14858 Federal Register / Vol. 87, No. 51 / Wednesday, March 16, 2022 / Notices 

stakeholders relevant to the issues. The 

survey format will differ depending on 

the project, but may be conducted in 

one or more of the following ways, both 

in-person and virtually: Individual or 

group interviews, individual or group 

discussions, or written surveys. The 

survey requests information such as 

stakeholder understanding of the 

particular issue, stakeholder interests in 

the particular issue, appropriate 

stakeholders, methods of engagement 

with the issue, and other similar 

information that will allow FMCS to 

best create a successful process. A link 

to the survey is found here: https://

tags.fmcs.gov/4DAction/FC/ 

DoAsynchTop?Fedreg*UPPJ*919/10300. 

To log in, go to: https://tags.fmcs.gov/, 

use user name ‘‘Fedreg’’ and password 

‘‘UPPJ.’’ The collection of such 

information is critical for ensuring the 

appropriate process, stakeholders, and 

stakeholder input in the process. No 

other collections are being conducted 

that would provide this information to 

FMCS. 

Burden: The current total annual 

burden estimate is that FMCS will 

receive information from approximately 

15,000 respondents per year. Interviews 

and discussions would be 

approximately thirty minutes in 

duration. Written surveys would take 

approximately ten minutes to complete. 

FMCS expects the total burden to not 

exceed 2,535 hours per year. 

II. Request for Comments 

FMCS solicits comments to: 

i. Evaluate whether the proposed 

collections of information are necessary 

for the proper performance of the 

functions of the agency, including 

whether the information will have 

practical utility. 

ii. Enhance the accuracy of the 

agency’s estimates of the burden of the 

proposed collection of information. 

iii. Enhance the quality, utility, and 

clarity of the information to be 

collected. 

iv. Minimize the burden of the 

collections of information on those who 

are to respond, including the use of 

appropriate automated, electronic 

collection technologies or other forms of 

information technology. 

III. The Official Record 

The official records are electronic 

records. 

List of Subjects 

Information Collection Requests. 

Dated: March 11, 2022. 

Sarah Cudahy, 

Senior Advisor, Federal Mediation and 

Conciliation Service. 

[FR Doc. 2022–05543 Filed 3–15–22; 8:45 am] 

BILLING CODE 6732–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–2436–N] 

RIN 0938–ZB62 

Medicaid Program; Final FY 2018, Final 

FY 2019, Preliminary FY 2020, and 

Preliminary FY 2021 Disproportionate 

Share Hospital Allotments, and Final 

FY 2018, Final FY 2019, Preliminary FY 

2020, and Preliminary FY 2021 

Institutions for Mental Diseases 

Disproportionate Share Hospital Limits 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), Department 

of Health and Human Services (HHS). 

ACTION: Notice. 

SUMMARY: This notice announces the 

final Federal share (FS) disproportionate 

share hospital (DSH) allotments for 

Federal fiscal year (FY) 2018 and FY 

2019, and the preliminary FS DSH 

allotments for FY 2020 and FY 2021. 

This notice also announces the final FY 

2018 and FY 2019 and the preliminary 

FY 2020 and FY 2021 limitations on 

aggregate DSH payments that States may 

make to institutions for mental disease 

and other mental health facilities. In 

addition, this notice includes 

background information describing the 

methodology for determining the 

amounts of States’ FY DSH allotments. 

DATES: The allotments announced in 

this notice are effective April 15, 2022. 

The final allotments and limitations set 

forth in this notice are applicable for the 

fiscal years specified. 

FOR FURTHER INFORMATION CONTACT: 

Stuart Goldstein, (410) 786–0694 and 

Richard Cuno, (410) 786–1111. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Fiscal Year DSH Allotments 

A State’s Federal fiscal year (FY) 

disproportionate share hospital (DSH) 

allotment represents the aggregate limit 

on the Federal share (FS) amount of the 

State’s DSH payments to DSH hospitals 

in the State for the FY. The amount of 

such allotment is determined in 

accordance with the provisions of 

section 1923(f) of the Social Security 

Act (the Act), with some State-specific 

exceptions as specified in section 

1923(f) of the Act. Under such 

provisions, in general, a State’s FY DSH 

allotment is calculated by increasing the 

amount of its DSH allotment for the 

preceding FY by the percentage change 

in the Consumer Price Index for all 

Urban Consumers (CPI–U) for the 

previous FY. 

The Patient Protection and Affordable 

Care Act of 2010 (Pub. L. 111–148), as 

amended by the Health Care and 

Education Reconciliation Act of 2010 

(Pub. L. 111–152) (collectively, the 

Affordable Care Act), amended 

Medicaid DSH provisions, adding 

section 1923(f)(7) of the Act. Section 

1923(f)(7) of the Act would have 

required reductions to States’ FY DSH 

allotments from FY 2014 through FY 

2020, the calculation of which was 

described in the Disproportionate Share 

Hospital Payment Reduction final rule 

published in the September 18, 2013 

Federal Register (78 FR 57293). 

Subsequent legislation, most recently 

the Consolidated Appropriations Act, 

2021 (Pub. L. 116–260, enacted 

December 27, 2020), delayed the start of 

these reductions until FY 2024. The 

final rule delineating a revised 

methodology for the calculation of DSH 

allotment reductions beginning in 2020 

(subsequently delayed by further 

statutory enactment) was published in 

the September 25, 2019 Federal Register 

(84 FR 50308). 

Because there are no reductions to 

DSH allotments for FY 2018 through FY 

2023 under section 1923(f)(7) of the Act, 

as amended, this notice contains only 

the State-specific final FY 2018 and FY 

2019 DSH allotments and preliminary 

FY 2020 and FY 2021 DSH allotments, 

as calculated under the statute without 

application of the reductions that would 

have been imposed beginning as early as 

FY 2014 under prior versions of section 

1923(f)(7) of the Act. This notice also 

provides information on the calculation 

of the FY DSH allotments, the 

calculation of the States’ institution for 

mental diseases (IMD) DSH limits, and 

the amounts of States’ final FY 2018 and 

FY 2019 IMD DSH limits and 

preliminary FY 2020 and FY 2021 IMD 

DSH limits. 

B. Determination of Fiscal Year DSH 

Allotments 

Generally, in accordance with the 

methodology specified under section 

1923(f)(3) of the Act, a State’s FY DSH 

allotment is calculated by increasing the 

amount of its DSH allotment for the 

preceding FY by the percentage change 

in the CPI–U for the previous FY. Also, 

in accordance with section 1923(f)(3) of 


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the Act, a State’s DSH allotment for a FY 

is subject to the limitation that an 

increase to a State’s DSH allotment for 

a FY cannot result in the DSH allotment 

exceeding the greater of the State’s DSH 

allotment for the previous FY or 12 

percent of the State’s total medical 

assistance expenditures for the 

allotment year (this is referred to as the 

12 percent limit). 

Furthermore, under section 1923(h) of 

the Act, Federal financial participation 

(FFP) for DSH payments to IMDs and 

other mental health facilities is limited 

to State-specific aggregate amounts. 

Under this provision, the aggregate limit 

for DSH payments to IMDs and other 

mental health facilities is the lesser of 

a State’s FY 1995 total computable 

(State and FS) IMD and other mental 

health facility DSH expenditures 

applicable to the State’s FY 1995 DSH 

allotment (as reported on the Form 

CMS–64 as of January 1, 1997), or the 

amount equal to the product of the 

State’s current year total computable 

DSH allotment and the applicable 

percentage specified in section 1923(h) 

of the Act. 

C. Determination of Fiscal Year DSH 

Allotments for FY 2020 and FY 2021 

The Families First Coronavirus 

Response Act’s (FFCRA) (Pub. L. 116– 

127, enacted March 18, 2020) temporary 

Federal medical assistance percentage 

(FMAP) increase of 6.2 percentage 

points went into effect on January 1, 

2020 for eligible States, as provided in 

section 6008 of the FFCRA. As relevant 

to this notice, this FMAP increase 

applies to eligible Medicaid 

expenditures including DSH payments 

for FY 2020 (with the exception of the 

1st quarter, from October 1, 2019 

through December 31, 2019), and FY 

2021, and all States currently are 

receiving the temporary FFCRA FMAP 

increase. For States that exhaust their 

entire DSH allotment, the FFCRA FMAP 

increase would effectively reduce the 

amount of total computable (TC) DSH 

payments that such States could pay to 

qualifying providers. 

To avoid this reduction in TC DSH 

allotments, section 9819 of the 

American Rescue Plan Act of 2021 

(ARP) (Pub. L. 117–2, enacted March 11, 

2021) added section 1923(f)(3)(F) of the 

Act, adjusting FS DSH allotments 

during periods when and for States 

where the temporary 6.2 percentage 

point FMAP increase under section 

6008 of the FFCRA is in effect. As 

directed by the ARP, we are required to 

recalculate FS DSH allotments to an 

amount that will allow States to make 

the same amount of TC DSH payments 

as they would have been otherwise able 

to make in the absence of the FFCRA 

FMAP increase. 

In accordance with section 

1923(f)(3)(B) of the Act, a State’s DSH 

allotment for a FY is subject to the 

limitation that an increase to a State’s 

DSH allotment for a FY cannot result in 

the DSH allotment exceeding the greater 

of the State’s DSH allotment for the 

previous FY or 12 percent of the State’s 

total medical assistance expenditures 

for the allotment year. Because States 

incur medical assistance expenditures 

throughout the fiscal year, the 

calculations for the 12 percent limit 

under section 1923(f)(3)(B)(ii) of the Act 

were performed using a prorated FMAP 

for FY 2020. To arrive at the stated 

limits, we prorated each State’s FY 2020 

FMAP rate because the temporary 6.2 

percentage point FMAP increase under 

section 6008 of the FFCRA does not 

apply to the 1st quarter of FY 2020. For 

the calculation of the 12 percent limit 

for FY 2021, we used the FFCRA FMAP 

rate (that is, the otherwise applicable 

FMAP rate plus the temporary 6.2 

percentage point FFCRA FMAP 

increase), because the FFCRA FMAP 

rate applies to the entire FY for 

qualifying States, and medical 

assistance expenditures are made 

throughout the year. 

Section 1923(f)(3)(F)(i) of the Act 

requires us to recalculate the annual 

DSH allotment, including the DSH 

allotment specified under paragraph 

(6)(A)(vi), to ensure that the total DSH 

payments (including both Federal and 

State shares) that a State may make 

related to a fiscal year is equal to the 

total DSH payments that the State could 

have made for such fiscal year without 

such FMAP increase. To meet the 

statutory requirement to enable States to 

make the same amount of TC DSH 

payments as if the FFCRA FMAP 

increase were not in effect, we have 

used the full (non-prorated) FFCRAincreased FMAP rate in the calculation 

of the increased FY 2020 and FY 2021 

FS DSH allotments. We used the full 

FFCRA-increased FMAP rate rather than 

a prorated FMAP rate for the FY 2020 

calculation, despite it not being 

applicable to the 1st quarter of FY 2020, 

to ensure this provision applies to all 

States consistent with the statutory 

requirement, including a State that 

made all DSH payments for FY 2020 in 

quarters other than the first fiscal 

quarter of that fiscal year. 

While States have distinct payment 

methodologies that specify when DSH 

payments are made to providers, States 

may not claim TC DSH payments in 

excess of the amount they would have 

otherwise been able to claim without 

the application of the temporary 6.2 

percentage point FFCRA FMAP rate 

increase. This is regardless of whether a 

portion of unspent FS DSH allotment as 

adjusted to account for section 

1923(f)(3)(F) of the Act, as added by 

section 9819 of the ARP, remains. For 

example, if the State made all DSH 

payments for FY 2020 during the first 

quarter of that FY, then no increase to 

the State’s DSH allotment is available 

for that year, since the temporary 6.2 

percentage point FMAP increase under 

section 6008 of the FFCRA was not 

available for that quarter and section 

1923(f)(3)(F) therefore has no effect. We 

will monitor both the FS and TC DSH 

allotments to ensure that States do not 

exceed statutory authority to claim DSH 

payments. Consistent with previous 

guidance by CMS during the public 

health emergency, States should follow 

existing Federal requirements regarding 

the applicability of a particular match 

rate available for a given quarter, 

including reporting prior period 

adjustments. 

For calculation of the FY 2020 and FY 

2021 IMD limits determined under 

section 1923(h) of the Act, we used the 

ARP-adjusted DSH allotments and the 

associated non-prorated FFCRAincreased FMAP rates for FY 2020 and 

FY 2021, to reflect the maximum DSH 

allotment amount and IMD limit that 

might be available to a State, for FY 

2020, depending on the State’s timing of 

DSH payments. 

In general, we determine States’ DSH 

allotments for a FY and the IMD DSH 

limits for the same FY using the most 

recent available estimates of or actual 

medical assistance expenditures, 

including DSH expenditures and the 

most recent available CPI–U data for the 

FY in accordance with the methodology 

prescribed in the statute. The indicated 

estimated or actual expenditures are 

obtained from States for each relevant 

FY from the most recent available 

quarterly Medicaid budget reports 

(Form CMS–37) or quarterly Medicaid 

expenditure reports (Form CMS–64), 

respectively, submitted by the States. 

For example, as part of the initial 

determination of a State’s FY DSH 

allotment (referred to as the preliminary 

DSH allotments) that is determined 

before the beginning of the FY for which 

the DSH allotments and IMD DSH limits 

are being determined, we use estimated 

expenditures for the FY obtained from 

the August submission of the CMS–37 

submitted by States prior to the 

beginning of the FY; such estimated 

expenditures are subject to update and 

revision during the FY before actual 

expenditure data become available. We 

also use the most recent available 

estimated CPI–U percentage change that 


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is available before the beginning of the 

FY for determining the States’ 

preliminary FY DSH allotments; such 

estimated CPI–U percentage change is 

subject to update and revision during 

the FY before the actual CPI–U 

percentage change becomes available. In 

determining the final DSH allotments 

and IMD DSH limits for a FY we use the 

actual expenditures for the FY and 

actual CPI–U percentage change for the 

previous FY. 

II. Provisions of the Notice 

A. Calculation of the Final FY 2018 and 

FY 2019 FS State DSH Allotments and 

the Preliminary FY 2020 and FY 2021 

FS State DSH Allotments 

1. Final FY 2018 FS State DSH 

Allotments 

Addendum 1 to this notice provides 

the States’ final FY 2018 DSH 

allotments determined in accordance 

with section 1923(f)(3) of the Act. As 

described in the background section, in 

general, the DSH allotment for a FY is 

calculated by increasing the FY DSH 

allotment for the preceding FY by the 

CPI–U increase for the previous fiscal 

year. For purposes of calculating the 

States’ final FY 2018 DSH allotments, 

the preceding final fiscal year DSH 

allotments (for FY 2017) were published 

in the February 11, 2019 Federal 

Register (84 FR 3169). For purposes of 

calculating the States’ final FY 2018 

DSH allotments we are using the actual 

Medicaid expenditures for FY 2018. 

Finally, for purposes of calculating the 

States’ final FY 2018 DSH allotments, 

the applicable historical percentage 

change in the CPI–U for the previous FY 

(FY 2017) was 2.1 percent; we note that 

this is lower than the estimated 2.4 

percentage change in the CPI–U for FY 

2017 that was available and used in the 

calculation of the preliminary FY 2018 

DSH allotments which were published 

in the July 6, 2018 Federal Register (83 

FR 31536). 

2. Final FY 2019 FS State DSH 

Allotments 

Addendum 2 to this notice provides 

the States’ final FY 2019 DSH 

allotments determined in accordance 

with section 1923(f)(3) of the Act. As 

described in the background section, in 

general, the DSH allotment for a FY is 

calculated by increasing the FY DSH 

allotment for the preceding FY by the 

CPI–U increase for the previous fiscal 

year. For purposes of calculating the 

States’ final FY 2019 DSH allotments, 

the preceding final fiscal year DSH 

allotments (for FY 2018) are being 

published in this notice. For purposes of 

calculating the States’ final FY 2019 

DSH allotments we are using the actual 

Medicaid expenditures for FY 2019. 

Finally, for purposes of calculating the 

States’ final FY 2019 DSH allotments, 

the applicable historical percentage 

change in the CPI–U for the previous FY 

(FY 2018) was 2.4 percent; we note that 

this is the same as the estimated 2.4 

percentage change in the CPI–U for FY 

2018 that was available and used in the 

calculation of the preliminary FY 2019 

DSH allotments which were published 

in the February 11, 2019 Federal 

Register (84 FR 3169). 

3. Calculation of the Preliminary FY 

2020 FS State DSH Allotments 

Addendum 3 to this notice provides 

the preliminary FY 2020 DSH 

allotments determined in accordance 

with section 1923(f)(3) of the Act. The 

preliminary FY 2020 DSH allotments 

contained in this notice were 

determined based on the most recent 

available estimates from States of their 

FY 2020 total computable Medicaid 

expenditures and by increasing the 

preliminary FY 2019 DSH allotments. 

The applicable historical percentage 

change in the CPI–U for FY 2019 was 

1.9 percent (we originally published the 

preliminary FY 2019 DSH allotments in 

the February 11, 2019 Federal Register 

(84 FR 3169)). We then used each State’s 

FS DSH allotment divided by its 

respective regular FMAP rate in order to 

determine the TC amount of DSH 

payments each State would have 

otherwise been able to make without 

application of the FFCRA-increased 

FMAP rate. We then multiplied each 

State’s TC DSH payment amount by its 

respective FFCRA-increased FMAP rate 

in order to calculate the increased FY 

2020 DSH allotment. 

We will publish States’ final FY 2020 

DSH allotments in a future notice based 

on the States’ four quarterly Medicaid 

expenditure reports (Form CMS–64) for 

FY 2020 available following the end of 

FY 2020 utilizing the actual change in 

the CPI–U for FY 2019. 

4. Calculation of the Preliminary FY 

2021 FS State DSH Allotments 

Addendum 4 to this notice provides 

the preliminary FY 2021 DSH 

allotments determined in accordance 

with section 1923(f)(3) of the Act. The 

preliminary FY 2021 DSH allotments 

contained in this notice were 

determined based on the most recent 

available estimates from States of their 

FY 2021 total computable Medicaid 

expenditures and by increasing the 

preliminary FY 2020 DSH allotments 

calculated prior to the application of the 

ARP adjustment. The applicable 

historical percentage change in the CPI– 

U for FY 2020 was 1.5 percent (we are 

publishing the preliminary FY 2020 

DSH allotments in this notice). We then 

used each State’s FS DSH allotment 

divided by its respective regular FMAP 

rate in order to determine the TC 

amount of DSH payments each State 

would have otherwise been able to make 

without application of the FFCRAincreased FMAP rate. We then 

multiplied each State’s TC DSH 

payment amount by its respective 

FFCRA-increased FMAP rate in order to 

calculate the ARP-adjusted FY 2021 

DSH allotment. 

We will publish States’ final FY 2021 

DSH allotments in a future notice based 

on the States’ four quarterly Medicaid 

expenditure reports (Form CMS–64) for 

FY 2021 available following the end of 

FY 2021. 

B. Calculation of the Final FY 2018 and 

FY 2019 and Preliminary FY 2020 and 

FY 2021 IMD DSH Limits 

Section 1923(h) of the Act specifies 

the methodology to be used to establish 

the limits on the amount of DSH 

payments that a State can make to IMDs 

and other mental health facilities. FFP 

is not available for DSH payments to 

IMDs or other mental health facilities 

that exceed the IMD DSH limits. In this 

notice, we are publishing the final FY 

2018 and FY 2019 and the preliminary 

FY 2020 and FY 2021 IMD DSH limits 

determined in accordance with the 

provisions discussed above. 

Addendums 5 through 8 to this notice 

detail each State’s final FY 2018 and FY 

2019 and preliminary FY 2020 and FY 

2021 IMD DSH limits, respectively, 

determined in accordance with section 

1923(h) of the Act. 

III. Collection of Information 

Requirements 

As it relates to the Paperwork 

Reduction Act of 1995 (PRA; 44 U.S.C. 

3501 et seq.), this notice does not 

impose any new or revised ‘‘collection 

of information’’ requirements or burden. 

With respect to the PRA and this section 

of the preamble, collection of 

information is defined under 5 CFR 

1320.3(c) of the PRA’s implementing 

regulations. While discussed in sections 

I.B., I.C., II.A.3., II.A.4., and in 

Addendums 3 through 8 of this notice, 

the requirements and burden associated 

with form CMS–37 and form CMS–64 

are unaffected by this notice. Both forms 

are approved by the Office of 

Management and Budget (OMB) under 

control number 0938–1265, which 

expires on April 30, 2024. Since this 

notice will not impose any new or 

revised collection of information 

requirements/burden, we are not 


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making any changes under that control 

number. 

IV. Regulatory Impact Analysis 

We have examined the impact of this 

notice as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 1993), the 

Regulatory Flexibility Act (RFA) 

(September 19, 1980, Pub. L. 96–354), 

section 1102(b) of the Act, section 202 

of the Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4; enacted on 

March 22, 1995) (UMRA ‘95), Executive 

Order 13132 on Federalism (August 4, 

1999) and the Congressional Review Act 

(5 U.S.C. 804(2)). 

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 1 year). This notice reaches the 

$100 million economic threshold and 

thus has been designated a major rule 

under the Congressional Review Act by 

the Office of Information and Regulatory 

Affairs. 

The final FY 2018 DSH allotments 

being published in this notice are $36 

million less than the preliminary FY 

2018 DSH allotments published in the 

July 6, 2018 Federal Register (83 FR 

31536). This is due to the actual 

percentage change in the CPI–U for FY 

2017 used in the calculation of the final 

FY 2018 allotments (2.1 percent) being 

less than the estimated percentage 

change in the CPI–U for FY 2017 used 

in the calculation of the preliminary FY 

2018 allotments (2.4 percent). The final 

FY 2018 IMD DSH limits being 

published in this notice are $2.4 million 

less than the preliminary FY 2018 IMD 

DSH limits published in the July 6, 2018 

Federal Register (83 FR 31536). Since 

the final FY 2018 DSH allotments were 

less than the preliminary FY 2018 DSH 

allotments, the associated FY 2018 IMD 

DSH limits also decreased. 

The final FY 2019 DSH allotments 

being published in this notice are $36 

million less than the preliminary FY 

2019 DSH allotments published in the 

February 11, 2019 Federal Register (84 

FR 3169). The decrease in the final FY 

2019 DSH allotments is a result of being 

calculated by multiplying the actual 

increase in the CPI–U for 2018 by the 

final FY 2018 DSH allotments, while the 

preliminary FY 2019 DSH allotments 

were calculated by multiplying the 

estimated CPI–U for 2018 by the 

preliminary FY 2018 DSH allotments. 

Although the estimated and actual 

increase in the CPI–U remained the 

same at 2.4 percent, the preliminary FY 

2018 DSH allotments were higher than 

the final FY 2018 DSH allotments and 

therefore the final FY 2019 DSH 

allotments are lower than the 

preliminary FY 2019 DSH allotments. 

The final FY 2019 IMD DSH limits being 

published in this notice are 

approximately $2 million lower than the 

preliminary FY 2019 IMD DSH limits 

published in the February 11, 2019 

Federal Register (84 FR 3169). The 

decreases in the IMD DSH limits are 

because the DSH allotment for a FY is 

a factor in the determination of the IMD 

DSH limit for the FY. Since the final FY 

2019 DSH allotments were decreased as 

compared to the preliminary FY 2019 

DSH allotments, the associated FY 2019 

IMD DSH limits for some States were 

also decreased. This is a result of 

statutory provision, discussed above, 

that the aggregate limit for DSH 

payments to IMDs and other mental 

health facilities is the lesser of a State’s 

FY 1995 total computable IMD and 

other mental health facility DSH 

expenditures applicable to the State’s 

FY 1995 DSH allotment or the amount 

equal to the product of the State’s 

current year total computable DSH 

allotment and the applicable percentage 

specified in section 1923(h) of the Act. 

As a result of the final FY 2019 DSH 

allotments decreasing from the 

preliminary FY 2019 DSH allotments, 

States that had applicable percentages of 

their current year’s total computable 

DSH allotments lower than FY 1995 

total computable IMD and other mental 

health facility DSH expenditures had 

their IMD limits decreased as a result. 

The preliminary FY 2020 DSH 

allotments being published in this 

notice have been increased by 

approximately $1.6 billion more than 

the preliminary FY 2019 DSH 

allotments published in the February 

11, 2019 Federal Register (84 FR 3169). 

The increase in the DSH allotments is 

due to the application of the statutory 

formula for calculating DSH allotments 

under which the prior fiscal year 

allotments are increased by the 

percentage increase in the CPI–U for the 

prior fiscal year, and to the ARP 

adjustment, as discussed in more detail 

in the next paragraph. The preliminary 

FY 2020 IMD DSH limits being 

published in this notice are 

approximately $246 million more than 

the preliminary FY 2019 IMD DSH 

limits published in the February 11, 

2019 Federal Register (84 FR 3169). The 

increases in the IMD DSH limits are 

because the DSH allotment for a FY is 

a factor in the determination of the IMD 

DSH limit for the FY. Since the 

preliminary FY 2020 DSH allotments 

are greater than the preliminary FY 2019 

DSH allotments, the associated 

preliminary FY 2020 IMD DSH limits 

for some States also increased. 

The preliminary FY 2020 DSH 

allotments (before application of the 

ARP adjustment) being published in this 

in this notice are approximately $238 

million more than the final FY 2019 

DSH allotments being published in this 

notice. This increase is attributable to 

the application of the statutory formula 

for calculating DSH allotments under 

which the prior fiscal year allotments 

are increased by the percentage increase 

in the CPI–U for the prior fiscal year. 

The applicable historical percentage 

change in the CPI–U for FY 2019 was 

1.9 percent. The preliminary FY 2020 

DSH allotments were further increased 

by approximately $1.4 billion in order 

to comply with the statutory provisions 

of the ARP requiring us to recalculate 

FS DSH allotments to an amount that 

will allow States to make the same 

amount of TC DSH payments as they 

would have been otherwise able to make 

in the absence of the FFCRA FMAP 

increase. 

The preliminary FY 2021 DSH 

allotments (before application of the 

ARP adjustment) being published in this 

notice are approximately $192 million 

more than the preliminary FY 2020 DSH 

allotments published in this notice. The 

increase in the DSH allotments is due to 

the application of the statutory formula 

for calculating DSH allotments under 

which the prior fiscal year allotments 

are increased by the percentage increase 

in the CPI–U for the prior fiscal year. 

The applicable historical percentage 

change in the CPI–U for FY 2020 was 

1.5 percent. The preliminary FY 2020 

DSH allotments were increased by 

approximately $1.4 billion in order to 

comply with the statutory provisions of 

the ARP requiring us to recalculate FS 

DSH allotments to an amount that will 

allow States to make the same amount 

of TC DSH payments as they would 

have been otherwise able to make in the 

absence of the FFCRA FMAP increase. 

The preliminary FY 2021 DSH 

allotments were further increased by 

approximately $1.4 billion in order to 

comply with the statutory provisions of 

the ARP requiring us to recalculate FS 

DSH allotments to an amount that will 

allow States to make the same amount 

of TC DSH payments as they would 

have been otherwise able to make in the 

absence of the FFCRA FMAP increase. 


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14862 Federal Register / Vol. 87, No. 51 / Wednesday, March 16, 2022 / Notices 

The preliminary FY 2021 IMD DSH 

limits being published in this notice are 

approximately $16 million more than 

the preliminary FY 2020 IMD DSH 

limits published in this notice. The 

increases in the IMD DSH limits are 

because the DSH allotment for a FY is 

a factor in the determination of the IMD 

DSH limit for the FY. Since the 

preliminary FY 2021 DSH allotments 

are greater than the preliminary FY 2020 

DSH allotments, the associated 

preliminary FY 2021 IMD DSH limits 

for some States also increased. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses, if a rule has a significant 

impact on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of less than $8.0 million to $41.5 

million in any one year. Individuals and 

States are not included in the definition 

of a small entity. We are not preparing 

an analysis for the RFA because the 

Secretary has determined that this 

notice will not have significant 

economic impact on a substantial 

number of small entities. Specifically, 

any impact on providers is due to the 

effect of the various controlling statutes; 

providers are not impacted as a result of 

the independent regulatory action in 

publishing this notice. The purpose of 

the notice is to announce the latest DSH 

allotments and IMD DSH limits, as 

required by the statute. 

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 604 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a Core-Based Statistical Area for 

Medicaid payment regulations and has 

fewer than 100 beds. We are not 

preparing analysis for section 1102(b) of 

the Act because the Secretary has 

determined that this notice will not 

have a significant impact on the 

operations of a substantial number of 

small rural hospitals. 

The Medicaid statute specifies the 

methodology for determining the 

amounts of States’ DSH allotments and 

IMD DSH limits; and as described 

previously, the application of the 

methodology specified in statute results 

in the decreases or increases in States’ 

DSH allotments and IMD DSH limits for 

the applicable FYs. The statute 

applicable to these allotments and limits 

does not apply to the determination of 

the amounts of DSH payments made to 

specific DSH hospitals; rather, these 

allotments and limits represent an 

overall limit on the total of such DSH 

payments. For this reason, we do not 

believe that this notice will have a 

significant economic impact on a 

substantial number of small entities. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2021, that threshold is approximately 

$158 million. This notice will have no 

consequential effect on spending by 

State, local, or tribal governments, in the 

aggregate, or on the private sector. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it issues a proposed 

rule (and subsequent final rule) that 

imposes substantial direct requirement 

costs on State and local governments, 

preempts State law, or otherwise has 

Federalism implications. Since this 

notice does not impose any costs on 

State or local governments or otherwise 

have Federalism implications, the 

requirements of E.O. 13132 are not 

applicable. 

A. Alternatives Considered 

Because the FFCRA temporary FMAP 

increase of 6.2 percentage points was 

not applicable to the 1st quarter of FY 

2020, we considered utilizing prorated 

FMAP rates in the calculation of the 

ARP-adjusted FY 2020 DSH allotments. 

However, this could have been contrary 

to the statutory language at section 

1923(f)(3)(F) of the Act requiring us to 

recalculate FS DSH allotments to an 

amount to allow for States to make the 

same amount of TC DSH payments as 

they would have been otherwise able to 

make in the absence of the FFCRA 

FMAP increase, depending on States’ 

timing of their DSH payments to eligible 

providers. The methodologies for 

determining the States’ fiscal year DSH 

allotments and IMD DSH limits, as 

reflected in this notice, were established 

in accordance with the methodologies 

and formula for determining States’ 

allotments and limits as specified in 

statute. This notice does not put forward 

any further discretionary administrative 

policies for determining such allotments 

and limits, or otherwise. 

B. Accounting Statement 

As required by OMB Circular A–4 

(available at https://obamawhitehouse.

archives.gov/omb/circulars_a004_a-4/), 

in Tables 1 and 2, we have prepared an 

accounting statement showing the 

classification of the estimated 

expenditures associated with the 

provisions of this notice. Table 1 

provides our best estimate of the change 

(decrease) in the FS of States’ Medicaid 

DSH payments resulting from the 

application of the provisions of the 

Medicaid statute relating to the 

calculation of States’ FY DSH allotments 

and the increase in the FY DSH 

allotments from FY 2019 to FY 2020. 

Table 2 provides our best estimate of the 

change (decrease) in the FS of States’ 

Medicaid DSH payments resulting from 

the application of the provisions of the 

Medicaid statute relating to the 

calculation of States’ FY DSH allotments 

and the increase in the FY DSH 

allotments from FY 2020 to FY 2021. 

TABLE 1—ACCOUNTING STATEMENT: 

CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM THE FY 2019 TO

FY 2020 

[In millions] 

Category Transfers 

Annualized Monetized 

Transfers.

$238. 

From Whom To 

Whom? 

Federal Government 

to States. 

TABLE 2—ACCOUNTING STATEMENT: 

CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM THE FY 2020 TO

FY 2021 

[In millions] 

Category Transfers 

Annualized Monetized 

Transfers.

$192. 

From Whom To 

Whom? 

Federal Government 

to States. 

C. Congressional Review Act 

This document is subject to the 

Congressional Review Act provisions of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996 (5 

U.S.C. 801 et seq.) and has been 

transmitted to the Congress and the 

Comptroller General for review. 


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In accordance with the provisions of 

Executive Order 12866, this notice was 

reviewed by the Office of Management 

and Budget. 

Chiquita Brooks-LaSure, 

Administrator of the Centers for 

Medicare & Medicaid Services, 

approved this document on February 1, 

2022. 

Dated: March 9, 2022. 

Xavier Becerra, 

Secretary, Department of Health and Human 

Services. 

BILLING CODE 4120–01–P 


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1Under section 744M(a)(1) of the FD&C Act, 

‘‘Each person that owns a facility identified as an 

OTC monograph drug facility on December 31 of 

the fiscal year or at any time during the preceding 

12-month period shall be assessed an annual fee for 

each such facility’’. For purposes of FY 2022 facility 

fees, that time period is January 1, 2021, through 

December 31, 2021. 

2Assuming that, as we anticipate, the FY 2022 fee 

appropriation will occur prior to June 1, 2022. 

Under section 744M(a)(1)(D)(ii), the FY 2022 

facility fees are due on the later of (1) the first 

business day of June 2022 (i.e., June 1, 2022) or (2) 

the first business day after the enactment of an 

appropriations Act providing for the collection and 

obligation of FY 2022 OMUFA fees. 

3The term ‘‘hand sanitizer’’ commonly refers to 

consumer antiseptic rubs. However, because the 

Health and Human Services (HHS) notice published 

January 12, 2021, referred to ‘‘persons that entered 

the over-the-counter drug market to supply hand 

sanitizer products in response to the COVID–19 

Public Health Emergency’’ (86 FR 2420,https:// 

www.federalregister.gov/documents/2021/01/12/ 

2021–00237/notice-that-persons-that-entered-theover-the-counter-drug-market-to-supply-handsanitizer-during), we are using the same 

terminology—‘‘hand sanitizer products’’—to refer to 

OTC monograph drug products intended for use 

(without water) as antiseptic hand rubs or antiseptic 

hand wipes by consumers or healthcare personnel. 

4See HHS Federal Register notice of January 12, 

2021, 86 FR 2420, https://www.federalregister.gov/ 

documents/2021/01/12/2021-00237/notice-thatpersons-that-entered-the-over-the-counter-drugmarket-to-supply-hand-sanitizer-during. 

5Under OMUFA, a Tier 1 OMOR is defined as 

any OMOR that is not a Tier 2 OMOR (see section 

744L(8) of the FD&C Act). Tier 2 OMORs are 

detailed in section 744L(9) of the FD&C Act. 

6These OMUFA fees are for FY 2022, per section 

744M(a) of the FD&C Act. 

[FR Doc. 2022–05459 Filed 3–14–22; 4:15 pm] 

BILLING CODE 4120–01–C 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

[Docket No. FDA–2022–N–0284] 

Over-the-Counter Monograph Drug 

User Fee Rates for Fiscal Year 2022 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Notice. 

SUMMARY: The Food and Drug 

Administration (FDA or the Agency) is 

announcing the fee rates under the overthe-counter (OTC) monograph drug user 

fee program (OMUFA) for fiscal year 

(FY) 2022. The Federal Food, Drug, and 

Cosmetic Act (FD&C Act) authorizes 

FDA to assess and collect user fees from 

qualifying manufacturers of OTC 

monograph drugs and submitters of 

OTC monograph order requests. This 

notice publishes the OMUFA fee rates 

for FY 2022. 

FOR FURTHER INFORMATION CONTACT: 

David Haas, Office of Financial 

Management, Food and Drug 

Administration, 4041 Powder Mill Rd., 

Rm. 61075, Beltsville, MD 20705–4304, 

240–402–9845. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 744M of the FD&C Act (21 

U.S.C. 379j–72), as added by the 

Coronavirus Aid, Relief, and Economic 

Security Act (CARES Act), authorizes 

FDA to assess and collect: (1) Facility 

fees from qualifying owners of OTC 

monograph drug facilities and (2) fees 

from submitters of qualifying OTC 

monograph order requests. These fees 

are to support FDA’s OTC monograph 

drug activities, which are detailed in 

section 744L(6) of the FD&C Act (21 

U.S.C. 379j–71(6)) and include various 

FDA activities associated with OTC 

monograph drugs and inspection of 

facilities associated with such products. 

For OMUFA purposes: 

• An OTC monograph drug is a 

nonprescription drug without an 

approved new drug application that is 

governed by the provisions of section 

505G of the FD&C Act (21 U.S.C. 355h) 

(see section 744L(5) of the FD&C Act); 

• An OTC monograph drug facility 

(MDF) is a foreign or domestic business 

or other entity that, in addition to 

meeting other criteria, is engaged in 

manufacturing or processing the 

finished dosage form of an OTC 

monograph drug (see section 744L(10) 

of the FD&C Act); 

• A contract manufacturing 

organization (CMO) facility is an OTC 

monograph drug facility where neither 

the owner nor any affiliate of the owner 

or facility sells the OTC monograph 

drug produced at such facility directly 

to wholesalers, retailers, or consumers 

in the United States (see section 744L(2) 

of the FD&C Act); and 

• An OTC monograph order request 

(OMOR) is a request for an 

administrative order, with respect to an 

OTC monograph drug, which is 

submitted under section 505G(b)(5) of 

the FD&C Act (see section 744L(7) of the 

FD&C Act). 

Under section 744M(a)(1)(A) of the 

FD&C Act, a facility fee for FY 2022 

shall be assessed with respect to each 

facility that is identified as an OTC 

monograph drug facility during the feeliable period from January 1, 2021, 

through December 31, 2021.1 Consistent 

with the statute, FDA will assess and 

collect facility fees with respect to the 

two types of OTC monograph drug 

facilities—MDF and CMO facilities. A 

full facility fee will be assessed to each 

qualifying person that owns a facility 

identified as an MDF (see section 

744M(a)(1)(A) of the FD&C Act), and a 

reduced facility fee of two-thirds will be 

assessed to each qualifying person that 

owns a facility identified as a CMO 

facility (see section 744M(a)(1)(B)(ii) of 

the FD&C Act). The facility fees for FY 

2022 are due on June 1, 2022 (see 

section 744M(a)(1)(D)(ii) of the FD&C 

Act).2

As discussed in greater detail below: 

• OTC monograph drug facilities are 

exempt from FY 2022 facility fees if 

they had ceased OTC monograph drug 

activities, and updated their registration 

with FDA to that effect, prior to 

December 31, 2020 (see section 

744M(a)(1)(B)(i) of the FD&C Act). 

• Entities that registered with FDA 

during the Coronavirus Disease 2019 

(COVID–19) pandemic whose sole 

activity with respect to OTC monograph 

drugs during the pandemic consists (or 

had consisted) of manufacturing OTC 

hand sanitizer products 3 are not 

identified as OTC monograph drug 

facilities subject to OMUFA facility 

fees.4

In addition to facility fees, the Agency 

is authorized to assess and collect fees 

from submitters of OMORs, except for 

OMORs that request certain safetyrelated changes (as discussed below). 

There are two levels of OMOR fees, 

based on whether the OMOR at issue is 

a Tier 1 or Tier 2 OMOR.5

For FY 2022, the OMUFA fee rates 

are: Tier 1 OMOR fees ($507,021), Tier 

2 OMOR fees ($101,404), MDF facility 

fees ($24,178), and CMO facility fees 

($16,119). These fees are effective for 

the period from October 1, 2021, 

through September 30, 2022.6 This 

document is issued pursuant to sections 

744M(a)(4) and 744M(c)(4)(B) of the 

FD&C Act and describes the calculations 

used to set the OMUFA facility fees and 

OMOR fees for FY 2022 in accordance 

with the directives in the statute. 

II. Facility Fee Revenue Amount for FY 

2022 

A. Base Fee Revenue Amount 

Under OMUFA, FDA sets annual 

facility fees to generate the total facility 

fee revenues for each fiscal year 

established by section 744M(b) of the 

FD&C Act. The yearly base revenue 

amount is the starting point for setting 

annual facility fee rates. The base 

revenue for FY 2022 is the dollar 

amount of the total revenue amount for 

the previous fiscal year, without certain 

adjustments made for that previous 

year, and is $8,000,000 (see section 

744M(b)(3)(B) of the FD&C Act). 

B. Fee Revenue Adjustment for Inflation 

Under OMUFA, the annual base 

revenue amount for facility fees is 


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