2010-32054. Adjustments for Disaster-Recovery States to the Fourth Quarter of Fiscal Year 2011 and Fiscal Year 2012 Federal Medical Assistance Percentage (FMAP) Rates for Federal Matching Shares for Medicaid and Title IV-E Foster Care, Adoption ...

AGENCY:

Office of the Secretary, DHHS.

ACTION:

Notice.

SUMMARY:

This notice describes the methodology for calculating the higher federal matching funding that is made available under section 1905(aa) of the Social Security Act, as amended by section 2006 of the Patient Protection and Affordable Care Act of 2010 (“Affordable Care Act”) and provides the adjusted Federal Medical Assistance Percentage (FMAP) rates for the fourth quarter of Fiscal Year 2011 and Fiscal Year 2012 for disaster-recovery FMAP adjustment states. Section 1905(aa) of the Social Security Act provides for an increase in the FMAP rate for qualifying states that have experienced a major, statewide disaster.

DATES:

Effective Date: The percentages listed are for the fourth quarter of Fiscal Year 2011 beginning July 1, 2011 and ending September 30, 2011, and for Fiscal Year 2012.

A. Background

The Federal Medical Assistance Percentage (FMAP) is used to determine the amount of Federal matching for specified State expenditures for assistance payments under programs under the Social Security Act. Sections 1905(b) and 1101(a)(8)(B) of the Social Security Act (“the Act”) require the Secretary of Health and Human Services to publish the FMAP rates each year. The Secretary calculates the percentages, using formulas set forth in sections 1905(b) and 1101(a)(8)(B), from the Department of Commerce's statistics of average income per person in each State and for the Nation as a whole. The percentages must be within the upper and lower limits given in section 1905(b) of the Act. The percentages to be applied to the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands are specified in statute, and thus are not based on the statutory formula that determines the percentages for the 50 States.

Section 1905(b) of the Social Security Act specifies the formula for calculating FMAP as follows:

The FMAP for any State shall be 100 per centum less the State percentage; and the State percentage shall be that percentage which bears the same ratio to 45 per centum as the square of the per capita income of such State bears to the square of the per capita income of the continental United States (including Alaska) and Hawaii; except that (1) the FMAP shall in no case be less than 50 per centum or more than 83 per centum, and (2) the FMAP for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa shall be 50 per centum. Section 4725 of the Balanced Budget Act of 1997 amended section 1905(b) to provide that the FMAP for the District of Columbia for purposes of titles XIX (Medicaid) and XXI (CHIP) shall be 70 percent.

Section 2006 of the Patient Protection and Affordable Care Act of 2010 (“Affordable Care Act”) amended section 1905 of the Social Security Act by adding section (aa) to provide for an increase in the FMAP rate for qualifying states for Medicaid and title IV-E Foster Care, Adoption Assistance and Guardianship Assistance programs. The purpose of the increase to the FMAP rate is to provide increased Federal financial participation for qualifying states that have experienced a major, statewide disaster.

B. Definition of a Disaster-Recovery FMAP Adjustment State

Section 1905(aa) of the Social Security Act, as added by section 2006 of the Affordable Care Act specifies that the annual FMAP rate shall be increased for a “disaster-recovery FMAP adjustment state.” The statute defines a “disaster-recovery FMAP adjustment state” as one of the 50 states or District of Columbia for which, at any time during the preceding 7 fiscal years, the President has declared a major disaster under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act under which every county or parish in the state is eligible for individual and public or public assistance from the federal government, and for which the FMAP as determined for the fiscal year is less than the FMAP for the preceding fiscal year by at least three percentage points. For Fiscal Year 2011 (FY11), the first fiscal year in which a state can qualify for the disaster adjustment, the FMAP for FY11 must be less than the FMAP for the preceding fiscal year after the application of the “hold harmless” provision under subsection (a) of Section 5001 of the American Recovery and Reinvestment Act of 2009 (ARRA) (Pub. L. 111-5), by at least three percentage points. For Fiscal Year 2012 (FY12) and beyond, the FMAP rate for the state for the fiscal year, as determined based on the annual FMAP calculation (without regard to section 1905(aa)), must be less than the preceding year FMAP rate, including the applicable disaster-recovery adjustment, by at least three percentage points.

C. Calculation of the Increased FMAP Rates for Disaster-Recovery FMAP Adjustment States

For the first year in which a state qualifies for the disaster-recovery FMAP adjustment, the FMAP shall be equal to the FMAP as determined for the fiscal year, plus 50% of the number of percentage points by which the FMAP is less than the preceding fiscal year FMAP. For FY11, the preceding fiscal year FMAP includes the application of the “hold harmless” provision under subsection (a) of Section 5001 of the ARRA. In year two or any succeeding fiscal year in the qualifying 7-year period, the FMAP shall be equal to the FMAP as determined for the preceding fiscal year, including any disaster-recovery adjustment for that year, plus 25% of the number of percentage points by which the FMAP as determined for the fiscal year (without any disaster-recovery adjustment) is less than the FMAP for the previous year (including any applicable disaster-recovery adjustments).

Expenditures for which the increased FMAP is not available under title XIX include expenditures for disproportionate share hospital payments and expenditures that are paid at an enhanced FMAP rate, as well as any payments made under Title XXI. The increased FMAP is available for expenditures under part E of title IV only.

Disaster-recovery FMAP adjustments will be included in the annual publication of the FMAP rates for the succeeding fiscal year. Beginning in the fall of 2011, the annual Federal Register Notice will include the FMAP rates for the succeeding fiscal year, as well as disaster-recovery adjustments to the FMAP rates.

D. Disaster-Recovery FMAP Adjustments for the Fourth Quarter of Fiscal Year 2011 and Fiscal Year 2012

The application of the disaster-recovery FMAP adjustment is effective January 1, 2011. Due to the extension of the ARRA FMAP adjustments, which extended the recession adjustment period to June 30, 2011 (the end of the third quarter of FY11), no state will qualify for the disaster-recovery adjustment until the fourth quarter of FY11. As such, any adjustments that are made to the FY11 FMAP rates are effective for the fourth fiscal quarter only. Disaster-recovery FMAP adjustments made in future fiscal years will be applicable for all four quarters of the year.

Based on the criteria for a qualifying state, only three states meet the requirement that the FMAP as determined for FY11 is less than the previous year FMAP, after the application of subsection (a) of Section 5001 of the ARRA, by at least three percentage points. Of the three states, only one state, Louisiana, has had a presidential disaster declaration that applies to all counties and parishes within the state in the preceding 7 fiscal years. Therefore, this notice only provides a disaster-recovery FMAP adjustment for the state of Louisiana for fourth quarter of FY11. The disaster-recovery adjusted FMAP rate is shown in the accompanying table.

Based on the criteria for a qualifying state, only two states meet the requirement that the FMAP as determined for FY12 is less than the previous year FMAP by at least three percentage points. Of the two states, only one state, Louisiana, has had a presidential disaster declaration that applies to all counties and parishes within the state in the preceding 7 fiscal years. Therefore, this notice only provides a disaster-recovery FMAP adjustment for the state of Louisiana for FY12. The disaster-recovery adjusted FMAP rate is shown in the accompanying table. This is the second fiscal year for which Louisiana has qualified for the disaster-recovery adjustment; the adjusted FMAP rate for FY12 reflects the calculation as prescribed in statute for succeeding qualifying years.

FOR FURTHER INFORMATION CONTACT:

Carrie Shelton, Office of Health Policy, Office of the Assistant Secretary for Planning and Evaluation, Room 447D—Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201, [phone].

(Catalog of Federal Domestic Assistance Program Nos. 93.658: Foster Care; 93.659: Adoption Assistance; 93.090: Guardianship Assistance; 93.778: Medical Assistance Program)

Dated: November 12, 2010.

Kathleen Sebelius,

Secretary.

Fiscal Year 2011 (Q4) Disaster-Recovery Adjusted FMAP Rates

State	FY11 FMAP	ARRA Hold harmless FY 08-10 FMAP	Decrease in FMAP	Disaster-recovery adjusted FMAP FY11 (Q4)
Louisiana	63.61	72.47	8.86	68.04

Fiscal Year 2012 Disaster-Recovery Adjusted FMAP Rates

State	FY12 FMAP	FY11 FMAP/Disaster recovery adjusted FMAP	Decrease in FMAP	Disaster-recovery adjusted FMAP FY12
Louisiana	61.09	68.04	6.95	69.78