Increasing Federal support to State Medicaid programs during economic downturns

(a)

In general

Section 1905 of the Social Security Act (42 U.S.C. 1396d) is amended—(1)in subsection (b), by striking and (ff) and inserting (ff), and (gg); and(2)by adding at the end the following new subsection:

(gg)

Increased FMAP during economic downturns

(1)

In general

Notwithstanding subsection (b), (y), or (z)(2), if a fiscal quarter that begins on or after January 1, 2020, is an economic downturn quarter (as defined in paragraph (2)) with respect to a State, then the Federal medical assistance percentage applicable to amounts expended by the State for medical assistance for services furnished during such quarter shall be increased in accordance with paragraphs (3) and (4).(2)

Economic downturn quarter

(A)

In general

(i)

In general

In this subsection, the term economic downturn quarter means, with respect to a State, a fiscal quarter during which the State’s unemployment rate for the quarter exceeds the percentage determined for the State and quarter under clause (ii).(ii)

Threshold percentage

The percentage determined under this clause for a State and fiscal quarter is the percentage equal to the lower of—(I)the State unemployment rate at the 20th percentile of the distribution of the State’s quarterly unemployment rates for the 60-quarter period preceding the quarter involved, increased by 1 percentage point; and(II)the State’s average quarterly unemployment rate for the 12-quarter period preceding the quarter involved, increased by 1 percentage point.(B)

Unemployment data

(i)

In general

Except as provided in clause (ii), for purposes of determining unemployment rates for a State and a quarter under this paragraph, the Secretary shall use data from the Local Area Unemployment Statistics from the Bureau of Labor Statistics. (ii)

Application to certain territories

In the case of the Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa, the Secretary shall use data from the U–6 unemployment measure of the Bureau of Labor Statistics to make any necessary determinations under subparagraph (A).(3)

FMAP increase during economic downturn quarter

(A)

In general

During a fiscal quarter that is an economic downturn quarter with respect to a State, the Federal medical assistance percentage otherwise determined for the State and quarter under subsection (b) and, if applicable, the Federal medical assistance percentage applicable under subsection (y), (z)(2), or (ff) with respect to medical assistance furnished by the State during such quarter to individuals described in either such subsection shall be increased by the number of percentage points (rounded to the nearest tenth of a percentage point) equal to the product of—(i)the number of percentage points (rounded to the nearest tenth of a percentage point) by which the unemployment rate for the State and quarter exceeds the percentage determined for the State and quarter under paragraph (2)(A)(ii); and(ii)4.8.(B)

Application of COVID–19 FMAP increase

Any increase applicable to the Federal medical assistance percentage of a State for a fiscal quarter under subparagraph (A) shall be in addition to any increase to such percentage for such quarter made pursuant to section 6008(a) of the Families First Coronavirus Response Act.(C)

Limitation

In no case shall an increase to the Federal medical assistance percentage of a State under this paragraph result in a Federal medical assistance percentage that exceeds 95 percent.(D)

Scope of application

Any increase to the Federal medical assistance percentage of a State for a fiscal quarter under this paragraph shall only apply with respect to payments for amounts expended by the State for medical assistance for services furnished during such quarter and shall not apply with respect to—(i)disproportionate share hospital payments described in section 1923;(ii)payments under title IV or XXI;(iii)any payments under this title that are based on the enhanced FMAP described in section 2105(b); or(iv)any payments under this title that are based on a Federal medical assistance percentage determined for a State under subsection (aa) (but only to the extent that such Federal medical assistance percentage is higher than the economic recovery FMAP).(4)

Advance payment; retrospective adjustment

(A)

In general

Prior to the beginning of each fiscal quarter that begins on or after July 1, 2020, the Secretary shall, with respect to each State— (i)determine the increase (if any) that is expected to apply to the Federal medical assistance percentage of such State for such quarter under this subsection based on the projections made for the State and quarter under subparagraph (B); and(ii)shall apply such increase to the Federal medical assistance percentage of the State for purposes of making payments to the State for amounts expended during such quarter as medical assistance under the State plan.(B)

Projection of State unemployment rates

Prior to the beginning of each fiscal quarter that begins on or after July 1, 2020, the Secretary, acting through the Chief Actuary of the Centers for Medicare & Medicaid Services, shall, using the most recently available data described in paragraph (2)(B), make projections with respect to—(i)the unemployment rates for each State for such quarter;(ii)the threshold percentages described in paragraph (2)(A)(ii) for each State for such quarter; and(iii)the national unemployment rate for such quarter.(C)

Retrospective adjustment

As soon as practicable after final unemployment data becomes available for a fiscal quarter that begins on or after July 1, 2020, the Secretary shall, with respect to each State— (i)make a final determination of the increase (if any) applicable to the Federal medical assistance percentage of the State for the quarter under this subsection; and(ii)in accordance with subsection (d)(2) of section 1903, reduce or increase the amount payable to the State under subsection (a) of such section for a subsequent fiscal quarter to the extent of any overpayment or underpayment which the Secretary determines was made as a result of a miscalculation of the increase applicable to the Federal medical assistance percentage of the State for such prior fiscal quarter under this subsection.(5)

Retrospective application of over-the-limit FMAP increases

(A)

In general

If a State has excess percentage points with respect to an economic downturn quarter and an applicable FMAP (as determined under subparagraph (B)), the State may elect to apply such excess percentage points to increase such applicable FMAP for one or more quarters during the look-back period for the State and economic downturn quarter in accordance with this paragraph.(B)

Excess percentage points

For purposes of this paragraph, the number of excess percentage points for a State, economic downturn quarter, and an applicable FMAP shall be equal to the number of percentage points by which— (i)the applicable FMAP for the State and quarter (after application of paragraph (3) but without regard to subparagraph (C) of such paragraph); exceeds(ii)95 percent.(C)

Effect of application of excess percentage points

If a State elects to apply excess percentage points to an applicable FMAP to a quarter during a look-back period under this paragraph, the Secretary shall determine the additional amount of payment under section 1903(a) to which the State would have been entitled for such quarter if the applicable FMAP (as so increased) had been in effect for such quarter, and shall treat such additional amount as an underpayment for such quarter.(D)

Distribution of excess percentage points

A State that has excess percentage points with respect to an economic downturn quarter and applicable FMAP may elect to divide such points among more than 1 quarter during the look-back period for such State and quarter provided that no excess percentage point (or fraction of an excess percentage point) is applied to the applicable FMAP of more than 1 quarter.(E)

Limitations

(i)

No increases over 100 percent

A State may not increase an applicable FMAP for any quarter during a look-back period under this paragraph if such increase would result in the applicable FMAP for such quarter exceeding 100 percent.(ii)

Scope of application

Any increase to an applicable FMAP of a State for a fiscal quarter under this paragraph— (I)shall only apply with respect to payments for amounts expended by the State for medical assistance for services furnished during such quarter to which such applicable FMAP is applicable; and (II)shall not apply with respect to payments described in paragraph (3)(D).(F)

Definitions

In this paragraph: (i)

Applicable FMAP

The term applicable FMAP means, with respect to a State and fiscal quarter—(I)the Federal medical assistance percentage determined for the State and quarter under subsection (b); (II)the Federal medical assistance percentage applicable under subsection (y); (III)the Federal medical assistance percentage applicable under subsection (z)(2); or(IV)the Federal medical assistance percentage determined for the State and quarter under subsection (ff).(ii)

Look-back period

The term look-back period means, with respect to a State and a fiscal quarter that is an economic downturn quarter for the State, the period of 4 fiscal quarters that ends with the fourth quarter which precedes the most recent fiscal quarters that was not an economic downturn quarter for the State.(6)

Requirement for all States

A State may not receive an increase in the Federal medical assistance percentage for such State under this subsection, with respect to a fiscal quarter, if—(A)eligibility standards, methodologies, or procedures under the State plan or a waiver of such plan are more restrictive during such quarter than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) as in effect on the last day of the most recent fiscal quarter that was not an economic downturn quarter for the State;(B)the amount of any premium imposed by the State pursuant to section 1916 or 1916A during such quarter, with respect to an individual enrolled under such plan (or waiver), exceeds the amount of such premium as of the date described in subparagraph (A); or(C)the State fails to provide that an individual who is enrolled for benefits under such plan (or waiver) as of the date described in subparagraph (A) or enrolls for benefits under such plan (or waiver) during the period beginning with such date and ending with the day before the first day of the next quarter that is not an economic downturn quarter for the State shall be treated as eligible for such benefits for not less than 12 months (or, if such period is less than 12 months, throughout such period) unless the individual requests a voluntary termination of eligibility or the individual ceases to be a resident of the State.

(b)

Exclusion of economic downturn FMAP increases from territorial caps

Section 1108 of the Social Security Act (42 U.S.C. 1308) is amended—(1)in subsection (f), in the matter preceding paragraph (1), by striking subsection (g) and section 1935(e)(1)(B) and inserting subsections (g) and (h) and section 1935(e)(1)(B); and(2)by adding at the end the following:

(h)

Exclusion from caps of amounts attributable to economic downturn FMAP

The portion of any payment made to a territory for a fiscal year that is attributable to an increase in the Federal medical assistance percentage for a fiscal quarter during such year under section 1905(gg) shall not be taken into account for purposes of applying payment limits under subsections (f) and (g).