[Federal Register Volume 60, Number 174 (Friday, September 8, 1995)]
[Notices]
[Pages 46838-46841]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22170]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[MB-094-N]
RIN 0938-AG61
Medicaid Program; Limitations on Aggregate Payments to
Disproportionate Share Hospitals: Federal Fiscal Year 1995
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the final Federal fiscal year (FFY) 1995
national target and individual State allotments for Medicaid payment
adjustments made to hospitals that serve a disproportionate number of
Medicaid recipients and low-income patients with special needs. We are
publishing this notice in accordance with the provisions of section
1923(f)(1)(C) of the Social Security Act (the Act) and implementing
regulations at 42 CFR 447.297 through 447.299. The final FFY 1995 State
disproportionate share hospital (DSH) allotments published in this
notice supersede the preliminary FFY 1995 DSH allotments that were
published in the Federal Register on January 13, 1995 (60 FR 3250).
EFFECTIVE DATE: The final DSH payment adjustment expenditure limits
included in this notice apply to Medicaid DSH payment adjustments that
are applicable to FFY 1995.
FOR FURTHER INFORMATION CONTACT: Richard Strauss, (410) 966-2019.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1902(a)(13)(A) of the Act requires States to ensure that
their Medicaid payment rates include payment adjustments for Medicaid-
participating hospitals that serve a large number of Medicaid
recipients and other low-income individuals with special needs
(referred to as disproportionate share hospitals (DSH)). The payment
adjustments are calculated on the basis of formulas specified in
section 1923 of the Act.
Section 1923(f) of the Act and implementing Medicaid regulations at
42 CFR 447.297 through 447.299 require us to estimate and publish in
the Federal Register the national target and each State's allotment for
DSH payments for each Federal fiscal year (FFY). The implementing
regulations provide that the national aggregate DSH limit for a FFY
specified in the Act is a target rather than an absolute cap when
determining the amount that can be allocated for DSH payments. The
national DSH target is 12 percent of the total amount of medical
assistance expenditures (excluding total administrative costs) that are
projected to be made under approved Medicaid State plans during the
FFY. (Note: Whenever the phrases ``total medical assistance
expenditures'' or ``total administrative costs'' are used in this
notice, they mean both the State and Federal share of expenditures or
costs.)
In addition to the national DSH target, there is a specific State
DSH limit for each State for each FFY. The State DSH limit is a
specified amount of DSH payment adjustments applicable to a FFY above
which FFP will not be available. This is called the ``State DSH
allotment''.
Each State's DSH allotment for FFY 1995 is calculated by first
determining whether the State is a ``high-DSH State,'' or a ``low-DSH
State.'' This is determined by using the State's ``base allotment.'' A
State's base allotment is the greater of the following amounts: (1) The
total amount of the State's actual and projected DSH payment
adjustments made under the State's approved State plan applicable to
FFY 1992, as adjusted by HCFA; or (2) $1,000,000.
A State whose base allotment exceeds 12 percent of the State's
total medical assistance expenditures (excluding administrative costs)
projected to be made in FFY 1995 is referred to as a ``high-DSH
State.'' The FFY 1995 State DSH allotment for a high-DSH State is
limited to the State's base allotment.
A State whose base allotment is equal to or less than 12 percent of
the State's total medical assistance expenditures (excluding
administrative costs) projected to be made in FFY 1995 is referred to
as a ``low-DSH State.'' The FFY 1995 State DSH allotment for a low-DSH
State is equal to the State's DSH allotment for FFY 1994 increased by
growth amounts and supplemental amounts, if any. However, the FFY 1995
DSH allotment for a low-DSH State cannot exceed 12 percent of the
State's total medical assistance expenditures for FFY 1995 (excluding
administrative costs).
The growth amount for FFY 1995 is equal to the projected percentage
increase (the growth factor) in a low-DSH State's total Medicaid
program expenditures between FFY 1994 and FFY 1995 multiplied by the
State's final DSH allotment for FFY 1994. Because the national DSH
limit is considered a target, low-DSH States whose programs grow from
one year to the next can receive a growth amount that would not be
permitted if the national limit was viewed as an absolute cap.
There is no growth factor and no growth amount for any low-DSH
State whose Medicaid program does not grow (that is, stayed the same or
declined) between FFY 1994 and FFY 1995. Furthermore, because a low-DSH
State's FFY 1995 DSH allotment cannot exceed 12 percent of the State's
total medical assistance expenditures, it is possible for its FFY 1995
DSH allotment to be lower than its FFY 1994 DSH allotment. This occurs
when the State experiences a decrease in its program expenditures
between years and its prior FFY DSH allotment is greater than 12
percent of the total projected medical assistance expenditures for the
current FFY. This is the case for the State of Indiana for FFY 1995.
There is no supplemental amount available for redistribution for
FFY 1995. The supplemental amount, if any, is equal to a low-DSH
State's proportional share of a pool of funds (the redistribution
pool). The redistribution pool is equal to the national 12 percent DSH
target reduced by the total of the base allotments for high-DSH States,
the total of the State DSH allotments for the previous FFY for low-DSH
States, and the total of the low-DSH State growth amounts. Since the
sum of these amounts is above the projected FFY 1995 national 12
percent DSH target, there is no redistribution pool and, therefore, no
supplemental amounts for FFY 1995.
As prescribed in the law and regulations, no State's DSH allotment
will be below a minimum of $1,000,000.
[[Page 46839]]
As an exception to the above requirements, under section
1923(f)(1)(A)(i)(II) of the Act and regulations at 42 CFR 447.296(b)(5)
and 447.298(f), a State may make DSH payments for a FFY in accordance
with the minimum payment adjustments required by Medicare methodology
described in section 1923(c)(1) of the Act. The State of Nebraska's
final State DSH allotment has been determined in accordance with this
exception.
We are publishing in this notice the final FFY 1995 national DSH
target and State DSH allotments based on the best available data we
received to date from the States, as adjusted by HCFA. These data are
taken from each State's actual Medicaid expenditures for FFY 1994 as
reported on the State's quarterly expenditure report Form HCFA-64
submissions and the FFY 1995 projected Medicaid expenditures as
reported on the February 1995 Form HCFA-37 submission. All data are
adjusted as necessary.
II. Calculations of the Final FFY 1995 DSH Limits
The total of the final State DSH allotments for FFY 1995 is equal
to the sum of the base allotments for all high-DSH States, the FFY 1994
State DSH allotments for all low-DSH States, and the growth amounts for
all low-DSH States. A State-by-State breakdown is presented in section
III of this notice.
We classified States as high-DSH or low-DSH States. If a State's
base allotment exceeded 12 percent of its total unadjusted medical
assistance expenditures (excluding administrative costs) projected to
be made under the State's approved plan in FFY 1995, we classified that
State as a ``high-DSH'' State. If a State's base allotment was 12
percent or less of its total unadjusted medical assistance expenditures
projected to be made under the State's approved State plan under title
XIX of the Act in FFY 1995, we classified that State as a ``low-DSH''
State. Based on this classification, there are 34 low-DSH States and 16
high-DSH States for FFY 1995.
Using the most recent data from the States' February 1995 budget
projections (Form HCFA-37), we estimate the States' FFY 1995 national
total medical assistance expenditures to be $152,830,147,000. Thus, the
overall final national FFY 1995 DSH expenditure target is
$18,339,618,000 (12 percent of $152,830,147,000).
In the final FFY 1995 State DSH allotments, we provide a total of
$644,305,000 ($356,788,000 Federal share) in growth amounts for the 34
low-DSH States. The growth factor percentage for each of the low-DSH
States was determined by calculating the Medicaid program growth
percentage for each low-DSH State between FFY 1994 and FFY 1995. To
compute this percentage, we first ascertained each low-DSH State's
total FFY 1994 medical assistance and administrative expenditures as
reported on the State's quarterly expenditure reports (Form HCFA-64)
for FFY 1994. Next, we compared the FFY 1994 reported expenditures to
each low-DSH State's total estimated unadjusted FFY 1995 medical
assistance and administrative expenditures as reported to HCFA on the
State's February 1995 Form HCFA-37 submission.
The growth factor percentage was multiplied by the low-DSH State's
final FFY 1994 DSH allotment amount to establish the State's final
growth amount for FFY 1995.
Since the sum of the total of the base allotments for high-DSH
States, the total of the State DSH allotments for the previous FFY for
low-DSH States, and the growth for low DSH States ($19,084,239,000) is
greater than the final FFY 1995 national target ($18,339,618,000),
there is no final FFY 1995 redistribution pool.
The low-DSH State's growth amount was then added to the low-DSH
State's final FFY 1994 DSH allotment amount to establish the final
total low-DSH State DSH allotment for FFY 1995. If a State's growth
amount, when added to its final FFY 1994 DSH allotment amount, exceeds
12 percent of its FFY 1995 estimated medical assistance expenditures,
the State only receives a partial growth amount that, when added to its
final FFY 1994 allotment, limits its total State DSH allotment for FFY
1995 to 12 percent of its estimated FFY 1995 medical assistance
expenditures. For this reason, nine of the low-DSH States received
partial growth amounts.
As explained above, Indiana's final FFY 1995 DSH allotment is lower
than its final FFY 1994 DSH allotment. Also, in accordance with the
minimum payment adjustments required by Medicare methodology,
Nebraska's FFY 1995 State DSH allotment is $11,000,000.
In summary, the total of all final State DSH allotments for FFY
1995 is $19,084,239,000 ($10,886,177,000 Federal share). This total is
composed of the prior FFY's final State DSH allotments
($18,490,099,000) plus growth amounts for all low-DSH States
($644,305,000), minus the amount of reduction in Indiana's FFY 1995 DSH
allotment ($50,165,000), plus supplemental amounts for low-DSH States
($0). The total of all final FFY 1995 State DSH allotments is 12.5
percent of the total medical assistance expenditures (excluding
administrative costs) projected to be made by these States in FFY 1995.
The total of all final DSH allotments for FFY 1995 is $744,621,000 over
the FFY 1995 national target amount of $18,339,618,000.
Each State should monitor and make any necessary adjustments to its
DSH spending during FFY 1995 to ensure that its actual FFY 1995 DSH
payment adjustment expenditures do not exceed its final State DSH
allotment for FFY 1995 published in this notice. As the ongoing
reconciliation between actual FFY 1995 DSH payment adjustment
expenditures and the final FFY 1995 DSH allotments takes place, each
State should amend its plan as may be necessary to make any adjustments
to its FFY 1995 DSH payment adjustment expenditure patterns so that the
State will not exceed its final FFY 1995 DSH allotment.
The FFY 1995 reconciliation of DSH allotments to actual
expenditures will take place on an ongoing basis as States file
expenditure reports with HCFA for DSH payment adjustment expenditures
applicable to FFY 1995. Additional DSH payment adjustment expenditures
made in succeeding FFYs that are applicable to FFY 1995 will continue
to be reconciled with each State's final FFY 1995 DSH allotment as
additional expenditure reports are submitted to ensure that the final
FFY 1995 DSH allotment is not exceeded. As a result, any DSH payment
adjustment expenditures in excess of the final DSH allotment will be
disallowed; and therefore, subject to the normal Medicaid disallowance
procedures.
III. Final FFY 1995 DSH Allotments Under Public Law 102-234
Key to Chart
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Column Description
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Column A =....................... Name of State.
Column B =....................... Final FFY 1994 DSH Allotments for All
States. For a high-DSH State, this
is the State's base allotment, which
is the greater of the State's FFY
1992 allowable DSH payment
adjustment expenditures applicable
to FFY 1992, or $1,000,000. For a
low-DSH State, this is equal to the
final DSH allotment for FFY 1994,
which was published in the Federal
Register on May 2, 1994.
[[Page 46840]]
Column C =....................... Growth Amounts for Low-DSH States.
This is an increase in a low-DSH
State's final FFY 1994 DSH allotment
to the extent that the State's
Medicaid program grew between FFY
1994 and FFY 1995.
Column D =....................... Final FFY 1995 State DSH Allotments.
For high-DSH States, this is equal
to the base allotment from column B.
For low-DSH States, this is equal to
the final State DSH allotments for
FFY 1994 from column B plus the
growth amounts from column C and the
supplemental amounts, if any, from
column D.
Column E =....................... High or Low DSH State Designation for
FFY 1995. ``High'' indicates the
State is a high-DSH State and
``Low'' indicates the State is a low-
DSH State, after calculation of the
final State DSH allotments.
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Final Federal Fiscal Year 1995 Disproportionate Share Hospital Allotments under Public Law 102-234
[Amounts are state and Federal shares; dollars are in thousands (000)]
Final FFY 94 DSH Growth amounts
State allotments for for low DSH Final FFY95 state High or low DSH
all states states\1\ DSH allotments state designation
A B C D E
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AL............................... $417,458 Not applicable $417,458 High.
AK............................... 19,589 1,011 20,600 Low.
AR............................... 3,039 300 3,338 Low.
CA............................... 2,191,451 Not applicable 2,191,451 High.
CO............................... 302,014 Not applicable 302,014 High.
CT............................... 408,933 Not applicable 408,933 High.
DE............................... 5,924 1,145 7,069 Low.
DC............................... 41,039 5,466 46,505 Low.
FL............................... 286,478 47,706 334,183 Low.
GA............................... 382,344 26,799 409,142 Low.
HI............................... 64,078 18,608 82,686 Low.
ID............................... 1,985 100 2,085 Low.
IL............................... 394,993 57,178 452,172 Low.
IN \2\........................... 336,799 Not applicable 286,634 Low.
IA............................... 5,497 623 6,121 Low.
KS............................... 188,935 Not applicable 188,935 High.
KY............................... 264,289 Not applicable 264,289 High.
LA............................... 1,217,636 Not applicable 1,217,636 High.
ME............................... 165,317 Not applicable 165,317 High.
MD............................... 129,543 13,557 143,100 Low.
MA............................... 567,128 8,162 575,289 Low.
MI............................... 617,700 56,305 674,005 Low.
MN............................... 55,394 6,004 61,398 Low.
MS............................... 158,464 24,736 183,200 Low.
MO............................... 731,894 Not applicable 731,894 High.
MT............................... 1,300 42 1,342 Low.
NE \3\........................... 11,000 Not applicable 11,000 Low.
NV............................... 73,560 Not applicable 73,560 High.
NH............................... 392,006 Not applicable 392,006 High.
NJ............................... 1,094,113 Not applicable 1,094,113 High.
NM............................... 15,757 1,546 17,303 Low.
NY............................... 2,831,864 192,007 3,023,871 Low.
NC............................... 389,266 40,840 430,106 Low.
ND............................... 1,155 48 1,203 Low.
OH............................... 566,925 62,999 629,925 Low.
OK............................... 23,568 658 24,225 Low.
OR............................... 25,058 6,356 31,413 Low.
PA............................... 967,407 Not applicable 967,407 High.
RI............................... 94,432 16,470 110,901 Low.
SC............................... 439,759 Not applicable 439,759 High.
SD............................... 1,302 140 1,443 Low.
TN............................... 430,611 Not applicable 430,611 High.
TX............................... 1,513,029 Not applicable 1,513,029 High.
[[Page 46841]]
UT............................... 5,514 429 5,943 Low.
VT............................... 26,662 2,419 29,081 Low.
VA............................... 185,746 19,051 204,798 Low.
WA............................... 307,993 28,535 336,527 Low.
WV............................... 121,883 4,211 126,094 Low.
WI............................... 10,881 724 11,605 Low.
WY............................... 1,389 131 1,520 Low.
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Total........................ $18,490,099 $644,305 $19,084,239
Notes
\1\ There was 1 low DSH state which had negative growth and 9 low DSH states which got partial growth up to 12%
of FFY 95 MAP.
\2\ Due to negative growth, allotment limited to 12% of FFY 95 MAP.
\3\ Allotment based upon minimum payment adjustment amount.
IV. Regulatory Impact Statement
We generally prepare a regulatory flexibility analysis that is
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612), unless the Secretary certifies that a notice would not
have a significant economic impact on a substantial number of small
entities. For purposes of a RFA, States and individuals are not
considered small entities. However, providers are considered small
entities. Additionally, section 1102(b) of the Act requires the
Secretary to prepare a regulatory impact analysis if a notice may have
a significant impact on the operations of a substantial number of small
rural hospitals. Such an analysis must conform to the provisions of
section 604 of the RFA. For purposes of section 1102(b) of the Act, we
define a small rural hospital as a hospital that is located outside of
a Metropolitan Statistical Area and has fewer than 50 beds.
This notice sets forth no changes in our regulations; rather, it
reflects the DSH allotments for each State as determined in accordance
with Secs. 447.297 through 447.299.
We have discussed the method of calculating the final FFY 1995
national aggregate DSH target and the final FFY 1995 individual State
DSH allotments in the previous sections of this preamble. These
calculations should have a positive impact on payments to DSHs.
Allotments will not be reduced for high-DSH States since we interpret
the 12 percent limit as a target. Low-DSH States will get their prior
FFY DSH allotments plus their growth amounts.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
(Catalog of Federal Assistance Program No. 93.778, Medical
Assistance Program)
Dated: June 26, 1995.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
[FR Doc. 95-22170 Filed 9-7-95; 8:45 am]
BILLING CODE 4120-01-P
