.80 
   
 
FY 2012 Maximum Nominal Deductible and MCO Copayment Amounts 
State payment for service  FY 2012 Maximum copayment 
Deductible  $2.55 
Managed Care Organization 
$3.80 
Copayment 
  
Questions related to these cost sharing amounts may be directed to Rebecca Bruno at 410-786-
5568 or Rebecca.Bruno@cms.hhs.gov  
 
Calendar Year (CY) 2011 October through December and Calendar Year (CY) 2012 
January through September Phased-down State Contribution Final Per-Capita Rates  
 
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) requires 
that CMS notify each State, no later than October 15 of each CY, of its annual per capita drug 
payment expenditure amount for the following year. Payments for the phased-down State 
contribution are made on a monthly basis. These payments are defined by the MMA to be the 
product of the annual per capita full dual-eligible drug payment amount and the monthly State 
enrollment of full dual eligibles. The phased-down State contribution full dual-eligible per capita 
Medicaid drug payment amount for January through September 2012 are included in this 
bulletin, as required by the MMA.  
 
Since State phased-down per capita rates have reverted to using original, unenhanced Federal 
Medical Assistance Percentages (FMAPs), we have also included in Attachment 1 the phased-
down State contribution full dual-eligible per capita Medicaid drug payment amount for October 
through December 2011. The per capita drug expenditure amount for October through December 
2011 is based on the value for July through September 2011, adjusted for the change in FMAP, if 
any, between FY 2011 and FY 2012. The per capita drug expenditure amount for January 
through September 2012 is based on the value for October through September 2011 with the 
following adjustments:  
 
1. The value is adjusted by the annual percentage increase (API) in per capita Part D 
expenditures for the 2012 contract year (3.34 percent), along with an adjustment to account for 
revisions to prior year estimates of per capita drug cost growth from 2003 to 2006 (0.74 percent). 
This results in a total growth rate of 4.10 percent.  
 
2. The phased-down contribution percentage is reduced from 81-2/3 percent of projected State 
per capita expenditures to 80 percent. 
 
3. Based on the effects of the API update and the reduction in the phased-down contribution 
percentage, the net change in the State phased-down per capita drug payment amount for 
CY2012 is 1.98 percent. Details are described in Attachment 2, provided by the CMS Office of 
the Actuary. 
 
Questions regarding these calculations may be directed to Yong Li, Division of Information 
Analysis and Technical Assistance, Data and Systems Group, at 410-786-3882 or via email at 
yong.li@cms.hhs.gov. 
  ATTACHMENT 1: Phased-down State Contribution Rates October 2011 through 
September 2012 
 STATE   STATE NAME  OCT - DEC 2011  JAN - SEP 2012 
AK  Alaska  149.09  152.03 
AL  Alabama  64.53  65.80 
AR  Arkansas  55.17  56.26 
AZ  Arizona  50.06  51.05 
CA  California  100.77  102.76 
CO  Colorado  129.84  132.41 
CT  Connecticut  159.74  162.89 
DC  District of Columbia  57.29  58.42 
DE  Delaware  117.35  119.67 
FL  Florida  122.53  124.95 
GA  Georgia  78.17  79.71 
HI  Hawaii  92.00  93.82 
IA  Iowa  108.28  110.42 
ID  Idaho  85.56  87.25 
IL  Illinois  130.52  133.10 
IN  Indiana  88.94  90.69 
KS  Kansas  117.32  119.63 
KY  Kentucky  74.50  75.97 
LA  Louisiana  77.25  78.78 
MA  Massachusetts  106.96  109.07 
MD  Maryland  136.45  139.15 
ME  Maine  83.59  85.24 
MI  Michigan  65.51  66.81 
MN  Minnesota  131.70  134.30 
MO  Missouri  117.78  120.11 
MS  Mississippi  51.79  52.82 
MT  Montana  88.64  90.39 
NC  North Carolina  92.98  94.82 
ND  North Dakota  102.08  104.10 
NE  Nebraska  118.35  120.69 
NH  New Hampshire  151.69  154.69 
NJ  New Jersey  163.20  166.43 
NM  New Mexico  54.24  55.31 
NV  Nevada  108.26  110.40 
NY  New York  120.34  122.71 
OH  Ohio  116.37  118.67 
OK  Oklahoma  71.56  72.98 
OR  Oregon  98.85  100.81 
PA  Pennsylvania  126.49  128.99 
RI  Rhode Island  124.26  126.72 
SC  South Carolina  54.82  55.90 
SD  South Dakota  108.76  110.91 
TN  Tennessee  100.35  102.34 
TX  Texas  85.12  86.80 
UT  Utah  88.21  89.96 
VA  Virginia  137.43  140.14 
VT  Vermont  105.72  107.81 
WA  Washington  130.09  132.66 
WI  Wisconsin  106.58  108.68 
WV  West Virginia  66.23  67.54 
WY  Wyoming  143.63  146.47 
   
 
ATTACHMENT 2: Phased-Down State Contribution to Part D 
Annual Rate Update for 2012 
 
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(MMA)  requires CMS to calculate the payment rates for the Phased-Down State 
Contribution (PDSC) to Part D each year using the latest available National 
Health Expenditure (NHE) estimates of per capita drug expenditure growth for 
the period 2003 to 2006, combined with the annual percentage increase (API)  in 
average per capita aggregate Part D expenditures for 2007 and later years, as 
defined in section 1860D-2(b)(6) of the Social Security Act.  As announced on 
April 4, 2011, the API for 2012 is 3.34%.1  Details of the API calculation are 
contained in the advance notice dated February 18, 2011.2 
 
The 2012 API includes an adjustment for revisions to the 2007, 2008, 2009, 
2010, and 2011 percentage increases, based on subsequent data and 
projections, as described in the February 18 advance notice.  Since the MMA 
requires use of the latest NHE estimates for 2003 through 2006, the 2012 PDSC 
rates also reflect updates to estimates of per capita prescription drug expenditure 
growth for the period 2003 to 2006 that have occurred since the promulgation of 
the 2011 rates.  The 2011 rates were based on historical NHE estimates from 
January 2010 and reflected a cumulative per capita prescription drug expenditure 
growth rate of 21.00% from 2003 to 2006.  The current, January 2011, NHE 
estimates show a cumulative growth rate of 21.89% for the same period.3  
Accordingly, the 2012 PDSC rates include a multiplicative adjustment of  0.74% 
                                         
1 See http://www.cms.gov/MedicareAdvtgSpecRateStats/Downloads/Announcement2012.pdf,  
Attachment IV.    
2 See http://www.cms.gov/MedicareAdvtgSpecRateStats/Downloads/Advance2012.pdf, Attachment IV. 
3 The current per capita estimates are $603 for 2003 and $735 for 2006.  These values are derived from data found at 
https://www.cms.gov/NationalHealthExpendData/downloads/nhe2009.zip. 
  (1.2189/1.2100  1) to account for the updated 2003 to 2006 growth estimates.  
When applied to the 2012 API of 3.34%, this adjustment results in a net per 
capita prescription drug expenditure increase for 2012 of 4.10% (1.0334  1.0074 
 1). 
The final PDSC payment rates include a discount factor (the factor for the 
month specified in section 1935(c)(5)), which is 80% in 2012.  Since the factor 
2
for 2011 was 81 / %, the 2012 payment rates will include an adjustment of 
3
2.04% (80 / 812/   1) and the net payment rate will increase by 1.98% (1.0410 
3
 (1  0.0204)  1 = 0.0198).  The table below summarizes these calculations. 
 
2012 Phased-down State Contribution Payment Rate Increase 
Annual Percentage Increase for  3.34% 
2012 
Adjustment for updated 2003-2006  0.74% 
growth 
2012 PDSC per capita expenditure  4.10% 
increase 
Change in discount factor  2.04% 
Final 2012 PDSC payment rate  1.98% 
increase 
Note:  Percentages in this table are multiplicative, not additive.  Calculations based on displayed 
values may vary from results shown, since values are carried to additional decimal places. 
Office of the Actuary 
August 31, 2011