2011-19358. Calculation of Annual Federal Medical Assistance Percentages for Indian Tribes for Use in the Title IV-E Foster Care, Adoption Assistance, and Kinship Guardianship Assistance Programs

AGENCY:

Office of the Secretary, DHHS.

ACTION:

Notice.

SUMMARY:

This notice finalizes the methodology that will be used to calculate reimbursement rates applicable to fiscal years 2010 and beyond for assistance payments under the tribal Foster Care, Adoption Assistance and Guardianship Assistance Programs authorized by title IV-E of the Social Security Act. A Notice with Comment Period on this topic was previously published on October 8, 2010.

DATES:

Effective Date. The methodology described in this Notice is effective upon publication.

A. Background

The Fostering Connections to Success and Increasing Adoptions Act of 2008 (“Fostering Connections Act, ” Pub. L. 110-351), authorizes Indian tribes, tribal organizations and tribal consortia to receive funding directly for Foster Care, Adoption Assistance, and Kinship Guardianship Assistance Programs under title IV-E of the Social Security Act (42 U.S.C. 679c). Such direct funding was authorized to begin in fiscal year (FY) 2010 for Indian tribes, tribal organizations or tribal consortia with approved title IV-E plans, or eligible Indian tribes may submit plans to operate such programs at any time in the future. Indian tribes not operating their own programs may receive title IV-E funds through cooperative agreements or contracts with the States within which they are located. The methodology described in this notice is also applicable in calculating reimbursement rates under such agreements beginning in FY 2010.

The Federal share of assistance payments for the Title IV-E Foster Care, Adoption Assistance and Kinship Guardianship Assistance Programs is calculated using the Federal Medical Assistance Percentage (FMAP), a match rate calculated annually for each State by the Department of Health and Human Services (HHS) according to a formula specified in statute (section 1905(b) of the Social Security Act, 42 U.S.C. 1396d(b)). The FMAP formula involves comparing the State's average per capita income over a three year period with the average per capita income of the U.S. as a whole for the same three year period, and results in FMAP rates that vary between statutory minimum and maximum levels of 50 and 83 percent. The formula produces higher Federal matching rates for jurisdictions with lower per capita incomes relative to the U.S. as a whole.

Indian tribes previously have not been authorized to directly administer Federal programs that use FMAPs and therefore tribal FMAPs have not previously been calculated. However, the Fostering Connections Act requires HHS to establish FMAP rates for Indian tribes, tribal organizations, or tribal consortia (Pub. L. 110-351, section 301(d); 42 U.S.C. 679c(d)). The Act further specifies that each Tribe's annual FMAP shall be based on the per capita income of the service population of the Indian tribe, tribal organization, or tribal consortium. However, no tribal FMAP shall be lower than the FMAP of any State in which the Indian tribe, tribal organization, or tribal consortium is located.

The FMAP rates calculated using the methodology described here will be used for Indian tribes' title IV-E Foster Care, Adoption Assistance, and Kinship Guardianship Assistance programs whether they are administered directly by the Indian tribe or through an agreement or contract with a title IV-E State agency per sections 474(a)(1) and (2) of the Social Security Act, 42 U.S.C. 674(a)(1) and (2). Thus, a State may also claim reimbursement for title IV-E allowable assistance payments made on behalf of tribal children served through agreements or contracts with Indian tribes at the higher of the FMAP rate applicable to the State or the FMAP rate for the involved Indian tribe.

B. Outreach Regarding the October 8, 2010, Federal Register Notice and Comments Received

On October 8, 2010, HHS published a Federal Register Notice requesting comments on its proposed methodology for calculating FMAP for Indian tribes. A 60-day comment period was provided. HHS mailed copies of the Notice to tribal chairman of all federally recognized Indian tribes and posted the Notice to several electronic listserves operated by the Department's Administration for Children and Families that are most relevant to tribal child welfare programs. Each of the letters and postings provided dates and call-in instructions for four conference calls that were to be held to describe the content of the Notice and answer any questions Tribes may have had about it. These calls were held on November 3, 4, 9 and 10, 2010.

A single set of written comments was received on the content of the Federal Register Notice and the methodology for calculating tribal FMAP rates. These comments, from the National Indian Child Welfare Association (NICWA), supported several specific aspects of the proposed methodology. These include: (1) The use of the standard FMAP formula to calculate rates for Indian tribes, substituting the Indian tribe's per capita income in place of the State's; (2) the proposal to round each Indian tribe's rate up to the next higher whole number; (3) the extension of temporary FMAP increases as specified in Section 5001 of Public Law 111-5, “the American Recovery and Reinvestment Act of 2009” and Section 201 of Public Law 111-226, the “Education, Jobs and Medicaid Assistance Act” to Indian tribes as they apply to States; and (4) our recommendation to use, as a default, data for the population identified as American Indian or Alaska Native only in the Indian tribe's service area to calculate the FMAP rate, while being open to discussion if the Indian tribe believes another formulation better represents its service population.

The NICWA comments also expressed guarded support for our proposed methodology for calculating FMAP rates for consortia or tribal organizations serving multiple Indian tribes, noting the methodology “may be appropriate” but noting that individual situations may produce complicating factors of which NICWA is unaware. Neither we nor NICWA has yet identified specific cases in which the proposed methodology is problematic. However, we acknowledge that no methodology is guaranteed to work in all situations and remain willing to work with tribal organizations and consortia to consider alternate methods in cases where the proposed methodology proves inadequate.

NICWA did express the concern that our proposed data source for FMAP calculations for fiscal year 2012 and beyond involves 5-year per capita income estimates from the American Community Survey (ACS). These data were unavailable before the comment period closed. NICWA, supported by a resolution from the National Congress of American Indians, suggested that we extend the comment period for several months in order to allow a thorough examination of the new data, which was scheduled for release in December, 2010. By the time the NICWA comments were received on the last day of the comment period, it was too late to extend the comment period under the existing Federal Register Notice. We did consider re-opening the comment period and also considered finalizing only rates for 2010 and 2011 while asking anew for comments on the methodology for 2012 and beyond. However, we have decided not to reopen the comment period for two reasons. First, an examination of these new data, published December 14, 2010, reveal few differences between the rates produced using the ACS 5-year estimates and those produced using the 2000 decennial Census data NICWA supported. Second, while NICWA expressed apprehension because the new data was as yet unseen, neither NICWA nor any other organization has identified a viable alternative to these data for routine use. While individual Indian tribes may have alternative data sources, and we have said consistently that we will consider such alternative data as an Indian tribe may choose to submit, the 5-year ACS data is the only data set we have been able to identify that provides consistent information on the per capita incomes of the range of Indian tribes eligible to participate in the title IV-E Foster Care, Adoption Assistance, and Guardianship Assistance Programs. Without a viable alternative to consider, and new evidence that the proposed data source is viable for FY 2012 and beyond, we have decided to finalize the methodology as proposed. A fuller analysis of the 5-year ACS estimates and their implications for tribal FMAP rates appears below. A look-up table for 2012 FMAP rates, equivalent to the table for FYs 2010 and 2011 that appeared in the previous Federal Register Notice, appears at the end of this Notice. We also repeat at the end of this notice the lookup table for the FMAP rates applicable to FYs 2010 and 2011.

During the conference calls we held with Indian tribes to explain the proposed methodology we did receive questions on the data sources used to calculate the rate, i.e., the 2000 Decennial Census and the ACS, both produced by the U.S. Census Bureau. Specifically, we were asked whether the Census Bureau's definition of income includes tribal payments to members (it does) and whether the data source makes any adjustments to account for the high cost of living in Alaska (it does not). In addition, several callers asked us to provide them with the per capita income data for their Indian tribe, and the associated FMAP rate calculated using the proposed methodology. We provided this information in each case. One caller also asked for clarification regarding which components of the title IV-E Program are matched using the FMAP. We noted that FMAP is used to match assistance payments, which are primarily room and board costs for children in foster care and payments to families under the adoption assistance and kinship guardianship assistance programs. Other costs, particularly administrative and training costs, are matched at other statutorily defined match rates, 50 percent in the case of administrative costs, and 55 to 75 percent in the case of eligible training costs.

C. Analysis of American Community Survey 5-Year Estimates for 2005-2009

As noted above, the first 5-year ACS estimates were published by the Census Bureau on December 14, 2010. We have conducted an analysis of these data to determine FMAP rates under our proposed methodology for 162 Indian tribes and Alaska native communities that have, to date, either expressed interest in participating in title IV-E programs directly or have agreements or contracts with states under which they operate title IV-E programs. We considered as “interested” those Indian tribes that currently operate title IV-E programs through agreements with States as well as those that either applied for a title IV-E planning grant from the Children's Bureau, or that submitted a letter of intent to the Children's Bureau indicating they are considering the submission of a title IV-E plan. Such letters of intent were solicited by the Children's Bureau in a program instruction in December, 2008 (http://www.acf.hhs.gov/​programs/​cb/​laws_​policies/​policy/​pi/​2008/​pi0806.htm). Our analysis of ACS 5-year estimates in conjunction with the FMAP calculation methodology has revealed the following:

• All 11 Indian tribes with current title IV-E planning grants would receive the maximum FMAP under the proposed methodology using the newly released 5-year ACS data, as they did under the 2000 Decennial Census data.
• Of the 162 Indian tribes and Alaska native communities examined, 5-year ACS data was found to be available covering 151 of these Indian tribes and Alaska native communities. Of the 151, data for those on tribal lands identifying themselves as American Indian or Alaska Native (AI/AN) was available for 143. For the remaining 8 Indian tribes data is available for persons of all races residing in the tribal area, but not for the AI/AN population specifically.
• The data established that, using AI/AN data when it is available and data for all persons where it is not, a total of 128 of the 151 Indian tribes and Alaska native communities for which ACS data is available would receive the maximum FMAP of 83 percent.
• Twenty-four other Indian tribes that have expressed interest in the title IV-E program were determined to have higher per capita income and as a result the applicable Tribal FMAP would be lower than the maximum rate. These 24 include four tribes that would receive rates of between 80 and 83 percent, 10 that would receive rates between 70 and 79 percent, seven that would receive rates between 60 and 69 percent and two that would receive rates between 50 and 59 percent. In only three cases (two in Oklahoma and one in Michigan) was the calculated FMAP for the Indian tribe lower than that of the State within which the Indian tribe is located. In these three cases, the Indian tribe would receive the State's higher FMAP rate.
• Per capita income data is not available in the 5-year ACS data for 11 very small Indian tribes that have previously expressed an interest in the title IV-E programs, but which have not yet submitted a title IV-E plan or received a title IV-E plan development grant. Some of these Indian tribes currently receive title IV-E funds under a contract or cooperative agreement with the State(s) within which they are located. As described in section E below, we have modified our proposal to provide a method of calculating FMAP for Indian tribes for which no ACS data is available.
• FMAP rates calculated using the 5-year ACS data are largely consistent with those calculated using the older 2000 Decennial Census data. Of the 147 Indian tribes for which we examined FMAP rates and for which income estimates are available in both data sets, 121 result in the same FMAP rates using both data sources, while 6 would receive slightly higher rates using the more recent data and 20 would receive slightly lower rates. This fluctuation is to be expected and likely reflects differential economic development since 2000. For instance, the Indian tribe may have opened a casino or other industry since 2000 that has improved its per capita income relative to the nation as a whole. Conversely, the Indian tribe may have been disproportionately affected by the recession if local industry was particularly hard hit relative to other parts of the nation.

The 5-year ACS data are the most recent data available for almost all of the Indian tribes that we are aware are considering participating in title IV-E programs and therefore represents the best measure of the current per capita income for each Indian tribe. The consistency with earlier Census data provides further confidence that the ACS data is suitable for the purpose of calculating FMAP rates for Indian tribes.

D. Calculation of FMAP for Indian Tribes for Use Matching Program Claims for Fiscal Years 2010 and 2011

In the October 8 Federal Register Notice we proposed to adapt the standard FMAP formula used for States by substituting each participating Indian tribe's per capita income for that of the State, that is to use the formula 1-0.45((Indian Tribe's Per Capita Income)²/(U.S. Per Capita Income)²). We further proposed that minimum and maximum FMAP rates would apply to Indian tribes as they do to States, noting that we had no legal authority to waive these limits. We proposed to use 2000 Decennial Census data to calculate the FMAP rates for FYs 2010 and 2011, noting that it was the only data source we identified that included per capita income data for all the Indian tribes that had expressed interest in participating in the Title IV-E programs. We proposed to use data for those living on tribal lands who identified themselves solely as American Indian or Alaska Native when that data is available, and data for all persons in the tribal area when it is not. Finally, we had proposed that rather than use decimal places, tribal FMAP rates would be rounded up to the next highest whole number (up to a maximum of 83 percent).

Having received one supportive comment and no negative comments on each of the above components of our proposed methodology and no information about alternative data sources, we are finalizing this proposal with respect to calculating the FMAP rates for FYs 2010 and 2011.

The calculations using this methodology are to be the default method to be used to calculate FMAP for Indian tribes. However, as spelled out in the statute, if in any case the tribal FMAP rate calculated in this manner is lower than that of any State in which the Indian tribe is located, the Indian tribe would receive the higher State rate instead. In addition, also as directed by statute, HHS will consider using supplemental data identified by an Indian tribe, tribal organization or tribal consortium rather than 2000 Decennial Census data on per capita income if the Indian tribe, tribal organization or tribal consortium can demonstrate that the supplemental data better represents the per capita income of its service population. See section H below for further information on how HHS will evaluate the suitability of supplemental data.

E. Calculation of FMAP for Indian Tribes for Use Matching Program Claims for Fiscal Years 2012 and Beyond

For fiscal years 2012 and beyond we had proposed to use the same methodology for calculating the FMAP rate for participating Indian tribes, but had proposed to use more recent data on tribal per capita incomes—5-year estimates from the Census Bureau's American Community Survey, the first of which were to be released in December 2010. As was the case with the 2000 Decennial Census data, we had proposed to use data for those on tribal lands identifying themselves only as American Indian or Alaska Native where it is available, and data for all persons on tribal lands where it is not. The 5-year estimates for 2005-2009 were released as scheduled on December 14, 2010. These estimates will be updated annually by the Census Bureau by adding a new year's data and dropping the oldest year. As described above, the new data result in FMAP rates that are substantially similar to those produced by the earlier 2000 Decennial Census data they replace. Decennial census data for 2010 and beyond will not include the per capita income data needed for the FMAP formula.

We are finalizing this proposal with respect to calculating the FMAP rates for FY 2012 and subsequent FYs. The FY 2012 FMAP rates for Indian tribes will thus be calculated using the ACS 5-year estimates for 2005-2009 published on December 14, 2010. The tribal FMAP rates for each subsequent FY will utilize the most recent update of the ACS 5-year estimates available as of June 30 of the prior FY. As with the calculations for fiscal years 2010 and 2011, no Indian tribe will receive an FMAP rate less than that of any State in which the Indian tribe is located, and any supplemental data provided by the Indian tribe will be considered.

As noted above, once the first 5-year ACS estimates were published on December 14, 2010, it became clear that for a few small Indian tribes, even 5-year ACS estimates would not be sufficient to produce per capita income estimates for either the AI/AN alone population or for persons of all races living on tribal lands. In these cases, we will use as a third choice the per capita income of all individuals in the State who identify themselves as American Indian/Alaska Native as an estimate of the Indian tribe's per capita income. If the Indian tribe operates in multiple States, we will weigh the per capita income of the AI/AN population in each State by the proportion of the Indian tribe's service population in the State. In establishing FMAP for Indian tribes for which ACS data is unavailable we will take care to consult with the Indian tribe regarding the availability of alternate data.

F. Calculation of FMAP for Consortia and Tribal Organizations Serving Multiple Tribes

In the October 8, 2010 Federal Register Notice we had proposed to calculate FMAP rates for consortia and tribal organizations serving multiple Indian tribes by weighting the per capita income data according to the proportional representation of each Indian tribe's service population relative to the total service population of the organization or consortium. Receiving no comments opposing the proposed methodology and having no alternatives suggested, this now becomes our established method for producing FMAP for organizations and consortia serving multiple Indian tribes. Again, consistent with NICWA's comments, we will consult with organizations and consortia as the issue comes up to ensure this method accurately represents the program's service population.

G. Procedures for Producing Annual Updates to Federal Medical Assistance Percentages for Indian Tribes

As noted above, we will use as our default source of per capita income data the 5-year estimates the American Community Survey. These data will be updated annually by the Census Bureau on a rolling basis by dropping the earliest of the 5 years and adding the latest. For fiscal year 2012 rates we will use ACS data for 2005-2009. For fiscal year 2013 we will update to using data for 2006-2010, and so forth. The formula for the calculation will remain as described above. In the third quarter of each fiscal year ACF regional office staff will communicate with each Indian tribe, tribal organization, or tribal consortium with an approved title IV-E plan their tribal FMAP rate for the upcoming fiscal year. Those States reporting title IV-E claims for Tribe-State agreement assistance payments will also be informed by the ACF regional office staff of the calculated FMAP rates for Indian tribes located in their State. Because most Indian tribes will be receiving the maximum FMAP rate, the calculation formula provides for rounding up to the next highest full percentage point and per capita incomes do not tend to change rapidly, it is likely that many programs will see little, if any, matching rate shifts from year to year. A link to a table similar to the ones at the end of this notice will be posted annually on ACF's Web site (http://www.acf.hhs.gov) displaying the per capita income thresholds for each FMAP rate for the fiscal year.

H. Consideration of Supplemental Data

As noted in our previous Federal Register Notice, before finalizing new FMAP rates for a year, HHS will consider any additional relevant data on its per capita income submitted by a Indian tribe, tribal organization or tribal consortium. In the absence of supplemental data, HHS will use the data and procedures described above to calculate the applicable FMAP for the grantee. Additional data submitted by Indian tribes, tribal organizations and tribal consortia will be evaluated by the Division of Mandatory Grants in the Office of Grants Management at ACF. Such data may be submitted to the attention of Joseph Lonergan, Director, Division of Mandatory Grant, ACF Office of Grants Management, at 202-401-6603 (phone); 202-401-5644 (fax); or email: [e-mail]. Supplemental data may relate to matters such as the per capita income of the Indian tribe, tribal organization or consortium, the numbers and/or geographic locations of its service population, and/or defining the grantee's service population to include individuals other than those who identified themselves solely as American Indian to be considered for the purposes of calculating the applicable per capita income.

The suitability of supplemental data submissions from Indian Tribes, tribal organizations and tribal consortia will be evaluated based on criteria that include: Whether the Decennial Census or American Community Survey data that would otherwise be used is either missing or has a high margin of error; if the supplemental data reflects the same or similar definitions of income as do the national data, such as what types of income are included and excluded; if the data have been collected and tabulated in a reliable manner; and if the data are current or more recently updated than the data that would otherwise be used and therefore reflect more current economic conditions of the Indian tribe's service population.

Data to be considered for a given fiscal year's calculation should be submitted no later than 30 days before the beginning of the next fiscal year (September 1) in order to provide sufficient time for the Department to evaluate the suitability of the additional data. The tribal FMAP rate for the next fiscal year calculated from the ACS 5-year data will be in effect beginning on October 1 of that year unless and until a decision is made by the Department to revise it based on the supplemental data previously provided by the Indian tribe, tribal organization, or tribal consortium. Tribal leadership will be consulted prior to a final decision by the Department regarding the suitability of any supplemental data submitted. The Department will also work closely with tribal leaders before establishing a final FMAP for the upcoming fiscal year.

I. Application of Temporary Increases to Tribal Federal Medical Assistance Percentages

As proposed in our previous Federal Register Notice, to the extent permitted by law we will extend to Tribes any temporary adjustments to FMAP that apply to States. Temporary FMAP rates that applied to states in Fiscal Year 2010 and 2011 (i.e., those authorized by Public Law 111-5 and Public Law 111-226) will apply to Indian tribes. The applicability of any future FMAP adjustments to Indian tribes, tribal organizations, and tribal consortia will depend on the specific statutory language enacting such adjustments.

FOR FURTHER INFORMATION CONTACT:

Laura Radel, Office of the Assistant Secretary for Planning and Evaluation, Room 404-E—Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201; 202-690-5938; [e-mail].

(Catalog of Federal Domestic Assistance Program Nos. 93.658: Foster Care Title IV-E; 93.659: Adoption Assistance; 93.090: Guardianship Assistance)

Dated: May 20, 2011.

Kathleen Sebelius,

Secretary.