[Federal Register Volume 74, Number 234 (Tuesday, December 8, 2009)]
[Notices]
[Pages 64697-64700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-29248]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES


Implementation of Section 5001 of the American Recovery and 
Reinvestment Act of 2009 for Adjustments to the Third and Fourth 
Quarters of Fiscal Year 2009 Federal Medical Assistance Percentage 
Rates for Federal Matching Shares for Medicaid and Title IV-E Foster 
Care, Adoption Assistance and Guardianship Assistance Programs

AGENCY: Office of the Secretary, DHHS.

ACTION: Notice

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SUMMARY: This notice finalizes the methodology for calculating the 
higher Federal matching funding that is made available under Section 
5001 of the American Recovery and Reinvestment Act of 2009 (ARRA), and 
provides the final calculation of the adjusted Federal Medical 
Assistance Percentage (FMAP) rates for the third and fourth quarters of 
Fiscal Year 2009 (FY09). Section 5001 of the ARRA provides for 
temporary increases in the FMAP rates to provide fiscal relief to 
States and to protect and maintain State Medicaid and certain other 
assistance programs in a period of economic downturn. The increased 
FMAP rates apply during a recession adjustment period that is defined 
as the period beginning October 1, 2008 and ending December 31, 2010.

DATES: Effective Date: The percentages listed are for the third quarter 
of FY09 beginning April 1, 2009 and ending June 30, 2009 and for the 
fourth quarter of FY09 beginning July 1, 2009 and ending September 30, 
2009.

A. Background

    The FMAP is used to determine the amount of Federal matching for 
specified State expenditures for assistance payments under programs 
under the Social Security Act. Sections 1905(b) and 1101(a)(8)(B) of 
the Social Security Act (``the Act'') require the Secretary of Health 
and Human Services

[[Page 64698]]

to publish the FMAP rates each year. The Secretary calculates the 
percentages using formulas set forth in sections 1905(b) and 
1101(a)(8)(B), and from the Department of Commerce's statistics of 
average income per person in each State and for the nation as a whole. 
The percentages must be within the upper and lower limits given in 
section 1905(b) of the Act. The percentages to be applied to the 
District of Columbia, Puerto Rico, the Virgin Islands, Guam, American 
Samoa, and the Northern Mariana Islands are specified separately in the 
Act, and thus are not based on the statutory formula that determines 
the percentages for the 50 States.
    Section 1905(b) of the Act specifies the formula for calculating 
FMAP as follows:

    The FMAP for any State shall be 100 per centum less the State 
percentage; and the State percentage shall be that percentage which 
bears the same ratio to 45 per centum as the square of the per 
capita income of such State bears to the square of the per capita 
income of the continental United States (including Alaska) and 
Hawaii; except that (1) the FMAP shall in no case be less than 50 
per centum or more than 83 per centum, and (2) the FMAP for Puerto 
Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and 
American Samoa shall be 50 per centum.

    Section 4725 of the Balanced Budget Act of 1997 amended section 
1905(b) to provide that the FMAP for the District of Columbia for 
purposes of titles XIX (Medicaid) and XXI (CHIP) shall be 70 percent. 
The Medicare Improvements for Patients and Providers Act of 2008 (Pub. 
L. 110-275) amended the FMAP applied to the District of Columbia for 
maintenance payments under title IV-E programs to make it consistent 
with the 70 percent Medicaid match rate.
    Section 5001 of Division B of the ARRA provides for a temporary 
increase in FMAP rates for Medicaid and title IV-E Foster Care, 
Adoption Assistance and Guardianship Assistance programs. The purposes 
of the increases to the FMAP rates are to provide fiscal relief to 
States and to protect and maintain State Medicaid and certain other 
assistance programs in a period of economic downturn, referred to as 
the ``recession adjustment period.'' The recession adjustment period is 
defined as the period beginning October 1, 2008 and ending December 31, 
2010.
    On August 4, 2009, we published a notice with a comment period that 
described the methodology for calculating the increased Federal 
matching funding made available under ARRA. (74 FR 38630.) In this 
issuance, we consider the single comment we received on that prior 
notice, and set forth the final methodology and FMAP rates for the 
third and fourth quarters of Federal fiscal year 2009.

B. Calculation of the Increased FMAP Rates Under ARRA

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

C. Response to Public Comments on Methodology

    Only one comment was received in response to the request for public 
comments on the methodology set forth in the August 4, 2009 Notice. The 
commenter supported the methodology set forth in the August 4, 2009 
Notice for the calculation of the ARRA increased FMAP. In light of the 
absence

[[Page 64699]]

of any issues raised through public comment, the methodology for 
calculating the adjusted FMAPs will remain as it was set forth in the 
August 4, 2009 Notice.

D. Adjusted FMAPs for the Third and Fourth Quarters of 2009

    ARRA adjustments to FMAPs are shown by State in the accompanying 
table. The hold harmless FY09 FMAP is the higher of the original FY08 
or FY09 FMAP. The 6.2 percentage point increase is added to the hold 
harmless FY09 FMAP. The unemployment tier is determined by comparing 
the average unemployment rate for the three consecutive months 
preceding the start of each fiscal quarter to the lowest consecutive 3-
month average unemployment rate beginning January 1, 2006. The 
unemployment adjustment is calculated according to the unemployment 
tier and added to the hold harmless FY09 FMAP with the 6.2 percentage 
point increase.

FOR FURTHER INFORMATION CONTACT: Carrie Shelton or Thomas Musco, Office 
of Health Policy, Office of the Assistant Secretary for Planning and 
Evaluation, Room 447D--Hubert H. Humphrey Building, 200 Independence 
Avenue, SW., Washington, DC 20201, (202) 690-6870.

(Catalog of Federal Domestic Assistance Program Nos. 93.558: TANF 
Contingency Funds; 93.563: Child Support Enforcement; 93-596: Child 
Care Mandatory and Matching Funds of the Child Care and Development 
Fund; 93.658: Foster Care; 93.659: Adoption Assistance; 93.090: 
Guardianship Assistance; 93.769: Ticket-to-Work and Work Incentives 
Improvement Act)

    Dated: November 20, 2009.
Kathleen Sebelius,
Secretary.

                                                                              ARRA Adjustments to FMAP Q3 & Q4 FY09
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                                                                          Hold
                                                                        harmless    1st & 2nd    3rd Quarter     3-month                                                             4th Quarter
                                         FY08       FY09       Hold    FY09 FMAP  Quarter FY09    FY09 FMAP      average       Minimum    Unemployment  Unemployment  Unemployment    FY09 FMAP
                State                  original   original   harmless     with        FMAP      unemployment  unemployment  unemployment   difference       tier       adjustment   unemployment
                                         FMAP       FMAP       FY09      6.2%pt   unemployment   adjustment    ending June                                               Q4 FY09     adjustment
                                                                        increase   adjustment                     2009
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Alabama.............................      67.62      67.98      67.98      74.18        76.64         77.51           9.6           3.3           6.3          11.5          3.33         77.51
Alaska..............................      52.48      50.53      52.48      58.68        58.68         61.12           8.2           6.0           2.2           5.5          2.44         61.12
Arizona.............................      66.20      65.77      66.20      72.40        75.01         75.93           8.2           3.6           4.6          11.5          3.53         75.93
Arkansas............................      72.94      72.81      72.94      79.14        79.14         80.46           6.9           4.8           2.1           5.5          1.32         80.46
California..........................      50.00      50.00      50.00      56.20        61.59         61.59          11.4           4.8           6.6          11.5          5.39         61.59
Colorado............................      50.00      50.00      50.00      56.20        58.78         61.59           7.5           3.6           3.9          11.5          5.39         61.59
Connecticut.........................      50.00      50.00      50.00      56.20        60.19         60.19           7.8           4.3           3.5          11.5          5.39         61.59
Delaware............................      50.00      50.00      50.00      56.20        60.19         61.59           8.0           3.3           4.7          11.5          5.39         61.59
District of Columbia................      70.00      70.00      70.00      76.20        77.68         79.29          10.5           5.4           5.1          11.5          3.09         79.29
Florida.............................      56.83      55.40      56.83      63.03        67.64         67.64          10.2           3.3           6.9          11.5          4.61         67.64
Georgia.............................      63.10      64.49      64.49      70.69        73.44         74.42           9.6           4.3           5.3          11.5          3.73         74.42
Hawaii..............................      56.50      55.11      56.50      62.70        66.13         67.35           7.2           2.2           5.0          11.5          4.65         67.35
Idaho...............................      69.87      69.77      69.87      76.07        78.37         79.18           7.7           2.8           4.9          11.5          3.11         79.18
Illinois............................      50.00      50.32      50.32      56.52        60.48         61.88           9.9           4.4           5.5          11.5          5.36         61.88
Indiana.............................      62.69      64.26      64.26      70.46        73.23         74.21          10.4           4.4           6.0          11.5          3.75         74.21
Iowa................................      61.73      62.62      62.62      68.82        68.82         68.82           5.6           3.7           1.9           5.5          1.89         70.71
Kansas..............................      59.43      60.08      60.08      66.28        66.28         68.31           6.8           4.0           2.8           8.5          3.13         69.41
Kentucky............................      69.78      70.13      70.13      76.33        77.80         79.41          10.5           5.4           5.1          11.5          3.08         79.41
Louisiana...........................      72.47      71.31      72.47      78.67        80.01         80.01           6.5           3.5           3.0           8.5          2.08         80.75
Maine...............................      63.31      64.41      64.41      70.61        72.40         74.35           8.3           4.4           3.9          11.5          3.74         74.35
Maryland............................      50.00      50.00      50.00      56.20        58.78         60.19           7.1           3.4           3.7          11.5          5.39         61.59
Massachusetts.......................      50.00      50.00      50.00      56.20        58.78         60.19           8.3           4.4           3.9          11.5          5.39         61.59
Michigan............................      58.10      60.27      60.27      66.47        69.58         70.68          14.1           6.7           7.4          11.5          4.21         70.68
Minnesota...........................      50.00      50.00      50.00      56.20        60.19         61.59           8.2           3.9           4.3          11.5          5.39         61.59
Mississippi.........................      76.29      75.84      76.29      82.49        83.62         84.24           9.3           6.0           3.3           8.5          1.75         84.24
Missouri............................      62.42      63.19      63.19      69.39        71.24         73.27           8.8           4.7           4.1          11.5          3.88         73.27
Montana.............................      68.53      68.04      68.53      74.73        76.29         77.14           6.2           3.2           3.0           8.5          2.41         77.14
Nebraska............................      58.02      59.54      59.54      65.74        65.74         67.79           4.8           2.8           2.0           5.5          2.05         67.79
Nevada..............................      52.64      50.00      52.64      58.84        63.93         63.93          11.3           4.2           7.1          11.5          5.09         63.93
New Hampshire.......................      50.00      50.00      50.00      56.20        56.20         58.78           6.6           3.4           3.2           8.5          3.99         60.19
New Jersey..........................      50.00      50.00      50.00      56.20        58.78         61.59           8.8           4.2           4.6          11.5          5.39         61.59
New Mexico..........................      71.04      70.88      71.04      77.24        77.24         78.66           6.4           3.5           2.9           8.5          2.20         79.44
New York............................      50.00      50.00      50.00      56.20        58.78         60.19           8.2           4.3           3.9          11.5          5.39         61.59
North Carolina......................      64.05      64.60      64.60      70.80        73.55         74.51          10.9           4.5           6.4          11.5          3.71         74.51
North Dakota........................      63.75      63.15      63.75      69.95        69.95         69.95           4.2           3.0           1.2             0          0.00         69.95
Ohio................................      60.79      62.14      62.14      68.34        70.25         72.34          10.7           5.3           5.4          11.5          4.00         72.34
Oklahoma............................      67.10      65.90      67.10      73.30        74.94         74.94           6.3           3.3           3.0           8.5          2.53         75.83
Oregon..............................      60.86      62.45      62.45      68.65        71.58         72.61          12.0           5.0           7.0          11.5          3.96         72.61
Pennsylvania........................      54.08      54.52      54.52      60.72        63.05         64.32           8.1           4.3           3.8          11.5          4.87         65.59
Rhode Island........................      52.51      52.59      52.59      58.79        63.89         63.89          11.9           4.8           7.1          11.5          5.10         63.89
South Carolina......................      69.79      70.07      70.07      76.27        78.55         79.36          11.8           5.5           6.3          11.5          3.09         79.36
South Dakota........................      60.03      62.55      62.55      68.75        68.75         70.64           5.0           2.7           2.3           5.5          1.89         70.64
Tennessee...........................      63.71      64.28      64.28      70.48        73.25         74.23          10.5           4.5           6.0          11.5          3.75         74.23
Texas...............................      60.56      59.44      60.56      66.76        68.76         68.76           7.1           4.4           2.7           8.5          3.09         69.85
Utah................................      71.63      70.71      71.63      77.83        77.83         79.98           5.4           2.5           2.9           8.5          2.15         79.98
Vermont.............................      59.03      59.45      59.45      65.65        67.71         69.96           7.3           3.5           3.8          11.5          4.31         69.96
Virginia............................      50.00      50.00      50.00      56.20        58.78         61.59           7.0           2.8           4.2          11.5          5.39         61.59
Washington..........................      51.52      50.94      51.52      57.72        60.22         62.94           9.1           4.4           4.7          11.5          5.22         62.94
West Virginia.......................      74.25      73.73      74.25      80.45        80.45         81.70           8.4           4.2           4.2          11.5          2.60         83.05
Wisconsin...........................      57.62      59.38      59.38      65.58        65.58         68.77           8.8           4.4           4.4          11.5          4.31         69.89
Wyoming.............................      50.00      50.00      50.00      56.20        56.20         56.20           5.2           2.8           2.4           5.5          2.58         58.78
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[FR Doc. E9-29248 Filed 12-7-09; 8:45 am]
BILLING CODE 4210-01-P