[Federal Register Volume 76, Number 107 (Friday, June 3, 2011)]
[Notices]
[Pages 32204-32207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-13783]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES


Adjusted Federal Medical Assistance Percentage (FMAP) Rates for 
the Second and Third Quarters of Fiscal Year 2011 (FY11)

    Implementation of Section 5001 of the American Recovery and 
Reinvestment Act of 2009 (Pub. L. 111-5) for adjustments to the second 
and third quarters of Fiscal Year 2011 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 provides the adjusted Federal Medical Assistance 
Percentage (FMAP) rates for the second and third quarters of Fiscal 
Year 2011 (FY11) as required under Section 5001 of the American 
Recovery and Reinvestment Act of 2009 (ARRA). 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 
was originally defined in ARRA as the period beginning October 1, 2008 
and ending December 31, 2010. Public Law 111-226 amended ARRA to extend 
the recession adjustment period to June 30, 2011 and to extend the hold 
harmless provision that prevents a state's FMAP rate from decreasing 
due to a lower unemployment rate from the calendar quarter ending 
before July 1, 2010 to the calendar quarter ending before January 1, 
2011. Public Law 111-226 also provided for a phase-down of the general 
FMAP increase in the last two quarters of the extended recession 
adjustment period, and changed the look back period for calculating the 
unemployment adjustment for those quarters.

DATES: Effective Date: The percentages listed are for the second 
quarter of FY11 beginning January 1, 2011 through March 31, 2011 and 
the third quarter of FY11 beginning April 1, 2011 through June 30, 
2011.

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 (``the Act''). Sections 1905(b) and 
1101(a)(8)(B) of the Act require the Secretary of Health and Human 
Services to publish the FMAP rates each year. The Secretary calculates 
the percentages using formulas in sections 1905(b) and 1101(a)(8)(B), 
and statistics from the Department of Commerce 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 
the 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 
(MIPPA) (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

[[Page 32205]]

IV-E Foster Care, Adoption Assistance and Guardianship Assistance 
programs. The purpose of the increases to the FMAP rates is 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 was originally defined as the period beginning 
October 1, 2008 and ending December 31, 2010. Public Law 111-226 
extended the recession adjustment period through June 30, 2011. Public 
Law 111-226 also provided for a phase-down of the general FMAP increase 
in the last two quarters of the extended recession adjustment period, 
and changed the look back period for calculating the unemployment 
adjustment for those quarters.

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 three calendar quarters 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 a general percentage point increase in each state's FMAP 
of 6.2 percentage points (decreasing during the last two quarters of 
the extended recession adjustment period); 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 of the Act 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 of the Act (including Foster 
Care, Adoption Assistance and Guardianship Assistance programs) only to 
the extent of a maintenance increase (hold harmless), if any, and the 
general percentage point increase. The increased FMAP does not apply to 
other parts of title IV, including part D (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 
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 general 
percentage point increase in the federal percentage) and the applicable 
percent determined from the state unemployment increase percentage for 
the quarter.
    The unemployment increase percentage for calendar quarters other 
than the last two quarters of the recession adjustment period 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 or after 
January 1, 2009 and ending before January 1, 2011, as amended by Public 
Law 111-226. This hold harmless provision is not in effect beginning 
January 1, 2011.
    Under section 5001(b)(2) of ARRA, Puerto Rico, the Virgin Islands, 
Guam, the Commonwealth of the Northern Mariana Islands, and America 
Samoa were given the option to make a special 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 Act), 
or (2) applying the general 6.2 percentage point increase in the FMAP 
plus a 15 percent increase in the cap on Medicaid payments. There is no 
quarterly unemployment adjustment for territories. All territories and 
the Commonwealth of the Northern Mariana Islands elected the 30 percent 
increase in their spending cap on Medicaid payments; therefore, there 
is no recalculation of their FMAP rate.

C. Adjusted FMAPs for the Second and Third Quarters of FY2011

    ARRA adjustments to FMAPs are shown by state in the accompanying 
table. The hold harmless FY11 FMAP is the higher of the original FY08, 
FY09, FY10 or FY11 FMAP. The general increase added to the hold 
harmless FY11 FMAP is 3.2 percentage points for the second quarter and 
1.2 percentage points for the third quarter. The unemployment 
adjustment is calculated according to the unemployment tier and added 
to the hold harmless FY11 FMAP with the general percentage point 
increases.
    The unemployment tier for the final two quarters of the recession 
adjustment period is determined by comparing the highest unemployment 
rate from any 3-consecutive-month period between January 2010 and 
December 2010 to the lowest consecutive 3-month average unemployment 
rate beginning January 1, 2006. Under section 5001(c)(3)(B) of ARRA, 
through December 31, 2010, a state's applicable percent would not 
decrease as the result of a lowered unemployment adjustment; but this 
protection ended December 31, 2010. However, Section 5001 stipulates 
that the Secretary shall notify a State at least 60 days prior to 
applying any lower applicable percent to the hold harmless FMAP. Final 
unemployment data for December 2010 were not available until March 
2011. Several states would have had a lower applicable percent because 
their unemployment tier dropped in 2010, but the Department cannot 
satisfy the statutory requirement at section 5001(c)(3)(B)(ii) to 
provide 60 day notice prior to lowering a state's applicable percent 
due to the availability of the data necessary to perform the 
calculations. Therefore, the FMAP rates for the final two quarters of 
the recession adjustment period for

[[Page 32206]]

Alaska, New Hampshire, and Vermont will reflect the applicable percent 
applied for the first quarter of FY11.

FOR FURTHER INFORMATION CONTACT: Rose Chu 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. 93.778: Medical 
Assistance Program; 93.658: Foster Care; 93.659: Adoption 
Assistance; 93.090: Guardianship Assistance)

    Dated: May 26, 2011.
Kathleen Sebelius,
Secretary.

                                                               ARRA Adjustments to Q2 FY11
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                                                Hold harmless                                         Hold harmless                        2nd Quarter
                                               FY11 FMAP  with                     Adjusted state         FY11          Unemployment        FY11 FMAP
                    State                          3.2% pt         State share          share         unemployment      adjustment Q2     unemployment
                                                  increase                                                tier              FY11           adjustment
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Alabama.....................................             71.74             31.46             29.86              11.5              3.43             75.17
Alaska*.....................................             55.68             47.52             45.92               8.5              3.90             59.58
Arizona.....................................             69.40             33.80             32.20              11.5              3.70             73.10
Arkansas....................................             76.14             27.06             25.46               8.5              2.16             78.30
California..................................             53.20             50.00             48.40              11.5              5.57             58.77
Colorado....................................             53.20             50.00             48.40              11.5              5.57             58.77
Connecticut.................................             53.20             50.00             48.40              11.5              5.57             58.77
Delaware....................................             56.35             46.85             45.25              11.5              5.20             61.55
Dist of Columbia............................             73.20             30.00             28.40              11.5              3.27             76.47
Florida.....................................             60.03             43.17             41.57              11.5              4.78             64.81
Georgia.....................................             68.53             34.67             33.07              11.5              3.80             72.33
Hawaii......................................             59.70             43.50             41.90              11.5              4.82             64.52
Idaho.......................................             73.07             30.13             28.53              11.5              3.28             76.35
Illinois....................................             53.52             49.68             48.08              11.5              5.53             59.05
Indiana.....................................             69.72             33.48             31.88              11.5              3.67             73.39
Iowa........................................             66.71             36.49             34.89               8.5              2.97             69.68
Kansas......................................             63.58             39.62             38.02               8.5              3.23             66.81
Kentucky....................................             74.69             28.51             26.91              11.5              3.09             77.78
Louisiana...................................             75.67             27.53             25.93              11.5              2.98             78.65
Maine.......................................             68.19             35.01             33.41              11.5              3.84             72.03
Maryland....................................             53.20             50.00             48.40              11.5              5.57             58.77
Massachusetts...............................             53.20             50.00             48.40              11.5              5.57             58.77
Michigan....................................             68.99             34.21             32.61              11.5              3.75             72.74
Minnesota...................................             53.20             50.00             48.40              11.5              5.57             58.77
Mississippi.................................             79.49             23.71             22.11              11.5              2.54             82.03
Missouri....................................             67.71             35.49             33.89              11.5              3.90             71.61
Montana.....................................             71.73             31.47             29.87              11.5              3.44             75.17
Nebraska....................................             63.76             39.44             37.84               5.5              2.08             65.84
Nevada......................................             55.84             47.36             45.76              11.5              5.26             61.10
New Hampshire*..............................             53.20             50.00             48.40              11.5              5.57             58.77
New Jersey..................................             53.20             50.00             48.40              11.5              5.57             58.77
New Mexico..................................             74.55             28.65             27.05              11.5              3.11             77.66
New York....................................             53.20             50.00             48.40              11.5              5.57             58.77
North Carolina..............................             68.33             34.87             33.27              11.5              3.83             72.16
North Dakota................................             66.95             36.25             34.65                 0              0.00             66.95
Ohio........................................             66.89             36.31             34.71              11.5              3.99             70.88
Oklahoma....................................             70.30             32.90             31.30              11.5              3.60             73.90
Oregon......................................             66.05             37.15             35.55              11.5              4.09             70.14
Pennsylvania................................             58.84             44.36             42.76              11.5              4.92             63.76
Rhode Island................................             56.17             47.03             45.43              11.5              5.22             61.39
South Carolina..............................             73.52             29.68             28.08              11.5              3.23             76.75
South Dakota................................             65.92             37.28             35.68               8.5              3.03             68.95
Tennessee...................................             69.05             34.15             32.55              11.5              3.74             72.79
Texas.......................................             63.76             39.44             37.84              11.5              4.35             68.11
Utah........................................             74.88             28.32             26.72              11.5              3.07             77.95
Vermont*....................................             62.65             40.55             38.95              11.5              4.48             67.13
Virginia....................................             53.20             50.00             48.40              11.5              5.57             58.77
Washington..................................             54.72             48.48             46.88              11.5              5.39             60.11
West Virginia...............................             77.45             25.75             24.15              11.5              2.78             80.23
Wisconsin...................................             63.41             39.79             38.19              11.5              4.39             67.80
Wyoming.....................................             53.20             50.00             48.40              11.5              5.57             58.77
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* The unemployment tier for these States decreased but the Department was not able to satisfy the 60 day notice requirement so their unemployment tier
  was held harmless.


[[Page 32207]]


                                                               ARRA Adjustments to Q3 FY11
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                                                Hold harmless                                         Hold harmless                       Third quarter
                                               FY11 FMAP  with                     Adjusted  state        FY11          Unemployment        FY11 FMAP
                    State                          1.2% pt        State  share          share         unemployment      adjustment Q3     unemployment
                                                  increase                                                tier              FY11           adjustment
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.....................................             69.74             31.46             30.86              11.5              3.55             73.29
Alaska*.....................................             53.68             47.52             46.92               8.5              3.99             57.67
Arizona.....................................             67.40             33.80             33.20              11.5              3.82             71.22
Arkansas....................................             74.14             27.06             26.46               8.5              2.25             76.39
California..................................             51.20             50.00             49.40              11.5              5.68             56.88
Colorado....................................             51.20             50.00             49.40              11.5              5.68             56.88
Connecticut.................................             51.20             50.00             49.40              11.5              5.68             56.88
Delaware....................................             54.35             46.85             46.25              11.5              5.32             59.67
Dist of Columbia............................             71.20             30.00             29.40              11.5              3.38             74.58
Florida.....................................             58.03             43.17             42.57              11.5              4.90             62.93
Georgia.....................................             66.53             34.67             34.07              11.5              3.92             70.45
Hawaii......................................             57.70             43.50             42.90              11.5              4.93             62.63
Idaho.......................................             71.07             30.13             29.53              11.5              3.40             74.47
Illinois....................................             51.52             49.68             49.08              11.5              5.64             57.16
Indiana.....................................             67.72             33.48             32.88              11.5              3.78             71.50
Iowa........................................             64.71             36.49             35.89               8.5              3.05             67.76
Kansas......................................             61.58             39.62             39.02               8.5              3.32             64.90
Kentucky....................................             72.69             28.51             27.91              11.5              3.21             75.90
Louisiana...................................             73.67             27.53             26.93              11.5              3.10             76.77
Maine.......................................             66.19             35.01             34.41              11.5              3.96             70.15
Maryland....................................             51.20             50.00             49.40              11.5              5.68             56.88
Massachusetts...............................             51.20             50.00             49.40              11.5              5.68             56.88
Michigan....................................             66.99             34.21             33.61              11.5              3.87             70.86
Minnesota...................................             51.20             50.00             49.40              11.5              5.68             56.88
Mississippi.................................             77.49             23.71             23.11              11.5              2.66             80.15
Missouri....................................             65.71             35.49             34.89              11.5              4.01             69.72
Montana.....................................             69.73             31.47             30.87              11.5              3.55             73.28
Nebraska....................................             61.76             39.44             38.84               5.5              2.14             63.90
Nevada......................................             53.84             47.36             46.76              11.5              5.38             59.22
New Hampshire*..............................             51.20             50.00             49.40              11.5              5.68             56.88
New Jersey..................................             51.20             50.00             49.40              11.5              5.68             56.88
New Mexico..................................             72.55             28.65             28.05              11.5              3.23             75.78
New York....................................             51.20             50.00             49.40              11.5              5.68             56.88
North Carolina..............................             66.33             34.87             34.27              11.5              3.94             70.27
North Dakota................................             64.95             36.25             35.65                 0              0.00             64.95
Ohio........................................             64.89             36.31             35.71              11.5              4.11             69.00
Oklahoma....................................             68.30             32.90             32.30              11.5              3.71             72.01
Oregon......................................             64.05             37.15             36.55              11.5              4.20             68.25
Pennsylvania................................             56.84             44.36             43.76              11.5              5.03             61.87
Rhode Island................................             54.17             47.03             46.43              11.5              5.34             59.51
South Carolina..............................             71.52             29.68             29.08              11.5              3.34             74.86
South Dakota................................             63.92             37.28             36.68               8.5              3.12             67.04
Tennessee...................................             67.05             34.15             33.55              11.5              3.86             70.91
Texas.......................................             61.76             39.44             38.84              11.5              4.47             66.23
Utah........................................             72.88             28.32             27.72              11.5              3.19             76.07
Vermont*....................................             60.65             40.55             39.95              11.5              4.59             65.24
Virginia....................................             51.20             50.00             49.40              11.5              5.68             56.88
Washington..................................             52.72             48.48             47.88              11.5              5.51             58.23
West Virginia...............................             75.45             25.75             25.15              11.5              2.89             78.34
Wisconsin...................................             61.41             39.79             39.19              11.5              4.51             65.92
Wyoming.....................................             51.20             50.00             49.40              11.5              5.68             56.88
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*The unemployment tier for these States decreased but the Department was not able to satisfy the 60 day notice requirement so their unemployment tier
  was held harmless.

[FR Doc. 2011-13783 Filed 6-2-11; 8:45 am]
BILLING CODE 4150-05-P