Department  of Health  and Human Services 
OFFICE  OF 
INSPECTOR  GENEML 
THE  RYAN  WHITE  CARE  ACT:

FUNDING  FORMULAS 
JUNE  GIBBS BROWN 
Inspector  General 
APRIL  1994 
0EI-05-93-O0330  OFFICE  OF INSPE~OR  GENERAL 
The mission of the Office of Inspector General  (OIG),  as mandated by Public Law 95-452, as 
amendq  is to protect the integrity of the Department  of Health  and Human Semites  (HHS) 
programs as well as the health and welfare of beneficiaries served by those programs.  This 
statutory mission is carried out through a nationwide network of audits, investigations,  and 
inspections  conducted  by three OIG operating components:  the Offke  of Audit Semites,  the 
Office of Investigations,  and the Offke  of Evaluation  and Inspections.  The OIG also informs 
the Secretary of HHS of program and management problems and recommends courses to 
correct them. 
OFFICE  OF AUDIT  SERVICES 
The OIGS  Office of Audit Services (OAS)  provides all auditing services for HHS,  either by 
conducting  audits with its own audit resources or by overseeing  audit work done by others. 
Audits examine the performance of HHS programs and/or its grantees and contractors in 
carrying out their respective responsibilities  and are intended to provide independent 
assessments of HHS  programs and operations  in order to reduce waste, abuse, and 
mismanagement  and to promote economy  and efficiency throughout the Department. 
OFFICE  OF INVESTIGATIONS 
The OIGS  Office of Investigations  (01)  conducts criminal, civil, and administrative 
investigations  of allegations of wrongdoing in HHS programs or to HHS beneficiaries  and of 
unjust enrichment by providers.  The investigative efforts of 01  lead to criminal convictions, 
administrative sanctions, or civil money penalties.  The 01  also oversees  State Medicaid fraud 
control units which investigate and prosecute  fraud and patient abuse in the Medicaid program. 
OFFICE  OF EVALUATION  AND INSPECTIONS 
The OIGS  Office of Evaluation  and Inspections  (OEI)  conducts short-term management  and 
program evaluations  (called inspections)  that focus on issues of concern to the Department, 
the Congress, and the public.  The findings and recommendations  contained  in these inspection 
reports generate  rapid, accurate, and up-to-date  information on the efficiency, vulnerability, 
and effectiveness  of departmental programs. 
This report was prepared under the direction of William Moran, the Retional  Insmector 
Genera,  and Na_talieCoen, Deputy Regional  Inspector General, for theOffke  of!Evaluat ion 
and Inspections,  Region  V.  Participating in this project were the following people 
Re~ion  V  Headquarters 
Barbara Butq  Project Leader  Alan S. Levine

Jemifer  Antico

Heather  Robertson

For a copy of this report, please call (312) 353-4124.
 Depatiment  of Health  and Human Services 
OFFICE  OF 
INSPECTOR  GENEUL 
THE  RYAN  WHITE  CARE  ACT:

FUNDING  FORMUWS 
JUNE  GIBBS BROWN 
Inspector  General 
ApRIL  1994 
OEI-05-93-00330  EXECUTIVE  SUMMARY 
PURPOSE 
To  examine  the  current  Ryan  White  CARE  Act  funding  formulas,  propose  options  for 
changing  the  formulas,  and  examine  their  potential  impact  on the  distribution  of funds  in 
Fiscal  Year  1995. 
BACKGROUND 
On August  18, 1990, Congress  passed  Public  Law  101-381 entitled  The  Ryan  White 
Comprehensive  AIDS  Resources  Emergency  (CARE)  Act  of 1990 (the  Act).  The 
purpose  of the  Act was to provide  emergency  assistance  to localities  ... 
disproportionately  affected  by the  Human  Immunodeficiency  Virus  (HIV)  epidemic  and 
to make  financial  assistance  available  to States  and  other  public  or private  nonprofit 
entities  to provide  for the  development,  organization,  coordination  and  operation  of 
more  effective  and  cost  efficient  systems  for the  delivery  of essential  services  to 
individuals  and  families  with HIV  disease. 
The  Act was created  to establish  services  for patients  with Acquired  Immune  Deficiency 
Syndrome  (AIDS)  or HIV  who would  otherwise  have  no access  to health  care.  It was 
also meant  to provide  emergency  relief  funding  to communities  with  the  highest  number 
of reported  AIDS  cases.  Congress  funded  the  Act  at $221 million  for  Fiscal  Year  (FY) 
1991, $276 million  for N  1992, $348 million  for FY  1993, and  $579.4 for  N  1994.  The 
Presidents  FY  1994 budget  proposes  funding  at $672 million. 
The  Act  has  four  titles.  The  bulk  of the  funds  fall under  Titles  I and  II.  Title  I provides 
emergency  relief  grants  to  cities  disproportionately  affected  by the  HIV  epidemic.  Title 
11provides  formula  grants  to States  and  territories  to improve  the  quality,  availability, 
and  organization  of health  care  and  support  services  for individuals  and  families  with 
HIV  disease.  Formulas  govern  the  distribution  of half  of the  Title  I funds  (the  other  half 
is distributed  competitively),  and  all Title  II funds. 
SCOPE  AND  METHODOLOGY 
The  Ryan  White  Act will be  reauthorized  in FY  1996.  This is the  first in a series  of 
studies  which  will provide  information  for  the  discussion  surrounding  reauthorization, 
Other  studies  examine  the  distribution  of FY  1992 Ryan  White  funding  by type  of service 
and  Title  II consortia  activities.  A future  study will survey grantees  concerning  several 
general  aspects  of the  implementation  of the  program. 
Concerns  about  the  funding  formulas  were  raised  by many  people  we talked  to as we 
designed  the  study:  congressional  staffers,  representatives  of national  organizations, 
experts,  grantee  staff,  and  Federal  officials.  We  expect  the  formulas  to be  an important 
focus for  discussions  during  reauthorization.  In this study, we analyze  how Title  I and 
i  Title  II funds  have  been  targeted  during  the  3 years  of the  program  and  how changes  in 
the  formulas  might  affect  targeting  in the  future. 
FINDINGS 
As  the number of high indence  cities increases, the proprtion  of lltle  Ijimd  going to 
cities with the iaqyxt  caseti  k likely to decrease. 
The  number  of high incidence  cities  eligible  for Ryan  White  funding  increased  from  16 in 
FY  1991 to 25 in FY  1993 and  34 in FY  1994; HRSA  expects  an increase  by as many  as 
4 to  7 in FY  1995.  With  all of these  eligible  metropolitan  areas,  or EMAs,  receiving 
funding,  the  proportion  of funds  going to those  with by far  the  greatest  number  of cases 
(i.e. New York,  San  Francisco,  Los Angeles)  can be  expected  to decline  in the  future, 
even  in the  face  of increases  in total  dollars.  Some  respondents  were  concerned  that 
such dilution  of funding  for cities with  the  most  cases  may conflict  with  Congressional 
intent  to target  funds  to cities  experiencing  the  greatest  burden  of the  epidemic. 
The cummt fomauhs  have &d to inequities hzjiuuiing between grantees on a per-new-case 
bask  We found  this to be especial& true for  I?tle J and less so for  l%le IL 
The  cumulative  case  counts  in the  Title  I formula  have  produced  significant  inequities  in 
funding  between  EMAs  on a per-new-case  basis.  For  example,  between  FY  1991 and 
1993, on average,  San Francisco  received  $4,354 per  new case  reported  and  Chicago, 
$1,673.  Also  during  that  period,  12 of the  16 EMAs  received  less than  the  average 
amount  per  new  case  of $2,639. 
The  Title  11formula  produces  considerably  more  equity  in funding  levels.  Two-thirds  of 
the  grantees  received  close  to the  average  amount  per  case  in that  3 year  period. 
ALTERNATIVE  FUNDING  OPTIONS 
We  present  four  basic  options  for formulas  that  could  be  used  to  address  the  inequities 
described  and  target  funds  to greatest  need.  These  options  are  not  mutually  exclusive; 
we realize  that  it could  be valuable  to  combine  various  ideas  to develop  an effective 
formula.  We  also recognize  that  factors  other  than  the  ones  we have  used  could  be 
incorporated  into  the  formulas.  Our  purpose  is to present  some  general  ideas  that  might 
be  helpful  in constructing  a final  allocation  methodology. 
Readers  might  ask why we propose  changing  the  Title  11 formula,  since  it produces  more 
equitable  funding  than  the  Title  I formula.  We believe  that  while  the  new-case  count  in 
the  current  Title  11formula  does  significantly  reduce  inequity,  the  options  we propose 
more  purposefully  ensure  equitable  funding. 
We  examined  each  option  against  five criteria.  These  criteria  are: 
ii  Equity:  The  amount  of funding  should  be  the  same  per  case  to minimize  inequities 
between  and  across  geographical  areas.  Some  readers  may disagree  with  this  criterion, 
believing  that  formulas  should  include  variables  to deliberately  target  different  amounts 
of funding  to grantees  based  on their  varying  circumstances  and  need.  However,  we 
believe  that  reliable  data  to establish  such variables  is lacking.  It is also  difficult  to know 
which  of many  potential  variables  are  most  important,  and  to what  extent  they  should  be 
built  into  national  formulas.  Therefore  we have  chosen  equity as a starting  point  for 
national  formulas,  which  Congress  could  then  modi$  as it sees  the  need. 
Ta~eting:  Funds  should  be  targeted  to areas  with  the  greatest  concentration  of cases, 
and  in amounts  sufficient  for grantees  to develop  the  mandated  continuum  of care. 
Flexibility:  Funding  formulas  should  be  flexible  enough  to respond  to demographic 
changes  in the  epidemic. 
Reasonable  Data  Req&rnen&K  Data  used  in the  formulas  to distribute  funds  should  be 
readily  available  and  reliable. 
Stability:  Aggregate  funding  to various  geographic  areas  should  not  fluctuate  significantly 
from  year  to year. 
OPTTON 1: D&tribute lltle I Formula Fund  on a Per-Nm-Case  Bas& to CitieY wth a 
Si~cant  Rqxwtion  of All  New  Cases Reported  Natiimdy. 
This option  targets  funds  to 41 cities with  72 percent  of new  cases  reported  in the  2 years 
prior  to FY  1995, consistent  with  Congressional  intent  to target  cities most  affected.  It 
also  creates  equitable  per-case  funding. 
OK!TON 2  D&tribute  lltik  I Fundk on a Per-New-Case  Basir, Including an Income  Factor. 
This option  applies  the  Title  IXformula  to Title  I formula  funds.  The  formula  is based 
on each  citys new cases  reported  for 2 years  prior  to FY  1995 and  includes  a per  capita 
income  adjustment.  We  select  the  same  cities  as under  Option  1 to demonstrate  this 
option. 
OK!TON 3:  Distribute  lltlk  II Funds on a Per-New-Case Bash, &cMing  an Ikcome 
Factor and A F-g  Floor. 
This option  establishes  an  average  amount  per  case  by dividing  the  dollars  available  by 
the  number  of new  cases  reported  nationally  for 2 years  prior  to FY  1995 and  allocates 
funds  to each  State  based  on its new-case  count.  It also eliminates  both  the  income 
factor  in the  formula  and  the  $100,000 funding  floor  currently  available  to States. 
OPTION  4: D&tribute 71de I and  Title II Formula Funds on a Per-New-Case  Bas& as a 
Single Fonnuk  Gnanti 
This  option  combines  formula  funds  and  distributes  them  on a per-new-case  basis  to both 
States  and  high-incidence  cities.  We  use  the  same  cities  as in Options  1 and  2 to 
... 
111  demonstrate  this option.  We  also set a $200,000 floor  to ensure  a minimum  amount  of 
funding  for every  State. 
COMMENTS 
The  PHS  commented  on this report;  the  full text  of their  comments  is in Appendix  D. 
The  Assistant  Secretary  for Planning  and  Evaluation  commented  verbally.  We  thank  all 
those  who commented. 
In response  to the  comments  we received,  and  in view of information  now available  on 
the  FY  1995 budget  request,  we recasted  our  four  proposed  formulas  looking  forward  to 
FY  1995.  We believe  this updated  view  be  more  helpful  during  reauthorization 
will 
discussions.  We  also  made  other  editorial  changes  in the  report  in response  to  the 
comments  received. 
iv  TABLE  CONTENTS 
OF 
EXECUTIVE  SUMMARY

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...1

FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

Dilution  of Funding  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...6

Funding  Disparities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...6

OPTIONS  ...................................................... 10

Option  l  . . . . . . . . . ..  o......  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

Option  2  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

Option  3  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

Option  4  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..O...  . . . . . . . . .  19

APPENDICES 
k  Current  Formulas.....,..  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..A-l 
B: Cases  and  Income  Data:  Cities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..B-l 
CCasesand  IncomeData:  States  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..C-l 
D:AgencyComments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..D-l  INTRODUCTION 
PURPOSE 
To  examine  the  current  Ryan  White  CARE  Act funding  formulas,  propose  options  for 
changing  the  formulas,  and  examine  their  potential  impact  on the  distribution  of funds  in 
Fiscal  Year  1995. 
BACKGROUND 
As of March  1990, the  year  in which  the  Ryan  White  C.A.R.E.  Act  was passed,  over 
128,000 cases  of Acquired  Immune  Deficiency  Syndrome  (AIDS)  had  been  reported  to 
the  Centers  for Disease  Control  (CDC).  Some  78,000 people  had  died  of the  disease 
and  nearly  one  million  were  infected  with  the  Human  Immunodeficiency  Virus  (HIV) 
virus.  The  rate  of acceleration  of the  disease  and  the  cost  of care  were  both  cause  for 
alarm. 
Until  1990, the  Federal  response  to the  AIDS  epidemic  had  been  primarily  prevention, 
through  the  CDC,  and  research,  through  the  National  Institutes  of Health  (NIH).  In 
Fiscal  Year  (FY)  1990, the  Public  Health  Semite  (PHS)  as a whole  spent  $1.6 billion  on 
AIDS/H~  the  CDC  spent  $443 million  of this on prevention  and  NIH  spent  $744 
million  on research. 
In the  first  decade  of the  epidemic,  financing  of AIDS-related  health  care  shifted 
increasingly  to the  public  sector  as those  affected  turned  to Medicaid  and  Medicare  to 
finance  their  care.  In FY  1990, the  Federal  Medicaid  share  of spending  for HIV/AIDS 
was $670 million,  and  Medicare  spending  was $110 million.  Social  Security  expenditures 
for HIV/AIDS  in that  year  totalled  $249 million,  with $210 million  for  the  Disability 
Insurance  program  and  $39 million  for the  Supplemental  Security  Income  program. 
Towards  the  end  of the  first decade,  while  the  vast  majority  of AIDS  cases  were  still 
reported  in metropolitan  areas,  rural  areas  were  beginning  to experience  an increase  in 
cases.  The  AIDS/HIV  population  also began  to change,  with  an increasing  rate  of 
growth  in new  cases  among  groups  which  historically  have  difficulty  accessing  care:  the 
poor,  minorities,  homeless  and  intravenous  drug  users. 
On August  18, 1990, Congress  passed  Public  Law  101-381 entitled  The  Ryan  White 
Comprehensive  AIDS  Resources  Emergency  (CARE)  Act  of 1990 (the  Act).  The 
purpose  of the  Act was to provide  emergency  assistance  to localities  disproportionately 
affected  by the  Human  Immunodeficiency  Virus  epidemic  and  to make  financial 
assistance  available  to States  and  other  public  or private  nonprofit  entities  to provide  for 
the  development,  organization,  coordination  and  operation  of more  effective  and  cost 
efficient  systems  for the  delivery  of essential  services  to individuals  and  families  with  HIV 
disease. 
1
 The  Act was created  as a comprehensive  response  to the  HIV  epidemic  and  its impact 
on individuals,  families,  communities,  cities,  and  States.  It was to establish  services  for 
AIDS  and  HIV  patients  who would  otherwise  have  no  access  to health  care.  It was also 
meant  to provide  emergency  relief  funding  to communities  with the  highest  number  of 
reported  AIDS  cases. 
The  Act  is multifaceted,  with four  titles  directing  resources  to various  entities  and 
allowing  grantees  maximum  flexibility in the  use  of funds,  particularly  at the  local  level. 
The  Federal  role  is minimized  in favor  of State  and  local  control.  The  Health  Resources 
and  Services  Administration  (HRSA)  in the  Public  Health  Service  administers  Titles  I, II, 
and  III(b)  of the  Act.  The  CDC  was to administer  Title  III(a),  which  has  not  been 
funded  to date. 
Congress  funded  the  Act  at $221 million  for FY  1991, $276 million  for FY  1992, $348 
million  for FY  1993, and  $579 million  for FY  1994.  The  Presidents  FY  1995 budget 
proposes  funding  at  $672 million. 
Title  I 
Title  I provides  emergency  relief  grants  to cities  (eligible  metropolitan  areas  (EMAs)) 
which  have  reported  a cumulative  total  of more  than  2,000 AIDS  cases,  or a per  capita 
incidence  of 25 AIDS  cases  per  100,000, to the  CDC  by March  31 of the  year  preceding 
grant  awards. 
Within  60 days after  an appropriation  becomes  available,  HRSA  is required  to allocate 
(formula)  funds  to grantees.  Grants  are  for HIV-related  outpatient  and  ambulatory 
health  and  support  services.  In-patient  services  are  not  permitted  except  for  case 
management  that  prevents  unnecessary  hospitalization  or expedites  discharge. 
Half  of the  funds  are  distributed  through  a formula  and  the  other  half  competitively,  as 
supplemental  grants,  to EMAs  which  have  demonstrated  a severe  need  for  financial 
assistance  to  address  the  epidemic  and  the  ability  to allocate  funds  expeditiously  to areas 
of greatest  need. 
Title  I funds  comprised  56 percent  of the  FY  1994 Ryan  White  appropriation.  In FY 
1991, 16 grantees  received  $88 million.  In FY  1992, 18 grantees  received  $120 million. 
In FY  1993, 25 grantees  received  $185 million.  Congress  appropriated  $325.5 million  for 
34 grantees  in FY  1994, an increase  of 76 percent  over  FY  1993.  The  President  has 
requested  $364.5 million  for up  to 41 grantees  in FY  1995. 
Title  11 
Title  11,including  Special  Projects  of National  Significance  (SPNS)  (see  next  section), 
comprised  33 percent  of the  FY  1993 Ryan  White  appropriation.  This  title  provides 
formula  grants  to States  and  territories  to improve  the  quality,  availability,  and 
2
 organization  of health  care  and  support  services  for individuals  and  families  with  HIV

disease.

A major  intent  of Title  II was to develop  service  delivery  systems  to provide  essential

services  throughout  the  course  of HIV  disease.  Congress  envisioned  the  establishment  of

community-based,  coordinated,  continuums  of care  to which  everyone  with  HIV  would

have  access.  Another  intent  was that  funds be  directed  to both  urban  and  rural  areas,

with a special  emphasis  on areas  most  affected  as well as the  needs  of smaller  cities and

rural  areas.  Priority  was to be  given to low income  individuals,  children,  families,  and  a

variety  of special  populations.  To  get the  money  out  quickly to meet  the  greatest  needs,

States  are  required  to allocate  75 percent  of services  within  120 days after  an

appropriation  becomes  available.

States  may use  funds  in one  or more  of four  ways.  They  may establish  HIV  care

consortia  consisting  of public  and  nonprofit  private  organizations  and  assist in the

planning,  development,  and  delivery  of comprehensive  outpatient  health  and  support

sexvices.  They  may provide  home- and  community-based  care  services  including

outreach  services  to individuals  in rural  areas.  They  may provide  assistance  to assure  the

continuity  of health  insurance  coverage.  Finally,  they  may provide  appraved  treatments

that  prolong  life or prevent  serious  deterioration  of health.

Title  II was funded  at $88 million  in FY  1991, $107 million  in FY  1992, $115 million  in

FY  1993, and  $183.9 million  for FY  1994.  There  were  54 State  and  territorial  grantees  in

FY  1993.  The  President  has  requested  $213.8 million  for FY  1995.

Special  Proiects  of National  Significance:  Title  II also establishes  a program  of Special

Projects  of National  Significance  (SPNS),  for which  up  to  10 percent  of the  Title  II

appropriation  is set  aside.  These  are  competitive  grants  to public  and  private  nonprofit

entities  for  special  programs.  Funds  are  provided  on a 3 year  cycle for  projects  that

contribute  to advancing  knowledge  and  skills in the  delivery  of health  and  support

services.  In FY  1991, HRSA  awarded  approximately  $4.4 million  for  22 projects.  These

projects  continued  in FY  1992 with  $5.2 million  and  four  new projects  funded  with  an

additional  $836,000.  In FY  1993, nearly  $6.1 million  was awarded  to  support  27 projects.

An  additional  $2.9 million,  $4.8 million,  and  $5.1 million  in W  1991, 1992, and  1993,

respectively,  was mandated  by Congress  to be  used  for reimbursement  of dental  health

providers  who provided  uncompensated  care  to people  with HIV/AIDS.

Title  111

Title  III(a),  intended  to provide  formula  grants  to States  for  early  intervention  services

on an outpatient  basis,  and  intended  to be  administered  by CDC,  has  not  been  funded  to

date.  Title  III(b)  supports  early  intervention  semices  on an  out-patient  basis,  including

counseling,  testing,  referrals,  clinical  and  diagnostic  services,  and  other  therapeutic

services.  It provides  competitive  grants  to private  non-profit  organizations  and  public

migrant,  community,  and  homeless  health  centers,  hemophilia  centers,  and  federally-

qualified  health  centers.

3  Title  IH(b)  funds  comprised  14 percent  of the  FY  1993 Ryan  White  appropriation.  The 
title  was funded  at $45 million  (121 grantees)  in FY  1991, $49 million  (136 grantees)  in 
FY  1992, $48 million  (136 grantees)  in both  FY  1993 and  FY  1994.  There  were  54 State 
and  territorial  grantees  in FY  1993.  The  President  has  requested  $66.9 million  for FY 
1995. 
Title  IV 
Title  IV was to provide  demonstration  grants  for research  and  services  for pediatric 
patients,  evaluation  and  reports,  and  requires  studies  on partner  notification  and  HIV 
disease  in rural  areas.  Congress  appropriated  $22 million  for FY  1994 for  existing  HRSA 
pediatric  and  adolescent  AIDS  demonstration  projects  to be  folded  into  Title  IV.  The 
President  has  requested  $27 million  for FY  1995. 
SCOPE  AND  METHOIXXDGY 
The  Ryan  White  Act will be  reauthorized  in FY  1996.  This is the  first in a series  of 
studies  on the  implementation  of the  Ryan  White  Act which  will provide  information 
useful  for the  discussion  surrounding  reauthorization.  Other  reports  are:  FY  1992 Title  I 
and Title  II Expenditures  (OEI-05-93-O0331);  Special  Projects  of National  Significance 
(OEI-05-93-O0332);  Consortia  Activities  (OEI-05-93-O0333);  and  a Technical  Report  of 
FY  1992 Expenditures  (OEI-05-93-00334). 
This  study focuses  on the  formulas  governing  the  distribution  of Ryan  White  Title  I and 
Title  II funds,  and  how certain  changes  in those  formulas  would  affect  distribution  in the 
future.  Concerns  about  this issue were  raised  by many  people  we talked  to  as we 
designed  this study:  congressional  staffers,  representatives  of national  organizations, 
experts,  grantee  staff,  and  Federal  officials.  We  expect  the  formulas  to be  an important 
focus  for discussions  during  reauthorization. 
In the  study we compare  the  relative  distribution  of Ryan  White  funding  allocations 
between  States  and  high incidence  cities  (EM&)  for FY  1991, FY  1992, and  FY  1993. 
We  compared  trends  in funding  levels.  We  use  case  data  provided  by CDC  for  this 
analysis.  Then,  based  on the  Presidents  FY  1995 budget  request,  we calculate  FY  1995 
allocations  for Titles  I and  11using formulas  based  on factors  other  than  cumulative  case 
counts.  We  assess  the  impact  of these  new formulas  on allocations  to States  and  EMAs 
by comparing  them  to projected  FY  1995 allocations  under  the  current  formulas. 
The  next  study  in this  series  will  suxvey  grantees  concerning  several  general  aspects  of the 
implementation  of the  program. 
We  conducted  this inspection  in accordance  with  the  Standards for Inspections  issued  by 
the  Presidents  Council  on  Integrity  and  Efficiency. 
4
 FINDINGS

As a backdrop  to this discussion,  it is important  to understand  not  only the  formula 
governing  each  Title,  but  also a new AIDS  case  definition  implemented  by the  CDC  in 
January  1993.  Because  each  formula  is based  on case  counts,  this new definition  is 
bound  to have  a significant  impact  on the  distribution  of funds. 
The  CDCS expanded  AIDS  surveillance  case  definition  of AIDS  includes  all HIV-
infected  persons  who have  <200  CD4+  T-lymphocytes,  or a CD4+  T-lymphocyte 
percentage  of total  lymphocytes  of <14  and  pulmonary  tuberculosis,  recurrent 
pneumonia,  or invasive  cervical  cancer,  in addition  to the  clinical  conditions  included  in 
the  AIDS  surveillance  case  definition  published  in 1987. 
Before  it was put  into  effect,  the  CDC  estimated  that  this expanded  definition  would  lead 
to a 75 percent  increase  in the  number  of newly reported  cases  in the  first year  it was in 
effect;  experts  then  expected  the  rate  of increase  to level  off.  However,  in early  March 
1994, the  CDC  reported  that  in the  first year  of the  definition,  the  number  of cases 
reported  grew by 111 percent,  from  49,016 in 1992 to  103,500 in  1993. 
Half  of Title  I funds  are  distributed  to high-incidence  cities  (eligible  metropolitan  areas, 
or EMAs)  through  a formula  based  on both  (1) cumulative  AIDS  cases  reported  to CDC 
as of March  31 of the  most  recent  fiscal year  and  (2) per  capita  incidence  (cases  per 
100,000) of cumulative  AIDS  cases. 3  The  formula  weights  the  EMAs  cumulative  total 
of AIDS  cases  more  heavily  to target  funds  to areas  experiencing  the  greatest  burden  of 
the  epidemic  (in the  law, the  localities  disproportionately  affected).4  The  remaining 
half  of Title  I funds  are  distributed  to EMAs  via competitive  supplemental  grants. 
Title  II funds  are  distributed  to all States,  Puerto  Rico,  the  District  of Columbia,  and  up 
to U.S.  territories  (all referred  to as States in this report)  via a formula.  The  formula 
distributes  funding  on a proportional  basis  and  is a function  ofi (a)  a States  total 
reported  AIDS  cases  for the  2-year  period  preceding  the  fiscal year  in which  funds  are 
requested,  and  (b)  a States  average  per  capita  income  divided  by the  U.S.  average  per 
capita  income.  States  receive  the  greater  amount  of the  formula  calculation  or a 
minimum  allocation  of $100,000.  Unlike  Title  I, which  targets  only the  cities with  the 
highest  (cumulative)  case  counts,  Title  II provides  funding  for all States. 
. 
> AppendixApresentstheformulasforTitleI,TitleII,andthefouroptionspresentedinthisreport. 
4 Inthe pastyear,the Officeof ManagementandBudgethasalso madechangesin the definitionof 
MetropolitanStatisticalAreas. These changesaffectthe numberof AIDScasebseingreportedinmetropolitan 
areas,whichin turnaffectsthedistributionofTitle Iformulafunds. 
5  As  thenumberof high inckknce  citks  increases, the proportion  of lltle  Ifhn&  going to 
citkwdh  thekzrgest  caseknzdkklike~  todecreasc 
The  number  of EM%  has  increased  from  16 in FY  1991 to 34 in FY  1994.  The 
Presidents  FY  1995 budget  projects  an increase  of up  to 7 EMAs  for FY  1995.  While 
this means  that  more  cities  can  access  Title  I funds,  it also inevitably  means  that  the 
proportion  of formula  funds  going to the  ENL% with by far  the  most  cases  will decline, 
even  if total  dollars  increase.  For  example,  from  FY  1991 to FY  1993, New  Yorks 
proportion  of total  formula  funds  declined  from  37 to 31 percent  despite  increased 
appropriations. 
Possible  dilution  of funding  for  areas  with  the  largest  caseloads  concerns  some  of the 
people  we spoke  with  at the  beginning  of our  study.  They  view it as conflicting  with  the 
intent  of Congress  to target  funds  to areas  experiencing  the  greatest  burden  of the 
epidemic.  They  seek  ways to target  Title  I funds  in the  face  of increasing  needs  and 
appropriations  which  at some  time  in the  future  are  certain  to level  off. 
The cumntfonnuiks  have kd  to bquitia  in fiuuhg  between grantees on a per-new-case 
bask  We f&th&to  betxpeci@tr  wforTIde&  andksssofor  lltle17. 
Some  people  we spoke  with  as we designed  this study  expressed  the  view that  Ryan 
White  funding  across  grantees  should  be  equitable  - that  is, that  grantees  should  receive 
the  same  amount  of funding  per  case.  They  also  questioned  whether  the  cumulative  case 
count  in the  Title  I formula  is the  most  appropriate  way to address  the  current  geography 
of the  AIDS  epidemic,  since  it includes  persons  who have  died.  Instead,  they  proposed 
funding  based  on new  cases  reported. 
We  examined  the  distribution  of Title  I and  Title  11funds  between  FY  1991-1993 to 
learn  whether  either  formula  has  produced  significant  funding  inequities  on a per-case 
basis  (new  cases  reported). 
l%e Title I formula  has produced  significant inequities in jimding  on a per
ctise bash  between  high incidence cities. 
A look  at the  16 cities  funded  from  FY  1991 through  FY  1993 shows both  a wide  range 
and  significant  differences  in funding  levels  per  case.  For  example,  Table  1 on the  next 
page  shows that  in these  three  years,  on average,  San  Francisco  received  $4,354 per  case 
while  Chicago  received  $1,673, a difference  of  160 percent.  Furthermore,  the  national 
average  amount  received  per  case was $2,639 in those  years;  yet  12 of the  16 EMAs 
received  less than  that  amount. 
These  inequities  exist primarily  due  to the  cumulative  case  counts.  Cities  such  as San 
Francisco  and  New York  which  have  been  struggling  with the  AIDS  epidemic  for many 
years,  have  much  higher  cumulative  case  counts  than  other  cities which  at present  are 
experiencing  large  rates  of increase  in their  caseloads.  This  disparity  in cumulative  case 
6  counts  points  to a weakness  in the  Title  I formula:  it is not  flexible  enough  to meet  the 
changing  demographics  of the  epidemic. 
TABLE  1 
TITLE  1FORMULA  FUNDING  PER  REPORTED  CASE 
FOR  ORIGINAL  16 EMAs 
FY 1991-FY  1993 
Funds  New  Cases 
EMA
 1991-1993  1990-1992  $/Case 
------ ------ ------
San  Francisco
 $26,206,255  6019  $4,354 
New  York
 65,188,920  19326  3,373 
Jersey  City
 3,671,757  1124  3,267 
Newark
 8,099,881  2900  2,793 
Houston
 7,817,958  3551  2,202 
Los Angeles
 17,180,530  7882  2,180 
Miami
 8,852,698  4244  2,086 
Dist. of Col.
 7,283,634  3543  2,056 
Dallas
 4,239,970  2093  2,026 
Ft. Lauderdale
 4,903,566  2517  1,948 
San  Diego
 3,600,036  1877  1,918 
San Juan
 5,565,320  2929  1,900 
Boston
 3,776,815  2032  1,859 
Philadelphia
 4,925,715  2658  1,853 
Atlanta
 5,297,244  2952  1,794 
Chicago
 5,892,174  3522  1,673 
TOTAL
 $182,502,473  69,169  $2,639 
Funding Distribution from HRSA; case data from HIV/AIDS  Surveillance, 
Case 
First Quarter Edition, Issued April 1991, 1992, and May 1993. 
COWItSare cases reported as of March 31 of the preceding year. 
We  also  looked  at Title  I formula  and  supplemental  funds  combined  (Table  2).  The 
degree  of variation  in per-case  amounts  across  grantees  is roughly  the  same  as for  the 
formula  funds  alone.  However  the  dollar  amounts  are  much  higher:  San  Francisco 
received  the  largest  average  amoun$  $9,782 per  case,  and  San  Juan  the  least,  $3,394- a 
difference  of 188 percent.  Also, while  the  average  amount  received  per  case  was $5,260 
between  FY  1991-1993,  13 of the  16 EMAs  received  less than  this amount. 
7  TITLE  I FORMUIA  AND  SUPPLEMENTAL  FUNDING  PER  REPORTED  CASE 
FOR  ORIGINAL  16 EMAs 
FY1991  -FY1993 
Funds  New  Cases 
EMA  1991-1993  1990-1992  $/Case 
--------- ------ ------ ------
SanFrancisco
 58,875,136  6,019  $9,782 
Jersey City
 7,362,801  1,124  6,551 
New York
 113,821,426  19,326  5,890 
Houston
 17,333,540  3,551  4,881 
LosAngeles
 36,826,670  7,882  4,672 
Boston
 9,214,779  2,032  4,535 
Dist. of Col.
 15,967,546  3,543  4,507 
Vewark
 13,018,014  2,900  4,489 
Miami
 18,683,630  4,244  4,402 
Oallas
 9,041,156  2,093  4,320 
San Diego
 8,000,908  1,877  4,263 
Zhicago
 14,948,165  3,522  4,244 
Philadelphia
 10,624,115  2,658  3,997 
ct. Lauderdale
 9,464,341  2,517  3,760 
4tlanta
 10,726,012  2,952  3,633 
San Juan
 9,940,840  2,929  3,384 
rOTAL
 $363,849,079  69,169  $5,260 
%ndingdistributionfromHRSA;casedata fromHIV/AIDS Surveillance,First Quarter 
Edition Issued April 1991, 1992, and May 1993.  Case counts are cases reported as of 
March 31 of the preceding year. 
The Ilde  II fomudk  produces greater 
@u@?  than the lWe  I foimuik 
equip 
At first glance  the  figures  presented  in Table  3 would  appear  to belie  this statement, 
since between  FY  1991 and  FY  1993, Title  II dollars  per  case  ranged  from  $17,647 in 
South  Dakota  to $1,911 in Hawaii,  with  an  average  of $2,152.  This  is an  anomaly, 
however,  stemming  from  a handful  of States  that  have  extremely  high per-case  averages. 
North  and  South  Dakot~  for  example,  received  $17,647 and  $16,013  per  case 
respectively.  A few States  like these  have  extremely  low case  counts  yet nevertheless  are 
eligible  to receive  the  minimum  Title  II grant  of $100,000. 
The  more  important  fact  to note  is that  despite  this anomaly,  over  two-thirds  of the  54 
Title  II grantees  received  funding  between  $2,000 and  $2,475 per  case  - close  to the 
average  of $2,152.  This  is because  the  formula  is based  on a new-case  count  rather  than 
a cumulative  count. 
8
 TABLE 3 
TITLE II FUNDS PER REPORTED CASE:  FY 1991 -FY 1993 
Funds  New Cases 
STATE  1991-1993  1990-1992  S/Case 
------ .--  . 
South Dakota  300,000  17  17,647 
North Dakota  219,872  13  16,913 
Wyoming  244,037  34  7,178 
Vermont  300,000  59  5,085 
Alaska  300,000  4,688 
Montana  256,197  :  4,342 
Puerto Rico  16,520,102  4,712  3,506 
Idaho  300,000  86  3,486 
Arkansas  1,244,633  503  2,475 
Kentucky  1,173,506  483  2,430 
Mississippi  1,625,056  679  2,393 
Alabama  2,057,855  893  2,304 
Utah  738,197  321  2,300 
Iowa  490,499  214  2,292 
Nebrasks  363,877  159  2,269 
Oklahoma  1,396,972  618  2,260 
Minnesota  1,276,798  569  2,244 
Texas  20,139,425  9,021  2,233 
Louisiana  4,824,689  2,162  2,232 
North Carolina  3,605,739  1,619  2,227 
Delaware  554,356  249  2,226 
Wisconsin  1,295,753  586  2,211 
West Virginia  416,071  189  2,201 
Arizona  2,092,429  952  2,196 
Tennessee  2,248,535  1,027  2,169 
New Mexico  717,498  326  2,167 
Missouri  3,833,362  1,787  2,169 
Oregon  1,846,634  853  2,165 
Georgia  8,376,328  3,677  2,161 
Pennsylvania  7,827,679  3,541  2,154 
Nevada  1,305,177  611  2,136 
Rhode Island  577,819  271  2,132 
New York  48,330,884  22,669  2,132 
Guam  10,656  5  2,131 
Maine  376,142  178  2.113 
Ohio  3,967,672  1,683  2,107 
Illinois  8,716,907  4,165  2,093 
South Carolina  2,247,710  1,079  2,083 
Virginia  3,751,967  1,804  2,080 
Florida  28,482,462  13,710  2,077 
Virgin Islands  101,484  49  2,071 
Indiana  2,104,243  1,021  2,061 
Maryland  5,711,996  2,781  2,054 
Washington  3,619,091  1,797  2,014 
California  45,696,302  22,757  2,006 
Colorado
 2,497,921  1,249  2,000 
New Hampshire
 307,027  154  1,994 
Dist. of Col.
 3,921,396  1,964  1,977 
Massachusetts
 5,086,166  2,609  1,949 
Michigan  3,745,223  1,931  1,940 
Kansas  826,931  429  1,926 
Connecticut  2.747,197  1,430  1,921 
New Jersey  13,432,803  7,012  1,916 
Hawaii  1,068,159  559  1,911 
TOTAIJAVG  $275,019,614  127,791  $2,152 
Funding distrhtial  frwn HRSA; cam data frun HIV/AIDS SUWSIIIMCORsprxt. FwstOusIIsr Edithm,

Issued A@ll 1901, 1SS2, and Mny 1W3, Case counts are casea repated  a.! of March 3! C4Iho pfOCSdintJyew

9
 OPTIONS

We  present  four  options,  and  some  variations  of them,  for funding  formulas  that  could  be 
used  to address  the  inequities  described  and  target  funds  to need.  We  recognize  that 
formulas  could  be  constructed  in countless  ways; our  intention  is to present  some  general 
ideas  that  might  be  helpful  in constructing  a final  allocation  methodology.  We  also do 
not  see  these  options  as mutually  exclusive.  We  believe  that  it could  be  valuable  to 
combine  various  ideas  to develop  a formula. 
We realize  that  the  best  reflection  of the  current  geographical  impact  of the  AIDS 
epidemic  would  be  prevalence  data  - a count  of live AIDS  cases  by city and  State. 
However,  not  all States  report  AIDS-related  deaths  to CDC,  so that  reliable  prevalence 
data  is not  available.  Also,  data  on the  number  and  the  proportion  of people  with AIDS 
and  HIV  requiring  care,  those  already  in care,  and  the  insurance  status  of those  people, 
is not  available. 
Therefore  we base  our  options  on 2-year  counts  of new AIDS  cases  as reported  by CDC 
and  published  in their  HIV/AIDS  Sumeillance  Report,  First  Quarter  Edition,  issued  in 
October,  1993.  The  case  counts  are  from  October  1991 to September  1993, which 
includes  three  quarters  (January-September  1993) of reporting  using  the  new CDC 
definitions  These  counts  are  the  most  up-to-date  counts  available  for  cities  and  States. 
We view these  new-case  counts  as more  accurate  than  cumulative  counts  in terms  of 
reflecting  those  alive with AIDS  today  who need  semices. 
We  examine  each  option  against  five criteria  which we believe  could  be  useful  in 
assessing  any new formula.  We  recognize  that  there  are  inherent  tensions  between  some 
of these  criteria,  making  it unlikely  that  a formula  could  be  devised  that  would  fully 
satis~  all of them.  Our  purpose  in proposing  them  is to provide  a framework  within 
which  potential  formulas,  and  the  tradeoffs  inherent  in them,  can be  evaluated  in a 
systematic  manner.  The  five criteria  are: 
Equ@:  The  amount  of funding  should  be  the  same  per  case  to minimize  inequities 
between  and  across  geographical  areas. 
Targeting:  Funds  should  be  targeted  to areas  with the  greatest  concentration  of cases, 
and  in amounts  sufficient  for grantees  to develop  the  continuum  of care  called  for in the 
law. 
FZmibility:  Funding  formulas  should  be  flexible  enough  to respond  to  demographic 
changes  in the  epidemic. 
Reasonable  Datu Requiremenfi:  Data  used  in the  formulas  to distribute  funds  should  be 
readily  available  and  reliable. 
5  CasecountsthroughMarch1994willbe usedbyHRSA toestablFiYsh1995allocations.

10
 Stability:  Aggregate  funding  to various  geographic  areas  should  not  fluctuate  significantly

from  year  to year.

Some  readers  may  question  or even  disagree  that  equity should  be  a criterion  for

evaluating  formulas.  Instead,  they  may advocate  including  variables  in formulas  to

deliberately  target  funds  to cities  and  States  based  on the  differing  demographics  of the

epidemic  and  service  needs  they  have.  Indeed,  both  of the  current  formulas  already

include  such variables:  incidence  (cases  per  100,000) in the  Title  I formula  and  per  capita

income  data  in the  Title  II formula.  Many  other  potential  variables  were  mentioned  to

us during  the  course  of this study: HIV  seroprevalence  rates  (since  services  are  also

provided  to people  with HIV  infection  but  not  an AIDS  diagnosis),  numbers  of infected

women  and  children,  the  cost of health  care  in different  locations,  tuberculosis  and

sexually  transmitted  disease  rates,  the  migration  of people  with HIV/AIDS,  minority

population  statistics,  poverty  statistics,  health  insurance  statistics,  and  others.

We  understand  that  it could  be  valuable  to include  new  variables  such  as these  in future

formulas,  but  for several  reasons  we  have  chosen  not  to  do  so  in this  report.  First,  we

believe  that  any national  formula  governing  the  distribution  of funds  among  grantees  that

are  by nature  so diverse  should  strive  to achieve  equity  as much  as possible.  Second,  we

are  concerned  that  much  of the  data  mentioned  above  either  does  not  exist or is not

completely  reliable.  Third,  based  on our  reading  and  discussions  for this study, we do

not  believe  there  is consensus  about  which variables  are  most  important  or the  extent  to

which  they  should  be  factored  into  a national  formula.  Finally,  as the  Act  is structured

today,  monies  are  available  to meet  the  special  circumstances  and  needs  of individual

grantees  through  the  Title  I supplemental  funding  mechanism.

For  these  reasons,  we have  chosen  to present  a few simple,  basic  options,  and  describe

some  variations  which  Congress  could  use  to target  funds  in response  to the  changing

face  of the  epidemic  and  the  specific  needs  of grantees.  We  present  each  option  looking

ahead  to FY  1995, which we believe  is the  most  useful  approach  for  the  discussion

surrounding  reauthorization.  It is important  to note  that  we present  the  information

available  at this time  to show how new formulas  might  affect  funding;  however  the  actual

amount  of the  FY  1995 allocations,  whether  governed  by the  current  formulas  or

different  formulas,  will be  highly dependent  on the  size of the  actual  appropriation,  the

number  of cases  reported  by cities  and  States  as of March  1994, and,  for Title  I, the

number  of cities  eligible  for funding.

Readers  will note  that  in Tables  4, 5, and  8, we have  identified  a number  of EMAs  by

letter  rather  than  name  (City ~  for example).  Our  FY  1995 projections,  under  both  the

current  and  proposed  formulas,  are  based  on CDC  data  as of September  1993.

However,  these  particular  cities may  or may not  be  eligible  for Title  I funding  in FY

1995, since  eligibility will be based  on case  counts  and  incidence  rates  not  currently

available.

All tables  show the  FY  1994 allocations  reported  by HRS~  and  projected  FY  1995

allocations  under  the  current  formulas  and  the  proposed  options.

11  OPTION  1: Dktn3ute  Title I Formula Fund  on a Per-tie  Basis to (l-ties wrtha 
Sign@cant Pkpwtion  of AU New  Cases Reprted  National& 
This  option  targets  funds  to the  cities with the  highest  numbers  of new  cases,  consistent 
with  Congressional  intent.  It also eliminates  the  funding  inequities  produced  by the 
cumulative  case  count  in the  current  formula.  Table  4 presents  the  results  of applying 
this option  to the  proposed  Title  I formula  amount  ($182.2  million)  for FY  1995. 
First  we calculate  projected  FY  1995 formula  allocations  using  the  current  formula,  as a 
basis  for  comparison  with  this Option  1 new formula.  We identify  seven  metropolitan 
areas  that  might  quali~  for Title  I funding  in FY  1995 based  on either  a cumulative  case 
count  or incidence.  These  seven  cities,  combined  with  the  existing  34 grantees,  bring  the 
total  number  of possible  EMAs  to 41, which is the  maximum  number  of cities  that 
HRSA  predicts  will be  eligible  for funding  in FY  1995.  To  identify  the  cities, we use 
CDC  case  counts  as of September,  1993.6  We  then  calculate  projected  allocations  for 
all 41 cities using  the  current  formula,  which is based  on cumulative  case  counts  and 
incidence. 
We  next  calculate  projected  FY  1995 allocations  under  the  new  formula.  We  identify  the 
41 metropolitan  areas  with  the  highest  number  of new AIDS  cases  reported  for the  two 
year  period,  October  1991 to September  1993.  This  period  includes  three  quarters  of 
reporting  under  the  new  CDC  definition.  Collectively,  these  41 cities  reported  72 percent 
of all new  cases  nationally  in that  period  and  86 percent  of all new  cases  reported  in 
metropolitan  areas  (population  500,000 or more). 
We  then  calculate  an  average  dollar  amount  per  case  ($1,764)  based  on these  case 
counts  and  the  Title  I FY  1995 budget  request  (formula  portion  only).  Last,  we calculate 
a FY  1995 allocation  for  each  EMA  and  compare  it to the  projected  allocation  under  the 
current  formula. 
ANALYSIS 
Equity:  This  option  provides  the  same  amount  per  case  ($1,764)  for  each  EMA.  Under 
the  current  formula,  dollars  per  case would  range  from  $3,898 to $1,307;  28 of the  41 
cities would  receive  less than  $2,000 per  case. 
Targeting  This option  targets  Title  I formula  funds  to the  cities with  a strong  majority  of 
new  cases  reported  both  nationally  and  by metropolitan  areas.  Up  to seven  new  cities 
would  be  funded.  The  cities with  the  highest  number  of newly reported  cases would 
receive  the  greatest  amount  of funding. 
6
AppendicBe sa ndC contaitnh ecasecountsi,n cidenaened,p ercapitian comef iguruesse
 dto

calcultahteef ouro
ptions.

12
 FZexiM&  ~isoption  protides  the  flefibili~  totarget  aid based  onchan@ng  case 
counts,  whether  increasing  or decreasing. 
Data  Re@wwnts  :  The  data  required,  new  cases  reported,  is the  same  as now  used  in 
the  current  Title  II formula. 
StubiZdy:  Funding  is somewhat  less stable  than  if based  on a steadily  growing  cumulative 
case  count  as it is now, since  a new-cases  count  could  conceivably  rise  or fall in any given 
year.  Using  a 3-year  case  count  might  lend  greater  stability. 
Ponce,  Puerto  Rico  is the  only current  grantee  that  is not  eligible  for funding  under  this 
option,  due  to a relatively  low new-case  count  of 522.  Of the  33 other  FY  1994 grantees, 
17 receive  increased  funding  under  this option,  including  two of the  largest  grantees,  New 
York  and  Los Angeles.  Fifteen  see  decreased  funding,  including  San Francisco.  One  city 
sees  no change. 
VARIATIONS 
The  incidence  factor  which  is a small  part  of the  current  Title  I formula  could  be 
retained  to target  relatively  more  funds  to cities with higher  incidence  rates.  This would 
produce  some  inequity  in funding  per  case,  although  less than  that  produced  by the 
cumulative  case  count  in the  current  formula. 
Alternatively,  rather  than  introducing  other  variables  into  the  national  formula,  Congress 
could  continue  to use  Title  I supplemental  funds  to target  the  special  needs  of individual 
EMAs. 
IfCongress  decided  that  the  impact  on the  cities  that  would  lose  funds  (including  Ponce) 
would  be  too  great,  they  could  hold  them  harmless  at FY  1994 funding  levels  at a cost  of 
about  $4 million  (and  at the  expense  of City H, which would  be  displaced  by Ponce). 
Alternatively,  Congress  could  use Title  I supplemental  funds  for this purpose. 
Another  variation  would  be  to collapse  all Title  I funds  into  a single formula  grant.  This 
alternative  eliminates  funding  inequities  completely  and  dispenses  with  the  need  for 
Federal  personnel  to review  applications  and  monitor  competitive  grants.  option  4 
provides  a look  at this type  of approach. 
13
 TABLE 4 
OPTION  1 
TITLE  I FORMULA  FUNDS  DISTRIBUTED ON PER-CASE BASIS TO 41 CITIES 
WITH  MAJORllY  OF REPORTED  U.S. CASES  IN TWO  PRIOR  YEARS 
(Ranked  by size of grant in New  Formula  column.) 
FY 1995 Budget  Request  (Formula  Portion):  $182,250,000 
.-.  --  .-.-.  ..  -.---  ------ -. -------------
CURRENT  FORMULA  NEW  FORMULA  Diff.: 
Old VS 
Actual  Projected  Projected  New 
Clw  FY1994  FY1995  FY 1995  Formula
New York  45,835,380  32,980,861  36,066,602 
Los Angeles
 12,617,337  12,898,418  15,667,483  2%

San Franasco
 19,056,960  14,221,979  11,441,989  -20% 
Chicago
 4,706,676  5,675,881  7,465,157  32A 
Washington  D.C.
 5,225,866  6,157,582  6,886,709  12% 
Miami
 6,875,102  7,235,526  6,608,066  -9% 
Houston
 5,676,753  6,2=,576  6,366,458  1% 
Philadelphia
 3,479,453  4,614,459  5,493,495 
Boston
 3,091,876  4,281,146  5,161,945  A% 
Atlanta
 4,066,062  4,693,862  4,812,760  3% 
San Juan,  PR
 4,561,223  5,147,513  4,784,543  -7% 
Dallas
 3,445,177  4,293,970  4,521,772 
Newark
 5,166,261  5,395,89!3  4,193,750  -2;; 
Baltimore
 2,232,355  3,663,947  4,050,901  11% 
San Diego
 2,696,880  3,629,889  3,712,298 
Fort Lauderdale
 3,555,421  4,340,289  3,550,050  -1;: 
Tampa-St.  Pete
 1,955,256  3,215,149  3,449,527 
Detroit
 1,623,489
 2,404,019  3,243,190  3;; 
Oakland
 2,379,546  3,234,108  3,153,248 
Riverside/San  Bern.
 1,299,021  2,118,013  2,610,071  z; 
Seattle
 1,617,949  2,760,750  2,587,145 
Nassau/Suffolk  Co.
 1,403,882  2,426,529  2,433,715 
Denver
 1,626,755  2,593,940  2.371.991  -:: 
West Palm Beach
 1,959,886  3,114,023  2;320:847
 -25% 
New Haven
 1,235,428  2,510,956  2,301,448
 -8% 
Orange  Co. CA
 1,426,850  2,030,880  2,239,723
 1o% 
City A
 2,801,110  2,181,526
 +2.% 
Orlando
 1,319,2  2,372,680  2,118,038
 -1 1% 
Phoenix
 1,175,959  1,846,899  2,036,914
 10?40 
Saint Louis
 1,176,039  1,785,574  1,994,588
 12% 
New Orleans
 1,691,877  2,375,415  1,918,755  -19% 
Kansas City, MO
 1,251,712  1,970,528  1,851,740  -6k 
Bergen-Passaic  NJ
 1,277,031  2,243,109  1,664,802  -26?6 
Jersey  City, NJ
 2,306,302  3,533,059  1,643,640  -53% 
City B
 0  1,744,183  1,594,260  -9% 
City C
 2,040,121  1,458,466  -29% 
City D
 1,329,726  na* 
City E
 1,352,72  1,305,036  -470 
City F
 1,290,927  * 
City G
 1,393,14:  1,208,040  !?3% 
City H
 1,158,660 
Ponce  PR
 2,034,8;  -1OYYO 
City I
 1,422,656  :  -100% 
City J
 1,400,781  0  -100Y. 
TOTAL  $159,994,501  $182,250,000  $182,250,000 
  Not eligible  for projected  FY 1995  (current formula). 
14
 OPHON  2  lMribute  lltle  I Forrnuk  Fumik on a Per-Nm-Case  Bas@ In&dhg  an 
Ihcorne Factor. 
This  option  demonstrates  the  results  of applying  the  Title  II formula  to Title  I formula 
(o~y)  tids.  The  Title  II formula  produces  a proportional  distribution  of funds.  We 
base  our  calculation  on each  State  or territorys  number  of cases  reported  in the  past  2 
years.  Each  States  proportion  of cases  is adjusted  by the  ratio  of U.S. per  capita  income 
to the  citys 1989 per  capita  income,  reported  by the  Census  Bureau  from  the  1990 
Census. 
We  use  the  same  cities  as in Option  1 to demonstrate  this formula.  We  compare  their 
projected  FY  1995 allocations  as produced  by this formula  with the  projected  allocations 
under  the  current  formula,  based  on cumulative  case  counts  and  incidence.  Table  5 
presents  the  results  of these  calculations. 
ANALYSIS 
E@ity  This  option  reduces,  although  does  not  eliminate,  the  funding  inequities  per  case 
across  EMAs  described  in our  findings,  since  it is based  on new  cases  rather  than 
cumulative  counts.  The  current  Title  I formula,  for example,  produces  funding  per  case 
from  $3,898 to $1,307.  This  option  produces  a range  of $2,320 to $1,554 per  case. 
Ta~etin~  As with  Option  1, EMAs  with  the  largest  caseloads  and  the  majority  of cases 
nationally  are  targeted,  consistent  with  Congressional  intent.  Since  funds  are  distributed 
on a proportional  basis,  EMAs  with  the  most  cases  continue  to receive  amounts 
proportional  to their  need.  In addition,  the  inclusion  of the  income  factor  targets 
relatively  more  money  to cities with lower  per  capita  incomes. 
FZaibility  This  option  provides  the  flexibility  to target  aid based  on changing  case  counts. 
However,  limitations  described  below  relative  to the  income  data,  specifically,  mean  that 
the  income-related  portion  of the  formula  is less reflective  of current  realities. 
Reasonabk  Dahz Requirerrwn&  Data  requirements  for this  option  would  be  the  same  as 
now.  However,  this  option  requires  income  data  for cities, which  is only available 
through  the  national  census  conducted  every  10 years.  These  figures  become  more 
outdated  the  farther  the  year  from  the  Census. 
Stab@:  The  Title  II formula  is somewhat  less stable  than  the  current  Title  I formula, 
given fluctuations  in the  number  of new cases  reported  compared  with  constantly 
increasing  cumulative  case  counts. 
As with  Option  1, Ponce  is the  only current  grantee  not  eligible  for funding  under  this 
option.  Seventeen  current  grantees  see  increased  dollars  under  this  option  compared 
with the  current  formula;  this includes  all of the  largest  grantees  (those  with new-case 
counts  of about  3,000 or above)  except  San  Francisco.  Sixteen  grantees  (San  Francisco 
included)  receive  less funding. 
15  VARIATIONS 
Stability  in allocations  could  be  increased  by using  a 3 year  rather  than  2 year  case  count. 
Congress  could  hold  harmless  those  EM%  losing funding,  at N  1994 Title  I formula 
levels,  using Title  I formula  funds  and  decreasing  allocations  to other  EMAs,  or using 
supplemental  funds. 
TABLE5 
oPnoN  2 
APPLY TITLE II FORMULA TO TITLE I FORMULA PORTION FOR 41 CITIES 
WITH MAJORITY OF REPORTED U.S. CASES IN TWO PRIOR YEARS 
(Ranked by sizo of grant in New Formula column.) 
FY 1995 Budget Request (Formula Potion):  $182,250,000 
  ... 
CURRENT FORMULA  NEW FORMUIA 
0!?% 
Actual  Projected  P~j~&d  New 
Clw
 IV  1994  FY 1995  Formula 
. 
New York
 46,635,380  32,980,661  34,723,675 
be  Angeles
 12,817,337  12.898,4Y8  15,112,940  1?; 
San Francisco
 19,066,960  14,221,979  10,338,646  -27% 
:;::go
 4,708,676  5,675,661  7,767,256  37% 
8,875,102  7.235.526  7,535,197  4% 
Houeton
 5,876,753  6:2@576  6,408,124 
Washington D.C.
 5,225,888  6,157,562  6,310,797  X 
San Juan, PR
 4,581,223  5.147.513  6,293,801  22% 
Philadelphia
 3,479,463  4,614,459  5,s40,394  27% 
Boston
 3,091,876  4,281,146  5,043,079  16% 
Newark
 5,166,261  5,395,693  4.844.752  -1o% 
;~;
 4,088,082  4,693,862  4:732:712  1% 
3,445,177  4,293,970  4,351,714  1% 
Baltimore
 2,232,355  3,683,947  4,316,283  16% 
Detroit
 1,623,469  2,404,019  3.744.121  56% 
2,696,880  3,629,869  3;556;333  -2% 
~~~$ag&
 1,965,256  3.215,149  3,461,900  8% 
3,555,421  4.340.289  3,201,288  -26% 
Oakland
 2,379,546  3:234:106  3,142,701 
Riverside/San Bern.
 1,299,021  2,116,013  2,560,211  2:2 
Seattfe
 1.617.949  2.760.750  2.395.271  -13% 
New Haven
 1;235:428  2,510:966  2:3&:329  -5% 
Denver
 1,626,755  2,593,940  2,316,924  -11% 
West Palm Beach
 1,969,666  3,114,023  2,261,086  -27% 
City A
 0  2,801,110  2..226.7 96  -21%
Saint Louis
 1,176,039  1,785,574  2,202; 012  23% 
Nassau/Suffolk Co.
 1,403,662  2,426,529  2.156.453  -11% 
Orlando
 1,319,944  2,372,680  2:150;611  -9% 
New Orleans
 1,691,877  2,375.415  2,062,035  -12% 
Phoenix
 1,175,959  1,846.899  2,057.571  11% 
Orange Co, CA
 1,426,860  2,030,860  2,017,113  -1% 
Kansas C@, MO
 1,251,712  1,970.528  1,883,644 
Jersey City
 2,308,302	 3,533,059  1,703,096  -5:2 
City B
 1.744.183  1,598,136  -6% 
Bergen-Passaio
 1,277,03:  2,243:109  1,467,009  45% 
City C
 0  2!040,121  1,466,386  -26% 
Ci,t,v  F
 0  o  1.412.937  nan 
8$; 0  1:346;473 
:  1,352,784  1,318,551  ::% 
City D  0  0  1,286.536  na* 
City G  0  1,393,140  1;148i569  -18% 
City J  0  1,400,761  o  -loo% 
City I  1,422,656  0  -loo% 
Ponce PR  976,7~  2,034,604  0  -100% 
TOTAL  S159.994,501  $182.250,000  $182,250,000 
*Not eligible for projected FY 1995 (current formula), 
16
 OITION  3:  D&bibute  lltik  II Funds on a Per-New-Case  Basik, Excluding an Income 
Factor and A Funding Fkwr. 
Readers  might  ask why we propose  changing  the  Title  II formula,  since  it produces  much

more  equitable  funding  per  case  than  the  Title  I formula.  We believe  that  while  the

new-case  count  in the  formula  does  significantly  even  out  inequities,  this option

represents  a way to ensure  equity  more  purposefully.

This  option  establishes  an average  amount  per  case by dividing  the  dollars  available  by

the  number  of new  cases  reported  nationally  for  2 years  prior  to the  year  of funding,  and

then  allocating  funds  to each  State  based  on its case  count.  Also,  this option  eliminates

both  the  income  factor  in the  current  formula  and  the  $100,000  funding  floor  available  to

States.

As a basis  for comparison,  we first  calculate  projected  FY  1995 allocations  using the

current  Title  II formula  and  based  on the  FY  1995 budget  request  less  10 percent  for

SPNS funding  ($192.5  million).  We  then  calculate  projected  allocations  using  the  new

formula.  Table  6 on page  18 shows the  results  of these  calculations.

ANALYSIS 
Equity:  Under  this option,  every State  is funded.  Every  State  also receives  the  same 
allocation  per  case.  The  current  formula  produces  a wide  range  in funding  per  case,  in 
large  part  due  to  the  $100,000 floor  for States  with  relatively  small  case  counts.  For 
example,  funding  per  case  ranges  from  $845 to $20,000 in FY  1994 and  would  be  $1,192 
to $12,500 in FY  1995 under  the  current  formula. 
While  this option  creates  equitable  Title  II funding  on a per-case  basis,  it is also true  that 
States  with  EMAs  in them  would  receive  Title  I funds  as well.  This  creates  inequity  by 
raising  their  total  allocation  per  case  (Titles  I and  II dollars  combined)  compared  to non-
EMA  States. 
Ta~etin~  The  States  with  the  highest  number  of new cases  receive  the  most  dollars. 
However,  some  States  might  complain  that  without  a minimum  allocation,  funds  are 
spread  too  thinly  for them  to develop  the  continuum  of care  called  for in the  legislation. 
FZaibiZity:  This  option  provides  the  flexibility to target  aid based  on changing  case 
counts,  whether  increasing  or decreasing. 
Reasonable  Data  Requirement.x  The  data  required  - new cases  reported  - is the  same  as 
that  used  in the  current  Title  II formula. 
7 
MinimumTitle IIgrantawardsapplyonlyto Statesanddo not includeterritories.. 
17  TABLE 6 
OPTION 3 
TITLE II FUNDS DISTRIBUTED ON PER CASE BASIS, NO FLOOR 
(Ranked by size of grant in New Formula column.) 
FY 1995 Budget Request (lese SPNS): $192,507,300 
CURRENT FORMULA  I  NEW FORMULA  I  Diff.: 
I I  Old W 
Actual  Pn&jelctete  Projected  New 
STA7E
 FY1994  FY 1995  Formula 
.
   -.  -.-.-.. 
California
 28,172,762  33,346,929  34,891,648  5% 
New York
 26,126,095  30,924,375  32,417,233  5% 
Florida
 16,361,666  19,366,649  19,533,444  1% 
Texas
 11,813,625  13,983,535  13,505,065  -3% 
New Jersey
 6@50,&57  7,872,106  8,605,671  9% 
Illinois
 5,363,921  6,349,051  6,475,965  2% 
Puerto Rico
 7,521,643  8,903,0S7  5,901,452  -34% 
Georgia
 4,527,265  5,358,760  5,270,823  -2% 
Pennsylvania
 4,421,998  5,234,136  5,202,663  -1% 
Maryland
 3,625,966  4,291,905  4,608,129  7% 
Massachusetts
 3,501,905  4,145,060  4,407,718  6% 
Michigan
 2,874,019  3,401,857  3,388,291  -o% 
Missouri
 2,716,091  3,214,924  3,111,723  -3% 
Connecticut
 2,246,095  2,858,609  2.980,788  12% 
Virginia
 2,403,511  2,644,936  2,934,025  3% 
Ohio
 2,519,172  2,981,639  2,920,664  -2% 
Dist. of COL
 2,155,767  2,551,892  2,797,745  1o% 
Washington
 2,262,588  2,676,129  2,714,908  1% 
Louisiana
 2,494,411  2,952,531  2,673,490  -9% 
South Carolina
 2,091,875  2,476,066  2,327,446  -6% 
North Carolina
 1,996,053  2,362,646  2,200,663  -3% 
Arizona
 1,655,383  2,196,140  2,151,064  -2% 
Colorado
 1,794,570  2,124,158  2,148,412  1% 
Tennessee
 1,675,354  1,983,047  1,882,532  -5% 
Indiana
 1,394,906  1,651,095  1,604,628  4% 
Alabama
 1,421,553  1,682,633  1,563,210  -7% 
Oregon
 1,170,946  1,386,000  1,356,118  -2% 
Oklahoma
 1,133,726  1,341,945  1,261,257  -6% 
Wisconsin
 1,069,752  1,288,221  1,234,535  -3% 
Minnesota
 970,420  1,148,646  1,150,362  o% 
Nevada
 924,694  1,094,759  1,116,960  2% 
Mississippi
 900,115  1,065,429  933,918  -12% 
Arkansas
 821,978  972,941  677,603  -lo% 
Kansas
 605,134  716,271  698,768  -2% 
Kentucky
 641,709  759,564  698,768  -.9% 
Hawaii
 545,494  645,679  666.702  3% 
Delaware
 515,066  609,662  630.628  3% 
Utah
 511,096  604,964  554,472  -8% 
Rhode Island
 452,600  535,723  543,763  2% 
New Mexico
 465,763  574,978  530,423  -8% 
Iowa
 333,799  395,104  376,774  -5% 
Nebraska
 292,135  345,788  330,011  -5% 
Maine
 205,421  243,148  235,150  -3% 
New Hampshire
 160,060  189,456  1%,403  4% 
West Virginia
 173,904  205,643  165,715  -lo% 
Idaho
 130,115  154,012  142.%0  -7% 
Vermont
 100,000  117,118  114,903  -2% 
Alaska
 100,OOO  100,000  104,214  4% 
Virgin Islands
 68,703  93!655  81.501  -13% 
Montana
 100,OOO  100,000  76,156  -24% 
Wyoming
 100,OOO  100,OOO  53,443  47% 
South Dakota
 Ioo,ooo  100,OOO  41,416  -59% 
North Dakota
 100,000  100,OOO  10,689  -89% 
Guam
 3,379  4,529  4,008  -12% 
TOTAL
 S162,705,300  $192,507,300  S192.507,300 
18
 StabiMy  ~reeofthe  four  largest  ~antees  gatianincrease  in funding  under  this option 
compared  with  the  current  formula.  Many  of the  smaller  grantees  lose  funding. 
However,  those  losing  the  most  proportionally  are  States  with  relatively  low case  counts 
that  would  lose  the  $100,000 floor.  Puerto  Rico  is adversely  affected  by the  removal  of 
the  income  factor  in the  current  formula.  Their  per  capita  income,  at  $4,172, is far 
below  that  of any other  grantee;  the  next  highest  is Virgin  Islands  ($9,440)  followed  by 
Mississippi  ($9,648). 
VARIATIONS 
If Congress  wished  to target  States  with  a higher  incidence  of AIDS  (cases  per  100,000), 
they  could  introduce  an incidence  factor  into  the  formula  such  as that  in the  current  Title 
I formula.  However,  this would  produce  some  inequities  in funding  per  case. 
As explained  under  Option  1, Congress  could  hold  harmless  the  States  losing  funding,  by 
funding  them  at the  prior  years levels  and  decreasing  allocations  to the  other  States. 
Some  people  we spoke  with  at the  beginning  of our  study  think  that  States,  especially 
rural  States,  need  a minimum  amount  of funding  two or more  times  greater  than  the 
current  $100,000  in order  to create  a continuum  of care.  If we apply  a $200,000  floor  in 
our  FY  1995 example,  nine  States  are  eligible.  As discussed  above  under  Equity, 
however,  such  a floor  would  reintroduce  funding  inequities  on a per-case  basis. 
Congress  could  decide  that  similar  to Title  I, Title  11funds  should  be  targeted  to the 
States  most  affected  by the  AIDS  epidemic.  For  example,  in FY  1995 Congress  could 
fund  only the  24 States  which  collectively  reported  91 percent  of all new  cases  nationally 
from  October  1991 to September  1993.  The  other  30 States,  each  with less than  1 
percent  of the  cases  reported  in that  period,  would  not  be  funded;  collectively,  these 
States  received  $15.5 million  in FY  1994, just  under  10 percent  of the  total  FY  1994 
formula  allocation. 
0K7TON  4: Distribute  lltk  I and  lltlk  II Fomudk  Fund  on a Per-NW-Case  BasiY as a 
Single Fomudh  Gmn& 
This  option  shows Title  I and  Title  11formula  funds  (only)  combined  into  a single 
formula  grant,  with  the  funds  distributed  on a per-new-case  basis  to both  States  and  cities 
(EMAs).  Our  example  uses  the  same  41 cities  as Options  1 and  2.  We  also  set  a 
$200,000  floor  for States  (not  territories)  to address  concerns  that  some  people  we spoke 
to raised  that  large  rural  States  with low case  counts  need  such  a floor  to  develop  the 
mandated  continuum  of care. 
To  calculate  the  option,  we first  establish  an average  amount  per  case  by dividing  FY 
1995 dollars  from  the  budget  request  ($374.7  million  in Title  I and  Title  II formula  funds, 
minus  SPNS)  by the  number  of new cases  reported  by States  for  2 years  prior  to FY 
1995.  We  then  allocate  funds  to each  State  based  on its new-case  count.  For  the  four 
States  with  allocations  under  $200,000, we impose  the  $200,000  floor  and  recalculate  the 
19
 per-case  allocation  for  the  other  50 States.  We  show the  projected  allocations  compared

with projected  FY  1995 Title  II allocations,  based  on the  current  formula.

This  option  shows the  dollar  distribution  of funds  across  States,  and  between  the  various

areas  in the  States  with EMAs.  Funds  could  be  distributed  in a variety  of ways.  One

way would  be  to give the  entire  grant  to States,  with  mandated  amounts  designated  for

each  EMA.  Another  way would  be  to grant  EMAs  their  allocations  directly,  with States

granted  the  balance-of-State  portions.  We  are  not  recommending  any one  specific

mechanism  by which  funds  should  be  disbursed  under  this option.

Tables  7 and  8 show the  results  of our  calculations.  Both  tables  array  States

alphabetically  for ease  of reading.  Table  7 shows the  results  of this option  for the  32

States  without  EMAs.  Table  8 shows the  results  for  the  22 States  with  one  or more

EMAs.  This  includes  Washington,  D. C., currently  a Title  I grantee,  which  includes  the

District  of Columbia,  currently  a Title  11grantee.  Table  8 also includes  cities  A through

J, which  as noted  under  Options  1 and  2, could  be  eligible  for Title  I funding  in FY  1995

under  the  current  formula  or our  proposed  formulas.

ANALYSIS

Ei@y  This  option  greatly  reduces  per-case  funding  inequities.  First,  it eliminates

inequities  between  EMAs  by basing  funding  on a new rather  than  a cumulative  case

count  and  then  calculating  a per-case  allocation.  Secondly,  it provides  a more  equitable

distribution  of funds  between  EMA  States  and  non-EMA  States.  This  formula  only

counts  the  new  cases  in EMA  States  once,  unlike  today  when  States  receive  Title  I

formula  funds  based  on the  cumulative  case  counts  of the  EMAs  there,  and  Title  11funds

based  on the  entire  States  new-case  count.

The  $200,000floor,  however,  does  produce  some  funding  inequities.  Under  this option,

the  average  per  case  allocation  for all States  excepting  the  four  receiving  $200,000  is

$2,598.  For  those  four  States,  their  per-case  allocations  range  from  $25,000  to $3,509.

Ta~efbzg  This  option  ensures  that  high-incidence  cities  are  targeted,  consistent  with

Congressional  intent.  The  $200,000  floor  ensures  that  every  State  receives  a minimum

amount  of funding,  helping  them  accomplish  a basic  goal  of Ryan  White  by establishing  a

continuum  of care.

FZexibi.Zi@This  option  provides  the  flexibility  to target  aid based  on changing  case

counts,  whether  increasing  or decreasing.

Reasonab14 Data  Requirement  The  data  required,  new case  counts,  would  be  the  same

as now.

StabiZity: Non-EMA  States  receive  proportionately  large  increases  under  this  option,

primarily  because  (former)  Title  I formula  dollars  are  added  to the  funds  available.  (The

20
 four  States  receiving  $200,000 gain  thanks  to the  floor.)  Tenofthe  22 EMA  States  gain 
increased  funding  12 of the  22, including  the  4 largest  States,  lose funds. 
TABLE 7 
OPTION  4 
STATES  WITHOUT  EMAs 
TITLE I AND TITLE  II FUNDS  DISTRIBUTED  ON A PER CASE  BASIS AS A SINGLE  FORMULA  GRANT 
WITH  A $200,000  FLOOR 
FY 1995 Budget  Request  (litfe  I formula  pottion;  Titfe II less SPNS):  $374,757,300 
  .. ...  -   -.  - ------ -
I  CURRENT  FORMULA  :  NEW  I  Diff, 
Cases  I  Actual  Projected  I  FORMULA  I  Old VS 
oct91- I  FY1994  FY1995  I  Projected  I  New 
GRANTEE  Sept 9(3  I  Titte II  Title II  I  FY 1995  I  Formula 
-    -   - .-------- -
ALABAMA  1170  1,421,553  1,662,633  I  3,039,501  819o 
ALASKA  78  100,000  100,OOO  I  202,633  1 os~o 
ARKANSAS  657  821,978  972,941  [  1,706,797  75% 
DELAWARE  472  515,066  609,662  [  1,226,192  101VO 
GUAM  3  3,379  4,529  [  7,794  727. 
101% 
HAWAII  499  545,494  645,679  [  1,296,334 
IDAHO  107  130,115  154,012  /  277,971  80?. 
INDIANA  1201  1,394,908  1,651,095  I  3,120,034  89% 
IOWA  282  333,799  395,104  I  732,598  85% 
KANSAS  523  605,134  716,271  I  1,358,683  w% 
KENTUCKY  523  641,709  759,554  I  1,3S8,683  79?0 
MAINE  176  205,421  243,148  457,224  88% 
MISSISSIPPI  699  900,115  1,065,429  1,815,907  70h 
MONTANA  57  100,000  100,OOO  200,000  100% 
NEBRASKA  247  292,135  345,788  641,672  86% 
836 
NEVADA  924,894  1,094,759  2,171,814  98% 
NEW  HAMPSHIRE  147  160,060  189,456  381,886  102?0 
NEW  MEXICO  397  485,763  574,978  1,031,352  79% 
NORTH  CAROLINA  1707  1,996,053  2,362,646  4,434,554  88% 
NORTH  DAKOTA  8  lW,000  100,000  200,000  1oo% 
OKLAHOMA  944  1,133,726  1,341,945  2,452,383  83% 
RHODE  ISLAND  407  452,600  535,723  1,057,331  97Y. 
SOUTH  CAROLINA  742  2,091,875  2,476,066  4,525,479  83% 
SOUTH  DAKOTA  31  100,OOO  100,000  200,000  100% 
TENNESSEE  409  1,675,354  1,983,047  3,660,390  85?0 
UTAH  415  511,096  604,964  1,078,113  78% 
VERMONT  86  100,000  117,118  223,416  91% 
VIRGIN  ISLANDS  61  68,703  93,655  158,470  69% 
VIRGINIA  2196  2,403,511  2,844,=6  5,704,909  10170 
WEST  VIRGINIA  139  173,904  205,843  361,103  75% 
WISCONSIN  924  1,069,752  1,266,221  2,400,426  90A 
WYOMING  40  100,OOO  100,OOO  200,000  1000/0 
TOTAL  18,183  $21,558,09$72 5,437,212 $47,683,648 
21
 TABLE8 
OPTION4 
STATESWITHEMAo 
TITLEI ANDTITLEII FUNDSDISTRIBUTEDONA PERCASEBASISASA SINGLEFORMULAGRANT 
WITHA $200,000 FLOOR 
FY19s5BudgetRaquaet(TitlaIformulaportion;Tiio IIIeeeSPNS):3374,757,300 
 
r  ~  ;  Diff: 
Caeae  I  CURRENT FORMUIA  CURRENT FORMUtA  I  NEWFORMUIA  ~  Old W 
Octsl - I  ActualFY1204  I  ProjaotedFf1995  Projaoted [  New 
GRANTEE  Sopt93  I  Tiie I  TRIOII  I  TM* I  TittoII  I  FY 1995  1  Formula 
.   
ARIZONA  I

Phoenix  1155  1,175,959  1,M6,800  3,000,533 
Bai.of stata  4s5  1,182,028 
Total  1610  1,855,3s3  1,s46,890  2,196,140  /  4,182,561  3% 
CALIFORNIA  28,172,752 
Los Angelaa  5ss4  12,617,337  12,S08,41 8  I  23,079,422 
Oakland

1788  2,379,548  3,234,108  4,844,980 
Orangcoo
.

1270  1,420,S50  2,030,S60  3,2S9,287 
Rhreida/San Barn.
 1400  1,289,021  2,118,013  3, S44,S38 
SanDieoo
 2105  2,506,ss0  3,520,s89  5,468,503 
SanFrenoieco
 8488  19,056,980  14,221,978  I  16,554,940 
CityE
 740  1,352,7S4  I  1,922,419 
city G
 8s5  1,393,140  I  1,770,537 
Baf.of stata
 2675  I  6,940,286 
Total
 26115  28,172,762  40,870,271  33,346,920  I  67, S43,213  -9% 
COLORADO
 I 
Denver
 1345  1,528,755  2,593,040  I  3,494,127 
Sal. of Stato
 263  883,238 
Total
 160s  1,7s4,570  2,593,940  2,124,158  I  4,1 77,3s5  -13% 
CONNECTICUT
 I  I 
NW Havan
 1305  1,235,428  2,510,956  I  3,390,212  I 
CityF
 732  0  1,901 ,s36  \ 
Bal.of State
 194  I  503,986  I 
Total
 2231  2,246,095  2,510,956  2,858,809  I  5,795,834  11% 
FLORIDA

ForlLaudwdal.
 2013  3,555,421  4,340,2S8  I  5,229,500 
Miami
 3747  6,875,102  7,235,528  9,734,196 
Orlando  1201  1,31s,044  2,372,8S0  I  3,120,034 
Tampa&  Pate
 1956  1,9S5,256  3,215,149  I  5,081,422 
WeetPalmBaach
 1316  1,959,888  3,114,023  I  3,41 8,7SS 
CityA
 1237  2,s01,110  3,213,558 
Sal. of Stato
 3150  I  8,1 S3,271 
Total
 14820  16,361,588  23,078,777  19,366,640  I  37,980,762  -12% 
GEORGIA

Atlanta
 2729  4,068,052  4,803,862  I  7,0ss,570 
Bal.of Stata
 1216  I  3,159,002 
Total
 3045  4,527,285  4,803,882  5,358,780  I  10,248,573  2% 
ILLINOIS

Chicago
 4233  4,708,676  5,875,ss1  I  10,996,758 
Bal. of Stata
 614  1,595,088  I 
Total
 4847  5,363,021  5,675,8S1  6,349,051  I  12,591,846  \  5% 
LOUISIANA
 I 
NW Orfaans
 108s  1,801,877  2,375,415  2,826,476  I 
Bal. of State
 013  2,371,850  \ 
Total
 2001  2,4S4,411  2,375,415  2,952,531  I  5,198,325  /  -2% 
MARYLAND

Baltimore
 22S7  2,232,355  3,563,947  5,967,293  \ 
Bal. of Stat.
 1152  2,992,739  I 
Total
 3449  3,825,968  3,883,947  4,201,905  I  8,960,032  I  11% 
MASSACHUSETTS
 I 
Boston
 2S27  3,021,876  4,281,146  7,603,947  I 
Bal. of State
 372  966,405  I 
Total
 3200  3,501,905  I  4,281,146  4,145,080  I  8,570,353  I  2% 
22
 ~~ 
cases  CURRENT FORMUIA  CURRENT  FORMLJIA  ~  NEW FORMUL4  Old Vi 
oot91 - ActualFY 1994  Projaotad FY 1995  Projected  New 
GRANTEE  Sapt93  Ttio I  Tie  II  Ttie I  TRlell  [  FY 1995  Formula 
MICHIGAN 
Detrott  1839  1,623,48S  2,404,019  4,777,472 
Sal. of state  697  1,810,711 
Total  2536  2,874,019  2,404,019  3,401 ,s57  6,588,183  12% 
MINNESOTA 
city D  754  0  1,958,762 
Bal.of Stato  107  277,971 
Total  881  970,420  1,148,646  2,236,761  49% 
MISSOURI 
Kansas City  1050  1,251,712  1,970,526  2,727,757 
Saint Louis  1131  1,178,039  1,7s6,574  2,938,184 
Bal. of Stat.  148  3s4,4s4 
Total  2329  2,71 6,(M1  3,756,102  3,214,924  6,050,425  -15% 
NEWJERSEY 
Bargan-Passaic  944  1,277,031  2,243,10S  2,452,383 
JerseyCity  932  2,306,302  3,533,059  2,421 ,20S 
Newark  2378  5,166,261  5,395,693  6,177,720 
CityJ  571  1,400,781  1,4s3,380 
BaLof state  1616  4,198,148 
Total  6441  6,650,657  12,572,S42  7,872,106  18,732,841  -22% 
NEW YORK 
Nassau/SutfoikCo.  1360  1,4Q3,882  2,426,528  3,S65,052 
NewYork  City  20451  45,835,360  32,980,861  53,128,913 
Bal. of Stat.  2432  6,318,005 
Total  24263  26,126,095  35,407,390  30,924,375  83,031,970  -5% 
OHIO 
o 
Cm H  667  1,706,797 
Bal. of Stat.  1529  3,972,134 
Total  2166  2,981 ,S39  5,678,930  47% 
OREGON 
City B  904  I  1,744,1s3  2,348,4SS 
Bal. of State  111  288,363 
Total  1015  1,170,946  I  1,744,1s3  1,386,000  2,636,832  -1 9% 
PENNSYLVANIA  I 
Philadelphia  3115  3,479,453  4,614,459  8,082,348 
Bai. of Stata  77s  2,023,736 
Total  3894  4,421,998  I  4,614,459  5,234,136  10,116,082  3% 
PUERTO RICO 
I 
Ponce  522  976,793  I  2,034,804  1,356,085 
San Juan  2713  4,561,223  5.147,513  7,048,005 
Bal. of State  1182  3,070,675 
Total  4417  7,521,643  I  7,182,317  8,903,057  11,474,784  40% 
TExAs 
Dallas  2564  3,445,1n  I  4,293,970  8,660,923 
Houston  3610  5,676,753  6,223,576  9,378,288 
city c  627  I  2,040,121  2,148,433 
city I  643  I  1,422,856  1,670,426 
Bal. of State  2464  6,401,136 
Total  10106  11,813.82Y  I  14060,323  13,983,535  28,259,207  -7% 
WASHINGTON  STATE 
Seattle  1467  1,617,949  I  2,780,750  3,811,066 
Sal. of State  565  1,467,793 
Total  2032  2,262, S86  I  2,760,750  2,678,129  5,278,659  -3% 
WASHINGTON  D.C.  5,225,S66 
Dist. of Col.  2W  2,155,787  I  2,551,692  5,439,927 
Washington D.C.  1611  I  6,157,582  4,704,731 
Total  I  6,157,582  2,551 ,6S2  10,144,658  14% 
TOTAL THESE STATES  125.901  $159,904,501  S166,600,793  I  $182,250,000  $167,070,088  S327,073,S52 
23
 VARIATIONS 
Using  3 years  of case  counts  might  guard  further  against  fluctuations  in year  to year 
allocations. 
As noted  under  previous  options,  Congress  could  retain  either  the  current  incidence 
factor  in the  Title  I formula  or the  income  factor  in the  Title  II formula,  in order  to 
further  target  funds  under  this option.  However  this would  produce  further  per-case 
funding  inequities. 
Alternatively,  Congress  could  use Title  I supplemental  funds,  as now, to meet  the  special 
needs  of specific  States  or cities. 
As noted  under  Option  1, Congress  could  fold Title  I supplemental  funds  into  this grant 
to make  a single  formula  grant.  This would  serve  to minimize  per-case  funding  inequities 
across  grantees,  as well as simplify administration. 
COMMENTS 
The PHS commentedon thisr eportt;h efultle xtoftheirc
ommentsisinAppendixD.

The AssistanSte cretarfyo rPlanninga ndEvaluatiocno mmentedverballyW.e
  thankall

thosewho commented.

Inresponset othecommentswe receiveda,n dinviewofinformationno w availabloen


theFY 1995budgetrequestw,e  recasteodu rfourproposedformulasl ookingf
orwardto

FY 1995.We believteh isu pdatedviewwillb emorehelpfudlu
 ringreauthorization

discussionWse.  alsomade othereditoricahla
 ngesinthereportinresponsetothe

commentsreceived.

24
 APPENDIX  A 
FUNDING  FORMUI.AS 
TllZE  k 
hPerCapit+Ian
 cidenee

fCumul.A
IDSCases

FundinEgm   = (.75TC)u mul.A IDSCaseEsM
 &_  + (.25-I-)

[CumulA.I DSCaseEsM
 A~oT)  erCapitaIncidenee

fCumul.AIDSCases

TOT 
Funding  StateX =  T  FStateX 
(F&ate~oT  ) 
FStat=e X(# NewAIDSCaseosf Stateqx )A v!zP.er  C.aUK-aIncomeU .S
(?Avg. PerCapitIan comeS
tatex
FStateT=o TE
  FStateX

x=1

0P170N 1 
FundinEg-  = (#ofNewAIDScasesEM AJ  TotaFlu
 ndsAmrouriated 
[# ofNewAIDS EMATOT1 
CiMC!S
A-1
 OP7TON  2

FundinEgM &=T  (mFE
&fT---)
FE- = (#NewAIDScasesofE MQ  ~AvQ.PerCaDitIan comeU
.S.

(vAvg.PerCapitIan comeE
@  1

FEMATO~=	 E  FEMAX

x=1

o?TloN  3 
FundingState. = (#of  NewAIDS cases*State.)  [TotalFundsADmomiated  ]

- (#ofNeWAIDS-State~o~J

0F770N 4

FundingGranteeX= (#  of New AIDSeasesG*ranteex) TotalFundsADDrODtiEited
I#  of NewAIDS cases Grantee~o~) 
$200,CKKFllo
 or Adjustment

Adjuste#d	 o fNew  = # ofNewAIDScaseGsr anteer-o#~ 
 ofNewAidsW=  of

AIDScaseGsr anteTeO T  Granteerse ceivifnlgo
or

AdjustedTotalFundsAppropriated= TotalFundsAppropriated- FundsAppropriat~ to

Granteesreceivingfloor

* # ofNewAIDScaseissa
 hvo-yearcasecount

EMA = EligibMleet ropolilt%aena
 

T = TotaFlu ndsAppropriaftoerdT itlIeo rTitl1e1
 

DF = DistributFiaocnt
or

FOR OPTION1ONLY  EM&  = Citiweist hnewlyr eportAeIdD Scasensa
 tionally

inthetoptwo-thiorfdtsh etotacla serse
 ported.

A-2
 APPENDIX  B 
AIDS CASES  and PER CAPITA  INCOME 
FOR METROPOLITAN  AREAS* 
.--.-z.  -  -...  .. ....----..-  ..-.... 
Cases  Re  orted  Per 
Cumulative  8 ct91 - Capita 
cm  cases  Rate  Sept 93  Income** 
--- ...  -.-. 
New York
 55699  155.3  20451  $16,281 
Los Angeles
 21850  61.1  8864  16,188 
San Francisco
 17424  279.8  19,965 
Chicago
 9376  34.5  4233  12,899 
Washington  D.C.
 58.7  3905  18,881 
Miami
 9563  120.1  3747  9,799 
Houston
 9312  72.8  3610  14,261 
Philadelphia
 7169  42.5  3115  12,W1 
Boston
 6627  40.2  2927  15,581 
Atlanta
 6679  56.4  2729  15,279 
San Juan,  PR
 6745  87.3  2713  6,383 
Dallas
 5891  64.4  2564  16,300 
Newark
 7413  80.6  2378  9,424 
Baltimore
 4661  66.6  2297  11,994 
San Diego
 4909  56.7  2105  16,401 
Fort Lauderdale
 88.4  2013  19,814 
~~~p:-St.  Pete
 :E  66.6  1956  14,374 
3529  28.7  1639  9,443 
Oakland
 4164  57.2  1788  14,676 
Riverside/San  Bern.
 2754  36.6  1480  13,879 
SeatUe
 3546  49.1  1467  18,308 
Nassau/Suffolk  CO.
 3266  38.4  1380  20,864 
Denver
 58.9  1345  15,590 
West Palm Beach
 F&  86<5  1316  15,712 
New Haven
 2731  60.4  1305  12,968 
Orange  Co. CA
 2832  29.0  1270  19,890 
City A
 2189  94.7  1237  13,661 
Orlando
 2291  1201  13,879 
Phoenix
 2245  E::  1155  14,096 
Saint Louis
 2245  33.3  1131  10,798 
New Orleans
 2905  46.9  1068  11,372 
Kansas City, MO
 45.4  1050  13,799 
Bergen-Passaic
 2476  52.8  21,234 
JeJe~  City
 3001  111.8  932  13,060 
1949  40.3  14,478 
Ci~  C
 1719  65.0  827  14,295 
City D
 1629  20.9  754  16,642 
City E
 1504  31.5  740  14,087 
City F
 1414  50.2  732  11,081 
City G
 1525  332  665  16,905 
City H  
 1441  20.6  657  9,258 
City I
 1605  31.1  643  na 
City J
 1548  34.2  571 
Ponce  PR
 1411  74.5  522  3,7:: 
Avg U.S.  Per Capita  Income:  $14,420 
Total Cumulative  Cases:  339,250 
Cumulative  Cases,  Metro.  Areas:  288,572 
Total New Cases:  144,084 
New Cases,  Metro.  Areas  120,4&l 

Reported  in HIV/AiDS  Suweillance  Report,  Issued  October  1993. 
Includes  three quarters  of reporting  under  new CDC  definition. 

*Reported  by Bureau  of the Census  as of 1989 (most  recent  available). 
B-1
 APPENDIX  C 
AIDS CASES AND PER CAPITA INCOME 
FOR STATES AND TERRITORIES 
...  ....-..---.-- .-... .-. 
Cases Reported  Per 
from Ott 91- Capita 
STATE  Sept 93*  Income** 
-.-  -  ---
California
 26115  16,409 
New York
 24263  16,501 
Florida
 14620  14,698 
Texas
 10106  12,904 
New Jersey
 8441  18,714 
Illinois
 4847  15,201 
Puerto Rico
 4417  4,172 
Georgia
 3945  13,631 
Pennsylvania
 3894  14,068 
Maryland
 3449  17,730 
Massachusetts
 3299  17,224 
Michigan
 2536  14,154 
Missouri
 2329  12,989 
Connecticut
 2231  20,169 
Virginia
 2196  15,713 
Ohio
 2186  13,461 
Dlst. of Cd.
 2094  18,681 
Washington
 2032  14,923 
Louidana
 2001  10,635 
South Carolina
 1742  11,897 
No*  Carolina
 1707  12,885 
Aruona
 1610  13,461 
Colorado
 1808  14,821 
Tennessee
 1409  12,255 
Indiana
 1201  13,149 
Alabama
 1170  11,486 
Oregon
 1015  13,418 
Oklahoma
 944  11,893 
Wisconsin
 924  13,276 
Minnesota
 861  14,389 
Nevada
 836  15,214 
Mississippi
 699  9,848 
Arkansas
 657  10,520 
Kentucky
 523  11,153 
Kansae
 523  13,300 
Hawaii
 499  15,770 
Delaware
 472  15,854 
Utah
 415  11,029 
Rhode Island
 407  14,981 
New Mexico
 397  11,246 
iowa
 262  12,422 
Nebraska
 247  12,452 
Maine
 176  12,957 
New Hampshire
 147  15,959 
West Virginia
 139  10,520 
idaho
 107  11,457 
Vermont
 86  13,527 
Alaska
 76  17,610 
Virgin Islands
 61  9,440 
Montana
 57  11,213 
Wyoming
 40  12,311 
South Dakota
 31  10,661 
North Dakota
 6  11,051 
Guam
 3  9,928 
TOTAL
 144.084 

Reported in CDCS HIV/AIDS Surveillance Report, issued October 1993. 
Inciudes three quarters of reporting under new CDC definition. 

*Reported  by Bureau of the Census as of 1989 (most recent available), 
c-1  APPENDIX  D 
AGENCY COMMENTS 
D-1  DEPARTMENTOF HEALTH& HUMAN SERVICES  PubIii Health Serwce 
Memorandum 
. FEB22]994 
Deputy Assistant  Secretary for Health Management  Operations

Office of Inspector General  (OIG) Draft Report  The Ryan White

Act :  Funding  Formulas, OEI-05-93-00330

Inspector General,  OS

Attached  are the Public Health Senices  comments  on the

subject draft report.  The report contained no recommendations

and our comments  reflect general concerns and suggest

technical  revisions  to narrative and tables.

 
Anthon

Attachment
 PUBLIC  I-IEALTH SERVICE  fPHS)  COMMENTS ON  THE 
OFFICE  OF  INSPECTOR  GENERAL  (OIG)  DRAFT REPORT: 
THE RYAN WHITE ACT: FUNDING FORMULAS,  0EI-05-93-O0330 
GENERAL  COMMENTS 
The PHS appreciates  the timeliness of the OIG examination  of

the formulas  governing the Ryan White Comprehensive  AIDS

Resources  Emergency  (CARE) Act funds and proposed  options to

change the formulas.  Since this report is the first in a

series of studies intended to provide information  that may be

useful during  the reauthorization  of the Ryan White CARE Act,

we offer the fbllowing comments for your consideration.

Background 
Wy  formula  funding  approach  to  ciistri,buting  HIV/AIDS  funds

will  not  fully  address  the  total  need  for  assistance.  It  is

reasonable  that  a  formula  should  take  into  account  new  cases

reported,  and  perhaps  include  multiple  years  of  reporting,  as

proposed  with  the  2  or  3  Year  case  count.  Over  time,  the

possible  contribution  to  funding  disparity  caused  by  the

expanded  AIDS  case  surveillance  definition  should  subside.

This  decrease  in  cii.sparity  will  occur  once  all  States  have

fully  implemented  Surveillance  methods  under  the  new

definition  and  individuals  who  meet  the  new  case  definition

are  fully  incorporated  into  case  counts.

Ryan White  funding has provided an incentive to timely 
reporting  of AIDS cases since there i.sa direct  financial 
incentive  for  a  State  to  report  cases  by  the  funding  cut-off 
date.  On  the  other  hand,  States  have  not  had  sufficient 
resources  to  adequately  conduct  other  aspects  of  AIDS 
surveillance,  such  as  followup  cases  reported  with  no 
identified  risk.  Any  options  which  might  be  proposed  and/or 
adopted  that would expand data required of State-AIDS

surveillance  or HIV sero-surveillance  programs  should

concurrently  provide sufficient additional  resources  for

strengthening  these programs.

QF&&ZU2

In reviewing  the options for funding formulas presented  in the

OIG report, a clarification  on reporting of AIDS-related

deaths would be useful.  The PHS aurees that a reasonable

approach would be to base funding zormulas on persons  living

with AIDS,  as opposed  to  cumulative  or  incident  AIDS cases 
which may include deceased persons.  The reason stated i.nthe 
report however,  that  this  is  not  feasible  since  reporting  of 
AIDS-relateci  deaths  is  not  required  by  Federal  law  i.s 
incorrect.  Indeed,  neither  reporting  of  AIDS  cases  nor  AIDS-
D-3  2

related  deaths  is required by Federal law.  However,

ascertainment  of vital status of persons reported with AIDS is

done routinely  by all State health departments  through review

of death  certificates.  States voluntarily  share such

information  with the Centers for Disease Control  and

Prevention  (CDC).  Accurate  State-specific  data  prevalence 
(the  number  of  persons  living  with  AIDS)  by  city  and  State 
would  require  that:  (1)  AIDS-case  reports  be  updated  promptly 
when  persons  die,  and  (2)  movements  of  persons  with  AIDS  from 
city-to-city  or  State-to-State  be  accurately  monitored.  While 
States  use  death  certificates  to  update  AIDS  case  reports,  to 
base  funding  on  such  updates  may  create  a  disincentive  to 
complete  death  reporting.  In  addition,  tracking  the  movement 
of  individuals  from  one  geographic  area  to  another  during  the 
course  of  their  HIV  illness  would  be  beyond  the  scope  of 
affected  communities  (e.g.,  this  would  require  making  a  change 
of  residence  in  a  person  with  AIDS  a  reportable  event  to 
health  departments). 
Criteria 
The OIG report examines each option against  five criteria that

they consider  useful in assessing any new allocation

methodology:  equity, targeting,  flexibility,  reasonable  data

requirements  and stability.  In the case of targeting, the

report  states that funds should be targeted  to areas with the

greatest  concentration  of cases, and is not spread so thin as

to be ineffective.  The PHS disagrees that $1 million  to

$2 million  for new Title I grantees is ineffective.  There is

substantial  evidence that funds to new Title  I grantees  are

extremely  useful in creating a community planning  process as

well as filling gaps in a continuum of care.

The criterion  of stability seems inconsistent  with the

criterion  of flexibility.   The tables clearly demonstrate

that proposed  changes in funding formulas result in

substantial  disruptions  of current funding and future funds.

The  flexibility  criterion,  combined with the  targeting

criterion  will create a scenario in which certain  States and

eligible  metropolitan  areas could move in and out of funding

as demographic  changes occur, resulting in major disruptions

in stability .

In the past, the formula was based on cases reported  from 
statistical  units  (Metropolitan Statistical Areas  - MSAS) as 
published  in CDCS HIV/AIDS Surveillance Reports.  Because 
these MSAS are not administrative  units, MSAS  frequently  cross 
administrative/legal  jurisdictions.  The result  is that CDC 
receives  numerous ad hoc requests by the various  agencies  that  3 
use the Ryan White  formula (e.g., HRSA, HUD) to parcel out

these cases across State/county/city  lines.

In addition,  part of the formula requires calculation  of a

rate to ensure equitable distribution  of funds.  However,

because  it is difficult to obtain accurate denominator  data,

these rates are only crude estimates of the impact of the

epidemic  in the targeted areas, and they are not responsive  to

changes  in the demographics  of the affected populations.

Denominators  for the calculation of rates are not readily

available,  especially by geographic and demographic  subgroups.

There are necessary delays following the decennial  census

until  stratified population counts are made available  to CDC

by the Bureau of the Census.  Official estimates  of annual 
population  change  by  demographic/geographic  substrata  are 
frequently  unavailable.  Therefore,  CDC is  required  to  develop 
crude  estimates  of  annual  population  change  with  limited 
statistical  resources. 
Another  criterion  to  be  considered  in  developing  funding 
options  is  reasonable  data  requirements.    Data  used  in  the 
formulas  to  distribute  funds  should  be  readily  available  and 
reliable.  It  is  reasonable  to  base  funding  formulas  on  AIDS 
statistics  because  national  AIDS surveillance  is currently  the 
only system that collects data completely and consistently  on

persons who are in care, or require care, for severe HIV

disease.  However, these data are readily available  and

r~liable  only insofar as concerted collaborative  efforts

among CDC and other State/local health departments  continue to

prioritize  the collection of AIDS suneillance  data.

lft in the future,  AIDS  suneillance  were  reemphasized  or  the 
quality  and  completeness  of  the  data  were  compromised  due  to 
fiscal  or  persofiel  constraints  at  Federal/State/local  levels, 
then  long  term  legislation  tied  to  these  data  could  result  in 
inequitable  distribution  of  resources.  The  data  are  available 
and  reliable  and  are  dependent  on  the  continued  support  for 
the  AIDS  surveillance  system. 
Methods 
The  tables  provided  in  the  report  do  not  i.nclucie  comparative 
data  necessary  for  any  meaningful  analysis  and  the  inclusion 
of  Fiscal Year (FY) 1994 data would provide the needed 
clarification.  Specifically,  for Tables 4 through  7:

(1) formulas proposed should be based on FY 1993 data for

comparison  of actual ET 1993 awards and changes that  would 
have  occurred  if DrODOSed  formulas  had  been  used: and 
(2) actual data oh F? 1994 awards should have be&  provided, 
again to highlight how proposed formulas would  have  changed 
135
 4

the  funding picture.  If actual FY 1994 data had been used, 
major  funding disruptions  that would result  from formula 
changes would have been highlighted,  e.g., a 31 percent 
decline  in funding for New York City and a 46 percent decline 
in funding  for San Francisco in Table 4.  By comparing 
proposed  FY 1994  to actual FY 1993, any funding disruptions 
caused by the formula change were masked by the 76 percent 
Title  I funding increase from FY 1993 to FY 1994, an increase

not likely to be repeated in future years.

TECHNICAL  COMMENTS 
(1) Definitions:  The report uses the words  equity and

parity as if they mean the same thing.  Equity means

fairness,  and is not an absolute term.  Parity means equality

as in amount,  status or character.  Equal funding for each

recently  reported AIDS case is one interpretation  of equity,

but many other interpretations  are equally valid.  For

example,  an interpretation  inconsistent with the stated

purpose  of the Ryan White CARE Act is in the report itself,

to establish  services for AIDS and HIV patients  who would

otherwise  have no access to health care.  It may be useful to

provide  a more extensive discussion  of why  equitywas

selected  as the principal determinant  for the analysis and

driving  force behind the proposed allocation  formulas.  Is

this the factor that best describes the need for Ryan White

services?

(2) The cover page should be more accurately  titled,  The  Ryan 
White CARE Act: Funding Formulas. 
(3)  Page  2,  second  full  paragraph.  The  last  sentence  should 
read:  The  Health  Resources  and  Services  Administration 
(=A)  in  the  Public  Health  Service  administers  Titles  I  and 
II  of  the  Act.  The  HRSA and  the  Centers  for  Disease  Control 
and  Prevention  (CDC)  were  to  administer  Title  III  of  the  Act. 
(4)  page  2,  second  paragraph  under  Title  I  Section.  The  last 
sentence  should  be  rewritten  as  follows:  HRSA  is  required  to 
allocate  funds  to  grantees  within  60  days  after  an 
appropriation  becomes  available. 
(5) Page 2, third paragraph under Title I Section  should be 
amended  to read,  as  supplemental grants to eligible 
metropolitan  areas  which have demonstrated  a severe need for 
additional  financial  assistance  to  address  the  epidemic and 
the ability  to allocate funds expeditiously  to areas of 
greatest  need.  5

(6) On Page 3, Line 2, insert areas most affected as well as

between  the words  on and the.

(7)  3, first paragraph.  The last sentence should be 
Page 
deleted and replaced with:  To get the money out quickly to 
meet the greatest  needs, States are required to allocate  75 
percent of services within 120 days after an appropriation 
becomes available. 
(8)  page  3,  Title III Section, first sentence should read: 
Title III(a), intended to provide formula grants to States 
for early intervention  semices  on an outpatient  basis, and 
intended to be administered by CDC, has not been funded to 
date.  
(9) Page 3, second paragraph.  The last sentence: delete the

word  drugs and insert the words  *approved treatments.

(10  )  Under  the  heading  of  Special  Projects  of  National

Si.gni.ficance  rewrite  the  last  two  sentences  as  follows:  ln

FY  1991,  HRSA  awarded  approximately  $4.4  million  for

22  projects.  These  projects  continued  in  FY  1992  with

$5.2  million  and  four  new  projects  funded  with  an  additional

$836,000.  In  FY  1993,  nearly  $6.1  million  was  awarded  to

support  27  projects.  An  additional  $2.97  million,

$4.84  million,  and  $5.10  million  in  FY  1991,  1992,  and  1993,

respectively,  was  mandated  by  Congress  to  be  used  for

reimbursement  of  dental  health  providers  who  provided

uncompensated  care  to  people  with  HIV/AIDS.

(11  )  Page 4, SCOPE  AND  METHODOLOGY.  The  first  line  in  the 
first  paragraph  should  read:  The  Ryan  White Act will be 
reauthorized  inFY 1996. 
(12)  Page  4,  first  paragraph,  second  sentence,  third  line. 
Replace  the  word  debate with discussion. 
(13  )  Page 5, first  paragraph,  mentions  the  implementation  of 
the  January  1993  AIDS  case  definition  as  an  important  backdrop 
with  significant  impact on  the  distribution  of  funds.  Another 
important  backcirop  factor  with  significant  hpact  which  has 
not  been  mentioned  i.s  the  December  31,  1992  Offf.ce  of 
Management  and  Budget  (OMB)  definition  of  Metropolitan 
Statistical  Areas.  The  new  definitions  in  many  cases  are 
substantially  different  than  the  definitions  they  replaced, 
and  they  significantly  affect  the  numbers  of  AIDS  cases being 
reported in affected metropolitan  areas.  For example,  New 
Haven, CT now includes Bridgeport/Stamford  CT, which  increases 
the number of AID cases reported in this metropolitan  area,

and would affect any funding based on AIDS cases reported.
 .  .,
6

(14) Page 5.  Rewrite the first sentence of the third

paragraph  as follows:  Title II funds are distributed  to all

States,  Puerto Rico, the District of Columbia,  and up to five

U.S. territories  via a formula.

(15) Page 5, fourth paragraph is not accurate.  The CDCS

expanded  AIDS surveillance  case definition  includes all HIV-

infected  persons who have < 200 CD4+ T-lymphocytes/uL  or have

CD4+ T-lyreDhocvtes,  14 Percent of total T-1vnmhocvtes,  and

adds pulmonary  TB, recurrent pneumonia, and invasive uterine

cervical  cancer.  The CD4+ T-cell percentage  has been omitted

in the OIG report.

(16) Page  6.  The second sentence in the second paragraph 
should  read:  Partly as a result of the new CDC definition, 
the number  of eligible cities increased to 34 in l?y1994 and 
HRSA expects  an increase by as many as 4 to 7 in FY 1995. 
(17)  10.  Add to the second paragraph:  Additionally, 
Page 
the number  and the proportion of people with AIDS and H~ 
requiring  care, those already in care, and fie insurance 
status  of those people, is not available. 
(18)  Page 10, third paragraph,  last sentence.  The report 
never  acknowledges  that services are also provided  to people 
with HIV infection who do not have an AIDS diagnosis. 
(19)  Page  11.  The first paragraph under Option  I needs 
clarification;  denominator  is cases reported to Title I 
eligible  metropolitan  areas  (-). 
(20)  Page  11 second  paragraph,  last  sentence.  The  proposed 
variation  is  the  way  supplemental  funds  are  currently  awarded. 
(21)  Page 12,  Table  4.  A  column  giving  the  actual  FY  1994 
formula  allocation,  which  i,s  now  available,  would  be  helpful. 
(22) Page 13.  In regard to the methodology  for Option  I,

second paragraph,  comparison  should also be made to the actual

1994 distribution.  This distribution  would help identify

instances  of service delivery disruption  in cities which get

level or decreased  funding and data which does not take into

account  full year funding of services providers.

(23)  Page  14, second paragraph.  The statement to hold 
[cities that would lose funds] harmless at the FY 1993 
levels,  fails to recognize that changes may occur in

FY 1996.

D-8
 7

(24) Page 14, third paragraph.  The variation  collapsing  all

Title  I funds into a formula grant fails to take into account

the role of the supplemental grant.

(25) Page 15.  Table 5 should add a column for actual

distribution  of 1994 dollars.

(26)  Page 16.  Option 3: first paragraph.  This option does 
not examine  the impact of dollars per case from Title I in the

equity discussion.

(27) Page 17.  Table 6 should include a column with actual

FY 1994 dollars.

(28)  Pages 21-22,  Table 7.  States without  EMA include the 
District  of Columbia.  Under the CARE Act, the District of 
Columbia  receives Title II funds and also qualifies  as an EMA 
and receives Title I funds.  The amounts proposed  for Guam and 
the Virgin  Islands fail to take into account that the minimum 
Title  II grant awards apply only to States and do not include 
territories. 
(29) Tables  7 and 8.  Add a column with FY 1994 actual

dollars.

(30)  Table  8 should include the District of Columbia. 
D-9