[Federal Register Volume 76, Number 147 (Monday, August 1, 2011)]
[Notices]
[Pages 45805-45810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19358]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES


Calculation of Annual Federal Medical Assistance Percentages for 
Indian Tribes for Use in the Title IV-E Foster Care, Adoption 
Assistance, and Kinship Guardianship Assistance Programs

AGENCY: Office of the Secretary, DHHS.

ACTION: Notice.

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SUMMARY: This notice finalizes the methodology that will be used to 
calculate reimbursement rates applicable to fiscal years 2010 and 
beyond for assistance payments under the tribal Foster Care, Adoption 
Assistance and Guardianship Assistance Programs authorized by title IV-
E of the Social Security Act. A Notice with Comment Period on this 
topic was previously published on October 8, 2010.

DATES: Effective Date. The methodology described in this Notice is 
effective upon publication.

A. Background

    The Fostering Connections to Success and Increasing Adoptions Act 
of 2008 (``Fostering Connections Act, '' Pub. L. 110-351), authorizes 
Indian tribes, tribal organizations and tribal consortia to receive 
funding directly for Foster Care, Adoption Assistance, and Kinship 
Guardianship Assistance Programs under title IV-E of the Social 
Security Act (42 U.S.C. 679c). Such direct funding was authorized to 
begin in fiscal year (FY) 2010 for Indian tribes, tribal organizations 
or tribal consortia with approved title IV-E plans, or eligible Indian 
tribes may submit plans to operate such programs at any time in the 
future. Indian tribes not operating their own programs may receive 
title IV-E funds through cooperative agreements or contracts with the 
States within which they are located. The methodology described in this 
notice is also applicable in calculating reimbursement rates under such 
agreements beginning in FY 2010.
    The Federal share of assistance payments for the Title IV-E Foster 
Care, Adoption Assistance and Kinship Guardianship Assistance Programs 
is calculated using the Federal Medical Assistance Percentage (FMAP), a 
match rate calculated annually for each State by the Department of 
Health and Human Services (HHS) according to a formula specified in 
statute (section 1905(b) of the Social Security Act, 42 U.S.C. 
1396d(b)). The FMAP formula involves comparing the State's average per 
capita income over a three year period with the average per capita 
income of the U.S. as a whole for the same three year period, and 
results in FMAP rates that vary between statutory minimum and maximum 
levels of 50 and 83 percent. The formula produces higher Federal 
matching rates for jurisdictions with lower per capita incomes relative 
to the U.S. as a whole.
    Indian tribes previously have not been authorized to directly 
administer Federal programs that use FMAPs and therefore tribal FMAPs 
have not previously been calculated. However, the Fostering Connections 
Act requires HHS to establish FMAP rates for Indian tribes, tribal 
organizations, or tribal consortia (Pub. L. 110-351, section 301(d); 42 
U.S.C. 679c(d)). The Act further specifies that each Tribe's annual 
FMAP shall be based on the per capita income of the service population 
of the Indian tribe, tribal organization, or tribal consortium. 
However, no tribal FMAP shall be lower than the FMAP of any State in 
which the Indian tribe, tribal organization, or tribal consortium is 
located.
    The FMAP rates calculated using the methodology described here will 
be used for Indian tribes' title IV-E Foster Care, Adoption Assistance, 
and Kinship Guardianship Assistance programs whether they are 
administered directly by the Indian tribe or through an agreement or 
contract with a title IV-E State agency per sections 474(a)(1) and (2) 
of the Social Security Act, 42 U.S.C. 674(a)(1) and (2). Thus, a State 
may also claim reimbursement for title IV-E allowable assistance 
payments made on behalf of tribal children served through agreements or 
contracts with Indian tribes at the higher of the FMAP rate applicable 
to the State or the FMAP rate for the involved Indian tribe.

B. Outreach Regarding the October 8, 2010, Federal Register Notice and 
Comments Received

    On October 8, 2010, HHS published a Federal Register Notice 
requesting comments on its proposed methodology for calculating FMAP 
for Indian tribes. A 60-day comment period was provided. HHS mailed 
copies of the Notice to tribal chairman of all federally recognized 
Indian tribes and posted the Notice to several electronic listserves 
operated by the Department's Administration for Children and Families 
that are most relevant to tribal child welfare programs. Each of the 
letters and postings provided dates and call-in instructions for four 
conference calls that were to be held to describe the content of the 
Notice and answer any questions Tribes may have had about it. These 
calls were held on November 3, 4, 9 and 10, 2010.
    A single set of written comments was received on the content of the 
Federal

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Register Notice and the methodology for calculating tribal FMAP rates. 
These comments, from the National Indian Child Welfare Association 
(NICWA), supported several specific aspects of the proposed 
methodology. These include: (1) The use of the standard FMAP formula to 
calculate rates for Indian tribes, substituting the Indian tribe's per 
capita income in place of the State's; (2) the proposal to round each 
Indian tribe's rate up to the next higher whole number; (3) the 
extension of temporary FMAP increases as specified in Section 5001 of 
Public Law 111-5, ``the American Recovery and Reinvestment Act of 
2009'' and Section 201 of Public Law 111-226, the ``Education, Jobs and 
Medicaid Assistance Act'' to Indian tribes as they apply to States; and 
(4) our recommendation to use, as a default, data for the population 
identified as American Indian or Alaska Native only in the Indian 
tribe's service area to calculate the FMAP rate, while being open to 
discussion if the Indian tribe believes another formulation better 
represents its service population.
    The NICWA comments also expressed guarded support for our proposed 
methodology for calculating FMAP rates for consortia or tribal 
organizations serving multiple Indian tribes, noting the methodology 
``may be appropriate'' but noting that individual situations may 
produce complicating factors of which NICWA is unaware. Neither we nor 
NICWA has yet identified specific cases in which the proposed 
methodology is problematic. However, we acknowledge that no methodology 
is guaranteed to work in all situations and remain willing to work with 
tribal organizations and consortia to consider alternate methods in 
cases where the proposed methodology proves inadequate.
    NICWA did express the concern that our proposed data source for 
FMAP calculations for fiscal year 2012 and beyond involves 5-year per 
capita income estimates from the American Community Survey (ACS). These 
data were unavailable before the comment period closed. NICWA, 
supported by a resolution from the National Congress of American 
Indians, suggested that we extend the comment period for several months 
in order to allow a thorough examination of the new data, which was 
scheduled for release in December, 2010. By the time the NICWA comments 
were received on the last day of the comment period, it was too late to 
extend the comment period under the existing Federal Register Notice. 
We did consider re-opening the comment period and also considered 
finalizing only rates for 2010 and 2011 while asking anew for comments 
on the methodology for 2012 and beyond. However, we have decided not to 
reopen the comment period for two reasons. First, an examination of 
these new data, published December 14, 2010, reveal few differences 
between the rates produced using the ACS 5-year estimates and those 
produced using the 2000 decennial Census data NICWA supported. Second, 
while NICWA expressed apprehension because the new data was as yet 
unseen, neither NICWA nor any other organization has identified a 
viable alternative to these data for routine use. While individual 
Indian tribes may have alternative data sources, and we have said 
consistently that we will consider such alternative data as an Indian 
tribe may choose to submit, the 5-year ACS data is the only data set we 
have been able to identify that provides consistent information on the 
per capita incomes of the range of Indian tribes eligible to 
participate in the title IV-E Foster Care, Adoption Assistance, and 
Guardianship Assistance Programs. Without a viable alternative to 
consider, and new evidence that the proposed data source is viable for 
FY 2012 and beyond, we have decided to finalize the methodology as 
proposed. A fuller analysis of the 5-year ACS estimates and their 
implications for tribal FMAP rates appears below. A look-up table for 
2012 FMAP rates, equivalent to the table for FYs 2010 and 2011 that 
appeared in the previous Federal Register Notice, appears at the end of 
this Notice. We also repeat at the end of this notice the lookup table 
for the FMAP rates applicable to FYs 2010 and 2011.
    During the conference calls we held with Indian tribes to explain 
the proposed methodology we did receive questions on the data sources 
used to calculate the rate, i.e., the 2000 Decennial Census and the 
ACS, both produced by the U.S. Census Bureau. Specifically, we were 
asked whether the Census Bureau's definition of income includes tribal 
payments to members (it does) and whether the data source makes any 
adjustments to account for the high cost of living in Alaska (it does 
not). In addition, several callers asked us to provide them with the 
per capita income data for their Indian tribe, and the associated FMAP 
rate calculated using the proposed methodology. We provided this 
information in each case. One caller also asked for clarification 
regarding which components of the title IV-E Program are matched using 
the FMAP. We noted that FMAP is used to match assistance payments, 
which are primarily room and board costs for children in foster care 
and payments to families under the adoption assistance and kinship 
guardianship assistance programs. Other costs, particularly 
administrative and training costs, are matched at other statutorily 
defined match rates, 50 percent in the case of administrative costs, 
and 55 to 75 percent in the case of eligible training costs.

C. Analysis of American Community Survey 5-Year Estimates for 2005-2009

    As noted above, the first 5-year ACS estimates were published by 
the Census Bureau on December 14, 2010. We have conducted an analysis 
of these data to determine FMAP rates under our proposed methodology 
for 162 Indian tribes and Alaska native communities that have, to date, 
either expressed interest in participating in title IV-E programs 
directly or have agreements or contracts with states under which they 
operate title IV-E programs. We considered as ``interested'' those 
Indian tribes that currently operate title IV-E programs through 
agreements with States as well as those that either applied for a title 
IV-E planning grant from the Children's Bureau, or that submitted a 
letter of intent to the Children's Bureau indicating they are 
considering the submission of a title IV-E plan. Such letters of intent 
were solicited by the Children's Bureau in a program instruction in 
December, 2008 (http://www.acf.hhs.gov/programs/cb/laws_policies/policy/pi/2008/pi0806.htm). Our analysis of ACS 5-year estimates in 
conjunction with the FMAP calculation methodology has revealed the 
following:
     All 11 Indian tribes with current title IV-E planning 
grants would receive the maximum FMAP under the proposed methodology 
using the newly released 5-year ACS data, as they did under the 2000 
Decennial Census data.
     Of the 162 Indian tribes and Alaska native communities 
examined, 5-year ACS data was found to be available covering 151 of 
these Indian tribes and Alaska native communities. Of the 151, data for 
those on tribal lands identifying themselves as American Indian or 
Alaska Native (AI/AN) was available for 143. For the remaining 8 Indian 
tribes data is available for persons of all races residing in the 
tribal area, but not for the AI/AN population specifically.
     The data established that, using AI/AN data when it is 
available and data for all persons where it is not, a total of 128 of 
the 151 Indian tribes and Alaska native communities for which ACS data 
is available would receive the maximum FMAP of 83 percent.

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     Twenty-four other Indian tribes that have expressed 
interest in the title IV-E program were determined to have higher per 
capita income and as a result the applicable Tribal FMAP would be lower 
than the maximum rate. These 24 include four tribes that would receive 
rates of between 80 and 83 percent, 10 that would receive rates between 
70 and 79 percent, seven that would receive rates between 60 and 69 
percent and two that would receive rates between 50 and 59 percent. In 
only three cases (two in Oklahoma and one in Michigan) was the 
calculated FMAP for the Indian tribe lower than that of the State 
within which the Indian tribe is located. In these three cases, the 
Indian tribe would receive the State's higher FMAP rate.
     Per capita income data is not available in the 5-year ACS 
data for 11 very small Indian tribes that have previously expressed an 
interest in the title IV-E programs, but which have not yet submitted a 
title IV-E plan or received a title IV-E plan development grant. Some 
of these Indian tribes currently receive title IV-E funds under a 
contract or cooperative agreement with the State(s) within which they 
are located. As described in section E below, we have modified our 
proposal to provide a method of calculating FMAP for Indian tribes for 
which no ACS data is available.
     FMAP rates calculated using the 5-year ACS data are 
largely consistent with those calculated using the older 2000 Decennial 
Census data. Of the 147 Indian tribes for which we examined FMAP rates 
and for which income estimates are available in both data sets, 121 
result in the same FMAP rates using both data sources, while 6 would 
receive slightly higher rates using the more recent data and 20 would 
receive slightly lower rates. This fluctuation is to be expected and 
likely reflects differential economic development since 2000. For 
instance, the Indian tribe may have opened a casino or other industry 
since 2000 that has improved its per capita income relative to the 
nation as a whole. Conversely, the Indian tribe may have been 
disproportionately affected by the recession if local industry was 
particularly hard hit relative to other parts of the nation.
The 5-year ACS data are the most recent data available for almost all 
of the Indian tribes that we are aware are considering participating in 
title IV-E programs and therefore represents the best measure of the 
current per capita income for each Indian tribe. The consistency with 
earlier Census data provides further confidence that the ACS data is 
suitable for the purpose of calculating FMAP rates for Indian tribes.

D. Calculation of FMAP for Indian Tribes for Use Matching Program 
Claims for Fiscal Years 2010 and 2011

    In the October 8 Federal Register Notice we proposed to adapt the 
standard FMAP formula used for States by substituting each 
participating Indian tribe's per capita income for that of the State, 
that is to use the formula 1-0.45((Indian Tribe's Per Capita 
Income)\2\/(U.S. Per Capita Income)\2\). We further proposed that 
minimum and maximum FMAP rates would apply to Indian tribes as they do 
to States, noting that we had no legal authority to waive these limits. 
We proposed to use 2000 Decennial Census data to calculate the FMAP 
rates for FYs 2010 and 2011, noting that it was the only data source we 
identified that included per capita income data for all the Indian 
tribes that had expressed interest in participating in the Title IV-E 
programs. We proposed to use data for those living on tribal lands who 
identified themselves solely as American Indian or Alaska Native when 
that data is available, and data for all persons in the tribal area 
when it is not. Finally, we had proposed that rather than use decimal 
places, tribal FMAP rates would be rounded up to the next highest whole 
number (up to a maximum of 83 percent).
    Having received one supportive comment and no negative comments on 
each of the above components of our proposed methodology and no 
information about alternative data sources, we are finalizing this 
proposal with respect to calculating the FMAP rates for FYs 2010 and 
2011.
    The calculations using this methodology are to be the default 
method to be used to calculate FMAP for Indian tribes. However, as 
spelled out in the statute, if in any case the tribal FMAP rate 
calculated in this manner is lower than that of any State in which the 
Indian tribe is located, the Indian tribe would receive the higher 
State rate instead. In addition, also as directed by statute, HHS will 
consider using supplemental data identified by an Indian tribe, tribal 
organization or tribal consortium rather than 2000 Decennial Census 
data on per capita income if the Indian tribe, tribal organization or 
tribal consortium can demonstrate that the supplemental data better 
represents the per capita income of its service population. See section 
H below for further information on how HHS will evaluate the 
suitability of supplemental data.

E. Calculation of FMAP for Indian Tribes for Use Matching Program 
Claims for Fiscal Years 2012 and Beyond

    For fiscal years 2012 and beyond we had proposed to use the same 
methodology for calculating the FMAP rate for participating Indian 
tribes, but had proposed to use more recent data on tribal per capita 
incomes--5-year estimates from the Census Bureau's American Community 
Survey, the first of which were to be released in December 2010. As was 
the case with the 2000 Decennial Census data, we had proposed to use 
data for those on tribal lands identifying themselves only as American 
Indian or Alaska Native where it is available, and data for all persons 
on tribal lands where it is not. The 5-year estimates for 2005-2009 
were released as scheduled on December 14, 2010. These estimates will 
be updated annually by the Census Bureau by adding a new year's data 
and dropping the oldest year. As described above, the new data result 
in FMAP rates that are substantially similar to those produced by the 
earlier 2000 Decennial Census data they replace. Decennial census data 
for 2010 and beyond will not include the per capita income data needed 
for the FMAP formula.
    We are finalizing this proposal with respect to calculating the 
FMAP rates for FY 2012 and subsequent FYs. The FY 2012 FMAP rates for 
Indian tribes will thus be calculated using the ACS 5-year estimates 
for 2005-2009 published on December 14, 2010. The tribal FMAP rates for 
each subsequent FY will utilize the most recent update of the ACS 5-
year estimates available as of June 30 of the prior FY. As with the 
calculations for fiscal years 2010 and 2011, no Indian tribe will 
receive an FMAP rate less than that of any State in which the Indian 
tribe is located, and any supplemental data provided by the Indian 
tribe will be considered.
    As noted above, once the first 5-year ACS estimates were published 
on December 14, 2010, it became clear that for a few small Indian 
tribes, even 5-year ACS estimates would not be sufficient to produce 
per capita income estimates for either the AI/AN alone population or 
for persons of all races living on tribal lands. In these cases, we 
will use as a third choice the per capita income of all individuals in 
the State who identify themselves as American Indian/Alaska Native as 
an estimate of the Indian tribe's per capita income. If the Indian 
tribe operates in multiple States, we will weigh the per capita income 
of the AI/AN population in each

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State by the proportion of the Indian tribe's service population in the 
State. In establishing FMAP for Indian tribes for which ACS data is 
unavailable we will take care to consult with the Indian tribe 
regarding the availability of alternate data.

F. Calculation of FMAP for Consortia and Tribal Organizations Serving 
Multiple Tribes

    In the October 8, 2010 Federal Register Notice we had proposed to 
calculate FMAP rates for consortia and tribal organizations serving 
multiple Indian tribes by weighting the per capita income data 
according to the proportional representation of each Indian tribe's 
service population relative to the total service population of the 
organization or consortium. Receiving no comments opposing the proposed 
methodology and having no alternatives suggested, this now becomes our 
established method for producing FMAP for organizations and consortia 
serving multiple Indian tribes. Again, consistent with NICWA's 
comments, we will consult with organizations and consortia as the issue 
comes up to ensure this method accurately represents the program's 
service population.

G. Procedures for Producing Annual Updates to Federal Medical 
Assistance Percentages for Indian Tribes

    As noted above, we will use as our default source of per capita 
income data the 5-year estimates the American Community Survey. These 
data will be updated annually by the Census Bureau on a rolling basis 
by dropping the earliest of the 5 years and adding the latest. For 
fiscal year 2012 rates we will use ACS data for 2005-2009. For fiscal 
year 2013 we will update to using data for 2006-2010, and so forth. The 
formula for the calculation will remain as described above. In the 
third quarter of each fiscal year ACF regional office staff will 
communicate with each Indian tribe, tribal organization, or tribal 
consortium with an approved title IV-E plan their tribal FMAP rate for 
the upcoming fiscal year. Those States reporting title IV-E claims for 
Tribe-State agreement assistance payments will also be informed by the 
ACF regional office staff of the calculated FMAP rates for Indian 
tribes located in their State. Because most Indian tribes will be 
receiving the maximum FMAP rate, the calculation formula provides for 
rounding up to the next highest full percentage point and per capita 
incomes do not tend to change rapidly, it is likely that many programs 
will see little, if any, matching rate shifts from year to year. A link 
to a table similar to the ones at the end of this notice will be posted 
annually on ACF's Web site (http://www.acf.hhs.gov) displaying the per 
capita income thresholds for each FMAP rate for the fiscal year.

H. Consideration of Supplemental Data

    As noted in our previous Federal Register Notice, before finalizing 
new FMAP rates for a year, HHS will consider any additional relevant 
data on its per capita income submitted by a Indian tribe, tribal 
organization or tribal consortium. In the absence of supplemental data, 
HHS will use the data and procedures described above to calculate the 
applicable FMAP for the grantee. Additional data submitted by Indian 
tribes, tribal organizations and tribal consortia will be evaluated by 
the Division of Mandatory Grants in the Office of Grants Management at 
ACF. Such data may be submitted to the attention of Joseph Lonergan, 
Director, Division of Mandatory Grant, ACF Office of Grants Management, 
at 202-401-6603 (phone); 202-401-5644 (fax); or email: 
[email protected]. Supplemental data may relate to matters such as the 
per capita income of the Indian tribe, tribal organization or 
consortium, the numbers and/or geographic locations of its service 
population, and/or defining the grantee's service population to include 
individuals other than those who identified themselves solely as 
American Indian to be considered for the purposes of calculating the 
applicable per capita income.
    The suitability of supplemental data submissions from Indian 
Tribes, tribal organizations and tribal consortia will be evaluated 
based on criteria that include: Whether the Decennial Census or 
American Community Survey data that would otherwise be used is either 
missing or has a high margin of error; if the supplemental data 
reflects the same or similar definitions of income as do the national 
data, such as what types of income are included and excluded; if the 
data have been collected and tabulated in a reliable manner; and if the 
data are current or more recently updated than the data that would 
otherwise be used and therefore reflect more current economic 
conditions of the Indian tribe's service population.
    Data to be considered for a given fiscal year's calculation should 
be submitted no later than 30 days before the beginning of the next 
fiscal year (September 1) in order to provide sufficient time for the 
Department to evaluate the suitability of the additional data. The 
tribal FMAP rate for the next fiscal year calculated from the ACS 5-
year data will be in effect beginning on October 1 of that year unless 
and until a decision is made by the Department to revise it based on 
the supplemental data previously provided by the Indian tribe, tribal 
organization, or tribal consortium. Tribal leadership will be consulted 
prior to a final decision by the Department regarding the suitability 
of any supplemental data submitted. The Department will also work 
closely with tribal leaders before establishing a final FMAP for the 
upcoming fiscal year.

I. Application of Temporary Increases to Tribal Federal Medical 
Assistance Percentages

    As proposed in our previous Federal Register Notice, to the extent 
permitted by law we will extend to Tribes any temporary adjustments to 
FMAP that apply to States. Temporary FMAP rates that applied to states 
in Fiscal Year 2010 and 2011 (i.e., those authorized by Public Law 111-
5 and Public Law 111-226) will apply to Indian tribes. The 
applicability of any future FMAP adjustments to Indian tribes, tribal 
organizations, and tribal consortia will depend on the specific 
statutory language enacting such adjustments.

FOR FURTHER INFORMATION CONTACT: Laura Radel, Office of the Assistant 
Secretary for Planning and Evaluation, Room 404-E--Hubert H. Humphrey 
Building, 200 Independence Avenue, SW., Washington, DC 20201; 202-690-
5938; [email protected].

(Catalog of Federal Domestic Assistance Program Nos. 93.658: Foster 
Care Title IV-E; 93.659: Adoption Assistance; 93.090: Guardianship 
Assistance)

    Dated: May 20, 2011.
Kathleen Sebelius,
Secretary.
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