[Federal Register Volume 73, Number 63 (Tuesday, April 1, 2008)]
[Notices]
[Pages 17348-17353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-5748]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2231-N]
RIN 0938-AP23


Medicaid Program; Final State Allotments for Payment of Medicare 
Part B Premiums for Qualifying Individuals for Federal Fiscal Year 2007

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This Notice sets forth the methodology and process used to 
compute and issue each State's final allotment for fiscal year (FY) 
2007 that is available to pay Medicare Part B premiums for qualifying 
individuals.

DATES: Effective date: Final allotments for payment of Medicare Part B 
premiums for FY 2007 are effective October 1, 2006, through September 
30, 2007.

FOR FURTHER INFORMATION CONTACT: Deborah Abshire, (410) 786-9291.

SUPPLEMENTARY INFORMATION:

I. Background

A. Allotments Prior to FY 2005

    Section 1902 of the Social Security Act (the Act) sets forth the 
requirements for State plans for medical assistance. Before August 5, 
1997, section 1902(a)(10)(E) of the Act specified that the State 
Medicaid plan must provide for some or all types of Medicare cost 
sharing for three eligibility groups of low-income Medicare 
beneficiaries. These three groups included qualified Medicare 
beneficiaries (QMBs), specified low-income Medicare beneficiaries 
(SLMBs), and qualified disabled and working individuals (QDWIs).
    A QMB is an individual entitled to Medicare Part A with income at 
or below the Federal poverty line (FPL) and resources below $4,000 for 
an individual and $6,000 for a couple. A SLMB is an individual who 
meets the QMB criteria, except that his or her income is above 100 
percent of the FPL and does not exceed 120 percent of the FPL. A QDWI 
is a disabled individual who is entitled to enroll in Medicare Part A 
under section 1818A of the Act, whose income does not exceed 200 
percent of the FPL for a family of the size involved, whose resources 
do not exceed twice the amount allowed under the Supplementary Security 
Income

[[Page 17349]]

(SSI) program, and who is not otherwise eligible for Medicaid. The 
definition of Medicare cost-sharing at section 1905(p)(3) of the Act 
includes payment for premiums for Medicare Part B.
    Section 4732 of the Balanced Budget Act of 1997 (BBA), enacted on 
August 5, 1997, amended section 1902(a)(10)(E) of the Act to require 
States to provide for Medicaid payment of the Medicare Part B premiums 
for two additional eligibility groups of low-income Medicare 
beneficiaries, referred to as qualifying individuals (QIs).
    Specifically, a new section 1902(a)(10)(E)(iv)(I) of the Act was 
added, under which States must pay the full amount of the Medicare Part 
B premium for qualifying individuals who are eligible QMBs but their 
income level is at least 120 percent of the FPL but less than 135 
percent of the FPL for a family of the size involved. These individuals 
cannot otherwise be eligible for medical assistance under the approved 
State Medicaid plan. The second group of QIs added under section 
1902(a)(10)(E) (iv)(II) of the Act includes Medicare beneficiaries who 
would be QMBs except that their income is at least 135 percent but less 
than 175 percent of the FPL for a family of the size involved, who are 
not otherwise eligible for Medicaid under the approved State plan. 
These QIs were eligible for only a portion of Medicare cost-sharing 
consisting of a percentage of the increase in the Medicare Part B 
premium attributable to the shift of Medicare home health coverage from 
Part A to Part B (as provided in section 4611 of the BBA).
    Coverage of the second group of QIs ended on December 31, 2002, and 
in 2003, section 401 of the Welfare Reform Bill (Pub. L. 108-89), 
enacted on October 1, 2003, eliminated reference to the second QI 
benefit (for the Medicare beneficiaries who would be QMBs except that 
their income is at least 135 percent but less than 175 percent of the 
FPL for a family of the size involved, who are not otherwise eligible 
for Medicaid under the approved State plan). In 2002 and 2003, 
continuing resolutions extended the coverage of the first group of QIs 
(whose income is at least 120 percent but less than 135 percent of the 
Federal poverty line) through the following fiscal year, but maintained 
the annual funding at the FY 2002 level. The Act was amended by 
Extension of Medicare Cost-Sharing for the Medicare Part B Premium for 
Qualifying Individuals, (Pub. L. 108-448), enacted December 8, 2004, 
which continued coverage of this group of QIs (whose income is at least 
120 percent but less than 135 percent of the Federal poverty line) 
through September 30, 2005, again with no change in funding.
    The BBA also added a new section 1933 to the Act to provide for 
Medicaid payment of Medicare Part B premiums for QIs. (The previous 
section 1933 was re-designated as section 1934.) Section 1933(a) of the 
Act specifies that a State plan must provide, through a State plan 
amendment, for medical assistance to pay for the cost of Medicare cost-
sharing on behalf of QIs who are selected to receive assistance. 
Section 1933(b) of the Act sets forth the rules that States must follow 
in selecting QIs and providing payment for Medicare Part B premiums. 
Specifically, the State must permit all qualifying individuals to apply 
for assistance and must select individuals on a first-come, first-
served basis (that is, the State must select QIs in the order in which 
they apply). Further, under section 1933(b)(2)(B) of the Act, in 
selecting persons who will receive assistance in years after 1998, 
States must give preference to those individuals who received 
assistance as QIs, QMBs, SLMBs, or QDWIs in the last month of the 
previous year and who continue to be (or become) QIs.
    Under section 1933(b)(4) of the Act, persons selected to receive 
assistance in a calendar year are entitled to receive assistance for 
the remainder of the year, but not beyond, as long as they continue to 
qualify. The fact that an individual is selected to receive assistance 
at any time during the year does not entitle the individual to 
continued assistance for any succeeding year. Because the State's 
allotment is limited by law, section 1933(b)(3) of the Act provides 
that the State must limit the number of QIs so that the amount of 
assistance provided during the year is approximately equal to the 
allotment for that year.
    Section 1933(c) of the Act limits the total amount of Federal funds 
available for payment of Part B premiums for QIs each fiscal year and 
specifies the formula that is to be used to determine an allotment for 
each State from this total amount. For States that executed a State 
plan amendment in accordance with section 1933(a) of the Act, a total 
of $1.5 billion was allocated over 5 years as follows: $200 million in 
FY 1998; $250 million in FY 1999; $300 million in FY 2000; $350 million 
in FY 2001; and $400 million in FY 2002.
    On March 29, 1999, the Department of Health and Human Services 
published a notice in the Federal Register (64 FR 14931) to advise 
States of the methodology used to calculate allotments and each State's 
specific allotment for that year. Following that notice, there was no 
change in methodology and States have been notified annually of their 
allotments. We did not include the methodology for computing the 
allocation in our regulations. Although the BBA originally provided 
coverage of QIs through FY 2002, through several continuing 
resolutions, coverage has been continued through fiscal year 2007, but 
without any increase in total allocation over the FY 2002 level.
    The Federal medical assistance percentage for Medicaid payment of 
Medicare Part B premiums for qualifying individuals is 100 percent for 
expenditures up to the amount of the State's allotment. No Federal 
funds are available for expenditures in excess of the State allotment 
amount. The Federal matching rate for administrative expenses 
associated with the payment of Medicare Part B premiums for QIs remains 
at the 50 percent matching level. Federal financial participation in 
the administrative expenses is not counted against the State's 
allotment.
    The amount available for each fiscal year is to be allocated among 
States according to the formula set forth in section 1933(c)(2) of the 
Act. The formula provides for an amount to each State that is to be 
based on each State's share of the Secretary's estimate of the ratio 
of: (a) An amount equal to the total number of individuals in the State 
who meet all but the income requirements for QMBs, whose incomes are at 
least 120 percent but less than 135 percent of the Federal poverty 
line, and who are not otherwise eligible for Medicaid, to (b) the sum 
of all those individuals for all eligible States.

B. Allotments for FY 2005

    In FY 2005, some States exhausted their FY 2005 allotments before 
the end of the fiscal year, which caused them to deny benefits to 
eligible persons under section 1933(b)(3) of the Act, while other 
States projected a surplus in their allotments. We asked those States 
that exhausted or expected to exhaust their FY 2005 allotments before 
the end of the fiscal year to project the amount of funds that would be 
required to grant eligibility to all eligible persons in their State, 
that is, their need. We also asked those States that did not expect to 
use their full allotments in FY 2005 to project the difference between 
the amount they expected to spend and their allotment, that is, their 
surplus. After all States reported these figures, it was evident that 
the total surplus exceeded the total need. In spite of there being 
adequate overall funding for the QI benefit, some eligible individuals 
would have been denied benefits due to the allocation methodology 
initially

[[Page 17350]]

used to determine the FY 2005 allotments.
    We believed that it was the clear intent of the statute to provide 
benefits to eligible persons up to the full amount of funds made 
available for the program. We attributed the difference between the 
surplus in available QI allotments for some States and the need in 
other States in FY 2005 as due to the imprecision in the data that we 
used to provide States with their initial allocations under section 
1933 of the Act. Therefore, on August 26, 2005 we published an interim 
final rule in the Federal Register (70 FR 50214) under which we 
compensated for this imprecision in order to enable States to enroll 
those QIs whom they would have been able to enroll had the data been 
more precise.
    The interim final rule amended 42 CFR 433.10(c) to specify the 
formula and the data to be used to determine States' allotments and to 
revise, under certain circumstances, individual State allotments for a 
Federal fiscal year for the Medicaid payment of Medicare Part B 
premiums for qualifying individuals identified under section 
1902(a)(10)(E)(iv) of the Act. Section 433.10(c)(5)(iv) states that CMS 
will notify States of any changes in allotments resulting from any 
reallocations.
    The FY 2005 allotments were determined by applying the U.S. Census 
Bureau data to the formula set forth in section 1933(c)(2) of the Act. 
However, the statute requires that the allocation of the fiscal year 
allotment be based upon a ratio of the amount of ``total number of 
individuals described in section 1902(a)(10)(E)(iv) in the State'' to 
the sum of these amounts for all States. Because this formula requires 
an estimate of an unknown number, that is, the number of individuals 
who could be QIs (rather than the number of individuals who were QIs in 
a previous period), our use of the Census Bureau data in the formula 
represented a rough proxy to attain the statutory number. Actual 
expenditure data, however, revealed that the Census Bureau data yielded 
an inappropriate distribution of the total appropriated fund as 
evidenced by the fact that several States projected significant 
shortfalls in their allotments, while many other States projected a 
significant surplus by the end of the fiscal year 2005. Census Bureau 
data were not accurate for the purpose of projecting States' needs 
because the data could not take into consideration all variables that 
contribute to QI eligibility and enrollment, such as resource levels 
and the application process itself. While section 1933 of the Act 
requires the Secretary to estimate the allocation of the allotments 
among the States, it did not preclude a subsequent readjustment of that 
allocation, when it became clear that the data used for that estimate 
did not effectuate the statutory objective. The interim final rule 
published in the Federal Register on August 26, 2005 permitted in this 
specific circumstance a redistribution of surplus funds, as it was 
demonstrated that the States' projections and estimates resulted in an 
inequitable initial allocation for FY 2005, such that some States were 
granted an allocation in excess of their total projected need, while 
the allocation granted to other States proved insufficient to meet 
their projected QI expenditures.
    In the August 26, 2005 interim final rule, we codified the 
methodology we have been using to approximate the statutory formula for 
determining State allotments. However, since certain States projected a 
deficit in their allotment before the end of fiscal year 2005, the rule 
permitted fiscal year 2005 funds to be reallocated from the surplus 
States to the need States. The regulation specified the methodology for 
computing the annual allotments, and for reallocating funds in this 
circumstance. The formula used to reallocate funds was intended to 
minimize the impact on surplus States, to equitably distribute the 
total needed amount among those surplus States, and to meet the 
immediate needs for those States projecting deficits. At the time of 
the publication of the interim final rule on August 26, 2005, the 
authorization for the QI benefit expired at the end of calendar year 
2005, and no additional funds were appropriated for the QI benefit 
beyond September 30, 2005; therefore, the regulation specified a sunset 
at the end of calendar year 2005.

C. Allotments for FY 2006 and FY 2007

    On October 20, 2005 the ``QI, TMA, and Abstinence Programs 
Extension and Hurricane Katrina Unemployment Relief Act of 2005'' was 
enacted by the Congress (Pub. L. 109-91) (QI, TMA, and Abstinence Act 
of 2005). Section 101 of the QI, TMA, and Abstinence Act extended the 
QI program through September 30, 2007 with no change in funding, that 
is, under this legislation $400 million per fiscal year was 
appropriated for each of FY 2006 and FY 2007. The provisions of section 
101 of the QI, TMA, and Abstinence Act of 2005 were effective as of 
September 30, 2005.
    On October 16, 2006 we published a final rule in the Federal 
Register (71 FR 60663), which implemented the provisions of section 101 
of the QI, TMA, and Abstinence Act relating the QI allotments for final 
FY 2006 allotments and preliminary FY 2007 allotments. As indicated in 
that final rule, we believe that the clear intent of the statute is to 
provide benefits to eligible persons up to the full amount of funds 
made available for the program in each fiscal year. We recognized that 
because of the imprecision in data for computing the States' QI 
allotments for a fiscal year, some States would experience either 
surpluses or shortages in their FY 2006 and FY 2007 allotments. In 
accordance with section 433.10(c), the FY 2006 and FY 2007 QI 
allotments were designed to compensate for the imprecision in data to 
permit shortage States to enroll more QIs than otherwise would have 
been possible.

D. Allotments for FY 2008 and Thereafter

    On September 29, 2007, the President signed the ``TMA, Abstinence 
Education, and QI Program Extension Act of 2007'' (QI, TMA, and 
Abstinence Act of 2007) (Pub. L. 110-90). Section 3 of the QI, TMA, and 
Abstinence Act of 2007 extends the QI program through December 31, 2007 
and allocates $100 million for such period. We will address this 
allocation and extend the allocation methodology's regulatory sunset in 
a subsequent rulemaking. If additional funding is authorized to extend 
the QI Program for some or all of the calendar year 2008 or beyond, we 
will also issue a notice in the Federal Register to announce the QI 
allotments to be provided in accordance with the extending legislation.

II. Provisions of the Notice

    This notice sets forth the final QI allotments for FY 2007.
    In the final rule published on October 16, 2006 (71 FR 60663), we 
set forth a two step/two phase methodology/process for determining 
States' QI allotments for FY 2007, and that regulation implemented 
phase one of the process. Under the first step of phase one, an 
``initial'' allocation was determined for each State under the formula 
specified in section 1933 of the Act and based only on the data 
obtained from the Census Bureau (the 3-year average of the number of 
Medicare beneficiaries in the State who are not enrolled in the 
Medicaid program but whose incomes are at least 120 percent of the FPL 
and less than 135 percent of the FPL). However, we further obtained 
States' projected QI expenditures for the fiscal year. We then compared 
the initial allocations for the fiscal year to the States' projected QI 
expenditures for the fiscal year to determine those States

[[Page 17351]]

with a projected need (that is, those States whose initial allocation 
is less than their projected expenditures) or a projected surplus (that 
is, those States whose initial allocation is greater than the projected 
expenditures) for FY 2007.
    Under the second step of the process, implemented now through this 
notice, we adjusted the States' initial allocations by considering the 
States' projected QI expenditures for FY 2007. This was done by 
proportionately reducing the QI allotments of States with surpluses for 
the fiscal year by the amount of the total need for States that do not 
have sufficient QI allotments for the fiscal year. We are thus 
completing the two phase methodology/process for the fiscal year. This 
notice accounts for the fact that at the beginning of the fiscal year, 
we determined the initial allocations based on the Census Bureau data, 
obtained States' projections of QI expenditures for the fiscal year, 
and made any adjustments based on the projected surpluses/needs for the 
fiscal year. The amounts of the States' QI allotments determined under 
this first phase at the beginning of the fiscal year were considered 
the States' ``initial'' QI allotments for the fiscal year and are shown 
on the table below. Now, under phase two of the process, during the 
fourth quarter of the fiscal year we obtained States' updated projected 
QI expenditures for the fiscal year. We then established the ``final'' 
QI allotments for the fiscal year based on these updated projections.
    As indicated in this notice and as shown on the table below, the 
States' final QI allotments for FY 2007 are determined by comparing the 
initial QI allotments for the fiscal year (again which are calculated 
based on the Census Bureau data) to the States' updated projections of 
QI expenditures for the fiscal year; this establishes those States with 
a ``final'' projected need (the initial allocation is less than the 
updated projected expenditures) or a surplus (initial allocation is 
greater than the updated projected expenditures) for the fiscal year. 
Using the updated projected QI expenditures, we adjusted the States' 
initial allocations by reducing the surplus States' initial allotments 
proportionately to meet the need States' deficits. This is the same 
methodology we used for determining the FY 2005 allotments as published 
in the interim final rule published on August 26, 2005, in the Federal 
Register; the only change was that in computing the FY 2007 allotments, 
we determined the preliminary allotments at the beginning of the fiscal 
year using States' preliminary projected QI expenditures, and then we 
determined the final QI allotments later in the fiscal year using 
States' updated projected QI expenditures. The formula used to 
reallocate the available funds to need States is intended to minimize 
the impact on surplus States, to equitably distribute the total needed 
amount among those surplus States, and to meet the needs for those 
States projecting deficits.
    Since under the QI, TMA, and Abstinence Act of 2005, the 
authorization for the QI benefit expires at the end of calendar year 
2007, the QI regulation will sunset at the end of calendar year 2007. 
We will amend the sunset date in the regulation to take into account 
the extension set out in the QI, TMA, and Abstinence Act of 2007 in a 
subsequent rulemaking.
    Based on the process described above, the resulting final 
allotments for FY 2007 are shown by State in the table below. In this 
table each column contains data defined as follows:
    Column A--State. Column A shows the name of each State. Columns B 
through D show the determination of the States' Final FY 2007 QI 
Allotments, based only on Census Bureau data.
    Column B--Number of Individuals. Column B contains the estimated 
average number of Medicare beneficiaries for the years 2004 through 
2006 that are not covered by Medicaid whose family income is between 
120 and 135 percent of the poverty level for each State, in thousands, 
as obtained from the Census Bureau's Annual Social and Economic 
Supplement to the Current Population Survey through December 31, 2006.
    Column C--Percentage of Total. Column C provides the percentage of 
total number of individuals for each State, determined as the Number of 
Individuals for the State in Column B divided by the sum of the Number 
of Individuals for all States in Column B.
    Column D--Initial QI Allotment. Column D contains each State's 
Initial FY 2007 QI allotment, calculated as the State's Percentage of 
Total in Column C multiplied by $400,000,000, the total amount 
available for FY 2007 for all States.
    Columns E through J show the determination of the States' Final FY 
2007 QI Allotments.
    Column E--FY 2007 Estimated QI Expenditures. Column E contains the 
States' most recent estimates of their total QI expenditures for FY 
2007 requested from States as of August 31, 2007.
    Column F--Need (Difference). Column F contains the additional 
amount of QI allotment needed for those States whose estimated 
expenditures in Column E exceed their Initial FY 2007 QI allotments in 
Column D; for those States, Column F shows the amount in Column E minus 
the amount in Column D. For other States, Column F shows ''NA.''
    Column G--Reduction Pool for Non-Need States. Column G contains the 
amount of the pool of surplus FY 2007 QI allotments for those States 
that project they will not need all of their FY 2007 QI allotments 
(referred to as Non-Need States). For States whose estimates of QI 
expenditures for FY 2007 in Column E are equal to or less than their 
Initial FY 2007 QI allotments in Column D, Column G shows the amount in 
Column D minus the amount in Column E. For the States with a need, 
Column G shows ``Need.'' The pool of excess QI allotments is equal to 
the sum of the amounts in Column G.
    Column H--Percent of Total Non-Need States. Column H shows the 
percentage of the total excess FY 2007 allotments for each Non-Need 
State, determined as the amount for each Non-Need State in Column G 
divided by the sum of the amounts for all States in Column G.
    Column I--Reduction for Non-Need States. Column I shows the amount 
of reduction to Non-Need States' Initial FY 2007 QI allotments in 
Column D in order to provide for the total need shown in Column F. The 
amount in Column I is determined as the percentage in Column H for Non-
Need States multiplied by the sum of the need for all States from 
Column F.
    Column J--Final FY 2007 QI Allotment. Column J contains the Final 
FY 2007 QI allotment for each State. For States that need additional 
amounts based on their FY 2007 Estimated QI Expenditures in Column E, 
Column J is equal to the Initial FY 2007 QI Allotment in Column D plus 
the amount of Need Column F. For Non-Need States, Column J is equal to 
the Initial FY 2007 QI Allotment in Column D minus the amount in Column 
I.

[[Page 17352]]



                                                     Final FY 2007 Qualified Individuals Allotments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Initial QI allotments for FY 2007                                                           Reduction
                                 ----------------------------------------                              Reduction    Percent of    for non-
                                                                             FY 2007        Need        pool for    total non-  need states    Final FY
              State                Number of    Percentage   Initial QI   estimated QI  (difference)    non-need   need states    (Col H x     2007 QI
                                  individuals    of total     allotment   expenditures   If E>D, E-D   states  If    G/(Total   Tot. Col F)   allotment
                                   \3\ (000s)   Col B/Tot.     Col C x         \1\                     D>=E, D-E      of G)                      \2\
                                                  Col B     $400,000,000                                                        $61,713,005
A                                           B            C             D             E             F            G            H            I            J
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.........................         27.0         1.78    $7,114,625   $19,850,000   $12,735,375        (\4\)        (\4\)        (\4\)  $19,850,000
Alaska..........................          1.7         0.11       439,174       130,000            NA     $309,174       0.3564     $219,953      219,222
Arizona.........................           35         2.31     9,222,661    11,466,582     2,243,921        (\4\)        (\4\)        (\4\)   11,466,582
Arkansas........................           21         1.38     5,533,597     6,190,217       656,620        (\4\)        (\4\)        (\4\)    6,190,217
California......................          118         7.80    31,181,379    12,989,337            NA   18,192,042      20.9716   12,942,175   18,239,204
Colorado........................           13         0.88     3,513,395     2,292,718            NA    1,220,677       1.4072      868,413    2,644,981
Connecticut.....................           16         1.05     4,216,074     7,889,657     3,673,583        (\4\)        (\4\)        (\4\)    7,889,657
Delaware........................            4         0.26     1,054,018       257,954            NA      796,064       0.9177      566,336      487,683
District of Columbia............            3         0.18       702,679        20,084            NA      682,595       0.7869      485,611      217,068
Florida.........................          104         6.87    27,492,314    30,089,989     2,597,675        (\4\)        (\4\)        (\4\)   30,089,989
Georgia.........................           45         2.96    11,857,708    18,295,552     6,437,844        (\4\)        (\4\)        (\4\)   18,295,552
Hawaii..........................            5         0.31     1,229,688       538,360            NA      691,328       0.7970      491,824      737,864
Idaho...........................            6         0.40     1,581,028     1,438,000            NA      143,028       0.1649      101,753    1,479,275
Illinois........................           80         5.29    21,168,204    14,400,000            NA    6,768,204       7.8023    4,815,033   16,353,171
Indiana.........................           58         3.80    15,195,433     6,293,236            NA    8,902,197      10.2623    6,333,197    8,862,235
Iowa............................           15         0.97     3,864,734     2,465,061            NA    1,399,673       1.6135      995,755    2,868,979
Kansas..........................           12         0.79     3,162,055     1,856,338            NA    1,305,717       1.5052      928,913    2,233,142
Kentucky........................           30         2.00     7,992,973     8,166,944       173,971        (\4\)        (\4\)        (\4\)    8,166,944
Louisiana.......................           32         2.11     8,432,148    11,442,532     3,010,384        (\4\)        (\4\)        (\4\)   11,442,532
Maine...........................            8         0.55     2,195,872     3,834,061     1,638,189        (\4\)        (\4\)        (\4\)    3,834,061
Maryland........................           20         1.32     5,270,092     3,634,249            NA    1,635,843       1.8858    1,163,771    4,106,321
Massachusetts...................           44         2.92    11,682,038     7,426,293            NA    4,255,745       4.9060    3,027,620    8,654,418
Michigan........................           52         3.40    13,614,405     8,552,043            NA    5,062,362       5.8358    3,601,464   10,012,941
Minnesota.......................           14         0.94     3,776,899     3,687,449            NA       89,450       0.1031       63,637    3,713,263
Mississippi.....................           18         1.16     4,655,248     9,000,000     4,344,752        (\4\)        (\4\)        (\4\)    9,000,000
Missouri........................           46         3.01    12,033,377     3,246,344            NA    8,787,033      10.1296    6,251,268    5,782,110
Montana.........................            7         0.46     1,844,532       799,103            NA    1,045,429       1.2052      743,739    1,100,793
Nebraska........................           10         0.66     2,635,046     2,181,470            NA      453,576       0.5229      322,683    2,312,363
Nevada..........................           10         0.68     2,722,881     2,208,927            NA      513,954       0.5925      365,637    2,357,244
New Hampshire...................            8         0.53     2,108,037       881,027            NA    1,227,010       1.4145      872,919    1,235,118
New Jersey......................           41         2.70    10,803,689     9,990,271            NA      813,418       0.9377      578,682   10,225,008
New Mexico......................           11         0.72     2,898,551     2,299,667            NA      598,884       0.6904      426,058    2,472,493
New York........................           89         5.86    23,451,910    38,375,979    14,924,069        (\4\)        (\4\)        (\4\)   38,375,979
North Carolina..................           64         4.24    16,952,130    17,598,664       646,534        (\4\)        (\4\)        (\4\)   17,598,664
North Dakota....................            5         0.33     1,317,523       441,201            NA      876,322       1.0102      623,433      694,090
Ohio............................           60         3.97    15,898,112    15,412,487            NA      485,625       0.5598      345,483   15,552,629
Oklahoma........................           18         1.21     4,830,918     7,695,103     2,864,185        (\4\)        (\4\)        (\4\)    7,695,103
Oregon..........................           21         1.38     5,533,597     7,045,898     1,512,301        (\4\)        (\4\)        (\4\)    7,045,898
Pennsylvania....................           69         4.55    18,181,818    20,005,059     1,823,241        (\4\)        (\4\)        (\4\)   20,005,059
Rhode Island....................            7         0.44     1,756,697     1,933,820       177,123        (\4\)        (\4\)        (\4\)    1,933,820
South Carolina..................           27         1.76     7,026,790     7,476,000       449,210        (\4\)        (\4\)        (\4\)    7,476,000
South Dakota....................            4         0.29     1,141,853       869,000            NA      272,853       0.3145      194,113      947,740
Tennessee.......................           32         2.09     8,344,313       369,605            NA    7,974,708       9.1931    5,673,363    2,670,949
Texas...........................           96         6.30    25,208,608    22,907,835            NA    2,300,773       2.6523    1,636,815   23,571,793
Utah............................            5         0.33     1,317,523       755,851            NA      561,672       0.6475      399,585      917,939
Vermont.........................            3         0.22       878,349     2,682,376     1,804,027        (\4\)        (\4\)        (\4\)    2,682,376
Virginia........................           33         2.17     8,695,652     6,500,000            NA    2,195,652       2.5311    1,562,030    7,133,622
Washington......................           26         1.73     6,938,955     5,072,243            NA    1,866,712       2.1519    1,328,015    5,610,939
West Virginia...................           18         1.21     4,830,918     3,568,573            NA    1,262,345       1.4552      898,057    3,932,861
Wisconsin.......................           23         1.49     5,972,771     2,000,375            NA    3,972,396       4.5793    2,826,041    3,146,731
Wyoming.........................            2         0.13       527,009       443,190            NA       83,819       0.0966       59,631      467,379
                                 -----------------------------------------------------------------------------------------------------------------------
    Total.......................        1,518       100.00   400,000,000   374,966,724    61,713,005   86,746,281     100.0000   61,713,005  400,000,000
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Footnotes:
\1\ FY 2007 Estimates from August 2007 CMS Survey of States.
\2\ For (\4\) States Final FY 2007 QI Allotment is equal to Initial QI Allotment in Column D increased by amount in Column F. For Non-(\4\) States Final
  FY 2007 QI Allotment is equal to Initial QI Allotment in Column D reduced by amount in Column I.
\3\ Three-year average (2004-2006) of number (000) of Medicare beneficiaries in State who are not enrolled in Medicaid but whose incomes are at least
  120 but less than 135 of FPL.
\4\ Need.
Source: Census Bureau Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS) for past 3 years through March of 2006.

III. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 35).

IV. Regulatory Impact Statement

    We have examined the impact of this notice as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review), the 
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), 
section 1102(b) of the Social Security Act, the Unfunded Mandates 
Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on 
Federalism, and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Order 12866 (as amended by Executive Order 13258, which 
merely reassigns responsibility of

[[Page 17353]]

duties) directs agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). A regulatory impact analysis (RIA) must be 
prepared for major rules with economically significant effects ($100 
million or more in any 1 year). This notice sets forth the amounts of 
States' final FY 2007 allotments for payment of Medicare Part B 
premiums for qualifying individuals determined in accordance with 
existing statutory and regulatory provisions. Because this notice 
merely redistributes allotments that have already been made, it has no 
impact. As a result, it does not reach the economic threshold of being 
considered a major rule.
    The RFA requires agencies to analyze options for regulatory relief 
for small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having revenues of 
$6 million to $29 million in any 1 year. Individuals and States are not 
included in the definition of a small entity.
    As indicated previously, this notice is applicable only to States. 
Moreover, the total amount of Federal funds available during a Federal 
fiscal year and the formula for determining individual State allotments 
are specified in the law. We have applied the statutory formula for the 
State allotments. Because the data specified in the law were not 
initially available, we used comparable data from the U.S. Census 
Bureau on the number of possible qualifying individuals in the States. 
The existing statute and regulations permit, in a specific 
circumstance, reallocation of funds to enable enrollment of all 
eligible individuals to the extent of the available funding.
    We believe that the final FY 2007 allotments set forth in this 
notice will have a positive effect on States and individuals. Federal 
funding at the 100 percent matching rate is available for Medicare 
cost-sharing for Medicare Part B premium payments for qualifying 
individuals and, with the reallocation of the State allotments, a 
greater number of low-income Medicare beneficiaries will be eligible to 
have their Medicare Part B premiums paid under Medicaid. The changes in 
allotments will not result in fewer individuals receiving the QI 
benefit in any State. The FY 2007 costs for this provision have been 
included in the FY 2007 President's Budget.
    Section 1102(b) of the Act requires us to prepare a regulatory 
impact analysis for any rule that may have a significant impact on the 
operations of a substantial number of small rural hospitals. The 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside a Core-Based Statistical 
Area and has fewer than 100 beds.
    We are not preparing analyses for either the RFA or section 1102(b) 
of the Act because we have determined and certify that this notice will 
not have a significant economic impact on a substantial number of small 
entities or a significant impact on the operations of a substantial 
number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (URMA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditure in any 1 year by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $110 million. This rule will have no consequential effect on 
the governments mentioned or on the private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a rule that imposes substantial 
direct requirement costs on State and local governments, preempts State 
law, or otherwise has federalism implications. Since this notice does 
not impose any costs on State or local governments, the requirements of 
E.O. 13132 are not applicable.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.

    Authority: Sections 1902(a)(10), 1933 of the Social Security Act 
(42 U.S.C. 1396a), and Pub. L. 105-33.

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program)

    Dated: November 20, 2007.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: December 3, 2007.
Michael O. Leavitt,
Secretary.

    Editorial Note: This document was received at the Office of the 
Federal Register on March 18, 2008.
[FR Doc. E8-5748 Filed 3-31-08; 8:45 am]
BILLING CODE 4120-01-P