[Federal Register Volume 75, Number 209 (Friday, October 29, 2010)]
[Notices]
[Pages 66763-66766]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27412]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES


Implementation of Section 5001 of the American Recovery and 
Reinvestment Act of 2009 (Pub. L. 111-5) for Adjustments to the Fourth 
Quarter of Fiscal Year 2010 Federal Medical Assistance Percentage Rates 
for Federal Matching Shares for Medicaid and Title IV-E Foster Care, 
Adoption Assistance and Guardianship Assistance Programs

AGENCY: Office of the Secretary, DHHS.

ACTION: Notice.

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SUMMARY: This notice provides the adjusted Federal Medical Assistance 
Percentage (FMAP) rate for the fourth quarter of Fiscal Year 2010 
(FY10) as required under Section 5001 of the American Recovery and 
Reinvestment Act of 2009 (ARRA). Section 5001 of the ARRA provides for 
temporary increases in the FMAP rates to provide fiscal relief to 
States and to protect and maintain State Medicaid and certain other 
assistance programs in a period of economic downturn. The increased 
FMAP rates apply during a recession adjustment period that was 
originally defined in ARRA as the period beginning October 1, 2008 and 
ending December 31, 2010. Public Law 111-226 amended ARRA to extend the 
recession adjustment period to June 30, 2011 and to extend the hold 
harmless provision that prevents a State's FMAP rate from decreasing 
due to a lower unemployment rate from the calendar quarter ending 
before July 1, 2010 to the calendar quarter ending before January 1, 
2011. Public Law 111-226 also provided for a phase-down of the general 
FMAP increase in the last two quarters of the extended recession 
adjustment period, and changed the methodology for calculating the 
unemployment adjustment for those quarters.

DATES: Effective Date: The percentages listed are for the fourth 
quarter of FY10 beginning July 1, 2010 through September 30, 2010.

A. Background

    The FMAP is used to determine the amount of Federal matching for 
specified State expenditures for assistance payments under programs 
under the Social Security Act (``the Act''). Sections 1905(b) and 
1101(a)(8)(B) of the Act require the Secretary of Health and Human 
Services to publish the FMAP rates each year. The Secretary calculates 
the percentages using formulas in sections 1905(b) and 1101(a)(8)(B), 
and statistics from the Department of Commerce of average income per 
person in each State and for the Nation as a whole. The percentages 
must be within the upper and lower limits given in section 1905(b) of 
the Act. The percentages to be applied to the District of Columbia, 
Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern 
Mariana Islands are specified separately in the Act, and thus are not 
based on the statutory formula that determines the percentages for the 
50 States.
    Section 1905(b) of the Act specifies the formula for calculating 
the FMAP as follows:

    The FMAP for any State shall be 100 per centum less the State 
percentage; and the State percentage shall be that percentage which 
bears the same ratio to 45 per centum as the square of the per 
capita income of such State bears to the square of the per capita 
income of the continental United States (including Alaska) and 
Hawaii; except that (1) the FMAP shall in no case be less than

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50 per centum or more than 83 per centum, and (2) the FMAP for 
Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, 
and American Samoa shall be 50 per centum.

    Section 4725 of the Balanced Budget Act of 1997 amended section 
1905(b) to provide that the FMAP for the District of Columbia for 
purposes of titles XIX (Medicaid) and XXI (CHIP) shall be 70 percent. 
The Medicare Improvements for Patients and Providers Act of 2008 
(MIPPA) (Pub. L. 110-275) amended the FMAP applied to the District of 
Columbia for maintenance payments under title IV-E programs to make it 
consistent with the 70 percent Medicaid match rate.
    Section 5001 of Division B of the ARRA provides for a temporary 
increase in FMAP rates for Medicaid and title IV-E Foster Care, 
Adoption Assistance and Guardianship Assistance programs. The purpose 
of the increases to the FMAP rates is to provide fiscal relief to 
States and to protect and maintain State Medicaid and certain other 
assistance programs in a period of economic downturn, referred to as 
the ``recession adjustment period.'' The recession adjustment period is 
defined as the period beginning October 1, 2008 and ending December 31, 
2010. Public Law 111-226 extends the recession adjustment period to 
June 30, 2011.

B. Calculation of the Increased FMAP Rates Under ARRA

    Section 5001 of the ARRA specifies that the FMAP rates shall be 
temporarily increased for the following: (1) Maintenance of FMAP rates 
for FY09, FY10, and the first three calendar quarters of FY11, so that 
the FMAP rate will not decrease from the prior year, determined by 
using as the FMAP rate for the current year, the greater of any prior 
fiscal year FMAP rates between 2008-2010 or the rate calculated for the 
current fiscal year; (2) in addition to any maintenance increase, the 
application of a general percentage point increase in each State's FMAP 
of 6.2 percentage points (decreasing during the last two quarters of 
the extended recession adjustment period); and (3) an additional 
percentage point increase based on the State's increase in unemployment 
during the recession adjustment period. The resulting increased FMAP 
cannot exceed 100 percent. Each State's FMAP will be recalculated each 
fiscal quarter beginning October 2008. Availability of certain 
components of the increased FMAP is conditioned on States meeting 
statutory programmatic requirements, such as the maintenance of effort 
requirement, which are not part of the calculation process.
    Expenditures for which the increased FMAP is not available under 
title XIX include expenditures for disproportionate share hospital 
payments, certain eligibility expansions, services received through an 
IHS or Tribal facility (which are already paid at a rate of 100 percent 
and therefore not subject to increase), and expenditures that are paid 
at an enhanced FMAP rate. The increased FMAP is available for 
expenditures under part E of title IV (including Foster Care, Adoption 
Assistance and Guardianship Assistance programs) only to the extent of 
a maintenance increase (hold harmless), if any, and the general 
percentage point increase. The increased FMAP does not apply to other 
parts of title IV, including part D (Child Support Enforcement 
Program).
    For title XIX purposes only, for each qualifying State with an 
unemployment rate that has increased at a rate above the statutory 
threshold percentage, ARRA provides additional relief above the general 
percentage point increase in FMAP through application of a separate 
increase calculation. For those States, the FMAP for each qualifying 
State is increased by the number of percentage points equal to the 
product of the State matching percentage (as calculated under section 
1905(b) and adjusted if necessary for the maintenance of FMAP without 
reduction from the prior year, and after applying half of the general 
percentage point increase in the Federal percentage) and the applicable 
percent determined from the State unemployment increase percentage for 
the quarter.
    The unemployment increase percentage for calendar quarters other 
than the last two quarters of the recession adjustment period is equal 
to the number of percentage points (if any) by which the average 
monthly unemployment rate for the State in the most recent previous 3-
consecutive-month period for which data are available exceeds the 
lowest average monthly unemployment rate for the State for any 3-
consecutive-month period beginning on or after January 1, 2006.
    A State qualifies for additional relief based on an increase in 
unemployment if that State's unemployment increase percentage is at 
least 1.5 percentage points. A different but related methodology for an 
unemployment adjustment applies for the last two quarters of the 
recession adjustment period.
    The applicable percent is: (1) 5.5 percent if the State 
unemployment increase percentage is at least 1.5 percentage points but 
less than 2.5 percentage points; (2) 8.5 percent if the State 
unemployment increase percentage is at least 2.5 percentage points but 
less than 3.5 percentage points; and (3) 11.5 percent if the State 
unemployment increase percentage is at least 3.5 percentage points.
    If the State's applicable percent is less than the applicable 
percent for the preceding quarter, then the higher applicable percent 
shall continue in effect for any calendar quarter beginning on or after 
January 1, 2009 and ending before January 1, 2011, as amended by Public 
Law 111-226. This hold harmless provision is not in effect from January 
1, 2011 to June 30, 2011.
    Under section 5001(b)(2) of ARRA, Puerto Rico, the Virgin Islands, 
Guam, the Commonwealth of the Northern Mariana Islands, and America 
Samoa were given the option to make a special one-time election between 
(1) a 30 percent increase in their cap on Medicaid payments (as 
determined under subsections (f) and (g) of section 1108 of the Act), 
or (2) applying the general 6.2 percentage point increase in the FMAP 
plus a 15 percent increase in the cap on Medicaid payments. There is no 
quarterly unemployment adjustment for territories. All territories and 
the Commonwealth of the Northern Mariana Islands elected the 30 percent 
increase in their spending cap on Medicaid payments; therefore there is 
no recalculation of their FMAP rate.

D. Adjusted FMAPs for the Fourth Quarter of FY2010

    ARRA adjustments to FMAPs are shown by State in the accompanying 
table. The hold harmless FY10 FMAP is the higher of the original FY08, 
FY09, or FY10 FMAP. The 6.2 percentage point increase is added to the 
hold harmless FY10 FMAP. The unemployment adjustment is calculated 
according to the unemployment tier and added to the hold harmless FY10 
FMAP with the 6.2 percentage point increase.
    For the fourth quarter of FY10, the unemployment tier is determined 
by comparing the average unemployment rate for the three consecutive 
months preceding the start of the fiscal quarter to the lowest 
consecutive 3-month average unemployment rate beginning January 1, 
2006. If the State's applicable percent is less than the applicable 
percent for the third quarter of FY10, then the higher applicable 
percent shall continue for the fourth quarter of FY10.
    As indicated in the August 4, 2009 Federal Register Notice that 
proposed the methodology for the FMAP unemployment adjustment 
calculations (74 FR 38630), we utilize annual updates to the historical 
Bureau of

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Labor Statistics (BLS) data to make changes to the States' lowest 
unemployment rate beginning with the fourth quarter FMAP rate 
adjustment calculation each year. As such, the rates calculated and 
presented in the accompanying table are based on updates to the 
historical BLS data used to determine the States' average lowest 
unemployment rate for any 3 consecutive months beginning January 1, 
2006.

FOR FURTHER INFORMATION CONTACT: Carrie Shelton 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.

(Catalog of Federal Domestic Assistance Program Nos. 93.778: Medical 
Assistance Program; 93.658: Foster Care; 93.659: Adoption 
Assistance; 93.090: Guardianship Assistance)

    Dated: September 22, 2010.
Kathleen Sebelius,
Secretary.

                                                            ARRA Adjustments to FMAP Q4 FY10
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                                                                           Hold harmless    4th Quarter     4th Quarter     4th Quarter     4th Quarter
                                                           Hold harmless  FY10 FMAP with       FY10            FY10          FY10 FMAP       FY10 FMAP
                          State                                FY10           6.2% pt      unemployment    unemployment    unemployment    unemployment
                                                                             increase          tier         adjustment      adjustment     hold harmless
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Alabama.................................................           68.01           74.21            11.5            3.32           77.53           77.53
Alaska..................................................           52.48           58.68             5.5            2.44           61.12           62.46
Arizona.................................................           66.20           72.40            11.5            3.53           75.93           75.93
Arkansas................................................           72.94           79.14             8.5            2.04           81.18           81.18
California..............................................           50.00           56.20            11.5            5.39           61.59           61.59
Colorado................................................           50.00           56.20            11.5            5.39           61.59           61.59
Connecticut.............................................           50.00           56.20            11.5            5.39           61.59           61.59
Delaware................................................           50.21           56.41            11.5            5.37           61.78           61.78
Dist. of Columbia.......................................           70.00           76.20            11.5            3.09           79.29           79.29
Florida.................................................           56.83           63.03            11.5            4.61           67.64           67.64
Georgia.................................................           65.10           71.30            11.5            3.66           74.96           74.96
Hawaii..................................................           56.50           62.70            11.5            4.65           67.35           67.35
Idaho...................................................           69.87           76.07            11.5            3.11           79.18           79.18
Illinois................................................           50.32           56.52            11.5            5.36           61.88           61.88
Indiana.................................................           65.93           72.13            11.5            3.56           75.69           75.69
Iowa....................................................           63.51           69.71             8.5            2.84           72.55           72.55
Kansas..................................................           60.38           66.58             8.5            3.10           69.68           69.68
Kentucky................................................           70.96           77.16            11.5            2.98           80.14           80.14
Louisiana...............................................           72.47           78.67             8.5            2.08           80.75           81.48
Maine...................................................           64.99           71.19            11.5            3.67           74.86           74.86
Maryland................................................           50.00           56.20            11.5            5.39           61.59           61.59
Massachusetts...........................................           50.00           56.20            11.5            5.39           61.59           61.59
Michigan................................................           63.19           69.39            11.5            3.88           73.27           73.27
Minnesota...............................................           50.00           56.20             8.5            3.99           60.19           61.59
Mississippi.............................................           76.29           82.49            11.5            2.37           84.86           84.86
Missouri................................................           64.51           70.71            11.5            3.72           74.43           74.43
Montana.................................................           68.53           74.73            11.5            3.26           77.99           77.99
Nebraska................................................           60.56           66.76             5.5            2.00           68.76           68.76
Nevada..................................................           52.64           58.84            11.5            5.09           63.93           63.93
New Hampshire...........................................           50.00           56.20             8.5            3.99           60.19           61.59
New Jersey..............................................           50.00           56.20            11.5            5.39           61.59           61.59
New Mexico..............................................           71.35           77.55            11.5            2.94           80.49           80.49
New York................................................           50.00           56.20            11.5            5.39           61.59           61.59
North Carolina..........................................           65.13           71.33            11.5            3.65           74.98           74.98
North Dakota............................................           63.75           69.95               0            0.00           69.95           69.95
Ohio....................................................           63.42           69.62            11.5            3.85           73.47           73.47
Oklahoma................................................           67.10           73.30            11.5            3.43           76.73           76.73
Oregon..................................................           62.74           68.94            11.5            3.93           72.87           72.87
Pennsylvania............................................           54.81           61.01            11.5            4.84           65.85           65.85
Rhode Island............................................           52.63           58.83            11.5            5.09           63.92           63.92
South Carolina..........................................           70.32           76.52            11.5            3.06           79.58           79.58
South Dakota............................................           62.72           68.92             5.5            1.88           70.80           70.80
Tennessee...............................................           65.57           71.77            11.5            3.60           75.37           75.37
Texas...................................................           60.56           66.76            11.5            4.18           70.94           70.94
Utah....................................................           71.68           77.88            11.5            2.90           80.78           80.78
Vermont.................................................           59.45           65.65             8.5            3.18           68.83           69.96
Virginia................................................           50.00           56.20            11.5            5.39           61.59           61.59
Washington..............................................           51.52           57.72            11.5            5.22           62.94           62.94
West Virginia...........................................           74.25           80.45            11.5            2.60           83.05           83.05
Wisconsin...............................................           60.21           66.41            11.5            4.22           70.63           70.63
Wyoming.................................................           50.00           56.20            11.5            5.39           61.59           61.59
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[FR Doc. 2010-27412 Filed 10-28-10; 8:45 am]
BILLING CODE 4150-05-P