[Federal Register Volume 79, Number 13 (Tuesday, January 21, 2014)]
[Notices]
[Pages 3385-3388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-00931]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES


Federal Financial Participation in State Assistance Expenditures; 
Federal Matching Shares for Medicaid, the Children's Health Insurance 
Program, and Aid to Needy Aged, Blind, or Disabled Persons for October 
1, 2014 Through September 30, 2015

AGENCY: Office of the Secretary, DHHS.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Federal Medical Assistance Percentages (FMAP), Enhanced 
Federal Medical Assistance Percentages (eFMAP), and disaster-recovery 
FMAP adjustments for Fiscal Year 2015 have been calculated pursuant to 
the Social Security Act (the Act). These percentages will be effective 
from October 1, 2014 through September 30, 2015. This notice announces 
the calculated FMAP and eFMAP rates that the U.S. Department of Health 
and Human Services (HHS) will use in determining the amount of federal 
matching for state medical assistance (Medicaid) and Children's Health 
Insurance Program (CHIP) expenditures, Temporary Assistance for Needy 
Families (TANF) Contingency Funds, Child Support Enforcement 
collections, Child Care Mandatory and Matching Funds of the Child Care 
and Development Fund, Foster Care Title IV-E Maintenance payments, and 
Adoption Assistance payments. Table 1 gives figures for each of the 50 
States, the District of Columbia, Puerto Rico, the Virgin Islands, 
Guam, American Samoa, and the Commonwealth of the Northern Mariana 
Islands. This notice also announces the disaster-recovery FMAP 
adjustments for qualifying States for FY 2015 that the U.S. Department 
of Health and Human Services (HHS) will use in determining the amount 
of federal matching for state medical assistance (Medicaid) and title 
IV-E Foster Care, Adoption Assistance and Guardianship Assistance 
programs.
    Programs under title XIX of the Act exist in each jurisdiction. 
Programs under titles I, X, and XIV operate only in Guam and the Virgin 
Islands, while a program under title XVI (Aid to the Aged, Blind, or 
Disabled) operates only in Puerto Rico. The percentages in this notice 
apply to state expenditures for most medical assistance and child 
health assistance, and assistance payments for certain social services. 
The Act provides separately for federal matching of administrative 
costs.
    Sections 1905(b) and 1101(a)(8)(B) of the Social Security Act (the 
Act) require the Secretary of HHS to publish the FMAP rates each year. 
The Secretary calculates the percentages, using formulas in sections 
1905(b) and 1101(a)(8), and calculations by the Department of Commerce 
of average income per person in each State and for the Nation as a 
whole. The percentages must fall within the upper and lower limits 
given in section 1905(b) of the Act. The percentages for the District 
of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and 
the Northern Mariana Islands are specified in statute, 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 
FMAPs as follows:

    ``Federal medical assistance percentage'' 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 Federal medical 
assistance percentage shall in no case be less than 50 per centum or 
more than 83 per centum, (2) the Federal medical assistance 
percentage for Puerto Rico, the Virgin Islands, Guam, the Northern 
Mariana Islands, and American Samoa shall be 55 percent. . .''.

    Section 4725(b) 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 and XXI shall be 70 percent. For the District of 
Columbia, we note under Table 1 that other rates may apply in certain 
other programs. In addition, we note the rate that applies for Puerto 
Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of 
the Northern Mariana Islands in certain other programs pursuant to 
section 1118 of the Act.
    Section 1905(y) of the Act, as added by section 2001 of the Patient 
Protection and Affordable Care Act of 2010 (''Affordable Care Act''), 
provides for a significant increase in the Federal Medical Assistance 
Percentage (FMAP) for medical expenditures for individuals determined 
eligible under the new adult group in the State and who will be 
considered to be ``newly eligible'' in 2014, as defined in section 
1905(y)(2)(A) of the Act. The FMAP for these newly eligible individuals 
will be 100 percent for Calendar Years 2014, 2015, and 2016, gradually 
declining to 90 percent in 2020 where it remains indefinitely. In 
addition, section 1905(z) of the Act, as added by section 10201 of the 
Affordable Care Act, provides that

[[Page 3386]]

States that had expanded substantial coverage to low-income parents and 
nonpregnant adults without children prior to the enactment of the 
Affordable Care Act, referred to as ``expansion States,'' shall receive 
an enhanced FMAP that begins in 2014 for nonpregnant childless adults 
who may be required to enroll in benchmark coverage. These provisions 
are discussed in more detail in the Medicaid Eligibility proposed rule 
published on August 17, 2011 (76 FR 51172) and the final rule published 
on March 23, 2012 (77 FR 17143).
    For purposes of Title XIX (Medicaid) of the Social Security Act, 
the Federal Medical Assistance Percentage (FMAP), defined in section 
1905(b) of the Social Security Act, for each State beginning with 
fiscal year 2006 is subject to an adjustment pursuant to section 614 of 
the Children's Health Insurance Program Reauthorization Act of 2009 
(CHIPRA), Public Law 111-3. Section 614 of CHIPRA stipulates that a 
State's FMAP under Title XIX (Medicaid) must be adjusted in two 
situations.
    In the first situation, if a State experiences positive growth in 
total personal income and an employer in that State has made a 
significantly disproportionate contribution to a pension or insurance 
fund, the State's FMAP must be adjusted. Employer pension and insurance 
fund contributions are significantly disproportionate if the increase 
in contributions exceeds 25 percent of the increase in total personal 
income in that State. A Federal Register Notice with comment period was 
issued on June 7, 2010 announcing the methodology for calculating this 
adjustment; a final notice was issued on October 15, 
2010.1 2
---------------------------------------------------------------------------

    \1\ As required by section 614(b)(2), the personal income data 
set originally used to calculate FMAP rates shall also be used for 
making this adjustment to the FMAP rates. The required adjustment is 
a recalculation of the FMAP rate disregarding any significantly 
disproportionate employer pension or insurance fund contribution in 
computing the State per capita income, but not disregarding such 
contributions in computing the United States per capita income used 
in the FMAP calculation. Section 614(c) provides that in no case 
shall a State have its FMAP reduced because of the application of 
this disregard.
    \2\ A change in BEA's method for reporting defined benefit 
pension plans should mitigate the reporting, and therefore the need 
for this adjustment in the future. In 2013, BEA changed its method 
for reporting defined benefit pension plans as part of personal 
income by changing from a cash accounting basis to an accrual 
accounting basis. This change will tend to have steadier estimates 
than the more volatile cash contributions made by employers. 
(McCulla, Stephanie H., Holdren, Alyssa E., and Smith, Shelly. 
``Improved Estimates of the National Income and Product Accounts.'' 
Survey of Current Business, September 2013 (page 14)).
---------------------------------------------------------------------------

    A second situation arises if a State experiences negative growth in 
total personal income. Beginning with Fiscal Year 2006, section 
614(b)(3) of CHIPRA specifies that certain employer pension or 
insurance fund contributions shall be disregarded when computing the 
per capita income used to calculate the FMAP for States with negative 
growth in total personal income. In that instance, for the purposes of 
calculating the FMAP, for a calendar year in which a State's total 
personal income has declined, the portion of an employer pension and 
insurance fund contribution that exceeds 125 percent of the amount of 
the employer contribution in the previous calendar year shall be 
disregarded. The statutory formula for calculating the FMAP is based on 
the ratio of the State's per capita income to the per capita income of 
the entire United States. Employer pension or insurance fund 
contributions increase State personal income and, by operation of the 
statutory formula, could result in lower FMAPs than would be the case 
if those contributions were disregarded.
    We request that States follow the same methodology to determine 
potential FMAP adjustments for negative growth in total personal income 
that HHS employs to adjust the FMAP for States experiencing 
significantly disproportionate pension or insurance contributions. For 
a State experiencing negative growth in total personal income, if that 
State believes that an individual employer has made a pension or 
insurance fund contribution that may qualify for an FMAP adjustment for 
negative growth, the State should provide data on that individual 
employer contribution to HHS. The State may submit official audited 
financial statements for the employer for the year of the contribution 
and the prior year or other evidence that the increase in the 
employer's contribution is likely to exceed 125 percent of the 
employer's contribution in the previous year in the State.
    The deadline for submitting 2005 through 2012 employer 
contributions, and the associated prior year contributions, will be the 
end of FY 2014 (September 30, 2014). The deadline for submitting 2013 
and future employer contributions, and the associated prior year 
contributions, will be the end of the second fiscal year following the 
end of the employer's annual fiscal statement that includes the 
employer contributions.
    After a State submits written notification that such a contribution 
or contributions occurred, HHS will verify the State's data. As part of 
this verification process, HHS will search the Security Exchange 
Commission (SEC) filings or the Internal Revenue Service (IRS) 5500 
Annual Return/Report of Employee Benefit Plan database to find the 
employer's contributions for the relevant two-year period. If HHS is 
unable to verify the State's submitted data, no FMAP adjustment will be 
made.
    This notice does not contain an FY 2015 adjustment for a major 
statewide disaster for any State because no State's FMAP decreased by 
at least three percentage points from FY 2014 to FY 2015.
    Section 2105(b) of the Act specifies the formula for calculating 
the eFMAP rates as follows:

    The ``enhanced FMAP'', for a State for a fiscal year, is equal 
to the Federal medical assistance percentage (as defined in the 
first sentence of section 1905(b)) for the State increased by a 
number of percentage points equal to 30 percent of the number of 
percentage points by which (1) such Federal medical assistance 
percentage for the State, is less than (2) 100 percent; but in no 
case shall the enhanced FMAP for a State exceed 85 percent.

    The eFMAP rates are used in the Children's Health Insurance Program 
under Title XXI, and in the Medicaid program for certain children for 
expenditures for medical assistance described in sections 1905(u)(2) 
and 1905(u)(3) of the Act. There is no specific requirement to publish 
the eFMAP rates. We include them in this notice for the convenience of 
the States.

DATES: Effective Dates: The percentages listed in Table 1 will be 
effective for each of the four quarter-year periods beginning October 
1, 2014 and ending September 30, 2015.

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

(Catalog of Federal Domestic Assistance Program Nos. 93.558: TANF 
Contingency Funds; 93.563: Child Support Enforcement; 93.596: Child 
Care Mandatory and Matching Funds of the Child Care and Development 
Fund; 93.658: Foster Care Title IV-E; 93.659: Adoption Assistance; 
93.769: Ticket-to-Work and Work Incentives Improvement Act (TWWIIA) 
Demonstrations to Maintain Independence and Employment; 93.778: Medical 
Assistance Program; 93.767: Children's Health Insurance Program).


[[Page 3387]]


    Dated: December 18, 2013.
Kathleen Sebelius,
Secretary.

  Table 1--Federal Medical Assistance Percentages and Enhanced Federal
 Medical Assistance Percentages, effective October 1, 2014-September 30,
                                  2015
                           [Fiscal Year 2015]
------------------------------------------------------------------------
                                                             Enhanced
                                              Federal         federal
                  State                       medical         medical
                                            assistance      assistance
                                            percentages     percentages
------------------------------------------------------------------------
Alabama.................................           68.99           78.29
Alaska..................................           50.00           65.00
American Samoa *........................           55.00           68.50
Arizona.................................           68.46           77.92
Arkansas................................           70.88           79.62
California..............................           50.00           65.00
Colorado................................           51.01           65.71
Connecticut.............................           50.00           65.00
Delaware................................           53.63           67.54
District of Columbia **.................           70.00           79.00
Florida.................................           59.72           71.80
Georgia.................................           66.94           76.86
Guam *..................................           55.00           68.50
Hawaii..................................           52.23           66.56
Idaho...................................           71.75           80.23
Illinois................................           50.76           65.53
Indiana.................................           66.52           76.56
Iowa....................................           55.54           68.88
Kansas..................................           56.63           69.64
Kentucky................................           69.94           78.96
Louisiana...............................           62.05           73.44
Maine...................................           61.88           73.32
Maryland................................           50.00           65.00
Massachusetts...........................           50.00           65.00
Michigan................................           65.54           75.88
Minnesota...............................           50.00           65.00
Mississippi.............................           73.58           81.51
Missouri................................           63.45           74.42
Montana.................................           65.90           76.13
Nebraska................................           53.27           67.29
Nevada..................................           64.36           75.05
New Hampshire...........................           50.00           65.00
New Jersey..............................           50.00           65.00
New Mexico..............................           69.65           78.76
New York................................           50.00           65.00
North Carolina..........................           65.88           76.12
North Dakota............................           50.00           65.00
Northern Mariana Islands *..............           55.00           68.50
Ohio....................................           62.64           73.85
Oklahoma................................           62.30           73.61
Oregon..................................           64.06           74.84
Pennsylvania............................           51.82           66.27
Puerto Rico *...........................           55.00           68.50
Rhode Island............................           50.00           65.00
South Carolina..........................           70.64           79.45
South Dakota............................           51.64           66.15
Tennessee...............................           64.99           75.49
Texas...................................           58.05           70.64
Utah....................................           70.56           79.39
Vermont.................................           54.01           67.81
Virgin Islands *........................           55.00           68.50
Virginia................................           50.00           65.00
Washington..............................           50.03           65.02
West Virginia...........................           71.35           79.95
Wisconsin...............................           58.27           70.79
Wyoming.................................           50.00           65.00
------------------------------------------------------------------------
* For purposes of section 1118 of the Social Security Act, the
  percentage used under titles I, X, XIV, and XVI will be 75 per centum.
** The values for the District of Columbia in the table were set for the
  state plan under titles XIX and XXI and for capitation payments and
  DSH allotments under those titles. For other purposes, the percentage
  for D.C is 50.00, unless otherwise specified by law.


[[Page 3388]]

[FR Doc. 2014-00931 Filed 1-17-14; 8:45 am]
BILLING CODE 4150-05-P