Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Proposed Rules 64919

TABLE IX.—RULES LOG NUMBER, RULES REVISION, AND AFFECTED AREAS FOR TEXAS NOX SIP—Continued

Rule log No. Rule revision Affected areas

1999–055D–117–AI ......................... Point sources in D/FW area .......... Collin, Dallas, Denton, and Tarrant counties.

If you are in one of these Texas

counties, you should refer to the Texas

NOX rules to determine if and how

today’s action will affect you.

Administrative Requirements

Under Executive Order 12866 (58 FR

51735, October 4, 1993), this proposed

action is not a ‘‘significant regulatory

action’’ and therefore is not subject to

review by the Office of Management and

Budget. This proposed action merely

approves State law as meeting federal

requirements and imposes no additional

requirements beyond those imposed by

State law. Accordingly, the

Administrator certifies that this

proposed rule will not have a significant

economic impact on a substantial

number of small entities under the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.).

Because this rule proposes to approve

pre-existing requirements under State

law and does not impose any additional

enforceable duty beyond that required

by State law, it does not contain any

unfunded mandate or significantly or

uniquely affect small governments, as

described in the Unfunded Mandates

Reform Act of 1995 (Public Law 104–4).

For the same reason, this proposed rule

also does not significantly or uniquely

affect the communities of tribal

governments, as specified by Executive

Order 13084 (63 FR 27655, May 10,

1998).

This proposed rule will not have

substantial direct effects on the States,

on the relationship between the national

government and the States, or on the

distribution of power and

responsibilities among the various

levels of government, as specified in

Executive Order 13132 (64 FR 43255,

August 10, 1999), because it merely

approves a State rule implementing a

federal standard, and does not alter the

relationship or the distribution of power

and responsibilities established in the

Clean Air Act. This proposed rule also

is not subject to Executive Order 13045

(62 FR 19885, April 23, 1997), because

it is not economically significant.

In reviewing SIP submissions, EPA’s

role is to approve State choices,

provided that they meet the criteria of

the Clean Air Act. In this context, in the

absence of a prior existing requirement

for the State to use voluntary consensus

standards (VCS), EPA has no authority

to disapprove a SIP submission for

failure to use VCS.

It would thus be inconsistent with

applicable law for EPA, when it reviews

a SIP submission, to use VCS in place

of a SIP submission that otherwise

satisfies the provisions of the Clean Air

Act. Thus, the requirements of section

12(d) of the National Technology

Transfer and Advancement Act of 1995

(15 U.S.C. 272 note) do not apply.

The proposed rule does not involve

special consideration of environmental

justice related issues as required by

Executive Order 12898 (59 FR 7629,

February 16, 1994).

As required by section 3 of Executive

Order 12988 (61 FR 4729, February 7,

1996), in issuing this proposed rule,

EPA has taken the necessary steps to

eliminate drafting errors and ambiguity,

minimize potential litigation, and

provide a clear legal standard for

affected conduct.

The EPA has complied with Executive

Order 12630 (53 FR 8859, March 15,

1988) by examining the takings

implications of the rule in accordance

with the ‘‘Attorney General’s

Supplemental Guidelines for the

Evaluation of Risk and Avoidance of

Unanticipated Takings’’ issued under

the executive order. This proposed rule

does not impose an information

collection burden under the provisions

of the Paperwork Reduction Act of 1995

(44 U.S.C. 3501 et seq.).

List of Subjects in 40 CFR Part 52

Environmental protection, Air

pollution control, Carbon monoxide,

Hydrocarbons, Nitrogen dioxide,

Nitrogen oxides, Nonattainment, Ozone,

Reporting and recordkeeping

requirements, Volatile organic

compounds.

Authority: 42 U.S.C. 7401 et seq.

Dated: October 16, 2000.

Gregg A. Cooke,

Regional Administrator, Region 6.

[FR Doc. 00–27925 Filed 10–30–00; 8:45 am]

BILLING CODE 6560–50–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 435

[HCFA–2086–P]

RIN 0938–AK22

Medicaid Program; Change in

Application of Federal Financial

Participation Limits

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Proposed rule.

SUMMARY: This proposed rule would

change the current requirement that

limits on Federal Financial Participation

(FFP) must be applied before States use

less restrictive income methodologies

than those used by related cash

assistance programs in determining

eligibility for Medicaid.

This regulatory change is necessary

because the current regulatory

interpretation of how the FFP limits

apply to income methodologies under

section 1902 (r)(2) of the Social Security

Act (the Act) unnecessarily restricts

States’ ability to take advantage of the

authority to use less restrictive income

methodologies under that section of the

statute. While the enactment of section

1902(r)(2) of the Act could be read in

the limited manner embodied in current

regulations the statute does not require

such a reading, and subsequent State

experience with implementing section

1902(r)(2) calls into question the current

regulation’s approach.

DATES: We will consider comments if

we receive them at the appropriate

address, as provided below, no later

than 5 p.m. on November 30, 2000.

ADDRESSES: Mail written comments (1

original and 3 copies) to the following

address: Health Care Financing

Administration, Department of Health

and Human Services, Attention: HCFA–

2086–P, P.O. Box 8010, Baltimore, MD

21244–8010.

To ensure that mailed comments are

received in time for us to consider them,

please allow for possible delays in

delivering them.

If you prefer, you may deliver your

written comments (1 original and 3

copies) to one of the following

addresses:

64920 Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Proposed Rules

Room 443-G, Hubert H. Humphrey

Building, 200 Independence Avenue,

SW., Washington, DC 20201, or

Room C5–16–03, 7500 Security

Boulevard, Baltimore, MD 21244–

8010.

Comments mailed to the above

addresses may be delayed and received

too late for us to consider them.

Because of staff and resource

limitations, we cannot accept comments

by facsimile (FAX) transmission. In

commenting, please refer to file code

HCFA–2086–P.

Comments received timely will be

available for public inspection as they

are received, generally beginning

approximately 3 weeks after publication

of a document, in Room 443–G of the

Department’s office at 200

Independence Avenue, SW.,

Washington, DC, on Monday through

Friday of each week from 8:30 to 5 p.m.

(phone: (202) 690–7890).

FOR FURTHER INFORMATION CONTACT: Roy

Trudel, (410) 786–3417.

SUPPLEMENTARY INFORMATION: Generally,

in determining financial eligibility of

individuals for the Medicaid program,

State agencies must apply the financial

methodologies and requirements of the

cash assistance program that is most

closely categorically related to the

individual’s status. Our regulations at

42 CFR 435.601 set forth the

requirements for State agencies applying

less restrictive income and resource

methodologies when determining

Medicaid eligibility under the authority

of section 1902(r)(2) of the Social

Security Act (the Act). Current

regulations at 42 CFR 435.1007 provide

that when States use less restrictive

income and resource methodologies

under section 1902(r)(2), the limits on

Federal Financial Participation (FFP) in

section 1903(f) of the Act apply before

application of any less restrictive

income methodologies. We are

proposing to amend that regulation to

change this requirement so that FFP

limits would apply after application of

any less restrictive income

methodologies under section 1902(r)(2)

of the Act.

The adoption of this policy would

give States additional flexibility in

setting Medicaid eligibility

requirements. Also, we believe adoption

of this policy reflects the intent of

Congress to move the Medicaid program

away from cash assistance program

rules, as evidenced by enactment of the

Personal Responsibility and Work

Opportunity Reconciliation Act of 1996,

which severed the link between the

AFDC program and Medicaid.

I. Background

Section 2373(c) of the Deficit

Reduction Act of 1984 (DRA)

established a moratorium period

beginning on October 1, 1981, during

which the Secretary was prohibited

from taking any compliance,

disallowance, penalty, or other

regulatory action against a State because

a State’s Medicaid plan included a

standard or methodology for

determining financial eligibility for the

medically needy that the Secretary

determined was less restrictive than the

standard or methodology required under

the related cash assistance program.

The provisions of the DRA

moratorium were clarified by section 9

of the Medicare and Medicaid Patient

Program Protection Act of 1987. Section

9 amended section 2373(c) of DRA to

specify that the moratorium applied to

the Secretary’s compliance,

disallowance, penalty, or other

regulatory actions against a State

because the State plan is determined to

be in violation of provisions of the Act

for coverage, as optional categorically

needy, of certain aged, blind, and

disabled individuals who were in

institutions or receiving home and

community-based services, as well as

methodologies for determining financial

eligibility of the medically needy.

The moratorium applied to an

amendment or other changes in

Medicaid State plans, or operation or

program manuals, regardless of whether

the Secretary had approved,

disapproved, acted upon, or not acted

upon the amendment or other change,

or operation or program manual.

Authority to adopt less restrictive

financial methodologies as part of a

State’s Medicaid plan was added to the

law in 1988. Section 303(e) of the

Medicare Catastrophic Coverage Act of

1988, enacted on July 1, 1988 (and

amended by section 608(d)(16)(C) of the

Family Support Act of 1988), amended

the Act to permit States to use less

restrictive financial methodologies in

determining eligibility not only for the

medically needy eligibility group at

section 1902(a)(10)(C) of the Act, but

also for specified categorically needy

groups of individuals. These

categorically needy groups include

qualified pregnant women and children

(section 1902(a)(10)(A)(i)(III) of the Act),

poverty level pregnant women and

infants (section 1902(a)(10)(A)(i)(IV) of

the Act), qualified Medicare

beneficiaries (section 1905(p) of the

Act), all of the optional categorically

needy groups specified in section

1902(a)(10)(A)(ii) of the Act, and

individuals in States that have elected,

under section 1902(f) of the Act, to

apply more restrictive eligibility criteria

than are used by the Supplemental

Security Income (SSI) program. This

provision of the Medicare Catastrophic

Coverage Act was effective for medical

assistance furnished on or after October

1, 1982. This authority was codified in

a new section 1902(r)(2) of the Act.

The application of FFP limits prior to

use of section 1902(r)(2) more liberal

income methodologies was based on the

Senate Report accompanying the 1987

amendment to the DRA moratorium

(Senate Report No. 109, 100th Congress,

1st session at 24–25) which stated that:

The moratorium does not eliminate the

limits on income and resources of eligible

individuals and families under section

1903(f) (including the requirements that the

applicable medically needy income level not

exceed the amount determined in accordance

with standards prescribed by the Secretary to

be equivalent to 1331⁄3 percent of the most

generous AFDC eligibility standard, and that

the income of individuals receiving a State

supplementary payment in a medical

institution or receiving home and

community-based services under a special

income standard not exceed 300% of the SSI

standard). The moratorium also does not

permit States Medicaid benefits to those who

are not ‘‘categorically related’’ individuals

(that is, individuals who would not be

eligible for Medicaid, regardless of the

amount of their income and resources).

Since, as the legislative history

indicates, section 1902(r)(2) is

essentially the codification of the DRA

moratorium, we continued to apply the

FFP limits at section 1903(f) of the Act

when developing the implementing

regulations for section 1902(r)(2).

However, subsequent experience has

shown that the policy we adopted

restricted the flexibility Congress

intended States to have when it enacted

section 1902(r)(2) in ways we did not

foresee when we published the current

regulations. The real effect of the policy

we adopted was to make it almost

impossible for States to actually use less

restrictive income methodologies for

many eligibility groups, including the

medically needy, because use of such

methodologies would violate the FFP

limits. States have noted that the

application of the FFP limits prior to

use of less restrictive income

methodologies unnecessarily limits

their flexibility to expand Medicaid

eligibility and simplify program

administration by modifying cash

assistance financial methodologies that

do not work well in the Medicaid

context.

Further, the passage of Pub. L. 104–

193, the Personal Responsibility and

Work Opportunity Reconciliation Act of

1996, leads us to believe that the current

Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Proposed Rules 64921

application of the FFP income limits

under section 1902(r)(2) no longer

reflects Congressional intent. In

enacting this legislation, Congress

clearly expressed its intent that States

should have the flexibility to depart

from cash assistance program-based

income criteria to define Medicaid

eligibility. Given that Congress chose to

sever the link between cash assistance

and Medicaid under this legislation, we

believe it is valid to conclude that

Congress did not actually intend that

FFP limits, which are based on cash

assistance standards, apply prior to use

of less restrictive financial

methodologies under section 1902(r)(2)

of the Act for those eligibility groups to

which section 1902(r)(2) applies.

Also, section 1903(f) was enacted

prior to section 1902(r)(2). Had Congress

intended that the FFP limits apply prior

to use of less restrictive income

methodologies, it could have amended

section 1903(f) to so state. The fact that

section 1903(f) was not so amended

indicates that Congress intended that

the FFP limits apply after, not before,

use of less restrictive income

methodologies.

Thus, this change will give States

needed additional flexibility in setting

Medicaid eligibility requirements. Even

though section 1902(r)(2) was derived

from the DRA moratorium, its own

legislative history did not contain any

similar discussion of its interaction with

the 1903(f) FFP limits. As such, we do

not believe it is necessary to consider

the legislative history of DRA to be

determinative of Congressional

understanding of the operation of

section 1902(r)(2).

II. Provisions of the Proposed

Regulations

As explained above, we are proposing

to amend § 435.1007 to change the

requirement that FFP limits apply prior

to use of any less restrictive income

methodologies under section 1902(r)(2)

of the Act.

Section 435.1007 Categorically Needy,

Medically Needy, and Qualified

Medicare Beneficiaries

In 435.1007(b), we intend to delete

the phrase ‘‘does not exceed’’ and

replace it with the word ‘‘exceeds’’. This

is purely an editorial change to correct

an error in wording in the current

regulation.

In § 435.1007, we are proposing to

amend paragraph (e) by removing the

phrase ‘‘are applied and before the less

restrictive income deductions under

§ 435.601(c)’’ and replacing it with the

following language: ‘‘and any income

disregards in the State plan authorized

under section 1902(r)(2)’.

We are proposing to further amend

§ 435.1007 by adding a new paragraph

(f) to read: ‘‘A State may use the less

restrictive income methodologies

included under its State plan as

authorized under § 435.601 in

determining whether a family’s income

exceeds the limitation described in

paragraph (b) of this section.’’

III. Collection of Information

Requirements

Under the Paper Work Reduction Act

(PRA) of 1995, we are required to

provide 60-day notice in the Federal

Register and solicit public comment if

Office of Management and Budget

review and approval is needed because

a proposed regulation imposes a

collection of information requirement.

However, this proposed regulation

does not impose any new collection of

information requirements. Whether to

take advantage of the flexibility the

proposed rule makes available is strictly

at the option of each State. If a State

chooses to use any less restrictive

income methodologies under the

proposed rule, it would do so by using

the existing process for amending its

State Medicaid plan. The proposed rule

imposes no new or different processes

or information requirements on States.

IV. Response to Comments

Because of the large number of items

of correspondence we normally receive

on Federal Register documents

published for comment, we are not able

to acknowledge or respond to them

individually. We will consider all

comments we receive by the date and

time specified in the DATES section of

this preamble, and, if we proceed with

a subsequent document, we will

respond to the major comments in the

preamble to that document.

V. Regulatory Impact Statement

A. Overall Impact

We and the Office of Management and

Budget have examined the impacts of

this rule as required by Executive Order

12866 (September 1993, Regulatory

Planning and Review) and the

Regulatory Flexibility Act (RFA)

(September 19, 1980, Pub. L. 96–354).

Executive Order 12866 directs agencies

to assess all costs and benefits of

available regulatory alternatives and, if

regulation is necessary, to select

regulatory approaches that maximize

net benefits (including potential

economic, environmental, public health

and safety effects, distributive impacts,

and equity). A regulatory impact

analysis (RIA) must be prepared for

major rules with economically

significant effects ($100 million or more

in any one year). This rule is considered

to be a major rule with economically

significant effects.

The Medicaid and Medicare cost of

the proposed rule is projected to be

$960 million over five years. This

estimate is based on available cost data

on medically needy income standards

and medically needy spending levels.

Such data could be obtained for only

two States (Utah and California). Using

that available data, we projected the

potential cost of the proposed rule by

assuming that within two years of

enactment about one fourth of States

(i.e., States representing at least 25% of

total Medicaid program costs) would

implement changes similar to those

proposed by Utah and California. The

result was an estimated potential cost of

$860 million over five years in Medicaid

costs and about $100 million in

Medicare costs as explained below.

Arriving at the Medicaid and

Medicare costs was difficult due to the

fact that implementation of the option

under this rule is entirely at the

discretion of the State. Further, States

that choose to exercise the option have

great latitude in establishing the extent

to which, and the eligibility groups for

which, the option would be applied

under their State Medicaid plan. As a

result of limited data being available, we

invite comments on this section.

Benefits of the Proposed Rule Change

We believe the proposed change will

benefit both States and individuals in a

number of ways. For example, under

normal eligibility rules, States are

required to count many kinds of

income. Some of these types of income

are administratively burdensome to deal

with, and often do not materially affect

the outcome of the eligibility

determination. Some examples are the

value of food or shelter provided to an

applicant (called in-kind support and

maintenance), income belonging to a

parent of a child, or a spouse who is not

applying for benefits (called deemed

income), and low amounts of income

such as interest earned on savings

accounts. The proposed rule would

allow States to use income disregards to

simplify the process of determining

eligibility by not counting types of

income that primarily impose an

administrative burden.

Medically Needy Income Limits

Under a medically needy program,

States can choose to cover under

Medicaid individuals with income that

is too high to otherwise be eligible, but

64922 Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Proposed Rules

who, by subtracting incurred medical

expenses from their income, could

reduce their income to the State’s

medically needy income standard. This

process is known as spending down

excess income, or ‘‘spenddown’’.

However, in many States the

medically needy income standard is

very low; in at least 22 States, the

medically needy income standard is

actually lower than the income standard

for SSI benefits ($512 a month for an

individual in 2000). In four States, the

medically needy income standard is less

than $200 a month. This creates a

situation where individuals whose

income is just slightly over the limit that

would allow them to receive Medicaid

as SSI recipients must spend down a

certain amount of ‘‘excess’’ income to

reach the medically needy income level.

For example, a person with $512 a

month in income can be eligible for SSI

and get free Medicaid in most States. A

person with just $1 more cannot be

eligible for SSI, and thus cannot receive

Medicaid based on receiving SSI

benefits. Depending on a particular

State’s medically needy income level,

such an individual may have to spend

over $300 on medical care each month

just to reach a medically needy income

limit that is that far below the SSI level.

Under the Medicaid statute, States

cannot just increase their medically

needy income levels to deal with this

problem. However, under the proposed

rule, a State could use section 1902(r)(2)

to disregard additional amounts of

income under its medically needy

program, effectively reducing or even

eliminating the large spenddown

liability described in the example above.

Helping People Move From Institutions

to the Community

The medically needy spenddown

problem described above can also have

adverse effects for people in medical

institutions who would like to receive

care in community settings. In many

States, people with relatively high levels

of income (up to $1,536 a month in

2000) can still be eligible for Medicaid

provided they are in a medical

institution. This is because many States

cover an eligibility group that is

specifically targeted at people in

institutions, and which provides for that

high income standard.

As long as a person is in the

institution, he or she remains eligible

for Medicaid. However, if the person

wants to move to the community, he or

she will lose eligibility under the

institutional group. The only alternative

in many cases is to become eligible in

the community as medically needy.

However, as explained previously, the

medically needy income standard is

very low in many States. A person who

was eligible under the institutional

group may find that he or she must

spend most of his or her income on

medical care in the community before

the medically needy income standard

can be met. The person may not be able

to incur enough in the way of medical

expenses while in the community to

meet the medically needy income

standard, which in turn would mean the

person effectively would be without any

coverage for medical care. Even if the

person could incur enough medical

expenses, though, the medical expenses

would consume so much income that

the person would have little left to use

for the basic necessities of life such as

food, clothing, shelter, transportation,

etc.

The practical effect of this is that

many people in institutions who would

like to move to the community, and who

would normally be able to manage in a

community setting, remain in the

institution because they literally cannot

afford to leave. The proposed change in

the regulations would give States

opportunities to correct spenddown

problems so that more people could

leave institutional settings and live in

the community.

Encouraging Work Effort

While legislation enacted in the last

few years has given States new options

for providing Medicaid to individuals

with disabilities who want to work,

States may want to encourage work

effort among individuals eligible under

other groups such as the medically

needy, or among individuals who may

not readily fit into one of the new work

incentives groups. One way to

encourage work effort is to allow people

to keep more of the income they earn

without forcing them to either spend

more for medical care under a medically

needy spenddown, or risk losing

Medicaid altogether.

Under section 1902(r)(2) a State could

do that by increasing the amount of

earned income that is not counted in

determining a person’s eligibility.

However, the current application of the

FFP limits to the use of less restrictive

income disregards effectively precludes

States from offering that kind of

encouragement for many eligibility

groups. The proposed change in the

regulations would remove that

restriction, giving States another way to

encourage work effort.

Medicaid Eligibility Expansion

In addition to the specific examples

described above, section 1902(r)(2) gives

States the option of expanding their

Medicaid eligibility rolls by

disregarding additional types and

amounts of income and resources,

thereby allowing people who could not

otherwise meet the program’s eligibility

requirements to become eligible.

However, the current application of the

FFP limits to the use of less restrictive

income disregards greatly reduces the

options States have to implement that

kind of program expansion. The

proposed regulation change would give

States the full flexibility provided by

section 1902(r)(2) to expand their base

of eligible individuals if they choose to

do so.

Effect on Small Businesses and Small

Rural Hospitals

The RFA requires agencies to analyze

options for regulatory relief of small

businesses. For purposes of the RFA,

small entities include small businesses,

nonprofit organizations, and

government agencies. Most hospitals

and most other providers and suppliers

are small entities, either by nonprofit

status or by having revenues of $5

million or less annually. Individuals

and States are not included in the

definition of a small entity.

We certify that small entities would

not be affected by the proposed rule

because the rule only affects States,

which by definition are not small

entities. The proposed rule would affect

only States because any decisions

concerning whether to take advantage of

the options the rule makes available

would be made at the State government

level and then implemented by each

State. However, because of limited data

available, we invite comments in this

area.

In addition, section 1102(b) of the Act

requires us to prepare a regulatory

impact analysis if a rule may have a

significant impact on the operations of

a substantial number of small rural

hospitals. This analysis must conform to

the provisions of section 603 of the

RFA. For purposes of section 1102(b) of

the Act, we define a small rural hospital

as a hospital that is located outside of

a Metropolitan Statistical Area and has

fewer than 50 beds.

This proposed rule would have no

direct impact on small rural hospitals.

The proposed rule affects only States

because only States can implement the

option the proposed rule makes

available. As such small rural hospitals

are in no way involved in the process

of deciding whether to take advantage of

the flexibility the proposed rule offers.

Small rural hospitals would be

impacted only to the extent that a

State’s use of less restrictive income

methodologies could result in some

Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Proposed Rules 64923

increase in the number of individuals

eligible for Medicaid. This in turn could

result in a slight increase in utilization

of rural hospital services should an

individual eligible under the less

restrictive methodology need such

services. Again, because of limited data

available, we invite comments in this

area.

Section 202 of the Unfunded

Mandates Reform Act of 1995 also

requires that agencies assess anticipated

costs and benefits before issuing any

rule that may result in an annual

expenditure by State, local, or tribal

governments, in the aggregate, or by the

private sector, of $100 million. The

proposed rule would have no impact on

the private sector. The rule would

impose no requirements on State, local

or tribal governments. Rather, it would

offer State governments additional

flexibility in operating their Medicaid

programs, but would not require that

they make any changes in their

programs.

Federalism

Executive Order 13132 establishes

certain requirements that an agency

must meet when it promulgates a

proposed rule (and subsequent final

rule) that would impose substantial

direct requirement costs on State and

local governments, preempts State law,

or otherwise has Federalism

implications. The proposed rule would

impose no requirement costs on

governments, nor does it preempt State

law or otherwise have Federalism

implications.

HCFA has had discussions of this

issue with a number of State

governments since approximately 1990.

Those discussions have taken place both

with individual States and with groups

of States, including HCFA’s Medicaid

Eligibility Technical Advisory Group

and the National Association of State

Medicaid Directors Executive Council.

Based on the many discussions we have

had, we believe States will be

overwhelmingly in favor of the

proposed change.

B. Anticipated Effects

1. Effects on State Governments

The proposed rule will give States

greater flexibility in designing and

operating their Medicaid programs.

2. Effects on Providers

No providers would be affected by

this rule.

3. Effects on the Medicare and

Medicaid programs

This rule would increase Medicare

costs by about $100 million over five

years. Since the rule may increase the

number of individuals eligible for

Medicaid who receive inpatient hospital

services, it would affect the calculation

of hospitals’ disproportionate share

hospital (DSH) calculations under the

Medicare program. We estimate that

Medicare DSH payments would increase

by $100 million over five years due to

changes in this rule.

Under Medicaid, it is projected that

the Federal cost of this rule could be as

much as $860 million over 5 years.

However, because actual

implementation of the provisions of the

rule is strictly at the option of each

State, actual Federal program costs

would depend on whether, and to what

degree, States choose to take advantage

of the flexibility provided by the

proposed rule.

C. Alternatives Considered

There are few alternatives to the

proposed rule to consider. One

alternative is to maintain the

requirement that the FFP limits apply

prior to use of less restrictive income

methodologies under § 435.601, but

allow additional disregards at a

somewhat higher level than is possible

under the current regulations. However,

this would not provide States the level

of flexibility to operate their Medicaid

programs that is provided under the

proposed rule, and thus would be of

only limited value. We rejected this

alternative because it would not give

States what they need to effectively

operate their Medicaid programs.

We also considered pursuing a

legislative option that would have

changed the Medicaid statute itself to

clarify that the FFP limits at section

1903(f) of the Act should apply after,

rather than before, the use of any less

restrictive income methodologies under

section 1902(r)(2) of the Act. However,

as explained previously the current

policy concerning application of the

FFP limits to less restrictive income

methodologies does not reflect a clear

statutory requirement, but rather is an

administrative interpretation of the

statute. Since the statute as written will

support the proposed change in policy,

we believe the issue should be

addressed via a change in the

regulations rather than a change in the

statute. Also, we believe the proposed

rule is the most efficient and expedient

way of accomplishing the desired

change.

D. Conclusion

We expect this rule to benefit State

Medicaid programs and Medicaid

beneficiaries by giving States additional

flexibility in designing and operating

their programs. In turn, this would

allow States to make individuals eligible

for Medicaid who otherwise could not

be eligible under the current

regulations.

Because this rule is considered major

rule that is economically significant, we

have prepared a regulatory impact

statement. We believe that this rule will

have an estimated cost of $960 million

dollars over five years based on best

available data. In addition, we certify,

that this rule would not have a

significant economic impact on a

substantial number of small entities or

a significant impact on the operations of

a substantial number of small rural

hospitals.

In accordance with the provisions of

Executive Order 12866, this regulation

was reviewed by the Office of

Management and Budget.

List of Subjects in 42 CFR Part 435

Aid to Families with Dependent

Children, Grant programs—health,

Medicaid, Reporting and recordkeeping

requirements, Supplemental Security

Income (SSI), Wages.

For the reasons set forth in the

preamble, 42 CFR part 435 would be

amended as set forth below:

PART 435—ELIGIBILITY IN THE

STATES, DISTRICT OF COLUMBIA,

THE NORTHERN MARIANA ISLANDS,

AND AMERICAN SAMOA

1. The authority citation for part 435

continues to read as follows:

Authority: Sec. 1102 of the Social Security

Act (42 U.S.C. 1302).

2. Section 435.1007 is amended by

revising paragraphs (b) and (e) and

adding paragraph (f) to read as follows:

435.1007 Categorically needy, medically

needy, and qualified Medicare beneficiaries.

* * * * *

(b) Except as provided in paragraphs

(c) and (d) of this section, FFP is not

available in State expenditures for

individuals (including the medically

needy) whose annual income after

deductions specified in §§ 435.831(a)

and (c) exceeds the following amounts,

rounded to the next higher multiple of

$100.

* * * * *

(e) FFP is not available in

expenditures for services provided to

categorically needy and medically

needy recipients subject to the FFP

limits if their annual income, after the

cash assistance income deductions and

any income disregards in the State plan

authorized under section 1902(r)(2) of

the Act are applied, exceeds the 1331⁄3

percent limitation described under

paragraphs (b), (c), and (d) of this

section.

64924 Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Proposed Rules

(f) A State may use the less restrictive

income methodologies included under

its State plan as authorized under

§ 435.601 in determining whether a

family’s income exceeds the limitation

described in paragraph (b) of this

section.

(Catalog of Federal Domestic Assistance

Program No. 93.778, Medical Assistance

Program)

Dated: July 25, 2000.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing

Administration.

Approved: September 23, 2000.

Donna E. Shalala,

Secretary.

[FR Doc. 00–27923 Filed 10–27–00; 8:45 am]

BILLING CODE 4120–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 73

[DA 00–2302; MM Docket Nos. 00–189, 00–

190, 00–191, 00–192; RM–9984, RM–9985,

RM–9986, RM–9987

Radio Broadcasting Services (Heber,

Snowflake, Overgaard, and Taylor,

Arizona)

AGENCY: Federal Communications

Commission.

ACTION: Proposed rule.

SUMMARY: The Commission, at the

request of New Directions Media, Inc.,

seeks comment on four petitions for

rulemaking requesting the allotment of

Channel 288C2 at Heber, Arizona;

Channel 258C2 at Snowflake, Arizona;

Channel 232C3 at Overgaard, Arizona;

and Channel 278C3 at Taylor, Arizona

as each community’s first local aural

service. Channel 288C2 can be allotted

to Heber in compliance with the

Commission’s minimum distance

separation requirements, with respect to

domestic allotments, without the

imposition of a site restriction, at

coordinates 34–25–53 NL and 110–35–

36 WL. Channel 258C2 can be allotted

to Snowflake in compliance with the

Commission’s minimum distance

separation requirements, with respect to

domestic allotments, without the

imposition of a site restriction at

coordinates 34–30–48 NL and 110–04–

40 WL. Channel 232C3 can be allotted

to Overgaard in compliance with the

Commission’s minimum distance

separation requirements, with respect to

domestic allotments, without the

imposition of a site restriction at

coordinates 34–23–27 NL and 110–33–

04 WL. Channel 278C3 can be allotted

to Taylor in compliance with the

Commission’s minimum distance

separation requirements, with respect to

domestic allotments, without the

imposition of a site restriction at

coordinates 34–27–54 NL and 110–05–

26 WL. Petitioner is requested to

provide further information concerning

the community status of each proposed

community.

DATES: Comments must be filed on or

before December 1, 2000, and reply

comments on or before December 18,

2000.

ADDRESSES: Federal Communications

Commission, 445 12th Street, S.W.,

Room TW–A325, Washington, D.C.

20554. In addition to filing comments

with the FCC, interested parties should

serve the petitioner, or its counsel or

consultant, as follows: New Directions

Media, Inc., Robert D. Zellmer,

President, P.O. Box 1643, Greeley, CO

80632.

FOR FURTHER INFORMATION CONTACT:

Victoria M. McCauley, Mass Media

Bureau, (202) 418–2180.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Notice of

Proposed Rule Making, Docket No. 00–

189, 00–190, 00–191, 00–192, adopted

September 27, 2000, and released

October 11, 2000. The full text of this

Commission decision is available for

inspection and copying during normal

business hours in the FCC Reference

Center (Room 239), 445 12th Street, SW,

Washington, DC. The complete text of

this decision may also be purchased

from the Commission’s copy contractor,

International Transcription Services,

Inc., (202) 857–3800, 1231 20th Street,

NW, Washington, DC 20036.

Provisions of the Regulatory

Flexibility Act of 1980 do not apply to

this proceeding. Members of the public

should note that from the time a Notice

of Proposed Rule Making is issued until

the matter is no longer subject to

Commission consideration or court

review, all ex parte contacts are

prohibited in Commission proceedings,

such as this one, which involve channel

allotments. See 47 CFR 1.1204(b) for

rules governing permissible ex parte

contact.

For information regarding proper

filing procedures for comments, see 47

CFR 1.415 and 1.420.

List of Subjects in 47 CFR Part 73

Radio broadcasting.

Part 73 of title 47 of the Code of

Federal Regulations is amended as

follows:

PART 73—RADIO BROADCAST

SERVICES

1. The authority Citation for part 73

continues to read as follows:

Authority: 47 U.S.C 154, 303, 334 and 336.

§ 73.202 [Amended]

2. Section 73.202(b), the Table of FM

Allotments under Arizona, is amended

by adding Heber, Channel 288C2,

Snowflake, Channel 258C2, Overgaard,

Channel 232C3, and Taylor, Channel

278C3.

Federal Communications Commission.

John A. Karousos,

Chief, Allocations Branch, Policy and Rules

Division, Mass Media Bureau.

[FR Doc. 00–27906 Filed 10–30–00; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 73

[DA 00–2301; MM Docket No. 00–194, RM–

9972; MM Docket No. 00–195, RM–9973; MM

Docket No. 00–196, RM–9974; MM Docket

No. 00–197, RM–9975]

Radio Broadcasting Services;

Paradise, MI; Clinton TN; Lynchburg,

TN; Rincon, TX

AGENCY: Federal Communications

Commission.

ACTION: Proposed rule.

SUMMARY: This document proposes four

new allotments to Paradise, MI;

Lynchburg, TN; Clinton, TN; and

Rincon, TX. The Commission requests

comments on a petition filed by David

C. Schaburg proposing the allotment of

Channel 234A at Paradise, Michigan, as

the community’s first local aural

transmission service. Channel 234A can

be allotted to Paradise in compliance

with the Commission’s minimum

distance separation requirements at city

reference coordinates. The coordinates

for Channel 234A at Paradise are 46–37–

42 North Latitude and 85–02–18 West

Longitude. Since Paradise is located

within 320 kilometers (199 miles) of the

U.S.-Canadian border, concurrence of

the Canadian government has been

requested. See SUPPLEMENTARY

INFORMATION.

DATES: Comments must be filed on or

before December 1, 2000, and reply

comments on or before December 18,

2000.

ADDRESSES: Federal Communications

Commission, Washington, DC 20554. In

addition to filing comments with the

FCC, interested parties should serve the