OMB’s 2000 standards replaced the 1990 standards for metropolitan areas. Some of the terms have changed, and appendix II provides an explanation of the key terms used in the new standards. OMB’s 2000 standards provide for the identification of the following statistical areas in the United States and Puerto Rico: metropolitan statistical area (which can be further divided into New England city and town area (including New England city and town area divisions); and combined New England city and town area. Determining the boundaries of metropolitan and micropolitan statistical areas starts with identifying the county(ies) or equivalent entity(ies), which contain the Census Bureau defined-urbanized area or urban cluster. This county is referred to as the “central county.” A metropolitan statistical area has at least one urbanized area of 50,000 or more, and a micropolitan statistical area has at least one urban cluster of at least 10,000 but less than 50,000 people. In addition, outlying counties are included in metropolitan and micropolitan statistical areas based on commuting ties with the central county. Some metropolitan statistical areas are very large, contain several counties, and cross state lines. If specified criteria are met, large metropolitan statistical areas can be subdivided into smaller geographic units called metropolitan divisions. Having subdivisions within a larger metropolitan statistical area provides data users with a set of statistics at a lower level of geography. Combined statistical areas are groupings of adjacent metropolitan and micropolitan areas. These combined statistical areas have social and economic ties as measured by commuting—but at lower levels when compared to counties within metropolitan and micropolitan statistical areas. Combined statistical areas provide data users with a broader perspective of how adjacent metropolitan and micropolitan areas are related. In view of the importance of cities and towns in New England, the 2000 standards also provide for a set of geographic areas that are defined using cities and towns in the six New England states. New England city and town areas use the same criteria as metropolitan and micropolitan statistical areas, metropolitan divisions, and combined statistical areas. The six states included in the New England region are Maine, Massachusetts, Rhode Island, Connecticut, New Hampshire, and Vermont. To address the first and second objectives, we reviewed Federal Register notices concerning the 2000 standards, compared the 2000 standards to the 1990 standards, and discussed the process and changes with OMB and Census Bureau officials. To address the third objective, we compared counties in metropolitan statistical areas as of June 30, 1999, using the 1990 standards, to counties in metropolitan and micropolitan statistical areas as of June 6, 2003, and February 18, 2004, using the 2000 standards. As part of that analysis, we identified the status—metropolitan, micropolitan, or not classified—for each of the counties in those listings. To provide detailed information on the changes that have occurred to counties’ metropolitan and micropolitan statistical area status from 1999 to 2003, we obtained Census Bureau maps for Michigan, New Mexico, and New York. We selected Michigan and New York because you asked us to look at changes that occurred as a result of the new standards in those two states; we selected New Mexico because it illustrates additional statistical coverage under the 2000 standards. We assessed the data reliability of the Census Bureau’s June 30, 1999, June 6, 2003, and February 18, 2004, county listings of metropolitan and micropolitan statistical areas by electronic testing for obvious errors in accuracy and completeness and by reviewing relevant documents, such as OMB bulletins, for those counties listed in metropolitan and micropolitan statistical areas. We determined that the data were sufficiently reliable for the purpose of our review. To address the fourth objective, we discussed with your staff which federal programs to review. The programs we agreed with your offices to review were (1) HUD’s Community Development Block Grant (CDBG) Program; (2) OPM’s Locality Pay Program for General Schedule Employees; (3) HHS’s Medicare’s payment system for hospital inpatients; and (4) HHS’s Ryan White CARE Act Program. To determine how the 2000 standards affected these programs, we reviewed relevant documentation, such as analysis performed by the program offices on the impact of new standards; attended public hearings; and interviewed agency officials overseeing these programs. We also compiled a list of federal programs that specify the use of metropolitan statistical areas for determining funding for federal programs, and the potential affect that the 2000 standards may have on funding for those programs. We compiled this list by performing a search of statutes that referred to “metropolitan statistical area(s)” or “MSA(s).” Our search was limited to the United States Code and was not intended to serve as an exhaustive list of federal programs that refer to metropolitan statistical areas. OMB’s process for developing the 2000 standards took more than a decade and involved extensive consultation with experts inside and outside government. (See fig. 1.) The process for developing the 2000 standards began even before OMB had published the 1990 standards. In 1989, OMB asked the Census Bureau to examine the concepts underlying the identification and definitions of metropolitan areas. The goal was to evaluate alternative approaches for identifying metropolitan areas that would take into account the variation in geographic settlement patterns across the United States. These patterns range from heavy concentrations of people to vast sparsely populated regions. The Bureau formed two working groups to research alternative approaches. The working groups found that assigning all territory outside of a metropolitan area to a single residual, nonmetropolitan area was no longer satisfactory. Based on these conclusions, the Census Bureau established agreements with four university working groups in 1991; each was to develop its own alternative for defining both metropolitan and nonmetropolitan areas. In 1995, these four alternatives were presented at a public conference hosted by the Council of Professional Associations on Federal Statistics (COPAFS), a group of professional associations, businesses, research institutes, and others interested in federal statistics that was established to promote an open dialogue with the federal statistical agencies. As the process for revising the standards moved along, there was also congressional interest in its progress. In July 1997, OMB and Census Bureau officials testified before the Subcommittee on Government Management, Information, and Technology, House Committee on Government Reform and Oversight, on the effort. In the fall of 1998, OMB chartered the interagency Metropolitan Area Standards Review Committee (MASRC), a group representing various statistical agencies within the federal government, and charged it with recommending revisions to the 1990 standards. In a December 21, 1998, Federal Register notice, OMB requested comments from the public on (1) the suitability of the current standards, (2) principles that should govern any proposed revisions to the standards, (3) reactions to the four approaches outlined in the notice, and (4) proposals for other ways to define metropolitan and nonmetropolitan areas. The issues posed in this Federal Register notice were also discussed at a second public conference hosted by COPAFS in January 1999. In addition, these issues were discussed extensively in two subsequent Federal Register notices, which solicited public comment on MASRC’s recommendations. On December 27, 2000, after considering public comments on MASRC recommendations, OMB released new standards for determining the boundaries of metropolitan and micropolitan statistical areas. In that notice of decision, OMB stated that it would apply the standards to geographic areas within the United States based on Census 2000 data and publish the results in 2003. On June 6, 2003, OMB published newly configured geographic areas. OMB also noted in the 2000 standards that it would designate new areas based on population updates from the Census Bureau, the first of which occurred on February 18, 2004. The 2000 standards differ from the 1990 standards in many ways, and the Census Bureau and OMB have stated that the new standards are simpler and more transparent than the previous standards. The 2000 standards define certain important concepts differently from those used in the 1990 standards. (See table 1.) One of the most notable differences between 1990 and 2000 is the introduction of a new designation for less populated areas—micropolitan statistical areas. These areas are comprised of a central county or counties with a Census Bureau-defined urban cluster of 10,000 to 49,999 population, plus adjacent outlying counties having a high degree of economic and social integration with the central county as measured through commuting. The 2000 standards also replaced the term primary metropolitan statistical areas (PMSA) with the term metropolitan division. OMB told us that that this change in terminology was a concern for many areas renamed metropolitan divisions. Long Island, New York, for example, expressed concern that the change in its designation, from part of a PMSA to a metropolitan division, might affect the distribution of federal funds to the area under programs that use the OMB standards. Although the criteria for PMSAs and metropolitan divisions are not identical because the population threshold increased, Long Island qualified as a metropolitan division, leaving its statistical status effectively unchanged. OMB provided additional guidance in its February 18, 2004, population update stating that if federal agencies were using PMSAs for program, administrative, and fund allocation purposes, the agencies should now consider using the metropolitan division definition, the comparable geographic unit established by the 2000 standards. Another change in the 2000 standards was in how an outlying county could link to a central county (or counties) and become part of a metropolitan or micropolitan statistical area. This process has been streamlined. Under the 2000 standards, an outlying county can be linked to a central county (or counties) if at least 25 percent of employed residents from the outlying county work in the central county (or counties) or at least 25 percent of the employment in the outlying county is accounted for by workers residing in the central county (or counties). This differs from the 1990 standards in which there were six scenarios for linking outlying counties to central counties, each of which included differing requirements for measures of settlement structure, such as population density and the percentage of the population that was urban. Two of the six scenarios also required a minimum amount of commuting of 15 percent. Thus, because the 2000 standards raised that amount to 25 percent and eliminated the other requirements of the 1990 standards, counties that had qualified under one of these two scenarios and had a minimum amount of commuting from 15 to 25 percent would no longer qualify as outlying counties. When OMB issued its June 6, 2003, newly configured statistical areas using the 2000 standards for the United States, five counties that had been part of metropolitan statistical areas, no longer qualified for this designation. An additional 41 counties that had been a part of metropolitan statistical areas are now components of micropolitan statistical areas. For a list of these counties see appendix IV. The 2000 standards also increased the number of counties, by over 900, across the country that attained status in statistical areas. (See figs. 2 and 3.) Using the 1990 standards as of the June 1999 population update, there were 847 counties within metropolitan statistical areas. Under the 2000 standards as of the February 2004 new area update, the number of counties within metropolitan statistical areas increased by 243 to 1,090, and an additional 690 counties were classified as being within micropolitan statistical areas. Appendix V provides the status—metropolitan, micropolitan, or not classified—of the counties listed in the February 2004 population update as of 1999 and 2003. These increases mean that the vast majority of Americans live in statistically recognized areas. Approximately 83 percent of the nation’s population live in metropolitan statistical areas and 10 percent live in micropolitan statistical areas. The 2000 standards resulted in statistical area changes in every state. Of the three states we examined, the change was greatest in New Mexico where the number of counties in statistical areas increased by approximately 250 percent. State maps highlighting changes in county status from 1999 to 2003 for New Mexico, New York, and Michigan are in appendix VI. See table 2 for the increase in the number of counties included in statistical areas from 1999 to 2003 for New Mexico, New York, and Michigan. Some federal agencies are required by statute to use metropolitan statistical areas to allocate program funds and implement other aspects of their programs. In other instances, federal agencies are not required to use metropolitan statistical areas by statute, but elect to do so. While OMB does not take into account or attempt to anticipate any of these nonstatistical uses in defining metropolitan or micropolitan statistical areas, it does advise agencies that use metropolitan areas for such nonstatistical purposes that the standards are designed for statistical purposes only and that changes to the standards may affect the implementation of their programs. More specifically, OMB urges agencies, organizations, and policymakers to carefully review program goals to ensure that appropriate geographic entities are used to determine eligibility and allocation of federal funds for these programs. We selected four federal programs that use metropolitan statistical areas to illustrate the impact of the change in standards. Those four programs are HUD’s CDBG Program, OPM’s Locality Pay Program for General Schedule Employees; HHS’s Medicare Hospital Reimbursement System; and HHS’s Ryan White CARE Act Program. As a result of changes in the standards in 2000, eligibility under CDBG has already expanded; eligibility under the locality pay program is expected to be expanded in January 2005; HHS anticipates under its proposal that hospital payments for fiscal year 2005 will be affected, but with no net increase in funding; and eligibility under the Ryan White CARE Program is unaffected by the standards because the boundaries for providing services are set by statute. HUD’s CDBG Program provides cities and counties with funds they can use to revitalize neighborhoods, rehabilitate housing, expand economic opportunities, and/or improve community facilities and services to benefit low- and moderate-income persons. Under current law, HUD uses designated metropolitan statistical areas, in part, to determine the eligibility of city and county governments to receive CDBG formula entitlement funds. According to HUD officials, OMB’s 2000 standards resulted in new eligibility for 60 cities that would provide them under the GDBG formula with a total of $36.2 million in CDBGs. In addition, 7 cities and 5 counties that became eligible under the 2000 standards would have become eligible under the previous 1990 standards. According to HUD, because the amount of money appropriated for the CDBG Program did not take expanded grantee eligibility into account, under the CDBG share formula all existing entitlement grantees saw a 1.2 percent reduction in their CDBG funding. In December 2003 interim regulations, HUD addressed the effect of the new OMB standards on CDBG entitlement grantee eligibility. Specifically, the replacement of the term central city by principal city had no effect on the status of then-eligible communities. HUD officials said that although principal cities within newly created micropolitan statistical areas would not qualify for CDBG funding, no city that had established eligibility for at least 2 years would lose its eligibility as a result of the new standards because current law allows such cities to retain their eligibility once they obtain it. Current law also allows urban counties that were eligible by fiscal year 1999 to retain their eligibility in future years. Under the Federal Employees Pay Comparability Act of 1990 (FEPCA), compensation for federal employees is adjusted depending on the local pay area where they work. FEPCA requires that federal pay rates be comparable with nonfederal pay rates for the same level of work within the same local pay area and that any pay disparities between federal and nonfederal employees be eliminated. To accomplish this, the Federal Salary Council (FSC) reviews and makes recommendations to the President’s Pay Agent (which consists of the Secretary of Labor and the Directors of OMB and OPM) on the locality pay program, including the establishment or modification of locality pay boundaries. There are 31 locality pay areas for which the geographic boundaries generally coincide with some of the metropolitan statistical areas set by the 1990 standards. In anticipation of the revised standards, the President’s Pay Agent had to decide whether and how to implement changes to the locality pay program. OPM issued regulations on behalf of the Pay Agent to retain use of the existing statistical areas for locality pay boundaries so that FSC and the President’s Pay Agent could review the new statistical areas and their possible use in locality pay. After that review, FSC recommended (and in December 2003 the Pay Agent tentatively endorsed) the following changes for pay: Locality pay areas will be based on 2003 metropolitan statistical areas, and where available, the combined statistical area—formed by combining adjacent metropolitan and micropolitan statistical areas. Micropolitan statistical areas will not be used unless they are part of a combined statistical area. As a result of implementing these recommendations, 76 counties (including some partial counties in New England) with a total of about 5,300 General Schedule employees will be added to existing locality pay areas. After considering public comments, OPM (on behalf of the Pay Agent) plans to issue final regulations on implementing the new locality pay areas January 2005. The Centers for Medicare and Medicaid Service’s (CMS) Medicare Hospital Inpatient Prospective Payment System (IPPS) pays hospitals a fixed fee depending on the diagnosis for each Medicare inpatient hospital stay. These fixed payments are adjusted to account for variations in labor costs across the country. The labor cost adjustment is based on a wage index calculated for specific geographic areas that reflects how average hospital wages in each geographic area compare to average hospital wages nationally. The geographic areas are intended to represent the separate labor markets in which hospitals compete for employees. Under the existing labor market definitions, each metropolitan statistical area is considered a single labor market, while the remainder of the areas for each state that is not in a metropolitan statistical area is treated as a single rural labor market. Generally, hospitals in non-metropolitan areas have lower wages than those in metropolitan areas and therefore receive lower Medicare payments. CMS has evaluated the 2003 statistical areas and the impact of using them on the hospital wage index. The agency announced last year that no changes would be implemented until fiscal year 2005. CMS issued a proposed rule addressing among other matters, the use of the new statistical areas for fiscal year 2005 on May 18, 2004, and expects to promulgate a final rule on August 1, 2004, after considering the public comments received. CMS has the discretion to use some or all of the 2003 statistical areas to calculate the wage adjustment to hospital inpatient payments. CMS has proposed to adopt the new and revised definitions of metropolitan statistical areas for wage index purposes and to continue to treat areas outside the metropolitan statistical area as statewide rural labor markets. Under the proposal, the new micropolitan areas would not be recognized for wage index purposes. CMS has also proposed to provide a transition period for hospitals that were included in metropolitan statistical areas under the previous definitions but are now part of a statewide rural area: these hospitals will receive the wage index for the metropolitan statistical area to which they previously belonged for three years. In its proposed rule, CMS estimates that adopting the new statistical area definitions would result in no net increase in federal spending for fiscal year 2005. CMS estimates that urban hospitals will gain slightly (0.1 percent) from the adoption of the new labor market areas, and rural hospitals will lose slightly (-0.2 percent) from the change. The Medicare IPPS also includes an administrative process in which a hospital meeting certain criteria can apply to be paid for services as if it were located in a higher-wage area. This geographic reclassification depends on a hospital’s proximity to the higher-wage area and its wages relative to the wages in that area. Beginning in fiscal year 2005, CMS will also establish an administrative process for increasing the wage index adjustment to recognize that hospital employees residing in one county may work in another area with a higher wage index. Title I of the Ryan White CARE Act makes federal funds available to eligible metropolitan areas (EMA) to assist in health care costs and support services for individuals and families affected by AIDS or HIV. Currently there are 51 EMAs. The 1996 reauthorization of the CARE Act made permanent metropolitan area boundaries that were used to determine fiscal year 1994 EMAs. The reauthorization also toughened the eligibility criteria, requiring that a metropolitan area have a population of 500,000 and more than 2,000 AIDS cases over the previous 5 years to qualify as an EMA. As a consequence, only two metropolitan statistical areas have become EMAs since 1996. This is due in part to a general decline in the number of AIDS cases. EMAs established by fiscal year 1996 retain their eligibility in future years regardless of whether they continue to meet the eligibility criteria; EMAs created after 1996 could become ineligible if they fail to meet the criteria. Officials of the Health Resources and Services Administration told us that no new areas qualify for eligibility status under the new standards. The officials also noted that the combination of fixed metropolitan area boundaries and generally declining numbers of AIDS cases means that EMA eligibility is likely to remain relatively static. After extensive consultations with experts within and outside the government, OMB issued a new set of statistical standards in December 2000 and used those standards to determine a new set of statistical areas in June 2003. In keeping with its long-standing position, OMB reiterated that the new metropolitan and micropolitan statistical areas are designed for statistical purposes. OMB’s process for reviewing and revising statistical areas was undertaken without regard to their effect on any federal programs (that is, for nonstatistical purposes). However, certain federal programs that use OMB’s statistical areas to distribute funds may be affected as a result of the new statistical areas. Therefore, OMB’s suggestion to agencies that they assess the new statistical areas to ensure they continue to be appropriate for such use seems reasonable. We are making no recommendations for executive action nor identifying any specific matters for congressional consideration. On June 2, 2004 we met with OMB and Census Bureau representatives to discuss the draft report. OMB and the Census Bureau agreed with our findings and conclusions and provided us with technical comments. These comments have been incorporated into the report where appropriate. We are sending copies of this report to other interested congressional committees, the Director of the Office of Management and Budget, the Secretary of Commerce, and the Director of the U.S. Census Bureau. Copies will be made available to others upon request. This report will also be available at no charge on GAO’s home page at http://www.gao.gov. If you or your staff have questions about this report, please call me at (202) 512-6737 or Thomas James, Assistant Director, at (202) 512-2996. Key contributors to this report were Bertha Dong, Robert Dinkelmeyer, Karin Fangman, Jerry Fastrup, Lisa Pearson, and Michael Rose. Authorizes pay adjustments for Senate employees in the Washington, D.C.-Baltimore, Maryland consolidated metropolitan statistical area (CMSA), which are equivalent to those adjustments made under 5 U.S.C. § 5304 (authorizing locality-based comparability pay). Borders of the D.C. and Baltimore MSAs have changed. Federal spending could change at the discretion of the President Pro Tempore of the Senate. Eligibility for loan repayment is based, in part, on being paid at a rate of pay that does not exceed a certain level, which is to include locality pay adjustments applicable to the Washington, D.C.-Baltimore, Maryland CMSA. Boundaries of the D.C. and Baltimore MSAs have changed. More Senate employees could qualify for loan forgiveness. 5 U.S.C. § 5304(f) provides Pay Agent with authority to provide for such pay localities as deemed appropriate. The establishment or modification of any boundaries shall be affected by regulation. Boundaries of several designated MSAs and CMSAs have changed. The number of federal employees subject to locality pay adjustments may change at the discretion of the President’s Pay Agent. The Federal Law Enforcement Pay Reform Act of 1990, Pub. L. No. 101-509, as amended, contains special pay adjustments for law enforcement officers in selected cities (statute lists seven CMSAs and one MSA). The number of employees subject to a special pay adjustment may be affected by MSA boundary changes. Term “eligible rural community” defined to exclude places located in MSAs. Communities formerly located outside an MSA may no longer qualify for loans or loan guarantees. 7 U.S.C. § 1991(a)(13)(D) defines (for purposes of 7 U.S.C. § 1926(a)(23) and 2008m) the term “rural area” to exclude MSAs except for territory within an MSA that is within a census tract having a population density of less than 20 persons per square mile. Boundary changes may affect which communities may qualify for participation in programs. 7 U.S.C. § 1991(a)(13)(E) defines (for purposes of 7 U.S.C. § 2009cc et seq) “rural area” to mean an area located outside an MSA or within a community that has a population of 50,000 or less. 7 U.S.C. § 6612(3) defines (for purposes of 7 U.S.C. § 6611 et seq.) the term “rural community” to include certain population areas of no more than 10,000, or certain counties not contained within an MSA. Boundary changes may make some areas ineligible. Potential affect on federal funding 10 U.S.C. § 2391(b)(3) limits assistance to communities with certain numbers of jobs lost. Requisite number of jobs lost is tied, in part, to MSA/non-MSA status of community. The eligibility of grantees may be affected by the population threshold of communities located in MSAs versus those located outside of MSAs. 12 U.S.C. § 1834a(b)(3)(C) establishes different population thresholds for a qualified distressed community based upon whether community is located within an MSA. May affect the population threshold of designated distressed communities. Depository institutions may apply for assessment credits for qualified activities (that include financing by various federal agencies). Eligibility is limited to institutions in “urban areas,” which 20 U.S.C. § 1139g(1) defines, in part, by reference to MSAs with a certain population threshold. MSA boundary changes may result in an MSA or adjacent MSAs meeting the 350,000 population threshold, qualifying institutions for participation. 26 U.S.C. § 42(d)(5) provides for determining the eligible basis of a building located in a qualified census tract or difficult development area. These areas are designated by the Department of Housing and Urban Development (HUD) and may not encompass more than a certain percentage of the population in the MSA or nonmetropolitan area. Eligible census tracts and difficult development areas (DDA) are limited to 20 percent of the population of MSAs or non-MSAs. If the limitation/cap is binding (more census tracts or DDAs would meet the eligibility criteria but for the limitation/cap) then a change in the MSA boundaries, due to the new standards for MSA designation, could affect the number of census tracts or DDAs that could be declared eligible for a special increase in tax credits. 26 U.S.C. § 143(e) and (f) establish purchase price and income requirements for an issue, which are calculated based upon statistical areas. Statistical areas are defined, in § 143(k)(2), by reference to MSAs and counties (or portions thereof) outside MSAs. MSA border changes will affect the median income threshold to qualify for tax exemptions. MSA border changes will also affect the calculation of cost/income ratios in high-cost areas, which may also affect the number of people qualifying for tax exemptions. 26 U.S.C. § 1391 provides, with regard to the permissible number of areas to be designated, that there be a prescribed mix of rural and urban areas. A rural area is generally defined in 26 U.S.C. § 1393(a) to mean any area outside of an MSA, and urban area is defined to mean an area that is not rural. Changing MSA boundaries affects whether a designated area is selected as urban or rural. Rural communities are subject to a lower population threshold. Therefore, a change in MSA status may affect eligibility of some communities. 26 U.S.C. § 1400E(a)(2) provides that of the permissible number of areas to be designated, a certain number must be in rural areas. Rural area is defined, in part, to mean an area outside of an MSA with a population of less than 50,000. Changing MSA boundaries affects whether a designated renewal community is selected as urban or rural. Rural communities are subject to a lower population threshold. Therefore, a change in MSA status may affect eligibility of some communities. Potential affect on federal funding 38 U.S.C. § 2033 requires the Department of Veterans Affairs to establish sites for the provision of comprehensive and coordinated services in at least each of the 20 largest metropolitan statistical areas. A previously unselected MSA has moved into the top 20 largest MSAs. Eligible organizations must have a defined service area of sufficient size that either includes an entire MSA or excludes any part of the area. MSA boundary changes may affect the status of a qualified organization if its service area no longer includes all of an MSA or does not include any part of the area. 42 U.S.C. § 294d(d) defines “rural” as encompassing geographic areas that are located outside of an MSA. Some designated rural health care agencies may be located in newly designated MSA counties. 42 U.S.C. § 1395m(l)(9) provides an increased transitional fee schedule rate for ambulance services (furnished on or after July 1, 2001, and before January 2004) originating in a rural area, which is defined, in part, by reference to MSAs. MSA boundary changes may affect some originating sites. 42 U.S.C. § 1395m(m)(4) provides for payment of facility fees for telehealth services (services provided via a telecommunications system) only when originating site is located in a designated rural health professional shortage area or a county that is not included in an MSA, or is a site participating in a telemedicine demonstration project as of December 31, 2000. 42 U.S.C. § 1395w-23(d) defines the payment area for Medicare + Choice to mean a county or equivalent area specified by the Secretary of Health and Human Services. 42 U.S.C. § 1395w-23(d)(3) authorizes geographic adjustments of these payment areas upon request by the state, including using a metropolitan- based system in which all the portions of each MSA in the state are treated as individual Medicare+Choice payment areas. All areas in the state that do not fall within an MSA are treated as single Medicare+Choice payment areas. MSA boundary changes may affect MSAs meeting minimum population threshold requirements. 42 U.S.C. § 1395ww(d) addresses inpatient hospital service payments based on prospective rates (including adjustments). Under §1395ww(d), the labor component of the standardized payment amount must be adjusted to account for the geographic variation in hospitals’ labor costs. This requirement is implemented by the Centers for Medicare and Medicaid Services by calculating a wage-related cost adjustment on an MSA/non-MSA basis. Changes in MSA boundaries could affect prospective payment rates. Potential affect on federal funding 42 U.S.C. § 1397f(a)(1) provides that each state is entitled to two grants for each qualified empowerment zone in the state, and one grant for each qualified enterprise community in the state. 42 U.S.C. § 1397f(a)(2)(A) bases the amount of a grant for a qualified empowerment zone on whether it is designated urban or rural. 42 U.S.C. § 1397f(f) defines rural to mean any area outside of an MSA and urban to mean an area that is not rural. MSA boundary changes affect whether empowerment and enterprise zones are designated urban or rural, which, in turn, affects funding amounts. 42 U.S.C. § 1479(f)(8) defines “colonia” to mean an identifiable community that (1) is in Arizona, California, New Mexico, or Texas; (2) is in the area of the United States within 150 miles of the border between the United States and Mexico, except that the term does not include any MSA that has a population exceeding 1,000,000; (3) is determined to be a colonia on the basis of objective criteria, including lack of decent, safe, and sanitary housing; and (4) was in existence as a colonia before November 28, 1990. MSA boundary changes may affect colonias located in an MSA with a population exceeding 1,000,000. 42 U.S.C. § 1490 defines the terms “rural” and “rural area” to mean any open country or any place, town, village, or city that (1) is not part of or associated with an urban area and has a population of from 10,000 to 20,000; (2) is not contained within an MSA; and (3) has a serious lack of mortgage credit for lower- and moderate-income families. MSA boundary changes may affect places losing population and falling below the 20,000 population threshold required for designation as a rural area. 42 U.S.C. § 5306 provides for the allocation and distribution of funds to entitlement communities (metropolitan cities and urban counties) and to states for use in nonentitlement areas. HUD will use the new MSA definitions to distribute funding to entitlement communities that meet various population thresholds. Under 42 U.S.C. § 5302(a)(4), “metropolitan city” means either a central city within an MSA or any other city within an MSA with a population of 50,000 or more. Under 42 U.S.C. § 5302(a)(6)(A), “urban county” means any county within an MSA that is authorized (under state law) to undertake essential community development and housing assistance activities and exceeds certain population thresholds. 42 U.S.C. § 5302(a)(7) defines “nonentitlement area” to mean an area that is not a metropolitan city or part of an urban county and does not include Indian tribes. Section 916(e)(4) defines “U.S.-Mexico border region” to mean the area of the United States within 150 miles of the border between the United States and Mexico, except that the term does not include any MSA that has a population exceeding 1,000,00. MSA boundary changes may affect the set-aside for colonias if a colonia is located in an MSA whose population has risen above 1,000,000. These colonias may no longer qualify for participation in the set-aside. 42 U.S.C. § 11371 defines “metropolitan city” and “urban county” by reference to definitions used for the CDBG Program (42 U.S.C. § 5302). 42 U.S.C. § 11373 provides for the allocation and distribution of assistance to states, metropolitan cities, and urban counties in the same fashion funds are allocated under the CDBG Program. Distribution of grants is made using the CDBG formula that is affected by changes in MSA boundaries. Defines the terms “rural area” and “rural community” to mean (1) an area outside an MSA or (2) an area within an MSA but located in a rural census tract. MSA boundary changes could result in some areas losing eligibility unless they are located in designated rural census tracts. 42 U.S.C. § 12704 defines “metropolitan city” and “urban county” by reference to definitions used for the CDBG Program (42 U.S.C. § 5302). Links to the CDBG Program definitions for eligible entities, in which changes in MSA boundaries affect the distribution of federal financial assistance. 42 U.S.C. 12741 et seq. establishes the HOME Investment Partnership Program (allocation section at 12747). Eligibility of first-time homebuyers seeking assistance depends on not exceeding income ceiling, which is measured relative to the MSA or non-MSA median income. Median family income will be affected by MSA boundary changes and will affect the number of eligible homebuyers. Eligibility of homebuyers seeking to buy in an enterprise zone depends on their having family incomes that are not more than the median income in the MSA in which the enterprise zone is located. Grants are used to fund loans to homebuyers of eligible housing units in enterprise zones. Since median family income in MSAs is used to determine eligible homebuyers, the change in MSA boundaries may affect which households are eligible for loans under the program. Grant funds to states and cities are allocated based on number of AIDS cases and population thresholds using MSA and non-MSA boundaries. The largest city in an MSA with an over 500,000 population and more than 1,500 AIDS cases is eligible to receive funding under the program. Any new MSA meeting these criteria would become eligible and may affect funding for existing grantees. Potential affect on federal funding 42 U.S.C. § 13239 authorizes low-interest loans to fleets utilizing alternative fuels. 42 U.S.C. § 13211(9) defines “fleet” to mean, in part, vehicles used primarily in MSAs or CMSAs. Boundary changes may affect entities eligible for interest rate subsidies. “Federal fleet” is defined, in part, to mean vehicles located in an MSA or CMSA. Newly designated MSA may contain a federal fleet that will become subject to alternative fueled vehicle requirements. This entry reflects amendments made by Pub. L. No. 108-173, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Core based statistical area (CBSA): A statistical geographic entity consisting of the county or counties associated with at least one core (urbanized area or urban cluster) with a population of at least 10,000, plus adjacent counties having a high degree of social and economic integration with the core as measured through commuting ties with the counties containing the core. Metropolitan and micropolitan statistical areas are the two categories of CBSAs. Metropolitan statistical area: A CBSA associated with at least one urbanized area that has a population of at least 50,000. The metropolitan statistical area comprises the central county or counties containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county as measured through commuting. Micropolitan statistical area: A CBSA associated with at least one urban cluster that has a population of at least 10,000, but less than 50,000. The micropolitan statistical area comprises the central county or counties containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county as measured through commuting. Principal city: The largest city of a CBSA, plus additional cities that meet specified statistical criteria. Central county: The county or counties of a CBSA containing a substantial portion of an urbanized area or urban cluster or both and to and from which commuting is measured to determine qualification of outlying counties. Outlying county: A county that qualifies for inclusion in a CBSA on the basis of commuting ties with the CBSA’s central county or counties. Metropolitan division: A county or group of counties within a CBSA that contains a core with a population of at least 2.5 million. A metropolitan division consists of one or more main/secondary counties that represent an employment center or centers, plus adjacent counties associated with the main county or counties through commuting ties. Combined statistical area: A geographic entity consisting of two or more adjacent CBSAs with employment interchange measures of at least 15. Pairs of CBSAs with employment interchange measures of at least 25 combine automatically. Pairs of CBSAs with employment interchange measures of at least 15, but less than 25, may combine if local opinion in both areas favors combination. Employment interchange measure: A measure of ties between two adjacent entities. The employment interchange measure is the sum of the percentage of employed residents of the smaller entity who work in the larger entity and the percentage of employment in the smaller entity that is accounted for by workers who reside in the larger entity. New England city and town area (NECTA): A statistical geographic entity that is defined using cities and towns as building blocks and that is conceptually similar to the CBSAs in New England (which are defined using counties as building blocks). NECTA division: A city or town or group of cities and towns within a NECTA that contains a core with a population of at least 2.5 million. A NECTA division consists of a main city or town that represents an employment center, plus adjacent cities and towns associated with the main city or town, or with other cities and towns that are in turn associated with the main city or town through commuting ties. Urban area: The generic term used by the U.S. Census Bureau to refer collectively to urbanized areas and urban clusters. Urban cluster: A statistical geographic entity defined by the Census Bureau for Census 2000, consisting of a central place(s) and adjacent densely settled territory that together contain at least 2,500 people, generally with an overall population density of at least 1,000 people per square mile. For purposes of defining CBSAs, only those urban clusters with populations of 10,000 or more are considered. Urbanized area: A statistical geographic entity defined by the Census Bureau, consisting of a central place(s) and adjacent densely settled territory that together contain at least 50,000 people, generally with an overall population density of at least 1,000 people per square mile. 2000 metropolitan and micropolitan statistical area standards Metropolitan statistical areas based around at least one Census Bureau defined urbanized area of 50,000 or more population, and micropolitan statistical areas, based around at least one urban cluster of 10,000 to 49,999 population. A metropolitan statistical area with a single core of at least 2,500,000 population can be subdivided into component metropolitan divisions. Collectively, the metropolitan and micropolitan statistical areas are termed Core Based Statistical Areas (CBSAs). Metropolitan statistical areas based on total populations of at least 1,000,000 (level A), 250,000 to 999,999 (level B), 100,000 to 249,999 (level C), and less than 100,000 (level D), respectively. Metropolitan statistical areas of 1,000,000 or more population can be designated as consolidated metropolitan statistical areas if local opinion is in favor and component primary metropolitan statistical areas can be identified. Counties and equivalent entities throughout the U.S. and Puerto Rico. City and town based areas, conceptually similar to the county-based areas, provided for the New England states. Counties and equivalent entities throughout the U.S. and Puerto Rico, except in New England, where cities and towns are used to define metropolitan areas. County-based alternative provided for the New England states. Census Bureau defined urban area of at least 10,000 population and less than 50,000 population for micropolitan statistical area designation. Census Bureau defined urbanized area of at least 50,000 for metropolitan statistical area designation. City of at least 50,000 population, or Census Bureau defined urbanized area of at least 50,000 population in a metropolitan area of at least 100,000 population. Any county in which at least 50% of the population is located in urban areas of at least 10,000 population, or that has within its boundaries a population of at least 5,000 located in a single urban area of at least 10,000 population. Any county that includes a central city or at least 50% of the population of a central city that is located in a qualifier urbanized area. Also any county in which at least 50% of the population is located in a qualifier urbanized area. 2000 metropolitan and micropolitan statistical area standards Commuting ties: At least 25% of the employed residents of the county work in the central county/counties of a CBSA; or at least 25% of the employment in the county is accounted for by workers residing in the central county/counties of the CBSA. Combination of commuting and measures of settlement structure: 50% or more of employed workers commute to the central county/counties of a metropolitan statistical area and: 25 or more persons per square mile (ppsm), or at least 10% or 5,000 of the population lives in a qualifier urbanized area; OR 40% to 50% of employed workers commute to the central county/counties of a metropolitan statistical area and: 35 or more ppsm, or at least 10% or 5,000 of the population lives in a qualifier urbanized area; OR 25% to 40% of employed workers commute to the central county/counties of a metropolitan statistical area and: 35 ppsm and one of the following: (1) 50 or more ppsm, (2) at least 35% urban population, (3) at least 10% or 5,000 of population lives in a qualifier urbanized area; OR 15% to 25% of employed workers commute to the central county/counties of a metropolitan statistical area and: 50 or more ppsm and two of the following: (1) 60 or more ppsm, (2) at least 35% urban population, (3) population growth rate of at least 20%, (4) at least 10% or 5,000 of population lives in a qualifier urbanized area; OR 15% to 25% of employed workers commute to the central county/counties of a metropolitan statistical area and less than 50 ppsm and two of the following: (1) at least 35% urban population, (2) population growth rate of at least 20%, (3) at least 10% or 5,000 of population lives in a qualifier urbanized area; OR at least 2,500 of the population lives in a central city located in a qualifier urbanized area of a metropolitan statistical area. A county that qualifies as outlying to two or more CBSAs is included in the area with which it has the strongest commuting tie. If a county qualifies as outlying to two or more metropolitan areas, it is assigned to the area to which commuting is greatest; if the relevant commuting percentages are within 5 points of each other, local opinion is considered. Merging statistical areas Two adjacent CBSAs are merged to form one CBSA if the central county/counties (as a group) of one CBSA qualify as outlying to the central county/counties (as a group) of the other. If a county qualifies as a central county of one metropolitan statistical area and as an outlying county on the basis of commuting to a central county of another metropolitan statistical area, both counties become central counties of a single metropolitan statistical area. 2000 metropolitan and micropolitan statistical area standards Principal cities include the largest incorporated place with a population of 10,000 or more or, if no incorporated place of at least 10,000 is present, the largest incorporated place or census designated place in the CBSA AND each place of at least 250,000 population or in which at least 100,000 persons work AND each place with a population of at least 50,000, but less than 250,000 in which employment meets or exceeds the number of employed residents AND each place with a population that is at least 10,000 and 1/3 the size of the largest place, and in which employment meets or exceeds the number of employed residents. Central cities include the largest city in a metropolitan statistical area/consolidated metropolitan statistical area AND each city of at least 250,000 population or at least 100,000 workers AND each city of at least 25,000 population and at least 75 jobs per 100 workers and less than 60% out commuting AND each city of at least 15,000 population that is at least 1/3 the size of largest central city and meets employment ratio and commuting percentage above AND the largest city of 15,000 population or more that meets employment ratio and commuting percentage above and is in a secondary noncontiguous urbanized area AND each city in a secondary noncontiguous urbanized area that is at least 1/3 the size of largest central city in that urbanized area and has at least 15,000 population and meets employment ratio and commuting percentage above. 2000 metropolitan and micropolitan statistical area standards Metropolitan divisions consist of one or more counties within metropolitan statistical areas that have a single core of 2.5 million or more population. A county is identified as a main county of a metropolitan division if 65 percent or more of its employed residents work within the county and the ratio of its employment to its number of employed residents is at least .75. A county is identified as a secondary county of a metropolitan division if 50 percent or more, but less than 65 percent, of its employed residents work within the county and the ratio of its employment to its number of employed residents is at least .75. A main county automatically serves as the basis for a metropolitan division. For a secondary county to qualify as the basis for forming a metropolitan division, it must join with either a contiguous secondary county or a contiguous main county with which it has the highest employment interchange measure of 15 or more. Primary metropolitan statistical areas outside New England consist of one or more counties within metropolitan areas that have a total population of 1 million or more. Specifically, these primary metropolitan statistical areas consist of: (A) One or more counties designated as a standard metropolitan statistical area on January 1, 1980, unless local opinion does not support continued separate designation. (B) One or more counties for which local opinion strongly supports separate designation, provided one county has: (1) at least 100,000 population; (2) at least 60 percent of its population urban; (3) less than 35 percent of its resident workers working outside the county; and (4) less than 2,500 population of the largest central city in the metropolitan statistical area. (C) A set of two or more contiguous counties for which local opinion strongly supports separate designation, provided at least one county also could qualify as a primary metropolitan statistical area in section (B), and (1) each county meets requirements (B)(1), (B)(2), and (B)(4) and less than 50 percent of its resident workers work outside the county; (2) each county has a commuting interchange of at least 20 percent with the other counties in the set; and (3) less than 35 percent of the resident workers of the set of counties work outside the area. After all main counties and secondary counties have been identified and grouped (if appropriate), each additional county that already has qualified for the metropolitan statistical area is included in the metropolitan division associated with the main/secondary county to which the county at issue has the highest employment interchange measure. Counties within a metropolitan division must be contiguous. Each county in the metropolitan area not included within a central core under sections (A) through (C), is assigned to the contiguous primary metropolitan statistical area to whose central core commuting is greatest, provided this commuting is: (1) at least 15 percent of the county’s resident workers; (2) at least 5 percentage points higher than the commuting flow to any other primary metropolitan statistical area central core that exceeds 15 percent; and (3) larger than the flow to the county containing the metropolitan area’s largest central city. If a county has qualifying commuting ties to two or more primary metropolitan statistical area central cores and the relevant values are within 5 percentage points of each other, local opinion is considered. 2000 metropolitan and micropolitan statistical area standards Two adjacent CBSAs are combined if the employment interchange rate between the two areas is at least 25. The employment interchange rate is the sum of the percentage of employed residents of the CBSA with the smaller total population who work in the CBSA with the larger total population and the percentage of employment in the CBSA with the smaller total population that is accounted for by workers residing in the CBSA with the larger total population. Adjacent CBSAs that have an employment interchange rate of at least 15 and less than 25 may combine if local opinion in both areas favors combination. The combining CBSAs also retain separate recognition. Two adjacent metropolitan statistical areas are combined as a single metropolitan statistical area if: (A) the total population of the combination is at least one million and (1) the commuting interchange between the two metropolitan statistical areas is equal to at least 15% of the employed workers residing in the smaller metropolitan statistical area, or equal to at least 10% of the employed workers residing in the smaller metropolitan statistical area and the urbanized area of a central city of one metropolitan statistical area is contiguous with the urbanized area of a central city of the other metropolitan statistical area or a central city in one metropolitan statistical area is included in the same urbanized area as a central city in the other metropolitan statistical area; AND (2) at least 60% of the population of each metropolitan statistical area is urban. (B) the total population of the combination is less than one million and (1) their largest central cities are within 25 miles of one another, or the urbanized areas are contiguous; AND (2) there is definite evidence that the two areas are closely integrated economically and socially; AND (3) local opinion in both areas supports combination. Titles of CBSAs include the names of up to three principal cities in order of descending population size. Titles of metropolitan statistical areas include the names of up to three central cities in order of descending population size. Local opinion is considered under specified conditions. Titles of metropolitan divisions include the names of up to three principal cities in the metropolitan division in order of descending population size. If there are no principal cities, the title includes the names of up to three counties in the metropolitan division in order of descending population size. Titles of primary metropolitan statistical areas include the names of up to three cities in the primary metropolitan statistical area that have qualified as central cities. If there are no central cities, the title will include the names of up to three counties in the primary metropolitan statistical area in order of descending population size. Titles of combined statistical areas include the name of the largest principal city in the largest CBSA that combines, followed by the names of up to two additional principal cities in the combination in order of descending population size, or a suitable regional name, provided that combined statistical area title does not duplicate the title of a component metropolitan or micropolitan statistical area or metropolitan division. Local opinion will be considered when determining the titles of combined statistical areas. Titles of consolidated metropolitan statistical areas include the names of up to three central cities or counties in the consolidated metropolitan statistical area. The first name will be the largest central city in the consolidated metropolitan statistical area; the remaining two names will be the first city or county name that appears in the title of the remaining primary metropolitan statistical area with the largest total population and the first city or county name that appears in the title of the primary metropolitan statistical area with the next largest total population. Regional designations can be substituted for the second and third names if there is strong local support. Granbury, TX Micro Area Oak Harbor, WA Micro Area A portion of this New England county was a component of the 1999 metropolitan area shown. Where this occurred, it may be that other portion(s) of the county were included in more than one 1999 metropolitan area and/or another portion of the county was not included in any 1999 metropolitan area. Under the 1999 classification, metropolitan areas in the six New England states—Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont—were town- and city-based, not county- based. The 2003 classification is county-based, so the entire county is included in the micropolitan area shown. . Minneapolis-St. Paul-Bloomington, MN-WI MSA Baraboo, WI Micro Area Whitewater, WI Micro Area Milwaukee-Waukesha-West Allis, WI MSA Milwaukee-Waukesha-West Allis, WI MSA Wisconsin Rapids-Marshfield, WI Micro Area Laramie, WY Micro Area Gillette, WY Micro Area Riverton, WY Micro Area Sheridan, WY Micro Area Rock Springs, WY Micro Area Jackson, WY-ID Micro Area Evanston, WY Micro Area Broomfield County, Colorado was formed from parts of Adams, Boulder, Jefferson, and Weld Counties, Colorado on November 15, 2001. For purposes of defining and presenting data for MSAs, Broomfield city is treated as if it were a county in 1990 and in 2000. A portion of this New England county was a component of the 1999 metropolitan area shown. Where this occurred, it may be that other portion(s) of the county were included in more than one 1999 metropolitan area and/or another portion of the county was not included in a 1999 metropolitan area. Under the 1999 classification, metropolitan areas in the six New England states – Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont – were town- and city-based, not county- based. The 2003 classification is county-based, so the entire county is included in the metropolitan or micropolitan area shown. Pursuant to Pub. L. No. 100-202, Section 530, the part of Sullivan city in Crawford County, Missouri, was added to the St. Louis, Missouri-Illinois MSA effective December 22, 1987. . To view color versions of these maps (figs. 4-6), go to our Web site. The General Accounting Office, the audit, evaluation and investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. 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Summary: For the past 50 years, the federal government has had a metropolitan area program designed to provide a nationally consistent set of standards for collecting, tabulating, and publishing federal statistics for geographic areas in the United States and Puerto Rico. Before each decennial census, the Office of Management and Budget (OMB) reviews the standards to ensure their continued usefulness and relevance and, if warranted, revises them. While designed only for statistical purposes, various federal programs use the statistical areas to determine eligibility and to allocate federal funds. OMB advises agencies to carefully review program goals to ensure that appropriate geographic entities are used in making these decisions. GAO was asked to examine the process used for developing the OMB standards issued in 2000 and their effects on certain federal programs. Specifically, GAO agreed to report on (1) the process used to develop the 2000 standards, (2) how the 2000 standards differed from the 1990 standards, (3) how the application of the standards affected the geographic distribution of counties into statistical areas, and (4) the effect of standards on the eligibility and funding allocations for four federal programs. The new standards for federal statistical recognition of metropolitan areas issued by OMB in 2000 differ from the 1990 standards in many ways. One of the most notable differences is the introduction of a new designation for less populated areas--micropolitan statistical areas. These are areas comprised of a central county or counties with at least one urban cluster of at least 10,000 but fewer than 50,000 people, plus adjacent outlying counties if commuting criteria is met. The 2000 standards and the latest population update have resulted in five counties being dropped from metropolitan statistical areas, while another 41counties that had been a part of a metropolitan statistical area have had their statistical status changed and are now components of micropolitan statistical areas. Overall, the 2000 standards have resulted in changes in every state and nationwide statistical coverage has increased. Under the 1990 standards, 847 counties were in metropolitan statistical areas. Now, there are 1090 counties in metropolitan statistical areas and 690 counties in micropolitan statistical areas. Of the four federal programs GAO reviewed to determine the impact of the 2000 standards, eligibility under one has expanded; eligibility under another is expected to expand in January 2005; the agency overseeing another anticipates under its proposal that program payments for fiscal year 2005 will be affected, but with no net increase in funding; and eligibility under another program is unaffected because the geographic boundaries used to determine eligibility are set by statute. For example, the standards have resulted in new eligibility in fiscal year 2004 for 60 cities to receive a total of $36.2 million in Community Development Block Grants, which provide funds to revitalize neighborhood infrastructure. This funding increase required a 1.2 percent funding cut for all other grantees because a cut is required to offset increases due to expanded eligibility.