63480 Federal Register / Vol. 75, No. 199 / Friday, October 15, 2010 / Notices 

ESTIMATED ANNUALIZED BURDEN TABLE—Continued 

Forms (if necessary) Type of respondent Number of 

respondents 

Number of 

responses per 

respondent 

Average 

burden per 

response 

(in hrs.) 

Total burden 

hours 

Subsequent updates to the State 

Plan.

State Government or Qualified State 

Designated Entity.

56 1 500 28,000 

Total ........................................... ........................................................... ........................ ........................ ........................ 589,244 

Terry Nicolosi, 

Director, Office of Resources Management; 

Office of the Chief Information Officer. 

[FR Doc. 2010–25918 Filed 10–14–10; 8:45 am] 

BILLING CODE 4150–45–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Office of the Secretary 

Centers for Medicare & Medicaid 

Services 

Delegation of Authorities 

Notice is hereby given that I have 

delegated to the Administrator, Centers 

for Medicare & Medicaid Services 

(CMS), or his or her successor, 

authorities vested in the Secretary under 

Section 6409(a) and (b) of the Patient 

Protection and Affordable Care Act 

(ACA), Public Law 111–148, as 

amended hereafter, relating to the 

development of a Medicare self-referral 

disclosure protocol and the reduction of 

amounts due and owing under Section 

1877(g) [42 U.S.C. 1395nn(g)] of the 

Social Security Act. 

This delegation of authorities 

excludes the authority under Section 

6409(c) of ACA to submit a report to 

Congress on the implementation of 

Section 6409. 

This delegation of authorities granted 

herein may be re-delegated. 

These authorities shall be exercised 

under the Department’s policy on 

regulations and the existing delegation 

of authority to approve and issue 

regulations. 

I hereby affirm and ratify any actions 

taken by the Administrator, CMS, or his 

or her subordinates, which involved the 

exercise of the authorities delegated 

herein prior to the effective date of this 

delegation. 

This delegation of authorities granted 

herein is effective immediately. 

Authority: 44 U.S.C. 3101. 

Dated: September 29, 2010. 

Kathleen Sebelius, 

Secretary. 

[FR Doc. 2010–25976 Filed 10–14–10; 8:45 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Medicaid Program: Implementation of 

Section 614 of the Children’s Health 

Insurance Program Reauthorization 

Act of 2009 for Adjustments to the 

Federal Medical Assistance 

Percentage for Medicaid Federal 

Matching Funds 

AGENCY: Office of the Secretary, 

Department of Health and Human 

Services. 

ACTION: Final notice. 

SUMMARY: For purposes of Title XIX 

(Medicaid) of the Social Security Act, 

the Federal Medical Assistance 

Percentage (FMAP), defined in section 

1905(b) of the Social Security Act, for 

each State beginning with fiscal year 

2006 is subject to adjustment pursuant 

to section 614 of the Children’s Health 

Insurance Program Reauthorization Act 

of 2009 (CHIPRA), Public Law 111–3. 

Section 614 provides for a recalculation 

of the FMAP disregarding identifiable 

significantly disproportionate employer 

pension or insurance fund contributions 

for a State. These contributions, when 

counted, increase State personal income 

and, by operation of the statutory 

formula to calculate the FMAP, would 

decrease the FMAP for the State. This 

final notice announces the methodology 

that the U.S. Department of Health and 

Human Services will use to determine 

the need for, and amount of, any such 

recalculation of the FMAP for a State. 

A. Background 

Section 1905(b) of the Social Security 

Act defines the Federal Medical 

Assistance Percentage (FMAP), which is 

used to determine the share of Federal 

matching funds paid to each State for 

medical assistance payments under an 

approved Medicaid State plan under 

Title XIX of the Social Security Act. 

These FMAP rates are also used to 

determine Federal matching fund rates 

for State expenditures for assistance 

payments under certain social service 

programs under Title IV of the Social 

Security Act and for child health 

assistance expenditures under the 

Children’s Health Insurance Program 

under title XXI of the Social Security 

Act. In other Federal Register issuances, 

we have addressed changes to these 

FMAP rates required under the 

American Recovery and Reinvestment 

Act of 2009 (Pub. L. 111–5). 

This notice addresses adjustments to 

the FMAP rates that are applicable only 

to the Medicaid program and required 

by Section 614 of the Children’s Health 

Insurance Program Reauthorization Act 

of 2009 (CHIPRA). Section 614 specifies 

that certain significantly 

disproportionate employer pension or 

insurance fund contributions shall be 

disregarded when computing the per 

capita income used to calculate the 

FMAP. The statutory formula for 

calculating the FMAP is based on the 

ratio of the State’s per capita income to 

the per capita income of the entire 

United States. Under this formula, 

States with higher per capita income 

levels could have lower FMAP rates 

than States with lower per capita 

income levels. Significantly 

disproportionate employer pension or 

insurance fund contributions increase 

State personal income and, by operation 

of the statutory formula, could result in 

lower FMAPs than if those 

contributions were disregarded. 

CHIPRA requires adjustments to the 

Fiscal Year 2006 (FY06) through Fiscal 

Year 2010 (FY10) Medicaid FMAP rates 

and to any future FMAP calculation. 

A notice with comment on the 

proposed implementation of Section 

614 was published in the Federal 

Register on June 7, 2010. Only one 

person sent in comments during the 30- 

day period. 

B. Calculation of the FMAP Adjustment 

Under CHIPRA 

Section 614 of CHIPRA requires that 

the Title XIX Medicaid FMAP shall be 

adjusted for any States that had 

significantly disproportionate employer 

pension and insurance fund 

contributions. A significantly 

disproportionate employer contribution 

is defined as any identifiable employer 

contribution towards pension or other 

employee insurance funds that is 

estimated to accrue to residents of such 

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Federal Register / Vol. 75, No. 199 / Friday, October 15, 2010 / Notices 63481 

State for a calendar year if the increase 

exceeds 25 percent of the total increase 

in State personal income. The personal 

income data set originally used in 

calculating FMAP rates shall be used for 

making this adjustment to the FMAP 

rates. 

The required adjustment is a 

recalculation of the FMAP rate 

disregarding any significantly 

disproportionate employer pension or 

insurance fund contribution in 

computing the State per capita income, 

but not disregarding such contributions 

in computing the United States per 

capita income used in the FMAP 

calculation. Section 614(c) provides that 

in no case shall a State have its FMAP 

reduced because of the application of 

this disregard. 

Section 614(b)(3) specifies a special 

adjustment for negative growth in State 

personal income. In that instance, for 

the purposes of calculating the FMAP 

for a calendar year, an employer 

pension and insurance fund 

contribution shall be disregarded to the 

extent that it exceeds 125 percent of the 

amount of employer contribution in the 

previous calendar year. The 

methodology to implement this 

provision will be addressed in a future 

Federal Register notice. 

C. Analysis of and Responses to 

Comments 

In response to the June 2010 proposed 

regulation, we received correspondence 

from one commenter. The commenter 

posed several questions and 

suggestions. 

Application of FMAP Adjustment 

Comment: The commenter asked if 

HHS anticipates the adjustment 

applying to only one particular State or 

is there a reasonable expectation that 

other States may qualify? In addition, 

the commenter asked whether HHS will 

provide guidance to States in the form 

of thresholds above which a State may 

determine that a review of employer 

contributions is warranted for a 

potential FMAP adjustment. 

Response: Except for Louisiana with a 

negative growth in personal income in 

2005, all other States had increases in 

State personal income of between $359 

million and $1.4 billion or more during 

the 2003–2008 time period. A 

contribution attributed to a particular 

State’s personal income of at least 25 

percent of these amounts would be 

necessary to trigger an FMAP 

adjustment. At this time, HHS knows of 

only one disproportionate employer 

contribution, attributed to Michigan in 

2003. HHS does not think it is likely 

that another employer contribution in 

2003–2008 would be considered 

disproportionate, but does not rule out 

the possibility. It is possible, however, 

that additional States may qualify at any 

point in the future. HHS does not intend 

to issue guidance with each FMAP 

notice on a State’s potential threshold 

where a review of its employer 

contributions may be warranted. States 

can determine for themselves using 

Department of Commerce Bureau of 

Economic Analysis (BEA) data, whether 

an employer’s contribution would meet 

the threshold for triggering an FMAP 

adjustment. 

Definition of Employer Pension and 

Insurance Fund Contribution 

Comment: The commenter asked 

whether the definition of ‘‘employer 

pension and insurance fund 

contribution’’ is the same as the BEA 

definition. 

Response: HHS intends to use the 

BEA definition: contributions consisting 

of employer payments (including 

payments-in-kind) to private pension 

and profit-sharing plans, publicly 

administered government employee 

retirement plans, private group health 

and life insurance plans, privately 

administered workers’ compensation 

plans, and supplemental unemployment 

benefit plans, formerly called ‘‘other 

labor income’’. 

Accounting for Employer’s 

Contributions 

Comment: The commenter asked if it 

is the intent of the methodology to 

identify single employers with 

disproportionate pension and insurance 

fund contributions. The commenter also 

asked whether contributions from any 

employer (public, private for-profit, 

private non-profit, self-employed, S 

Corporations, C corporations, LLCs, etc) 

are eligible. 

Response: The legislation states that a 

significantly disproportionate employer 

pension and insurance fund 

contribution is any identifiable 

employer contribution meeting the 

threshold. HHS reads this language to 

refer to the contribution of a single 

employer. The legislation does not 

exclude any employer. 

Adjustment for Negative Growth in State 

Income 

Comment: The commenter asked 

whether the cumulative amount of 

contributions in excess of 125 percent 

from all such qualifying employers 

would be disregarded for the special 

adjustment for negative growth in State 

personal income. 

Response: This comment concerns the 

special adjustment for negative growth 

in State personal income, which is not 

covered in this notice. HHS intends to 

issue another notice on the special 

adjustment for negative growth in State 

personal income. 

Acceptable Evidence Submission 

Comment: The commenter suggested 

that it would be beneficial for HHS to 

describe in more detail what evidence of 

disproportionate employer pension and 

insurance fund contribution is 

acceptable and asked what methodology 

will be used to determine the amounts 

of employer contributions estimated to 

accrue to residents of a State. 

Response: In order to give States as 

much flexibility as possible in the type 

of information that can be submitted to 

request an adjustment, HHS does not 

want to prescribe the specific type or 

format of their submission, but the 

information should be documented in 

such a way to permit effective review 

and verification. HHS will be using the 

same methodology employed by BEA 

which is based on a distribution of 

industry wages to allocate employer 

contributions to States. 

Time Period for Adjustment and Data 

Submission 

Comment: The commenter asked 

whether it is correct that there is no end 

date to this provision. The commenter 

believed that the time frame for 

submitting data for employer 

contributions made between 2003 and 

2008 by the end of FY 2010 is 

unreasonable and that States should be 

given up to 4 years to supply 

information for future years. The 

commenter also asked how long the 

verification process will take in 

considering a request to adjust a State’s 

FMAP and indicates that States would 

appreciate a response within their fiscal 

year. 

Response: The commenter correctly 

noted that the legislation does not 

indicate an end date to this provision. 

HHS finds the commenter’s suggestion 

for a longer time frame for submitting 

initial data for the years 2003 through 

2008 reasonable. HHS therefore extends 

the time frame for submitting data for 

employer contributions made between 

2003 and 2008 to the end of FY 2011. 

Similarly, HHS agrees to extend the 

time frame for submitting data from 

2009 and beyond such that the deadline 

for submission of data from 2009 and 

beyond will be the end of the second 

fiscal year following the year end of the 

employer’s annual financial statement 

that includes the disproportionate 

employer contribution. 

Because it is not known what 

information a State may submit as 

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63482 Federal Register / Vol. 75, No. 199 / Friday, October 15, 2010 / Notices 

justification for an FMAP adjustment, 

we cannot predetermine how much time 

will be required to verify the 

information, but will review and verify 

a State’s submission and request for an 

adjustment to its FMAP as expeditiously 

as possible. 

D. Methodology Utilized in the 

Calculation of the Adjustment to the 

Medicaid FMAP 

This Final Notice announces the 

methodology that the U.S. Department 

of Health and Human Services (HHS) 

will use in implementing the employer 

contribution disregard required by 

Section 614 of CHIPRA. The approach 

reflects the absence of a Federal source 

of reliable and timely data on pension 

and insurance contributions by 

individual employer and State. 

We will use the BEA definition of 

pension and insurance contributions: 

contributions consisting of employer 

payments (including payments-in-kind) 

to private pension and profit-sharing 

plans, publicly administered 

government employee retirement plans, 

private group health and life insurance 

plans, privately administered workers’ 

compensation plans, and supplemental 

unemployment benefit plans, formerly 

called ‘‘other labor income’’. 

We will identify significantly 

disproportionate employer pension or 

insurance contributions for a State by 

reviewing contributions identified by 

the State. We believe that States may 

have greater access to timely and 

relevant data on such contributions than 

is available from Federal data sources. 

We would request that any State that 

believes an individual employer has 

made a significantly disproportionate 

employer or insurance contribution 

provide data on that individual 

employer contribution to HHS. The 

State may submit official audited 

financial statements for the employer for 

the year of the contribution (starting 

with the year 2003) and the prior year. 

If the State does not submit official 

audited financial statements for the 

employer, the State may submit other 

evidence that the increase in the 

employer’s contribution is likely to 

exceed 25 percent of the increase in the 

State’s personal income in that year. 

After a State submits written 

notification that such a contribution 

occurred, HHS will verify the State’s 

data. As part of this verification process, 

HHS will search the Security Exchange 

Commission (SEC) filings or the Internal 

Revenue Service (IRS) 5500 Annual 

Return/Report of Employee Benefit Plan 

database to find the employer’s 

contributions for the relevant two-year 

period. If HHS is unable to verify the 

State’s submitted data, no FMAP 

adjustment will be made. 

After the State’s data for an employer 

is verified, HHS will allocate employer 

contributions in both years to the State 

according to the methodology used by 

the BEA. Under that methodology, 

employer contributions to pension and 

insurance funds are distributed 

according to State wages and salaries by 

the employer’s industry subsector. 

Then, HHS will determine whether the 

State increase in the employer 

contribution exceeds the trigger of 25 

percent of the increase in total State 

personal income. 

If the employer contribution is 

significantly disproportionate, HHS will 

disregard the State-allocated 

contribution, i.e., subtract it from the 

State’s personal income in that year. 

HHS will calculate the FMAP 

adjustment for the State using the 

revised State per capita income based 

on the newly calculated State personal 

income. Since the FMAP calculation 

involves the average per capita income 

for three years, the FMAP adjustment 

will be calculated for each fiscal year 

affected by the State’s revised per capita 

income. For instance, a significantly 

disproportionate employer contribution 

in 2003 would affect the FMAPs for 

FY06 (based on State per capita income 

for calendar years 2001, 2002, and 

2003), FY07 (based on State per capita 

income for calendar years 2002, 2003, 

and 2004), and FY08 (based on State per 

capita income for calendar years 2003, 

2004, and 2005). 

States may submit data on 

disproportionate employer 

contributions made between 2003 and 

2008 to HHS by the end of FY 2011. The 

deadline for 2009 and beyond will be 

the end of the second fiscal year 

following the year end of the employer’s 

annual financial statement that includes 

the disproportionate employer 

contribution. 

To summarize this methodology, after 

receipt of a State submission, HHS will 

verify the employer contributions from 

SEC filings or IRS 5500 reports for the 

year of the contribution and the prior 

year. If the employer contributions are 

verified, HHS will allocate the employer 

contributions for the State for both years 

and determine whether the State 

increase in the employer contribution 

exceeds the trigger of 25 percent of the 

increase in the State’s personal income. 

If the employer contribution meets the 

definition of significantly 

disproportionate by exceeding the 

trigger, HHS will recalculate the FMAP 

rates for the corresponding fiscal years. 

The Centers for Medicare & Medicaid 

Services (CMS) will then calculate the 

changes in Federal medical assistance 

payments resulting from the adjusted 

FMAP rates for the State’s applicable 

fiscal years. If HHS is unable to verify 

the State’s submitted data, then no 

FMAP adjustment will be made. 

DATES: Effective Dates: This final notice 

is effective 30 days after publication and 

sets forth a methodology for adjusted 

percentages applicable under title XIX 

of the Social Security Act for fiscal years 

2006 and beyond, beginning October 1, 

2005. 

FOR FURTHER INFORMATION CONTACT: Rose 

Chu or Thomas Musco, Office of Health 

Policy, Office of the Assistant Secretary 

for Planning and Evaluation, Room 

447D—Hubert H. Humphrey Building, 

200 Independence Avenue, SW., 

Washington, DC 20201, (202) 690–6870. 

Dated: September 10, 2010 . 

Kathleen Sebelius, 

Secretary. 

[FR Doc. 2010–25977 Filed 10–14–10; 8:45 am] 

BILLING CODE 4210–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[Document Identifier: CMS–10304 and CMS– 

10315] 

Agency Information Collection 

Activities: Submission for OMB 

Review; Comment Request 

AGENCY: Centers for Medicare & 

Medicaid Services, HHS. 

In compliance with the requirement 

of section 3506(c)(2)(A) of the 

Paperwork Reduction Act of 1995, the 

Centers for Medicare & Medicaid 

Services (CMS), Department of Health 

and Human Services, is publishing the 

following summary of proposed 

collections for public comment. 

Interested persons are invited to send 

comments regarding this burden 

estimate or any other aspect of this 

collection of information, including any 

of the following subjects: (1) The 

necessity and utility of the proposed 

information collection for the proper 

performance of the Agency’s function; 

(2) the accuracy of the estimated 

burden; (3) ways to enhance the quality, 

utility, and clarity of the information to 

be collected; and (4) the use of 

automated collection techniques or 

other forms of information technology to 

minimize the information collection 

burden. 

1. Type of Information Collection 

Request: New collection; Title of 

Information Collection: Information 

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