Federal Register / Vol. 78, No. 181 / Wednesday, September 18, 2013 / Rules and Regulations 57293 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

42 CFR Part 7 

[Docket No. CDC–2013–0013] 

RIN 0920–AA52 

Distribution of Reference Biological 

Standards and Biological Preparations 

AGENCY: Centers for Disease Control and 

Prevention (HHS/CDC), Department of 

Health and Human Services (HHS). 

ACTION: Confirmation of effective date of 

direct final rule. 

SUMMARY: The Centers for Disease 

Control and Prevention (CDC) within 

the Department of Health and Human 

Services (HHS) is publishing this 

document to confirm the effective date 

of the Direct Final Rule (DFR), 

published on July 22, 2013 (78 FR 

43817). 

DATES: The Direct Final Rule published 

at 78 FR 43817, July 22, 2013, will 

become effective on September 20, 

2013. 

FOR FURTHER INFORMATION CONTACT: For 

questions concerning this document: Dr. 

Carolyn M. Black, M.D., Division of 

Scientific Resources, Centers for Disease 

Control and Prevention, 1600 Clifton 

Road NE., Mailstop C–17, Atlanta, 

Georgia 30333; telephone 404–639– 

3466. 

SUPPLEMENTARY INFORMATION: On July 

22, 2013, HHS/CDC published a Direct 

Final Rule (DFR) amending 42 CFR part 

7 to update the agency name, address, 

and contact information for that part (78 

FR 43817. In that document, HHS/CDC 

indicated that if we did not receive any 

significant adverse comments on the 

direct final rule by August 21, 2013, we 

would publish a document in the 

Federal Register confirming the 

effective date of the direct final rule 

within 30 days after the end of the 

comment period. HHS/CDC did not 

receive significant adverse comment to 

the DFR. Therefore, consistent with the 

Direct Final Rule, the updated agency 

name and address and contact 

information for 42 CFR part 7 will 

become effective on September 20, 2013 

(78 FR 43817). 

Dated: September 11, 2013. 

Kathleen Sebelius, 

Secretary. 

[FR Doc. 2013–22685 Filed 9–17–13; 8:45 am] 

BILLING CODE 4163–18–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 447 

[CMS–2367–F] 

RIN 0938–AR31 

Medicaid Program; State 

Disproportionate Share Hospital 

Allotment Reductions 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: The statute, as amended by 

the Affordable Care Act, requires 

aggregate reductions to state Medicaid 

Disproportionate Share Hospital (DSH) 

allotments annually from fiscal year 

(FY) 2014 through FY 2020. This final 

rule delineates a methodology to 

implement the annual reductions for FY 

2014 and FY 2015. The rule also 

includes additional DSH reporting 

requirements for use in implementing 

the DSH health reform methodology. 

DATES: Effective Date: These regulations 

are effective on November 18, 2013. 

FOR FURTHER INFORMATION CONTACT: Rory 

Howe, (410) 786–4878; or Richard 

Strauss, (410) 786–2019. 

SUPPLEMENTARY INFORMATION: 

I. Executive Summary 

A. Purpose 

The statute as amended by the 

Affordable Care Act sets forth aggregate 

reductions to state Medicaid 

disproportionate share hospital (DSH) 

allotments annually from fiscal year 

(FY) 2014 through FY 2020. This final 

rule delineates the DSH Health Reform 

Methodology (DHRM) to implement the 

annual reductions for FY 2014 and FY 

2015. 

B. Summary of the Major Provisions 

The statute as amended by the 

Affordable Care Act directs the 

Secretary to implement the annual DSH 

allotment reductions using a DHRM. 

This rule amends part 447 by 

establishing the DHRM. The DHRM 

incorporates five factors identified in 

the statute. 

C. Costs and Benefits 

Taking these five factors into account 

for each state, the DHRM will generate 

a state-specific DSH allotment reduction 

amount for FY 2014 and FY 2015. The 

total of all DSH allotment reduction 

amounts will equal the aggregate annual 

reduction amounts identified in the 

statute for FY 2014 and FY 2015. To 

determine the effective annual DSH 

allotment for each state, the statespecific annual DSH allotment 

reduction amount will be applied to the 

unreduced DSH allotment amount for 

its respective state. 

II. Background 

A. Introduction 

As a result of the Affordable Care Act, 

millions of Americans will have access 

to health insurance coverage through 

qualified health plans offered through 

Health Insurance Exchanges (also called 

Marketplaces) or through Medicaid and 

Children’s Health Insurance Program. 

This increase in the number of 

individuals having access to health 

insurance is expected to significantly 

reduce levels of uncompensated care 

provided by hospitals. 

On the assumption that the number of 

uninsured people will fall sharply 

beginning in 2014, the statute reforms 

an existing Medicaid payment program 

for hospitals which serve a 

disproportionate share of low income 

patients, and therefore, may have 

uncompensated care costs. Under 

sections 1902(a)(13)(A)(iv) and 1923 of 

the Social Security Act (the Act), states 

are required to make payments to 

qualifying ‘‘disproportionate share’’ 

hospitals (DSH payments). Section 2551 

of the Affordable Care Act amended 

section 1923(f) of the Act, by adding 

paragraph (7), to provide for aggregate 

reductions in federal funding under the 

Medicaid program for such DSH 

payments for the 50 states and the 

District of Columbia. This reform of the 

DSH payment authority is consistent 

with the reduction of uncompensated 

care costs (particularly those associated 

with the uninsured) expected to result 

from the expansion of coverage under 

the statute. 

Section 1923(f)(7)(A)(i) of the Act 

requires that the Secretary of Health and 

Human Services (the Secretary) 

implement the aggregate reductions in 

federal funding for DSH payments 

through reductions in annual state 

allotments of federal funding for DSH 

payments (state DSH allotments), and 

accompanying reductions in payments 

to each state. The amount of federal 

funding for DSH payments for each state 

is limited to an annual state DSH 

allotment in accordance with section 

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

the Act requires the use of a DHRM to 

determine the percentage reduction in 

each annual state DSH allotment to 

achieve the required aggregate annual 

reduction in federal DSH funding. 


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