[Federal Register Volume 76, Number 33 (Thursday, February 17, 2011)]
[Rules and Regulations]
[Pages 9233-9249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-3639]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 457
[CMS-2291-F]
RIN 0938-AP53
Children's Health Insurance Program (CHIP); Allotment Methodology
and States' Fiscal Years 2009 Through 2015 CHIP Allotments
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule describes the implementation of funding
provisions under Title XXI of the Social Security Act (the Act), for
the Children's Health Insurance Program (CHIP), as amended by the
Children's Health Insurance Program Reauthorization Act of 2009
(CHIPRA), by the Medicare, Medicaid, and SCHIP Extension Act of 2007
(MMSEA), by other related CHIP legislation, and most recently by the
Patient Protection and Affordable Care Act of 2010 (the Affordable Care
Act). Specifically, this final rule addresses methodologies and
procedures for determining States' fiscal years 2009 through 2015
allotments and payments in accordance with sections 2104 and 2105 of
the Act, as amended by CHIPRA and the Affordable Care Act.
DATES: Effective Date: These regulations are effective on April 18,
2011.
FOR FURTHER INFORMATION CONTACT: Richard Strauss, (410) 786-2019.
SUPPLEMENTARY INFORMATION:
I. Background
A. The Children's Health Insurance Program
Title XXI of the Social Security Act (the Act) sets forth CHIP to
enable States, the District of Columbia, and specified Commonwealths
and Territories to initiate and expand health insurance coverage to
uninsured, low-income children. The 50 States, the District of
Columbia, and the Commonwealths and Territories may implement the CHIP
through a separate child health program under title XXI of the Act, an
expanded Medicaid program under title XIX of the Act, or a combination
of both.
Federal funds appropriated for title XXI are limited, and the law
specifies a formula and methodology to divide the total annual
appropriation into individual allotments available for each State, the
District of Columbia, and each U.S. Territory and Commonwealth with an
approved child health plan.
B. Funding of CHIP Allotments Before the Enactment of CHIPRA
Section 4901 of the Balanced Budget Act of 1997 (Pub. L. 105-33,
enacted on August 5, 1997) (BBA), which added Title XXI to the Social
Security Act, appropriated funding for States' CHIPs for each fiscal
year over a 10 fiscal year (FY) period from 1998 through 2007. The
funding for each FY varied from $4.295 billion for FY 1998 up to $5.0
billion for FY 2007. Under section 2104(c)(4) of the Act, additional
appropriations were provided for each of FYs 1999 through 2007 to
provide additional allotment amounts particularly for the Commonwealths
and Territories.
Public Law 110-92 (enacted on September 29, 2007), contained
provisions to extend funding under the CHIP through November 16, 2007.
In particular, section 136(a) of Public Law 110-92 appropriated $5
billion for the purposes of providing FY 2008 allotments to the 50
States, the District of Columbia, and the Commonwealths and
Territories. In addition, $40 million was appropriated by this section
to provide additional allotments to the Commonwealths and Territories
in FY 2008.
[[Page 9234]]
Section 136(b) of Public Law 110-92 also provided that the FY 2008
allotments will be determined in accordance with the same methodology
as previous CHIP fiscal year allotments were determined. In addition,
section 136(c) of Public Law 110-92 amended the CHIP statute to add a
new section 2104(i) of the Act to provide for the redistribution in FY
2008 of the unexpended FY 2005 allotments remaining at the end of FY
2007 to those 50 States or the District of Columbia that had estimated
shortfalls in FY 2008. Finally, section 106 of Public Law 110-92 made
the FY 2008 allotment funds available only for States' CHIP
expenditures for assistance provided through November 16, 2007.
Subsequent to the enactment of Public Law 110-92; further
continuing appropriation legislation was enacted which extended the
dates which the FY 2008 allotment funds were available as provided in
section 106 of Public Law 110-92; in particular, Public Law 110-116
(enacted on November 13, 2007), Public Law 110-137 (enacted on December
14, 2007), and Public Law 110-149 (enacted on December 21, 2007)
extended the dates to December 14, 2007, December 21, 2007, and
December 31, 2007, respectively.
Section 201 of the Medicare, Medicaid, and SCHIP Extension Act of
2007 (Pub. L. 110-173, enacted on December 29, 2007) (MMSEA) amended
section 2104(a) of the CHIP statute to explicitly provide funding for
CHIP allotments in the amount of $5 billion for each of FYs 2008 and
2009 for the 50 States and the District of Columbia and the
Commonwealths and Territories, and for $40 million for the
Commonwealths and Territories for each of FYs 2008 and 2009. These
allotments will be determined in accordance with the existing
methodology in CHIP statute for fiscal years before FY 2008. The
funding provided for FY 2008 under the Continuing Appropriation
legislation discussed above and enacted before MMSEA will no longer be
available (and thus expenditures for FY 2008 will be paid from the
allotments as provided under MMSEA). MMSEA provided that the FYs 2008
and 2009 allotment funds were only available for States' expenditures
through March 31, 2009.
Section 201 of MMSEA amended the CHIP statute to add section
2104(j) of the Act which appropriated $1.6 billion for the purpose of
providing additional allotments to eliminate States' CHIP shortfalls in
FY 2008.
The provisions of MMSEA were implemented and described in a Federal
Register notice dated May 23, 2008 (73 FR 30112).
C. Enactment of CHIPRA
Section 101 of the CHIPRA amended section 2104(a) of the Act to
appropriate funding for each of FYs 2009 through 2012, and for two
semi-annual periods in FY 2013, October 1, 2012 through March 31, 2013
and April 1, 2013 through September 30, 2013 respectively, for the
purpose of providing allotments to States for each of those fiscal
years or fiscal year periods. Furthermore, section 108 of CHIPRA
provided additional funding for State allotments for the period October
1, 2012 through March 31, 2013 (the first half of FY 2013). Finally,
section 3(c) of CHIPRA provides for the coordination of funding for
CHIP in FY 2009 as previously provided under section 201 of MMSEA.
In particular, section 3(c) of CHIPRA requires the Federal
government to rescind any previously appropriated amounts that were not
allotted or obligated before April 1, 2009 for the following:
Section 2104(a)(11) of the Act for purposes of providing
State CHIP allotments for FY 2009 for States' expenditures through
March 31, 2009.
Section 2104(k) of the Act for purposes of the
redistribution of unexpended FY 2006 allotments in FY 2009 to address
States' funding shortfalls in FY 2009.
Section 2104(l) of the Act for purposes of providing
additional allotments for States' expenditures in FY 2009 to fund
States' shortfalls for their expenditures through March 31, 2009.
Furthermore, any amounts provided for FY 2009 CHIP allotments in
section 2104(a)(12) as appropriated through the amendments made by
CHIPRA must be reduced by the amounts that were obligated before April
1, 2009 under sections 2104(a)(11), 2104(k), or 2104(l) of the Act, as
amended by section 201 of MMSEA (which refer to States' FY 2009 CHIP
allotments, amounts of unexpended FY 2006 allotments redistributed in
FY 2009, and the amounts of additional FY 2009 allotments to address
States' CHIP funding shortfalls through March 31, 2009, respectively).
Funding for Territories and Commonwealths under Section 2104(c)(4) of
the Act was not subject to coordination of funding under section 3(c)
of CHIPRA.
The rescission of these unobligated amounts as well as the
reduction in the FY 2009 allotment for the amounts that were obligated
before April 1, 2009 ensure that States do not receive FY 2009
allotments as determined under CHIPRA in excess of the total amount
provided under section 2104(a)(12) of the Act for FY 2009, as amended
by CHIPRA, and 2104(c)(4).
D. The Patient Protection and Affordable Care Act
Section 10203(d)(1) of the Patient Protection and Affordable Care
Act of 2010 (``Affordable Care Act''), Public Law 111-148, amended
section 2104 of the CHIP statute to extend funding for CHIP to the end
of FY 2015 and made other technical changes to the funding provisions
under CHIP that do not affect the overall funding mechanism.
E. Authority for Qualifying States to Use Available CHIP Allotments for
Medicaid Expenditures
Under section 2105(a)(1)(A) through (D) and (a)(2) of the Act, and
before enactment of Extension of Availability of CHIP Allotment Act
(Pub. L. 108-74, enacted on August 15, 2003), only Federal payments for
the following Medicaid and CHIP expenditures were applied against
States' available CHIP allotments to include:
Medical assistance provided under title XIX (Medicaid) of
the Act, to targeted low-income children in a CHIP-related Medicaid
expansion, for which the CHIP enhanced Federal medical assistance
percentage (CHIP EFMAP) rate is available.
Medical assistance provided on behalf of a child during a
period of presumptive eligibility under section 1920A of the Act (these
funds are matched at the regular Medicaid Federal medical assistance
percentage (FMAP) rate).
Child health assistance to targeted low income children
that meets minimum benefit requirements under CHIP.
Other types of expenditures in CHIP that are subject to
the 10-percent limit on non-primary expenditures (including other child
health assistance for targeted low-income children, health services
initiatives, outreach, and administrative costs).
Section 1(b) of the Extension of Availability of CHIP Allotment Act
as amended by the Social Security Act, Technical corrections (Pub. L.
108-127, enacted November 17, 2003), added new section 2105(g) to the
Act that certain ``qualifying States'' that met prescribed criteria
could elect to use up to 20 percent of any of the States' available
CHIP allotments for FYs 1998, 1999, 2000, or 2001 to increase the FMAP
rate for certain regular Medicaid expenditures to the EFMAP rate
available under CHIP. These
[[Page 9235]]
expenditures were for children under 19 years of age whose family
income exceeds 150 percent of the Federal poverty line and who are
eligible under the States' Medicaid program. As described in the
Federal Register notice published on July 23, 2004 (69 FR 44013), if a
qualified State submitted both 20 percent allowance expenditures and
other ``regular'' CHIP expenditures at the same time in a quarter, the
20 percent allowance expenditures would be applied first against the
available fiscal year reallotments. However, the 20 percent allowance
expenditures could be applied only against the specified fiscal year
allotment funds (upon which the 20 percent allowances were based) and
which would remain available. Under section 2104(g)(1)(B)(iii) of the
Act, the amounts of States' FY 2001 reallotments would only be
available through the end of FY 2005; therefore, the FY 2001 20 percent
allowances for the qualifying States are only available through the end
of FY 2005.
Section 6103 of the Deficit Reduction Act of 2005 (Pub. L. 109-171,
enacted on February 8, 2006) amended section 2105(g) of the Act to
provide for continued authority for qualifying States to use a portion
of their available FYs 2004 and 2005 CHIP allotments for payments to
supplement the Medicaid FMAP that result in total Federal participation
at the EFMAP rate (as determined in section 2105(b) of the Act) for
certain expenditures made in the Medicaid program.
Section 201(b) of the National Institutes of Health Reform Act of
2006 (Pub. L. 109-482, enacted on January 15, 2007) and section 201(b)
of MMSEA, amended section 2105(g) of the Act to provide for continued
authority of payments to qualifying States for FYs 2006 through 2009.
Finally, section 107 of CHIPRA amended title XXI of the Act to add
a new paragraph (4) of section 2105(g) of the Act; under this new
provision, qualifying states at their option may use up to their entire
fiscal year allotments for each of FYs 2009 through 2015, to the extent
such allotments remain available to the State under the Act, in an
amount equal to the additional amount that would have been paid to the
State if the EFMAP as determined by section 2104(b) of the Act was
substituted for the FMAP defined in section 1905(b) of the Act. Section
10203(d)(2)(C) of the Affordable Care Act further amended section
2105(g)(4) of the Act to provide that qualifying states at their option
may use up to their entire fiscal year allotments for each of FYs 2009
through 2015.
The CHIPRA amendments to the qualifying State provision provide
that the indicated amounts of such allotments are available for certain
expenditures of the qualifying States as described in section
2105(g)(4)(B) of the Act, as amended by CHIPRA. In particular, these
are expenditures made by such States on or after February 5, 2009 for
children whose family income equals or exceeds 133 percent of the
Federal poverty line but does not exceed the Medicaid applicable income
level. As indicated above in this preamble, this is a change from what
was in effect previously; that is, before CHIPRA, the income level was
150 percent of the Federal poverty line.
II. Provisions of the Proposed Rule
We published on September 16, 2009 a proposed rule in the Federal
Register (74 FR 47517), that set forth the methodologies and procedures
to determine allotments of federal funds under title XXI of the Social
Security Act (the Act), reflecting the statutory changes described
above. We proposed new regulatory provisions that would be set forth in
42 CFR part 457 subpart F.
III. Analysis of and Responses to Public Comments
We received a total of 2 timely comments on the September 16, 2009
(74 FR 47517) proposed rule. Both comments either indicated agreement
with the content of the proposed rule or were outside of the scope of
the rule; neither of these comments suggested any changes to the
content of the proposed rule.
IV. Provisions of the Final Regulations
After consideration of the comments reviewed and further analysis
of specific issues, we are adopting the September 16, 2009 proposed
rule as final with minor revisions discussed and identified below.
The provisions of this final rule that differ from those of the
proposed rule relate to the amendments made by the Affordable Care Act,
which extended funding for CHIP to the end of FY 2015; previously
funding for CHIP extended only through the end of FY 2013. Therefore,
we are implementing the new provisions of the Affordable Care Act
discussed in this final regulation as final without the need for public
comments.
In this final rule, we are retaining the provisions as published in
the proposed rule, as follows:
Set forth the methodology and procedures for determining
the CHIP allotments for FYs 2009 through 2015 for the 50 States and the
District of Columbia, and the U.S. Commonwealths and Territories as
provided under section 2104(m) of the Act.
Describe the methodology and process used to coordinate
the funding provided previously to States under MMSEA, as described in
the May 23, 2008 Federal Register notice (73 FR 30112), under the
provisions of section 2104(a)(11) of the Act related to States' FY 2009
allotments provided to States before CHIPRA, section 2104(k) of the Act
related to the redistribution of States' unexpended FY 2006 allotments
to address States' shortfalls in FY 2009, and section 2104(l) of the
Act related to funding States' shortfalls in FY 2009 for their
expenditures through March 31, 2009.
Set forth the FY 2009 allotments as determined in
accordance with such methodologies and procedures.
Set forth the FY 2010 allotments as determined in
accordance with such methodologies and procedures.
Describe the implementation of the continued authority
under section 2105(g)(4) of the Act as amended by CHIPRA for
``qualifying States'' to elect to receive their available CHIP
allotments for FYs 2009 through 2015 CHIP as increased Federal matching
funds for certain expenditures in their Medicaid programs.
Describe the retrospective adjustment for the FY 2008
shortfall funding as provided under section 2104(j) of the Act.
To incorporate the policies and implement the statutory provisions
as described above, we applied the following revisions:
In Sec. 457.600(a), we removed the date ``2007'' and
added in its place ``2015''.
In Sec. 457.608, we revised the heading ``Process and
calculation of State allotments for a fiscal year'' to read ``Process
and calculation of State allotments prior to FY 2009''.
In part 457 subpart F, we added Sec. 457.609, ``Process
and calculation of State allotments for a fiscal year after FY 2008'',
which implements the funding amounts available for States' CHIP
allotments for FYs 2009 through 2015 of this regulation.
In Sec. 457.610, we revised the heading ``Period of
availability for State allotments for a fiscal year'' to read ``Period
of availability for State allotments prior to FY 2009''. In the first
line of the paragraph for this section, we removed the words ``for a
fiscal year'' and add in its place ``prior to FY 2009''.
In part 457 subpart F, we add Sec. 457.611, ``Period of
availability for State allotments for a fiscal year after FY 2008'',
which reflects the 3 fiscal year and 2 fiscal year periods of
availability,
[[Page 9236]]
as applicable to fiscal years before 2009 and effective for FY 2009 and
subsequent fiscal years, respectively.
A. Methodology and Procedures for Determining the CHIP Allotments for
FY 2009 Through FY 2015 for the 50 States and the District of Columbia,
and the U.S. Commonwealths and Territories
1. Reauthorization Funding for the CHIP
Section 2104(a)(1) through (18) of the Act, as amended by section
101 of CHIPRA, and as further amended by section 10203(d) of the
Affordable Care Act, provides funding for providing States' allotments
for FYs 2009 through 2015. In particular, section 101 of CHIPRA amended
section 2104(a) of the Act to revise paragraph (11) for FY 2008, and
adds new paragraphs (12) through (16) to provide appropriations for FY
2009 through FY 2013, respectively. The Affordable Care Act further
amended section 2104(a) of the Act to add new paragraphs (17) and (18),
which provide appropriations for CHIP in FYs 2014 and 2015. In
particular, under the amendments made by CHIPRA and the Affordable Care
Act, the appropriated amounts available for allotments for FYs 2009
through 2015, respectively are: $10,562,000,000 for FY 2009 (before
CHIPRA the amount for FY 2009 was $5,000,000,000); 12,520,000,000 for
FY 2010; $13,459,000,000 for FY 2011; $14,982,000,000 for FY 2012;
$17,406,000,000 for FY 2013, $19,147,000,000 for FY 2014, and
$2,850,000,000 for each of the first and second half of FY 2015. Also,
section 108 of CHIPRA, as amended by 10203(d) of the Affordable Care
Act, provides for a one-time appropriation of $15,361,000,000 for
allotments for the first half of FY 2015. Therefore, the total
appropriation for providing allotments during FY 2015 is
$21,061,000,000 (determined as the sum of $2,850,000,000,
$15,361,000,000, and $2,850,000,000).
2. Methodology for Determining State's Fiscal Year Allotments
a. CHIPRA and Affordable Care Act Provisions
Section 2104(m) of the Act, as amended by section 102 of CHIPRA and
section 10203(d) of the Affordable Care Act sets forth the methodology
for determining States' CHIP allotments for each of FYs 2009 through
2015. In general, the States' fiscal year allotments are provided from
the appropriation for the respective fiscal year allotment, subject to
a proration adjustment, described in section II.A.2.i. of this final
rule.
b. FY 2009 Allotments
The FY 2009 allotments for the 50 States and the District of
Columbia, and the Commonwealths and Territories, are provided from the
FY 2009 appropriation of $10,562,000,000, and the $40,000,000 available
at section 2104(c)(4) and are subject to a proration adjustment
described in II.A.2.i. of this final rule, if necessary. The FY 2009
CHIP allotments for the 50 States and the District of Columbia are
determined under a different methodology than is used for the
determining the FY 2009 allotments for the Commonwealths and
Territories.
The FY 2009 allotment for the 50 States and the District of
Columbia is determined as 110 percent of the highest of the following 3
amounts:
The total Federal payments to the State from the States'
available CHIP allotments in FY 2008 as reported by the State and
certified to the Secretary through the November 2008 submission of the
quarterly expenditure reports, Forms CMS-21 (OMB 0938-0731
with an expiration date of August 31, 2011) and CMS-64 (OMB
0938-0067 with an expiration date of August 31, 2011), multiplied by
the allotment increase factor described in section II.A.2.j. of this
final rule.
The amount allotted to the State for FY 2008, multiplied
by the allotment increase factor described in section II.A.2.j. of this
final rule.
The projected total Federal payments to the State under
title XXI of the Act for FY 2009, determined based on the February
submission of projections of expenditures as certified by the State to
CMS no later than March 31, 2009. These projections may include certain
amounts of Medicaid expenditures for certain ``qualifying States''
described in section 2105(g) of the Act.
With respect to the last item related to projected total Federal
payments for FY 2009 under title XXI, section 107 of CHIPRA added a new
paragraph section 2105(g)(4) of the Act to allow States to use up to
100 percent of their FY 2009 allotments for these expenditures. This
provision is further described in section II.E. of this final rule.
The FY 2009 allotment for the Commonwealths and Territories is
determined as the highest amount of the Federal payments made to the
Commonwealth or Territory under title XXI of the Act in any of the
fiscal years for the period of FYs 1999 through 2008, multiplied by the
allotment increase factor described in section II.A.2.j. of this final
rule, plus an additional amount. The additional amount is equal to
$40,000,000, as appropriated under section 2104(c)(4)(B) of the Act,
multiplied by the following percentage provided under section
2104(c)(2) of the Act for the indicated jurisdiction: 91.6 percent for
Puerto Rico; 3.5 percent for Guam; 2.6 percent for the Virgin Islands;
1.2 percent for American Samoa; and 1.1 percent for the Northern
Mariana Islands.
c. FY 2010 Allotments
The FY 2010 allotments for the 50 States and the District of
Columbia, and the Commonwealths and Territories, are provided from the
FY 2010 appropriation of $12,520,000,000, and are subject to a
proration adjustment if necessary, described in section II.A.2.i. of
this final rule. Under the CHIPRA, the FY 2010 allotment for each State
is determined by multiplying the allotment increase factor for FY 2010
for the State, by the sum of: The State's FY 2009 allotment; the amount
of the final FY 2006 redistributed allotments paid to the State as
determined under section 2104(k) of the Act, and subject to any final
retrospective adjustment to such amount determined by section
2104(k)(5) of the Act; the amount of the final additional FY 2009
allotments paid to the State as determined by section 2104(l) of the
Act, and subject to any final retrospective adjustment to such amount
determined by section 2104(l)(5) of the Act; and the amount of any
contingency fund payment made to the State for FY 2010, as determined
by section 2104(n) of the Act.
For the 50 States and the District of Columbia, section 2104(m)(6)
of the Act, the FY 2010 allotment may include additional amounts in
situations where such States have submitted an expansion allotment
adjustment request before August 31, 2009.
For the Commonwealths and Territories, in accounting for the
amounts of the FY 2009 allotments for purposes of determining the FY
2010 allotments, the component of the FY 2009 allotment for such
jurisdictions relating to the additional $40 million referenced in
section 2104(c)(4) of the Act, is not included. Section
2104(m)(2)(A)(i)(I) of the Act, as amended by CHIPRA, references the FY
2009 allotment as determined in section 2104(m)(1) of the Act; that
section, in turn, provides for determining the FY 2009 allotments from
the amounts appropriated in section 2104(a)(12) of the Act. That is,
such section 2104(m)(1) of the Act does not include the additional $40
million which is separately appropriated and available only for the
jurisdictions in determining their FY 2009 allotments. Therefore, the
[[Page 9237]]
component of the jurisdictions' FY 2009 allotment related to the
additional $40 million would not be included in determining the amount
of the jurisdictions' FY 2010 allotments.
d. FY 2011 Allotments
The FY 2011 allotments for the 50 States and the District of
Columbia, and the Commonwealths and Territories, are provided from the
FY 2011 appropriation ($13,459,000,000). The amounts of these
allotments are subject to a proration adjustment described in section
II.A.2.i of this final rule, if necessary. Section 2104(m)(2)(A)(ii) of
the Act, as amended by CHIPRA requires a ``rebasing'' process be used
for determining the FY 2011 allotments; under the rebasing methodology,
States' payments rather than their allotments for FY 2010 must be
considered in calculating the FY 2011 allotments. In particular, the FY
2011 allotments are determined by multiplying the allotment increase
factor for FY 2011 for the State by the sum of: Any Federal payments
made from the States' available allotments in FY 2010; any amounts
provided as redistributed allotments in FY 2010 to the State; and any
Federal payments attributable to any contingency fund payments made to
the State for FY 2010 determined under Section 2104(n) of the Act.
e. FY 2012 Allotments
The FY 2012 allotments for the 50 States and the District of
Columbia, and the Commonwealths and Territories, are provided from the
FY 2012 appropriation ($14,982,000,000), and are subject to a proration
adjustment described in section II.A.2.i. of this final rule, if
necessary. Under the CHIPRA, the FY 2012 allotment for each State will
be determined by multiplying the allotment increase factor for FY 2012
for the State, by the sum of: The State's FY 2011 allotment and any
contingency fund payment made to the State for FY 2011, as determined
under section 2104(n) of the Act.
For the 50 States and the District of Columbia, in section
2104(m)(6) of the Act, the FY 2012 allotment may include additional
amounts in situations where such States have submitted an expansion
allotment adjustment request before August 31, 2011.
f. FY 2013 Allotments
The FY 2013 allotments for the 50 States and the District of
Columbia, and the Commonwealths and Territories, are provided from the
FY 2013 appropriation ($17,406,000,000). The amounts of these
allotments are subject to a proration adjustment described in section
II.A.i. of this final rule, if necessary. Section 2104(m)(2)(B)(i) of
the of the Act, as amended by the Affordable Care Act requires a
``rebasing'' process be used for determining the FY 2013 allotments;
the rebasing methodology means the States' payments rather than their
allotments for FY 2012 must be considered in calculating the FY 2013
allotments. In particular, the FY 2013 allotments are determined by
multiplying the allotment increase factor for FY 2013 for the State by
the sum of: Any Federal payments made from the States' available
allotments in FY 2012; any amounts provided as redistributed allotments
in FY 2012 to the State; and any Federal payments attributable to any
contingency fund payments made to the State for FY 2012 determined
under Section 2104(n) of the Act.
g. FY 2014 Allotments
The FY 2014 allotments for the 50 States and the District of
Columbia, and the Commonwealths and Territories, are provided from the
FY 2014 appropriation of $19,147,000,000, and are subject to a
proration adjustment described in II.A.2.i. of this final rule, if
necessary. Under section 2104(m), as amended by the Affordable Care
Act, the FY 2014 allotment for each State is determined by multiplying
the allotment increase factor for FY 2014 for the State, by the sum of:
The State's FY 2013 allotment and any contingency fund payment made to
the State for FY 2013, as determined in section 2104(n) of the Act.
For the 50 States and the District of Columbia, under section
2104(m)(6) of the Act, the FY 2014 allotment may include additional
amounts in situations where such States have submitted an expansion
allotment adjustment request before August 31, 2013.
h. FY 2015 Allotments
The FY 2015 allotments for the 50 States and the District of
Columbia, and the Commonwealths and Territories, are comprised of two
components related to the first half of FY 2015 (that is, the period of
October 1, 2014 through March 31, 2015) and second half of FY 2015
(that is, April 1, 2015 through September 30, 2015). The FY 2015
allotments for the first and second half of FY 2015 are subject to a
proration adjustment described in section II.A.2.i. of this final rule,
as necessary.
The allotments for the first half of FY 2015 are provided from a
total available appropriation of $18,211,000,000, comprised of
$2,850,000,000 appropriated under section 2104(a)(18)(A) of the Act,
and $15,361,000,000 appropriated by section 108 of CHIPRA, as amended
by the Affordable Care Act. The allotments for the first half of FY
2015 are equal to the ``first half ratio'' multiplied by the allotment
increase factor for FY 2015 multiplied by the sum of any Federal
payments made from the States' available allotments in FY 2014; any
amounts provided as redistributed allotments in FY 2014 to the State;
and any Federal payments attributable to any contingency fund payments
made to the State for FY 2014 as determined under Section 2104(n) of
the Act. Therefore, the first half ratio is the percentage determined
by dividing $18,211,000,000 (calculated as the sum of $2,850,000,000
(the appropriation for the first half of FY 2015) and 15,361,000,000
(the one-time appropriation for the first half of the FY 2015)) by
$21,061,000,000 (calculated as $2,850,000,000, the appropriation for
the second half of FY 2015) plus the $18,211,000,000 amount).
The States' CHIP allotments for the second half of FY 2015 are
provided from a total available appropriation of $2,850,000,000,
appropriated under section 2104(a)(18)(B) of the Act. The allotments
for the second half of FY 2015 are equal to $2,850,000,000 multiplied
by a percentage equal to the amount of the allotment for the State for
the first half of FY 2015 divided by the sum of all such first half of
FY 2015 allotments for all States.
i. Proration Rule
Under section 2104(m)(4) of the Act, as amended by CHIPRA, if the
amount of States' allotments for a fiscal year (in accordance with the
provisions described in this final rule, or in the case of FY 2015, the
amount of an allotment for each half of the fiscal year) exceeds the
total appropriations available for such periods, the total allotments
for each of these periods will be reduced on a proportional basis. The
total amount available nationally for the period is multiplied by a
proration percentage determined by dividing the amount determined for
the period by the sum of such amounts.
j. The Allotment Increase Factor for a Fiscal Year
Under Section 2104(m)(5) of the Act, the allotment increase factor
for a fiscal year is equal to the product of two amounts for the fiscal
year: The per capita health care growth factor and the child population
growth factor.
The per capita health care growth factor for a fiscal year is equal
to 1 plus the percentage increase in the projected
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per capita amount of the National Health Expenditures from the calendar
year in which the previous fiscal year ends to the calendar year in
which the fiscal year involved ends, as most recently published by CMS
before the beginning of the fiscal year involved.
In general, for the 50 States and the District of Columbia, the
Child Population Growth Factor (CPGF) for a fiscal year is equal to 1
plus the percentage increase (if any) in the population of children in
the State from July 1 in the previous fiscal year to July 1 in the
fiscal year involved, as determined by CMS based on the most recent
published estimates of the Census Bureau available before the beginning
of the fiscal year involved plus 1 percentage point. In the
determination of the CPGF, section 2104(m)(5)(B) refers to ``the
percentage increase (if any)'' of the population of children in the
State. In this regard, CPGF refers only to increases in the population
of children. Thus, if there was a decrease in the population of
children over the indicated period, the CPGF for such State would be
0.0 percent plus one percentage point; that is, negative growth in the
children population would not result in the growth factor being less
than 101 percent.
Because of concerns about availability of data to determine the
CGPF for the Commonwealths and the Territories, section 2104(m)(1)(B)
of the Act explicitly required that the term ``United States'' be
substituted for the term ``the State''. For fiscal years after FY 2009,
that exception does not apply, and CMS will determine the CPGF for the
Commonwealths and the Territories, based on the most recent published
estimates of the Census Bureau. In accordance with section 602(b) of
the CHIPRA, which added a new section 2109(b)(2)(B) of the Act, we will
be working with the Secretary of the Commerce Department on appropriate
adjustments to improve the Current Population Survey (CPS), or develop
other data, to determine the CPGF.
k. CHIP Fiscal Year Allotment Process
As described above, the determination of the allotments for each
fiscal year potentially involves the collection of relevant data, such
as related to the allotment increase factor, or the consideration of
additional information later or after the end of the fiscal year; for
example, the determination of the FYs 2010, 2012, and 2014 allotments
allows States to receive increases in their CHIP allotments to reflect
the submission of certain expansions to their CHIP programs. In that
regard, we are incorporating into the CHIP regulation a process, which
the Secretary may elect to publish preliminary fiscal year allotments.
Consequently, this process at the time the updated allotment amounts
became available the Secretary would publish a final notice. For
example, the CHIPRA legislation as amended by the Affordable Care Act,
in the determination of the FYs 2010, 2012, and 2014 allotments, States
can amend their CHIP programs to provide for certain expansions; the
increase in expenditures for such expansions will serve to increase the
amount of the State fiscal year allotments associated with the year of
such expansions. As determined by the Secretary, the CHIP allotments
for a fiscal year may need to be published first as ``Preliminary
Allotments'' and then later as ``Final Allotments'' in the Federal
Register. The proposed rule provided for the potential for a
preliminary and final allotment to be determined.
B. Coordination of CHIP Funding for FY 2009
Before the enactment of CHIPRA, section 2104(a)(11) of the Act, as
amended by MMSEA, appropriated $5 billion for purposes of providing FY
2009 allotments for States. The CHIP statute as amended by MMSEA and
before the enactment of CHIPRA, funds were potentially available for
allotment and obligation to States for their CHIP related expenditures
in FY 2009 through March 31, 2009. Furthermore, section 2104(k) of the
Act and section 2104(l) of the Act, as amended by MMSEA, provided for
redistribution of the unexpended FY 2006 allotments in FY 2009, and for
additional FY 2009 shortfall allotments in FY 2009, respectively.
However, section 3(c)(1) of CHIPRA provides for a rescission of amounts
of these funds that were not obligated before April 1, 2009. Also,
section 3(c)(2) of CHIPRA requires that the FY 2009 allotments, as
determined under section 2104(m)(1) of the Act as amended by CHIPRA, be
reduced by the following amounts that were appropriated and obligated
before April 1, 2009. Amounts appropriated and obligated before April
1, 2009 include the amounts of the FY 2009 allotments appropriated by
section 2104(a)(11) of the Act, as amended by MMSEA and before the
enactment of CHIPRA; amounts of FY 2006 redistributed allotments,
provided in section 2104(k) of the Act; and, the amounts of the FY 2009
shortfall allotments, provided in section 2104(l) of the Act. Funding
for Territories and Commonwealths under section 2104(c)(4) is not part
of this coordination of funding. This coordination ensures that States'
FY 2009 CHIP funding does not exceed the final FY 2009 CHIP allotments
as determined under the CHIPRA.
C. FY 2009 Allotments Determined in Accordance With Such Methodologies
and Procedures
We calculated the FY 2009 allotments for the States in accordance
with the methodology described in section II.A. of the September 16,
2009 (74 FR 47517) proposed rule relating to the calculation of the
fiscal year CHIP allotments, and in section II.B. of the same proposed
rule. That calculation was contained in three tables described as Table
1 provided the calculation of the allotment increase factor for FY
2009, Table 2 provided the calculation of the FY 2009 allotment, and
Table 3 provided the coordination of funds in FY 2009.
D. FY 2010 Allotments Determined in Accordance With Such Methodologies
and Procedures
In accordance with the methodology described in section II.A.2.c.
of this final rule, relating to the calculation of the FY 2010 CHIP
allotments, and the availability of additional allotments, we
calculated the FY 2010 allotments for the States. That calculation is
contained in two tables described in section III of this final rule;
Table 1 provides the calculation of the allotment increase factor for
FY 2010, and Table 2 provides the calculation of the FY 2010 allotment.
E. FY 2011 Allotments Determined in Accordance With Such Methodologies
and Procedures
In accordance with the methodology described in section II.A.2.d.
of this final rule relating to the calculation of the fiscal year CHIP
allotments, we calculated the FY 2011 allotments for the States. That
calculation is contained in two tables described in section III of this
final rule; Table 3 provides the calculation of the allotment increase
factor for FY 2011, and Table 4 provides the calculation of the FY 2011
allotment, determined under the ``rebasing'' methodology.
F. Period of Availability for CHIP Allotments
Section 105 of CHIPRA amended section 2104(e) of the Act to revise
the period of availability for expenditure by States of their CHIP
fiscal year allotments. Before the enactment of CHIPRA, States' CHIP
fiscal year allotments were available for expenditure by the State for
three fiscal
[[Page 9239]]
years, the fiscal year in which they were initially allotted and the
subsequent two fiscal years. Section 2104(e) of the Act, as amended by
CHIPRA, now provides that each of the States' fiscal year allotments
for FYs 1998 through 2008 are available for expenditure by the State
for three fiscal years and allotments for FY 2009 and each succeeding
fiscal year are available for expenditure by the States for two fiscal
years; the fiscal year in which they were initially allotted and the
immediately subsequent fiscal year. In this final rule, we have amended
the CHIP regulations at Sec. 457.610 and added Sec. 457.611 to
reflect the three fiscal year and two fiscal year periods of
availability, as applicable to fiscal years before FY 2009 and
effective for FY 2009 and subsequent fiscal years, respectively.
G. Continuing Authority for Qualifying States to Use FY 2009 Through FY
2015 Allotments for Certain Medicaid Expenditures
Section 107 of CHIPRA amended the CHIP statute to add a new section
2105(g)(4) of the Act to allow certain ``qualifying States'' described
in section 2105(g) of the Act to elect to use up to 100 percent of
their available CHIP fiscal year allotments for FY 2009 and following
fiscal years (through FY 2015, as amended by section 10203(d)(2) of the
Affordable Care Act) for certain expenditures in Medicaid. Before the
enactment of CHIPRA, States were only able to use up to 20 percent of
their available fiscal year CHIP allotments for the applicable Medicaid
expenditures. With the enactment of CHIPRA, beginning with the FY 2009
allotment, States can use up to 100 percent of their FY 2009 and
following fiscal year allotments for the States' qualifying
expenditures. In that case, only the Federal share portion of the
expenditures which is above the amount that the State would have
received under Medicaid will be applied against the CHIP allotment.
Under section 5001 of the American Recovery and Reinvestment Act of
2009 (ARRA, Pub. L. 111-5, enacted on February 17, 2009), and as
further amended by the Public Law 111-226 (enacted on August 10, 2010),
the FMAP has been increased during the 11-quarter period, October 1,
2009 through June 30, 2011 under the Medicaid program. Therefore, the
amount of the Federal share funds that will be applied against the CHIP
qualifying States' FY 2009 (and following) allotments will be reduced.
For example, a qualifying State's regular Medicaid FMAP rate in FY 2009
is 50 percent, its increased FMAP under ARRA in Medicaid is 60.00
percent, and its CHIP EFMAP is 65.00 percent. The qualifying State will
be able to claim the ``qualifying'' expenditures in FY 2009 at the
65.00 percent EFMAP rate in CHIP, and only 5 percent of such
expenditures will apply against the State's FY 2009 allotment,
calculated as 65.00 percent (CHIP EFMAP) minus 60.00 percent (increased
FMAP under ARRA) claimable under the Medicaid program. In the same
example (and assuming the same FMAP for Medicaid and EFMAP in CHIP),
after June 30, 2011, 15.00 percent of the qualifying expenditure in FY
2011 will apply against the State's FY 2011 CHIP allotment, calculated
as 65.00 percent (CHIP EFMAP) minus 50.00 percent (regular FMAP)
claimable under the Medicaid program. We have amended the CHIP
regulations to reflect this provision in this final rule.
H. Retrospective Adjustment of FY 2008 Shortfall Allotments
Section 2104(j)(5) of the Act, as amended by MMSEA provides for a
potential retrospective adjustment with respect to the amounts of
States' FY 2008 shortfall allotments provided to them in FY 2008 and
based on expenditure reports for FY 2008 submitted and certified by
States to CMS no later than November 30, 2008.
Under section 2104(j)(2) and (3)(A) of the Act, additional FY 2008
shortfall allotments were made available only to those 50 States and
the District of Columbia that were initially determined to have a
shortfall in CHIP funding in FY 2008 based on their FY 2008 expenditure
projections as submitted and certified by the States by November 30,
2007. For those States, section 2104(j)(5) of the Act, the
retrospective adjustment to the amounts of their additional FY 2008
shortfall allotments is based on the FY 2008 expenditure projections
submitted and certified by such States by November 30, 2008.
Through the end of FY 2008 and based on States' estimated FY 2008
CHIP expenditures, we had provided approximately $1,201 million in
total additional FY 2008 shortfall allotments to States to address
their projected shortfalls in FY 2008. However, based on the States'
actual FY 2008 expenditures, as submitted through November 30, 2008,
the final States' shortfalls in FY 2008 were only approximately $995
million. That is, of those States who overestimated their projected
shortfalls, final shortfalls for FY 2008 were about $232 million less
than were previously estimated, and for States that underestimated
their shortfalls, their actual shortfalls were about $26 million
higher. Thus, the final net shortfall for States was about $995 million
($1,201 million minus $232 million plus $26 million). Table 4 of the
proposed rule published in the Federal Register on September 16, 2009
(74 FR 47517) contained the final FY 2008 shortfall allotments after
applying the retrospective adjustment under section 2104(j)(5) of the
Act.
I. Retrospective Adjustment of FY 2009 Shortfall Allotments
Section 2104(l)(5) of the Act, as amended by MMSEA provides for a
potential retrospective adjustment with respect to the amounts of
States' FY 2009 shortfall allotments provided to them in FY 2009 prior
to April 1, 2009 based on expenditure reports for the first two
quarters of FY 2009 as submitted and certified by States to CMS no
later than May 31, 2009.
Under section 2104(l)(2) and (3)(A) of the Act, additional FY 2009
shortfall allotments were made available to those States that were
initially determined to have a shortfall in CHIP funding in FY 2009
based on their expenditure projections for the first two quarters of FY
2009 as submitted and certified by the States by November 30, 2008. For
those States, section 2104(l)(5) of the Act, provided the retrospective
adjustment to the amounts of their additional FY 2009 shortfall
allotments is based on the FY 2009 expenditures for the first two
quarters of FY 2009 as submitted and certified by such States by May
31, 2009.
Before April 1, 2009, and based on States' estimated FY 2009 CHIP
expenditures through the end of the second quarter of FY 2009, we had
provided approximately $267 million in total additional FY 2009
shortfall allotments to States to address their projected shortfalls in
FY 2009 through the end of the second quarter FY 2009 in that amount.
However, based on the States' actual FY 2009 expenditures for the first
two quarters of FY 2009, as submitted through May 31, 2009, the final
States' shortfalls in FY 2009 through the second quarter of FY 2009 for
the shortfall States were only approximately $210 million. That is, for
the shortfall States initially receiving the additional FY 2009
shortfall allotments, based on their actual FY 2009 reported
expenditures for the first two quarters of FY 2009, their final
shortfalls for the first two quarters of FY 2009 were about $58 million
less than was previously estimated. Table 5 of the proposed rule
published in the September 16, 2009 Federal Register (74 FR 47517)
contained the final FY 2009 shortfall allotments after applying the
[[Page 9240]]
retrospective adjustment under section 2104(l)(5) of the Act.
III. Tables
Following are the keys and associated tables for the CHIP funding
provisions as discussed in previous sections:
Table 1--Allotment Increase Factor for 2010
Table 2--FY 2010 Children's Health Insurance Program Allotments
Under the Children's Health Insurance Program Reauthorization Act Of
2010
Table 3--Allotment Increase Factor for 2011
Table 4--FY 2011 Children's Health Insurance Program Allotments
Under the Children's Health Insurance Program Reauthorization Act Of
2011.
A. Table 1--Allotment Increase Factor for 2010
Key to Table 1 Column/Description
Column A = State. Column A contains the name of the State, District
of Columbia, U.S. Commonwealth or Territory.
Column B = PCNHE 2009, PCNHE 2010, PCHCG Factor. Column B contains
the calculation of the Per Capita Health Care Growth (PCHCG) Factor for
FY 2010, determined as 1 plus the percentage increase in the Per
Capital National Health Expenditures (PCNHE) from calendar year 2009 to
calendar year 2010.
Columns C through F = Calculation of the Child Population Growth
Factor (CPGF) for FY 2010:
Column C = July 1, 2009 Child Population. Column C contains the
population of children in each State or the United States as of July 1,
2009, as provided by the most recent published data of the Census
Bureau before the beginning of FY 2010.
Column D = July 1, 2010 Child Population. Column D contains the
population of children in each State or the United States as of July 1,
2010, as provided by the most recent published data of the Census
Bureau before the beginning of FY 2010.
Column E = Percent Increase 2009-2010. Column E contains the
percentage increase, if any, of the population of children in each
State, or the United States, from July 1, 2009 to July 1, 2010,
calculated as the difference between the number in Column D minus the
number in Column C divided by the number in Column C.
Column F = FY 2010 Child Population Growth Factor. Column F
contains the Child Population Growth Factor (CPGF) for each State,
determined as 1.01 plus the percent in Column E for the State.
Column G = FY 2010 Allotment Increase Factor. Column G contains the
FY 2010 Allotment Increase Factor, calculated as the PCHCG factor in
Column B multiplied by the CPGF percent in Column F.
B. Table 2--FY 2010 Children's Health Insurance Program Allotments
Under the Children's Health Insurance Program Reauthorization Act of
2009
Key to Table 2 Column/Description
Column A = State. Column A contains the name of the State, District
of Columbia, U.S. Commonwealth or Territory.
Column B = FY 2009 CHIP Allotments. Column B contains, for the 50
States and the District of Columbia only, the States' FY 2009 CHIP
allotments, as were published in the September 16, 2009 Federal
Register (74 FR 47617).
Column C = FY 2006 Redistributed Allotment Payments. Column C
contains for the 50 States and the District of Columbia only, the
amounts of redistributed FY 2006 allotments provided in FY 2009 as
determined under section 2104(k) of the Act.
Column D = FY 2009 Additional Allotment Payments. Column D contains
the any additional allotment payments provided to the State in FY 2009
under the provisions of section 2104(l) of the Act, including the
retrospective adjustments made under section 2104(l)(5) of the Act.
Column E = FY 2009 Contingency Fund Payments. Column E contains any
contingency fund payments made to a State for FY 2009, if any, under
the provisions of section 2104(n) of the Act.
Column F = Total. Column F contains the total of the amounts in
Columns B, C, D, E, and F.
Column G = FY 2010 Allotment Increase Factor. Column G contains the
Allotment Increase Factor for each State as contained in Column G of
Table 1.
Column H = FY 2010 Total x Increase Factor. Column H contains the
product of the total amount in Column F and the amount of the FY 2010
Allotment Increase Factor in Column G. This amount represents the FY
2010 CHIP allotment without the inclusion of any additional amounts
available for the FY 2010 allotment indicated in Column I.
Column I = Additional Amount Available for FY 2010 Allotment.
Column I contains, for the 50 States and the District of Columbia only,
the amount of additional amounts available to increase the FY 2010
allotment, if any, as determined under the provisions of section
2014(m)(6) or (7) of the Act.
Column J = Total FY 2010 Allotment. Column J contains the total FY
2010 CHIP allotment, determined as the sum of the amounts in Column H
and Column I, if any.
C. Table 3--Allotment Increase Factor for 2011
Key to Table 1 Column/Description
Column A = State. Column A contains the name of the State, District
of Columbia, U.S. Commonwealth or Territory.
Column B = PCNHE 2010, PCNHE 2011, PCHCG Factor. Column B contains
the calculation of the Per Capita Health Care Growth (PCHCG) Factor for
FY 2011, determined as 1 plus the percentage increase in the Per
Capital National Health Expenditures (PCNHE) from calendar year 2010 to
calendar year 2011.
Columns C through F = Calculation of the Child Population Growth
Factor (CPGF) for FY 2011:
Column C = July 1, 2010 Child Population. Column C contains the
population of children in each State or the United States as of July 1,
2010, as provided by the most recent published data of the Census
Bureau before the beginning of FY 2011.
Column D = July 1, 2011 Child Population. Column D contains the
population of children in each State or the United States as of July 1,
2010, as provided by the most recent published data of the Census
Bureau before the beginning of FY 2011.
Column E = Percent Increase 2010-2011. Column E contains the
percentage increase, if any, of the population of children in each
State, or the United States, from July 1, 2010 to July 1, 2011,
calculated as the difference between the numbers in Column D minus the
number in Column C divided by the number in Column C.
Column F = FY 2011 Child Population Growth Factor. Column F
contains the Child Population Growth Factor (CPGF) determined as 1.01
plus the percent in Column E for the State.
Column G = FY 2011 Allotment Increase Factor. Column G contains the
FY 2011 Allotment Increase Factor, calculated as the PCHCG factor in
Column B multiplied by the CPGF percent in Column F.
D. Table 4--FY 2011 Children's Health Insurance Program Allotments
Under the Children's Health Insurance Program Reauthorization Act of
2009
Key to Table 4
Column/Description
Column A = State. Column A contains the name of the State, District
of Columbia, U.S. Commonwealth or Territory.
[[Page 9241]]
Column B = FY 2010 FS Exp. Applied Against Allotments. Column B
contains the amounts of the Federal share expenditures that were
applied against the State's available allotments in FY 2010.
Column C = Contingency Fund Payments in FY 2010. Column C contains
the amounts of contingency fund payments made to the State in FY 2010,
if any.
Column D = Redistributed Allotments in FY 2010. Column D contains
the amounts of redistributed allotments provided to the State in FY
2010, if any.
Column E = Total FY 2010 FS Expenditures. Column E contains the sum
of the total amounts of Federal Share expenditures applied against the
States available allotments in FY 2010, Contingency Fund payments made
in FY 2010, if any, and amounts of Redistributed Allotments in FY 2010,
if any, calculated as the sum of the amounts in Columns B, C, and D.
Column F = FY 2011 Allotment Increase Factor. Column F contains the
Allotment Increase Factor for each State as contained in Column G of
Table 3.
Column G = FY 2011 CHIP Allotment. Column G contains the FY 2011
CHIP Allotment, calculated as the product of the total amount in Column
E and the amount of the FY 2011 Allotment Increase Factor in Column F.
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V. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite public comment on the proposed rule. This
procedure can be waived, however, if an agency finds good cause that a
notice-and-comment procedure is impracticable, unnecessary, or contrary
to the public interest and incorporates a statement of the finding and
its reasons in the rule issued.
As discussed above, on September 16, 2009, we issued a proposed
rule that set forth the methodologies and procedures to determine CHIP
allotments in accordance with applicable federal laws on that date.
Since that date, the Affordable Care Act was enacted into law. The
Affordable Care Act made technical changes to the CHIP funding
provisions and extended CHIP funding through the end of federal fiscal
year 2015. The Affordable Care Act did not make any fundamental changes
to the overall funding mechanism. Because there was no fundamental
change to the funding mechanism, we believe it is unnecessary to reopen
for public comment the methodologies and procedures to determine CHIP
allotments set out in the proposed rule and made final in this rule.
The changes made in the Affordable Care Act to extend the period of
funding do not open up any new issues or concerns as to the calculation
methodology or procedures.
Therefore, we find good cause to waive the notice of proposed
rulemaking and to issue this final rule.
VI. Collection of Information Requirements
This document does not impose any 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).
VII. Regulatory Impact Analysis
A. Overall
We have examined the impacts of this final rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), the Regulatory Flexibility Act (RFA) (September 19, 1980, Public
Law 96-354), section 1102(b) of the Social Security Act, section 202 of
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive
Order 13132 on Federalism (August 4, 1999), and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Order 12866 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). We have
determined that this final rule is economically significant, since it
provides the methodologies under which State allotments for FYs 2009
through 2015 are calculated. In particular, this final rule implements
the CHIP statute as amended by CHIPRA and the Affordable Care Act,
under which approximately up to $74 billion in additional Federal funds
may be made available for FYs 2009 through 2016 in addition to the
amount of funds previously appropriated for States' CHIPs in accordance
with the methodology established in the CHIP statute. This final rule
also includes the actual State fiscal year CHIP allotments for FYs 2010
and 2011 determined in accordance with the methodology set out in this
final rule. The methodologies for determining the States' CHIP
allotments was established in accordance with the methodologies
specified in statute and does not put forward any discretionary
administrative policies for determining such allotments. Therefore, we
have determined that there are no policy options that require an
analysis beyond that which is presented in section II of this final
rule.
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, we estimate that
most hospitals and most other providers and suppliers are small
entities as that term is used in the RFA nonprofit organizations. The
great majority of hospitals and most other health care providers and
suppliers are small entities, either by being nonprofit organizations
or by meeting the SBA definition of a small business having revenues of
less than $7.0 million to $34.5 million in any 1 year. Individuals and
States are not included in the definition of a small entity. We are not
preparing an analysis for the RFA because we have determined that this
final rule will not have a significant economic impact on a substantial
number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. We
are not preparing an analysis for section 1102(b) of the Act because we
have determined that this final rule will not have a significant impact
on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2011, that
threshold is approximately $136 million. This final rule will not
create an unfunded mandate on States, tribal, or local governments in
the aggregate, or by the private sector in the amount of $136 million
in any one year.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. We have determined that this final rule will not
significantly affect States' rights, roles, and responsibilities.
Low-income children will benefit from payments under this program
through increased opportunities for health insurance coverage. We
believe this final rule will have an overall positive impact by
informing States, the District of Columbia, and Commonwealths and
Territories of the extent to which they are permitted to expend funds
under their child health plans using the additional funds provided by
the FY 2009 allotment amounts.
B. Anticipated Effects
1. Effects on the CHIP program. This final rule provides the
methodologies established in accordance with the CHIP statute, for
determining the amounts of States' CHIP FY allotments through FY 2015.
In accordance with such methodologies, CMS will determine and issue
CHIP allotments to States each FY. States will be able to administer
their CHIP programs with the appropriate levels of funding made
available determined in accordance with the methodologies provided in
this rule.
2. Effects on other entities. This final rule will have no effects
on other entities; it is only promulgating the methodologies for
determining the amounts of States' CHIP allotments.
[[Page 9246]]
C. Anticipated Effects
1. Effects on the CHIP program. This final rule provides the
methodologies established in accordance with the CHIP statute, for
determining the amounts of States' CHIP FY 2009 allotments through FY
2015. In accordance with such methodologies, CMS will determine and
issue CHIP allotments to States each FY. States will be able to
administer their CHIP programs with the appropriate levels of funding
made available determined in accordance with the methodologies provided
in this rule.
2. Effects on other entities. This final rule will have no effects
on other entities; it is only promulgating the methodologies for
determining the amounts of States' CHIP allotments.
D. Alternatives Considered
The methodologies for determining the States' fiscal year CHIP
allotments, as reflected in the previously published proposed rule, and
in final rule, were established in accordance with the methodologies
and formula for determining States' allotments as specified in statute.
As indicated above, the only comments we received with respect to
proposed rule either agreed with the substance of the proposed rule or
were outside the scope of the rule. This final rule does not put
forward any further discretionary administrative policies for
determining such allotments. The main difference from the notice of
proposed rule published in the Federal Register on September 16, 2009,
is that this final rule reflects the extension of funding for the CHIP
and associated conforming changes in the CHIP statute for determining
States' FY allotments, as amended by the Affordable Care Act.
E. Accounting Statement
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 6, we have
prepared an accounting statement showing the classification of the
expenditures associated with the provisions of this rule. This table
provides our best impact estimate of the rule, as it implements the
CHIP statute as amended by CHIPRA, under which approximately up to $74
billion in additional Federal funds may be made available for fiscal
years 2009 through 2015, in addition to the amount of funds previously
appropriated for States' CHIPs. All expenditures are classified as
transfers from the Federal Government to States.
Table 6--Accounting Statement: Classification of Estimated Expenditures, From FY 2009 to FY 2015
[In $millions]
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Category Transfers
----------------------------------------------------------------------------------------------------------------
Year dollar Units discount rate Period covered
-----------------------------------------------------------------------------
.............. 7% 3% ............................
--------------------------------
Annualized Monetized Transfers.... 2009 $13,348.90 $13,381.15 FYs 2009-2015.
----------------------------------------------------------------------------------------------------------------
From Whom To Whom?................ Federal Government to States
----------------------------------------------------------------------------------------------------------------
In accordance with the provisions of Executive Order 12866, this
final rule was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 457
Administrative practice and procedure, Grant programs--health,
Health insurance, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as set forth below:
PART 457--ALLOTMENTS AND GRANTS TO STATES
0
1. The authority citation for part 457 continues to read as follows:
Authority: Section 1102 of the Social Security Act (42 U.S.C.
1302).
Subpart F--Payments to States
Sec. 457.600 [Amended]
0
2. Amend Sec. 457.600(a) by removing the date ``2007'' and adding in
its place ``2015''.
Sec. 457.608 [Amended]
0
3. Amend the section heading in Sec. 457.608 by removing the phrase
``for a fiscal year'' and adding in its place ``prior to FY 2009''.
0
4. Section 457.609 is added to subpart F to read as follows:
Sec. 457.609 Process and calculation of State allotments for a fiscal
year after FY 2008.
(a) General. For each of the 50 States and the District of Columbia
and for each Commonwealth and Territory with an approved State child
health plan, the State allotments for FY 2009 through FY 2015 are
determined by CMS as described in paragraphs (b) through (g) of this
section. Unless otherwise indicated in this section, the reference to
``State'' refers to the 50 States and the District of Columbia and the
Commonwealths and Territories (American Samoa, Guam, the Northern
Mariana Islands, Puerto Rico, and the Virgin Islands).
(b) Amounts available for allotment. The total amounts available
for allotment for each fiscal year are as follows:
(1) FY 2009: $10,562,000,000.
(2) FY 2010: $12,520,000,000.
(3) FY 2011: $13,459,000,000.
(4) FY 2012: $14,982,000,000.
(5) FY 2013: $17,406,000,000.
(6) FY 2014: $19,147,000,000.
(7) FY 2015, for the period beginning October 1, 2014 and ending
March 31, 2015, the following amounts are available for allotment:
(i) $2,850,000,000.
(ii) 15,361,000,000.
(8) FY 2015, for the period beginning April 1, 2013 and ending on
September 30, 2013, $2,850,000,000.
(c) Determination of a State allotment for FY 2009.
(1) For the 50 States and the District of Columbia. From the amount
in paragraph (b)(1) of this section as appropriated for the fiscal year
under section 2104(a) of the Act, subject to paragraph (e) related to
proration, and paragraph (c)(3) of this section relating to
coordination of funding, the allotment for FY 2009 is equal to 110
percent of the highest of the following amounts for each State and the
District of Columbia:
(i) The total Federal payments to the State under title XXI of the
Act for FY 2008 as reported by the State and
[[Page 9247]]
certified to the Secretary through the November 2008 submission of the
quarterly expenditure reports, Forms CMS-21 (OMB 0938-0731)
and CMS-64 (OMB 0938-0067), multiplied by the allotment
increase factor determined under paragraph (f) of this section.
(ii) The amount allotted to the State for FY 2008, multiplied by
the allotment increase factor determined under paragraph (f) of this
section;
(iii) The projected total Federal payments to the State under title
XXI of the Act for FY 2009, subject to paragraph (c)(1)(iv) of this
section, as determined based on the February 2009 projections certified
by the State to CMS by no later than March 31, 2009.
(iv) In the case of a State described in section 2105(g) of the Act
and electing the option under paragraph (4) of such section, for
purposes of the projections described in paragraph (c)(1)(iii) of this
section, such projections would include an amount equal to the
difference between the following amounts:
(A) the amount of Federal payments for the expenditures described
in section 2105(g)(4)(B) of the Act made after February 4, 2009 that
would have been paid to the State if claimed at the enhanced Federal
medical assistance percentage determined under section 2105(b) of the
Act.
(B) the amount of Federal payments for the expenditures described
in section 2105(g)(4)(B) of the Act made after February 4, 2009 that
would have been paid to the State if claimed at the Federal medical
assistance percentage defined in section 1905(b) of the Act; during the
recession adjustment period described in section 5001(h) of the
American Recovery and Reinvestment Act of 2009 (ARRA), as amended the
Federal medical assistance percentage is as determined for the State
under section 5001 of ARRA.
(2) For the Commonwealths or Territories.
(i) From the amount in paragraph (b)(1) of this section, as
appropriated for the FY 2009 under section 2104(a) of the Act, subject
to paragraph (e) of this section related to proration, and paragraph
(c)(3) of this section relating to coordination of funding, an amount
equal to the highest amount of Federal payments made to the
Commonwealth or Territory under title XXI of the Social Security Act
for any fiscal year occurring during the period for FY 1999 through FY
2008, multiplied by the allotment increase factor determined under
paragraph (f) of this section, plus the additional amount for the
fiscal year specified in paragraph (c)(2)(ii) of this section.
(ii) Additional Amounts for FY 2009. From the amount appropriated
for the fiscal year under section 2104(c)(4)(B) of the Act, the
additional amount for each Commonwealth or Territory is equal to
$40,000,000 multiplied by the following percentage as specified in
section 2104(c)(2) of the Act:
(A) For Puerto Rico, 91.6 percent.
(B) For Guam, 3.5 percent.
(C) For the Virgin Islands, 2.6 percent.
(D) For American Samoa, 1.2 percent.
(E) For the Northern Mariana Islands, 1.1 percent.
(3) Coordination of CHIP Funding for FY 2009. The amount of the
CHIP allotment for FY 2009 available for payment for a States'
expenditures may be reduced by the amounts appropriated and obligated
before April 1, 2009 for States' FY 2009 allotments, FY 2006 allotments
redistributed to the State in FY 2009 determined under section 2104(k)
of the Act, and the amounts of additional FY 2009 shortfall allotments
determined under section 2104(l) of the Act.
(d) Determination of a State allotment for FY 2010 through FY 2015.
(1) General. Subject to the provisions of paragraph (e) of this
section relating to proration and paragraph (g) of the section relating
to increases in a fiscal year allotment for approved program
expansions, the State allotments for FY 2010 through FY 2015 are
determined as follows.
(2) Determination of a State Allotment for FY 2010. (i) For the 50
States and the District of Columbia, and for the Commonwealths and
Territories subject to paragraph (d)(2)(ii) of this section, the State
allotment for FY 2010 is equal to the product of the following:
(A) The sum of:
(1) The State Allotment for FY 2009, as determined under paragraph
(c) of the section.
(2) The amount of any Federal payments made as redistributions of
unexpended FY 2006 allotments under section 2104(k) of the Act.
(3) The amount of any Federal payments made as additional FY 2009
allotments under section 2104(l) of the Act.
(4) The amount of any Federal payments made as contingency fund
payments for FY 2009 under section 2104(n) of the Act.
(B) The State allotment increase factor for FY 2010 as determined
under paragraph (f) of the section.
(ii) In determining the amount of the FY 2010 allotment for each
Commonwealth and Territory, for purposes of determining the amount of
the FY 2009 allotment under paragraph (d)(2)(i)(A)(1) of this section,
the amount of such FY 2009 allotment will not include the additional
amount determined under paragraph (c)(2)(ii).
(3) Determination of a State Allotment for FY 2011. For the 50
States and the District of Columbia, and the Commonwealths and
Territories, the State allotment for FY 2011 is equal to the product
of:
(i) The amount of Federal payments attributable and countable
toward the available State allotments in FY 2010, including:
(A) Any amount redistributed to the State in FY 2010, and
(B) Any Federal payments made as contingency fund payments for FY
2010 under section 2104(n) of the Act.
(ii) The State allotment increase factor for FY 2011 as determined
under paragraph (f) of the section.
(4) Determination of a State Allotment for FY 2012. For the 50
States and the District of Columbia, and the Commonwealths and
Territories, the State allotment for FY 2012 is equal to the product
of:
(i) The sum of:
(A) The State Allotment for FY 2011, as determined under paragraph
(d)(3) of this section.
(B) The amount of any Federal payments made as contingency fund
payments for FY 2011 under section 2104(n) of the Act.
(ii) The State allotment increase factor for FY 2012 as determined
under paragraph (f) of this section.
(5) Determination of a State Allotment for FY 2013. For the 50
States and the District of Columbia, and the Commonwealths and
Territories, the State allotment for FY 2013 is equal to the product
of:
(i) The amount of Federal payments attributable and countable
toward the available State allotments in FY 2012, including:
(A) Any amount redistributed to the State in FY 2012, and
(B) Any Federal payments made as contingency fund payments for FY
2012 under section 2104(n) of the Act.
(ii) The State allotment increase factor for FY 2013 as determined
under paragraph (f) of the section.
(6) Determination of a State Allotment for FY 2014. For the 50
States and the District of Columbia, and the Commonwealths and
Territories, the State allotment for FY 2014 is equal to the product
of:
(i) The sum of:
(A) The State Allotment for FY 2013, as determined under paragraph
(d)(5) of this section.
(B) The amount of any Federal payments made as contingency fund
payments for FY 2013 under section 2104(n) of the Act.
[[Page 9248]]
(ii) The State allotment increase factor for FY 2014 as determined
under paragraph (f) of this section.
(7) Determination of a State Allotment for FY 2015.
(i) General. There are two State allotments for FY 2015; one for
the period beginning October 1, 2014 and ending March 31, 2015 and the
second beginning April 1, 2015 and ending September 30, 2015. These
State allotments are determined for each of the 50 States and the
District of Columbia, and the Commonwealths and Territories.
(ii) The State allotment for FY 2015 for the period October 1, 2014
and ending March 31, 2015 is determined as the product of the
following:
(A) The first half ratio determined as the amount in paragraph
(d)(7)(ii)(A)(1) of this section divided by the amount in paragraph
(d)(7)(ii)(A)(2) of this section as follows:
(1) $18,211,000,000 (calculated as the sum of the amount in
paragraph (b)(7)(i) of this section, $2,850,000,000 (appropriated in
section 2104(a)(18)(A) of the Act) and the amount in paragraph
(b)(7)(ii) of this section, $15,361,000,000 (appropriated in section
108 of Pub. L. 111-3, as amended by section 10203 of Pub. L. 111-148)).
(2) $21,061,000,000, determined as the sum of the amount determined
in paragraph (1) of this section, $18,211,000,000, and $2,850,000,000,
the amount in paragraph (b)(8) of this section, as appropriated in
section 2104(a)(18)(B) of the Act, as amended by section 10203 Of
Public Law 111-148.
(B) The product of:
(1) The amount of Federal payments attributable and countable
toward the total amount of available State allotments in FY 2014, to
include:
(i) Any amount redistributed to the State in FY 2014; and
(ii) Any Federal payments made as contingency fund payments for FY
2014 under section 2104(n) of the Act.
(2) The State allotment increase factor for FY 2015 as determined
under paragraph (f) of this section.
(iii) The State allotment for FY 2015 for the period April 1, 2015
and ending September 30, 2015 is determined as the product of the
following:
(A) $2,850,000,000 the amount in paragraph (b)(8) of this section,
as appropriated in section 2104(a)(18)(B) of the Act; and
(B) The ratio determined as the amount in paragraph
(d)(7)(iii)(B)(1) of this section divided by the amount in paragraph
(d)(7)(iii)(B)(2) of this section:
(1) The amount of the State allotment determined in paragraph
(d)(7)(ii) of this section.
(2) The total of all the State allotments determined in paragraph
(d)(7)(ii) of this section.
(e) Proration.
(1) If for a fiscal year the sum of the State allotments for the 50
States and the District of Columbia, and the State allotments for the
Commonwealths and Territories (not including the additional amount for
FY 2009 determined under paragraph (c)(2)(ii) of this section), exceeds
the total amount available for allotment for the fiscal year in
paragraph (b) of this section, the amount of the allotment for each of
the 50 States and the District of Columbia, and for each of the
Commonwealths and Territories (not including the additional amount for
FY 2009 determined under paragraph (c)(2)(ii) of this section) will be
reduced on a proportional basis as indicated in paragraph (e)(2) of
this section.
(2) The amount of the allotment for each of the 50 States and the
District of Columbia, and for each of the Commonwealths and Territories
(not including the additional amount for FY 2009 determined in
paragraph (c)(2)(ii) of this section) is equal to the product of:
(i) The percentage determined by dividing the amount in paragraph
(e)(2)(i)(A) by the amount in paragraph (e)(2)(i)(B) of this section.
(A) The amount of the State allotment for each of the 50 States and
the District of Columbia, and for each of the Commonwealths and
Territories (not including the additional amount for FY 2009 determined
under paragraph (c)(2)(ii) of this section).
(B) The sum of the amounts for each of the 50 States and the
District of Columbia, and the Commonwealths and Territories in
paragraph (e)(2)(i) of this section.
(ii) The total amount available for allotment for the fiscal year
under paragraph (b) of this section.
(f) Allotment increase factor. The allotment increase factor for a
fiscal year is equal to the product of the following:
(1) Per capita health care growth factor. The per capita health
care growth factor for a fiscal year is equal to 1 plus the percentage
increase in the projected per capita amount of the National Health
Expenditures from the calendar year in which the previous fiscal year
ends to the calendar year in which the fiscal year involved ends, as
most recently published by CMS before the beginning of the fiscal year
involved.
(2) Child Population Growth Factor (CPGF). The CPGF for a fiscal
year is equal to 1 plus the percentage increase (if any) in the
population of children in the State from July 1 in the previous fiscal
year to July 1 in the fiscal year involved, as determined by CMS based
on the most recent published estimates of the Census Bureau available
before the beginning of the fiscal year involved plus 1 percentage
point. For purposes of determining the CPGF for FY 2009 for the
Commonwealths and Territories only, in applying the previous sentence,
``United States'' is substituted for ``the State''.
(g) Increase in State allotment for the 50 States and the District
of Columbia for FY 2010 through FY 2015 to account for approved program
expansions. In the case of the 50 States and the District of Columbia,
the State allotment for FY 2010 through FY 2015, as determined in
accordance with the provisions of this section, may be increased under
the following conditions and amounts:
(1) The State has submitted to the Secretary, and has approved by
the Secretary a State plan amendment or waiver request relating to an
expansion of eligibility for children or benefits under title XXI of
the Act that becomes effective for a fiscal year (beginning with FY
2010 and ending with FY 2015).
(2) The State has submitted to the Secretary, before the August 31
preceding the beginning of the fiscal year, a request for an expansion
allotment adjustment under this paragraph for such fiscal year that
specifies.
(i) The additional expenditures that are attributable to the
eligibility or benefit expansion provided under the amendment or waiver
described in paragraph (g)(1) of this section, as certified by the
State and submitted to the Secretary by not later than August 31
preceding the beginning of the fiscal year.
(ii) The extent to which such additional expenditures are projected
to exceed the allotment of the State or District for the year.
(3) Subject to paragraph (e) of this section relating to proration,
the amount of the allotment of the State or District under this section
for such fiscal year shall be increased by the excess amount described
in paragraph (g)(2)(i)of this section. A State or District may only
obtain an increase under paragraph (g)(2)(ii) of this section for an
allotment for FY 2010, FY 2012, or FY 2014.
(h) CHIP Fiscal Year Allotment Process. As determined by the
Secretary, the CHIP allotments for a fiscal year may be published as
Preliminary Allotments or Final Allotments in the Federal Register.
[[Page 9249]]
Sec. 457.610 [Amended]
0
5. Amend the section heading for Sec. 457.610 by--
0
A. Amending the section heading by removing the phrase ``for a fiscal
year'' and adding in its place ``prior to FY 2009''.
0
B. Removing the phrase ``for a fiscal year'' and add in its place
``prior to FY 2009''in the first line of the paragraph.
0
6. Section 457.611 is added to subpart F to read as follows:
Sec. 457.611 Period of availability for State allotments for a fiscal
year after FY 2008.
The amount of a final allotment for a fiscal year after FY 2008, as
determined under Sec. 457.609 and reduced to reflect certain Medicaid
expenditures in accordance with Sec. 457.616, remains available until
expended for Federal payments based on expenditures claimed during a 2-
year period of availability, beginning with the fiscal year of the
final allotment and ending with the end of the succeeding fiscal year
following the fiscal year.
Authority: (Section 1102 of the Social Security Act (42 U.S.C.
1302).
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
(Catalog of Federal Domestic Assistance Program No. 93.767, State
Children's Health Insurance Program)
Dated: November 3, 2010.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.
Approved: November 30, 2010.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2011-3639 Filed 2-14-11; 4:15 pm]
BILLING CODE 4120-01-P