E8-13525. Medicaid Program; Notice of Single-Source Grant Award to the States of Louisiana and Mississippi for the Grant Entitled “Deficit Reduction Act-Hurricane Katrina Healthcare Related Provider Stabilization”

AGENCY:

Centers for Medicare & Medicaid Services (CMS).

ACTION:

Notice of Single-Source Non-Competitive Supplemental Awards.

Funding Amount: $19,100,000.

Period of Performance: June 9, 2008-September 30, 2009.

CFDA: 93.776.

Authority: Section 6201(a)(4) of the Deficit Reduction Act of 2005 (DRA)

Purpose: The Secretary has authorized an additional $19.1 million in supplemental grant funds to be made available to the States of Louisiana and Mississippi. Based on the share of total Medicare inpatient payments made to each State's eligible general acute care hospitals and inpatient psychiatric facilities (IPFs) located in the Federal Emergency Management Agency (FEMA) designated counties/parishes in calendar year 2006 (the latest and most complete year of Medicare billing data available to us), funding is being allocated in the following proportions: 53 percent to Louisiana ($10,143,671) and 47 percent to Mississippi ($8,956,329).

Since its inception, the Provider Stabilization Grant (PSG) program has been used to fund State payments to general acute care hospitals, skilled nursing facilities, IPFs, and community mental health centers in impacted communities that may face financial pressures because of changing wage rates that are not yet reflected in Medicare prospective payment system (PPS) payment methodologies. For this third round of PSG funding, CMS determined that these supplemental grant funds would be used by the States to make payments to only those Medicare participating inpatient PPS (IPPS) hospitals and IPFs that are currently paid under a Medicare PPS and that are the most significantly, negatively impacted (financial or otherwise) related to Hurricane Katrina.

Although the States had significant discretion in determining the payment distribution methodology, the methodology had to clearly reflect the basis upon which the State would determine “negative impact” and then how each provider would receive an appropriate share of the funds. Grant funds may not be distributed to IPPS hospitals and IPFs that are not in operation or that are outside of the FEMA Hurricane Katrina designated counties/parishes for individual and public assistance. The States' payment methodologies were to specify the relevant time periods and any other factors that would be considered in distributing available grant funds according to the principles specified above, and were subject to approval by CMS.

The States were also allowed to choose to use a portion of the funds (not to exceed 20% of the grant) to address immediate, unmet, health care infrastructure needs that objective data indicate was caused as a direct result of Hurricane Katrina and or its subsequent flooding. This optional provision was also subject to CMS approval.

Under the authority of section 6201(a)(4) of the Deficit Reduction Act of 2005, the Secretary, Department of Health and Human Services, has invoked his authority to restore health care in impacted communities affected by Hurricane Katrina by offering this unique funding opportunity to enable States to make payments to assist general acute care hospitals and IPFs that are paid under a Medicare PPS, with the financial pressures that may result from changing wage rates in those impacted communities. Louisiana and Mississippi are the only States with knowledge and ability to administer a grant designed to affect impacted communities in their own respective States. For the reasons cited above, the Secretary has directed CMS to offer supplemental single-source awards to the States of Louisiana and Mississippi.

FOR FURTHER INFORMATION CONTACT:

Wendy J. Alexander, Ph.D., Health Insurance Specialist, Finance Systems and Budget Group, Centers for Medicaid and State Operations, Centers for Medicare & Medicaid Services, Mail Stop S3-13-15, 7500 Security Boulevard, Baltimore, MD 21244, [phone].

Authority: Section 6201(a)(4) of the Deficit Reduction Act of 2005 (DRA).

Dated: June 10, 2008.

Kerry Weems,

Acting Administrator, Centers for Medicare & Medicaid Services.