[Federal Register: August 26, 2005 (Volume 70, Number 165)]
[Notices]
[Page 50358-50372]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26au05-98]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-2209-N]
RIN 0938-AJ74
Medicaid Program; Fiscal Year Disproportionate Share Hospital
Allotments and Disproportionate Share Hospital Institutions for Mental
Disease Limits
AGENCY: Notice.
SUMMARY: This notice announces the final Federal share disproportionate
share hospital (DSH) allotments for Federal fiscal years (FFYs) 2003
and
[[Page 50359]]
2004, and the preliminary Federal share DSH allotments for FFY 2005. It
also announces the final FFYs 2003 and 2004, and the preliminary FFY
2005, limitations on aggregate DSH payments that States may make to
institutions for mental disease (IMDs) and other mental health
facilities. This notice also includes a background describing the
methodology for determining the amounts of States' FFY DSH allotments
for FFY 1998 and thereafter.
FOR FURTHER INFORMATION CONTACT: Richard Strauss, (410) 786-2019.
SUPPLEMENTARY INFORMATION:
I. Background
A. Disproportionate Share Hospital (DSH) Allotments and Institutions
for Mental Disease (IMD) DSH Limits Published in the Federal Register
on October 8, 1998
We published a notice in the October 8, 1998 Federal Register (63
FR 54142) that announced the Federal share DSH allotments for FFYs 1998
through 2002 and the IMD DSH limits for FFYs 1998 and 1999. The DSH
allotments and IMD DSH limits published in that notice specified and
were determined in accordance with sections 1923(f) and 1923(h) of the
Social Security Act (the Act), as amended by the Balanced Budget Act of
1997 (BBA), Pub. L. 105-33 (enacted on August 5, 1997). The notice also
reflected the FFY 1998 DSH allotment for one State, specified in
accordance with section 601 of Pub. L. 105-78 (enacted on November 13,
1997).
Additional legislative changes relating to the amounts or
methodologies for calculating the States' DSH allotments or IMD DSH
limits were made to the Act since the publication of the October 8,
1998 notice. In this section and in section II of this notice, we
describe subsequent legislative changes related to the DSH calculation
of the DSH allotments and IMD DSH limits for fiscal years.
B. Disproportionate Share Hospital Allotments for Federal Fiscal Years
(FFYs) 1998 Through 2000
Section 4721(a) of the BBA amended section 1923(f) of the Act to
require that Federal Medicaid DSH expenditures be limited by the
statutorily defined Federal share DSH allotments for FFYs 1998 through
2002 specified in a chart in section 1923(f)(2) of the Act. Section 601
of Pub. L. 105-78 amended the DSH allotment contained in this chart for
the State of Minnesota for FFY 1998. On October 8, 1998, we published a
notice of the statutorily prescribed DSH allotments for all States for
FFYs 1998 through 2002, in accordance with the amounts specified in the
chart at section 1923(f)(2) of the Act, as established by the BBA and
as amended by Pub. L. 105-78. Subsequent to the publication of the DSH
allotments for these years, a number of legislative actions revised the
DSH allotments specified in the chart at section 1923(f)(2) of the Act,
for certain States. Specifically, sections 702, 703, and 704 of Pub. L.
105-277 (enacted on October 21, 1998) amended the FFY 1999 DSH
allotments for Minnesota, New Mexico, and Wyoming, respectively, and
section 601(a) of the Medicare, Medicaid, SCHIP Balanced Budget
Refinement Act of 1999 (BBRA) (Pub. L. 106-113, enacted on November 29,
1999) amended the FFYs 2000, 2001, and 2002 DSH allotments for the
District of Columbia, Minnesota, New Mexico, and Wyoming.
C. DSH Allotments for FFYs 2001 and 2002
Section 701(a) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554, enacted
on December 21, 2000) added a new section 1923(f)(4) of the Act that
provided for a ``Special Rule for Fiscal Years 2001 and 2002,'' under
which States' DSH allotments for FFY 2001 and 2002 would be determined
through the application of a methodology. The DSH allotments for FFYs
2001 and 2002 as calculated under this methodology superseded the DSH
allotments for those years specified in the chart at section 1923(f)(2)
of the Act.
Under section 1923(f)(4) of the Act, the DSH allotments for FFY
2001 and FFY 2002 were determined by increasing the States' prior FFY
DSH allotments by the Consumer Price Index for all Urban Consumers
(CPI-U) for the prior fiscal year, subject to the limitation that an
increase to a State's DSH allotment for a fiscal year could not result
in the DSH allotment exceeding the greater of the State's DSH allotment
for the previous fiscal year or 12 percent of the State's total medical
assistance expenditures for the allotment year (referred to as the 12
percent limit). For example, if increasing a State's FY 2001 DSH
allotment by the CPI-U for FY 2001 resulted in an amount that was
higher than 12 percent of the State's total medical assistance
expenditures for FY 2002, and the 12 percent limit was higher than the
States' FY 2001 DSH allotment, the State's FY 2002 DSH allotment would
be limited to the 12 percent limit. The application of this special
rule for FFY 2001 and FFY 2002 had the effect of increasing States' DSH
allotments for those years, as compared to the allotments they would
have received under the chart at section 1923(f)(2) of the Act. In
fact, the chart contained at section 1923(f)(2) of the Act generally
would have provided for a decrease or no change in States' DSH
allotments over the fiscal years 1998 through 2002.
BIPA also added a new section 1923(f)(5) of the Act (Pub. L. 106-
554 section 701(a)(2)), which established a ``Special Rule for
Extremely Low DSH States.'' Under this rule, States with FFY 1999 DSH
expenditures that were greater than zero percent and less than 1
percent of the States' FFY 1999 total medical assistance expenditures
were considered to be ``low-DSH States.'' Under section 1923(f)(5) of
the Act, the Low-DSH States' FFY 2001 DSH allotments were increased to
1 percent of the States' total FFY 2001 medical assistance
expenditures. The Low-DSH States' increased FFY 2001 DSH allotments
were the basis for calculating the States' FFY 2002 DSH allotments.
That is, similar to the methodology applied for determining the other
(non-Low-DSH) States' allotments, the Low-DSH States' FFY 2002
allotments were determined by increasing their FFY 2001 allotment (as
determined under the Low-DSH provision at section 1923(f)(5) of the
Act) by the CPI-U for the prior fiscal year, subject to the 12 percent
limit.
D. DSH Allotments for FFY 2003
Section 1923(f)(3) of the Act, as established by the BBA and
amended by the BIPA, provided for States' FFY 2003 DSH allotments to be
calculated by increasing their FFY 2002 allotments (as specified in the
chart in section 1923(f)(2) of the Act) by the CPI-U for the prior
fiscal year, subject to the 12 percent limit. That is, the FFY 2003
allotments were not based on the FFY 2002 DSH allotments as were
determined under section 1923(f)(4) of the Act. Since the FFY 2002 DSH
allotments specified in the chart in section 1923(f)(2) of the Act were
lower than the actual FFY 2002 DSH allotments (determined under section
1923(f)(4) of the Act), in general, States' FFY 2003 DSH allotments
were lower than their FFY 2002 allotments. The exception to this were
the FFY 2003 DSH allotments for the Low-DSH States. Under the Low-DSH
State provision, the Low-DSH States' FFY 2003 allotments were
determined by increasing their actual FFY 2002 DSH allotments (not
their FFY 2002 allotments specified in the chart in section 1923(f)(2)
of the Act) by the CPI-U for the previous fiscal year. Therefore, Low-
DSH States' DSH
[[Page 50360]]
allotments increased (in general by the CPI-U) from FFY 2002 to FFY
2003.
E. DSH Allotments for FFY 2004
Section 1001(a) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L. 108-173, enacted on December
8, 2003) amended section 1923(f)(3) of the Act to provide for a
``Special, Temporary Increase In Allotments On A One-Time, Non-
Cumulative Basis.'' Under this provision, States' FFY 2004 DSH
allotments were determined by increasing their FFY 2003 allotments by
16 percent, and the fiscal year DSH allotment amounts so determined
were not subject to the 12 percent limit.
F. DSH Allotments for Non-Low DSH States for FFY 2005, and Fiscal Years
Thereafter
Under the methodology contained in section 1923(f)(3)(C) of the
Act, as amended by the MMA, the non-Low-DSH States' DSH allotments for
FFY 2005 and subsequent fiscal years continues at the same level as the
States' DSH allotments for FFY 2004 until a ``fiscal year specified''
occurs. The ``fiscal year specified'' is the first fiscal year for
which the Secretary estimates that a State's DSH allotment equals (or
no longer exceeds) the DSH allotment as would have been determined
under the statute in effect before the enactment of the MMA. We
determine whether the fiscal year specified has occurred under a
special parallel process. Specifically, under this process, a DSH
allotment is determined for FFYs after 2003 by increasing the State's
DSH allotment for the previous fiscal year by the CPI-U for the prior
fiscal year, subject to the 12 percent limit. The fiscal year specified
will be the fiscal year when the DSH allotment calculated under this
special parallel process finally equals or exceeds the FY 2004 DSH
allotment, as determined under the MMA provisions. Once the fiscal year
specified occurs for a State, that State's fiscal year DSH allotment
will be calculated by increasing the State's previous actual fiscal
year DSH allotment (which would be equal to the FY 2004 DSH allotment)
by the CPI-U, subject to the 12 percent limit. The following example
illustrates how the fiscal year DSH allotment would be calculated for
fiscal years after FFY 2004.
Example --A State's FFY 2003 DSH allotment is $100 million.
Under the MMA, the State's FFY 2004 DSH allotment would be $116
million ($100 million increased by 16 percent). The State's DSH
allotment for subsequent fiscal years would continue at $116 million
for fiscal years following FFY 2004 until the ``fiscal year
specified'' occurs. In a separate parallel process, we determine
whether the fiscal year specified has occurred by calculating the
State's DSH allotments in accordance with the statute in effect
before the enactment of the MMA. Under this special process, we
determine the State's DSH allotment each fiscal year by increasing
the State's DSH allotment for the previous fiscal year (as also
determined under the special parallel process) by the CPI-U for the
previous fiscal year, and subject to the 12 percent limit. Assume
for purposes of this example that, in accordance with this special
process, the State's FFY 2007 DSH allotment was determined to be
$115 million and the CPI-U for FFY 2007 was 2 percent. Therefore,
under the special parallel process, the State's FFY 2008 DSH
allotment would be $117.3 million (that is, $115 million increased
by the 2 percent CPI-U for FFY 2007). Since $117.3 is greater than
$116 million (the FFY 2004 DSH allotment calculated under the MMA),
we would determine that FFY 2008 is the ``fiscal year specified.''
We would then determine the State's FFY 2008 allotment as the FFY
2007 actual allotment ($116 million) increased by the CPI-U for FFY
2007 (2 percent). Therefore, the State's FFY 2008 DSH allotment
would be $118.32 million ($116 million increased by 2 percent); for
purposes of this example, the application of the 12 percent limit
has no effect. For FFY 2009 and thereafter, the State's DSH
allotment would be calculated by increasing the previous fiscal
year's DSH allotment by the CPI-U, subject to the 12 percent limit.
However, as amended by the MMA, section 1923(f)(5)(B) of the Act
contains new criteria for determining whether a State is a Low-DSH
State, beginning with FFY 2004. This provision is described in section
I.G below.
G. DSH Allotments For Low-DSH States for FFYs 2004, and Fiscal Years
Thereafter
The MMA amended section 1923(f)(5) of the Act regarding the
calculation of the fiscal year DSH allotments for ``Low-DSH'' States
for FFY 2004 and subsequent fiscal years. Specifically, under section
1923(f)(5)(B) of the Act, as amended by the MMA, a State is considered
a Low-DSH State for FFY 2004 if its total DSH payments under its State
plan for FFY 2000 (including Federal and State shares) as reported to
us as of August 31, 2003, are greater than 0 percent and less than 3
percent of the State's total FFY 2000 expenditures under its State plan
for medical assistance. For States that meet the new Low-DSH criteria,
their FFY 2004 DSH allotments are calculated by increasing their FFY
2003 DSH allotments by 16 percent. Therefore, for FFY 2004, Low-DSH
States' fiscal year DSH allotments are calculated in the same way as
the DSH allotments for regular States, which under the Act section
1923(f)(3) get the special temporary increase for FFY 2004.
Furthermore, for States meeting the new MMA Low-DSH definition, the
DSH allotments for FFYs 2005 through 2008 will continue to be
determined by increasing the previous fiscal year's DSH allotment by 16
percent. The Low-DSH States' DSH allotments for FFYs 2004 through 2008
are not subject to the 12 percent limit. The Low-DSH States' DSH
allotments for FFYs 2009 and subsequent fiscal years are calculated by
increasing those States' DSH allotments for the prior fiscal year by
the CPI-U for that prior fiscal year. For FFYs 2009 and thereafter, the
DSH allotments so determined would be subject to the 12 percent limit.
H. IMD DSH Limits for FFYs 1998 and Thereafter
Section 4721(b) of the BBA added section 1923(h) to the Act which
provides that Federal financial participation (FFP) is not available
for DSH payments to IMDs and other mental health facilities that are in
excess of State-specific aggregate limits.
In implementing the IMD DSH limit under the BBA in the October 8,
1998 Federal Register notice as codified in section 1923(h)(1) of the
Act, we indicated that the aggregate limit of IMD and other mental
health facilities to be the lesser of a State's FFY 1995 total
computable (State and Federal share) IMD and other mental health
facility DSH expenditures applicable to the State's FFY 1995 DSH
allotment (as reported on the Form CMS-64 as of January 1, 1997), or
the amount equal to the product of the State's current year total
computable DSH allotment and the applicable percentage.
Each State's IMD limit on DSH payments to IMDs and other mental
health facilities is calculated by first determining the State's total
computable DSH expenditures attributable to the FFY 1995 DSH allotment
for mental health facilities and inpatient hospitals. This was based on
the total computable DSH expenditures reported by the State on the Form
CMS-64 as mental health DSH and inpatient hospital as of January 1,
1997.
Once we determine the total computable amount of DSH expenditures
applicable to the FFY 1995 DSH allotment, we then calculate an
``applicable percentage.'' The applicable percentage for FFY 1998
through FFY 2000 (1995 IMD DSH percentage) is calculated by dividing
the total computable amount of IMD and mental health DSH expenditures
applicable to the State's FFY 1995 DSH allotment by the total
computable amount of all DSH
[[Page 50361]]
expenditures (mental health facility plus inpatient hospital)
applicable to the FFY 1995 DSH allotment. For FFY 2001 and thereafter,
the applicable percentage is defined as the lesser of the applicable
percentage as calculated above (for FFYs 1998 through 2001) or 50
percent for FFY 2001; 40 percent for FFY 2002; and 33 percent for each
subsequent FFY.
The applicable percentage is then applied to each State's total
computable FFY DSH allotment for the current FFY. The State's total
computable FFY DSH allotment is calculated by dividing the State's
Federal share DSH allotment for the FFY by the State's Federal medical
assistance percentage (FMAP) for that FFY.
In the final step of the calculation, the State's total computable
IMD DSH limit for the FFY is set at the lesser of the product of a
State's current fiscal year total computable DSH allotment and the
applicable percentage for that fiscal year, or the State's FFY 1995
total computable IMD and other mental health facility DSH expenditures
applicable to the State's FFY 1995 DSH allotment as reported on the
Form CMS-64.
The MMA legislation did not amend the Medicaid statute with respect
to the calculation of the IMD DSH limit.
I. DSH Allotments and IMD DSH Limits Published in the Federal Register
on March 26, 2004
On March 26, 2004, we published in the Federal Register (69 FR
15850) the final Federal share DSH allotments for FFYs 2001 and 2002,
and the preliminary Federal share DSH allotments for FFY 2003 (as
determined under the Medicaid statute in effect before the enactment of
the MMA). The March 26, 2004 notice also announced the preliminary FFY
2004 Federal share DSH allotments (as determined under the MMA
provisions).
The March 26, 2004 Federal Register notice also announced the final
FFYs 2000, 2001, and 2002, and the preliminary FFYs 2003 and 2004,
limitations on aggregate DSH payments that States may make to IMDs and
other mental health facilities.
The March 26, 2004 Federal Register notice also described the
methodologies for determining the amounts of States' FFY DSH allotments
for FFY 2001 and thereafter, and it republished the Federal share DSH
allotments for FFYs 1998 through 2000, and the final FFYs 1998 and 1999
limitations on aggregate DSH payments that States may make to IMDs and
other mental health facilities.
J. Publication in the Federal Register of Preliminary and Final Notice
for DSH Allotments and IMD DSH Limits
In general, we initially determine States' DSH allotments and IMD
DSH limits for a fiscal year using estimates of medical assistance
expenditures, including DSH expenditures in their Medicaid programs.
These estimates are provided by States each year on the August
quarterly Medicaid budget reports (Form CMS-37) before the Federal
fiscal year for which the DSH allotments and IMD DSH limits are being
determined. The DSH allotments and IMD DSH limits determined using
these estimates are referred to as ``preliminary.'' Only after we
receive States' reports of the actual related medical assistance
expenditures through the quarterly expenditure report (Form CMS-64),
are the ``final'' DSH Allotments and IMD DSH limits determined. In this
regard, the DSH allotments for FFY 1998 through FFY 2000, as published
in the October 8, 1998 Federal Register notice were considered as final
since these allotments were prescribed in the chart in section
1923(f)(2) of the Act. Similarly, the FFY 1998 and FFY 1999 IMD DSH
limits published in the October 8, 1998 Federal Register were also
considered as final, since these limits were based on the actual
expenditures from FFY 1995 and the final FFY 1998 and FFY 1999 DSH
allotments.
As indicated in the previous paragraph I, the notice published in
the Federal Register on March 26, 2004 announced the final FFY 2001 and
2002 DSH allotments (since they were based on the actual related
expenditures), the preliminary FFY 2003 and 2004 DSH allotments (since
they were based on estimated expenditures), the final FFY 2000 through
2002 IMD DSH limits (based on the final DSH allotments for those fiscal
years), and the preliminary FFY 2003 and 2004 IMD DSH limits (since
they were based on the preliminary DSH allotments for those years).
This notice announces the final FFYs 2003 and 2004 DSH allotments
and the final FFYs 2003 and 2004 IMD DSH limits (since they are based
on the actual related expenditures), the preliminary FFY 2005 DSH
allotments (based on estimates), and the preliminary IMD DSH limits
(since they are based on the preliminary DSH allotments for FFY 2005).
II. Calculation of the Final FFY 2003 Federal Share State DSH
Allotments, the Final FFY 2004 Federal Share State DSH Allotments, and
the Preliminary FFY 2005 Federal Share State DSH Allotments
Charts 1 and 2 of the Addendum to this notice provide the States'
``final'' FFY 2003 and FFY 2004 DSH allotments. The final FFY 2003 DSH
allotments for each State were computed using the States' expenditure
reports (Form CMS-64) for FFY 2003. As required by the provisions of
the MMA, the final FFY 2004 DSH allotments for the ``Low-DSH'' States
and all the other States were calculated by increasing the FFY 2003 DSH
allotments by 16 percent. The definition and determination of the
``Low-DSH'' States under the MMA provisions were explained and
published in the March 26, 2004 Federal Register notice.
Chart 3 of the Addendum to this notice provides the States'
``preliminary'' FFY 2005 DSH allotments. These preliminary allotments
were determined using the States' August 2004 expenditure estimates
submitted by the States on the Form CMS-37. We will publish the final
FFY 2005 DSH allotments for each State following receipt of the States'
four quarterly Medicaid expenditure reports (Form CMS-64) for FFY 2005.
As discussed earlier in this notice, the criteria and determination of
the ``Low-DSH'' States were also explained and published in the March
26, 2004 Federal Register notice.
III. Calculation of the FFYs 2000 Through 2005 IMD DSH Limits
Section 1923(h) of the Act specifies the methodology to be used to
establish the limits on the amount of DSH payments that a State can
make to IMDs and other mental health facilities. FFP is not available
for IMD/DSH payments that exceed the lesser of the State's FFY 1995
total computable mental health DSH expenditures applicable to the
State's FFY 1995 DSH allotment as reported to us on the Form CMS-64 as
of January 1, 1997; or the amount equal to the product of the State's
current FFY total computable DSH allotment and the applicable
percentage. The amounts of the limits on IMD DSH expenditures were made
available to the States as part of their CMS-64 report. We are
publishing the final FFY 2003 and FFY 2004 IMD DSH limit limits, and
the preliminary FFY 2005 IMD DSH limit along with an explanation of the
calculation of these limits.
[[Page 50362]]
For FFY 2000, the applicable percentage was computed as the ratio
of--
(1) The State's FFY 1995 total computable (Federal and State share)
mental health DSH payments applicable to the State's FFY 1995 DSH
allotment and as reported on the Form CMS-64 as of January 1, 1997;
compared to
(2) The State's FFY 1995 total computable amount of all DSH
expenditures (mental health facility and inpatient hospital) applicable
to the State's FFY 1995 DSH allotment as reported on the Form CMS-64 as
of January 1, 1997.
For FFY 2000, the applicable percentage was calculated and applied
to the State's FFY 2000 total computable DSH allotment. States' total
computable FFY 2000 DSH allotment was calculated by dividing each
State's Federal share DSH allotment for FFY 2000 by the State's Federal
medical assistance percentage (FMAP) for FFY 2000. This result was then
compared to the State's FFY 1995 total computable mental health DSH
expenditures applicable to the State's FFY 1995 DSH allotment as
reported on the Form CMS-64 as of January 1, 1997. The lesser of these
two amounts was the State's limitation on total computable IMD/DSH
expenditures for FFY 2000.
For FFY 2001, the applicable percentage was the lesser of 50
percent or the 1995 DSH IMD percentage of the amount computed for FFY
2000.
This percentage was applied to the State's FFY 2001 total
computable DSH allotment. This result was then compared to the State's
FFY 1995 total computable mental health DSH expenditures applicable to
the State's FFY 1995 DSH allotment as reported on the Form CMS-64 as of
January 1, 1997. The lesser of these two amounts was the State's
limitation on total computable IMD/DSH expenditures for FFY 2001.
For FFY 2002, the applicable percentage was the lesser of 40
percent or the 1995 DSH IMD percentage of the amount computed for FFY
2000. This percentage was applied to the State's FFY 2002 total
computable DSH allotment. This result was then compared to the State's
FFY 1995 total computable mental health DSH expenditures applicable to
the State's FFY 1995 DSH allotment as reported on the Form CMS-64 as of
January 1, 1997. The lesser of these two amounts was the State's
limitation on total computable IMD/DSH expenditures for FFY 2002.
For FFY 2003 and following fiscal years, the applicable percentage
was the lesser of 33 percent or the 1995 DSH IMD percentage of the
amount computed for FFY 2000. This percentage was applied to the
State's fiscal year total computable DSH allotment. This result was
then compared to the State's FFY 1995 total computable mental health
DSH expenditures applicable to the State's FFY 1995 DSH allotment as
reported on the Form CMS-64 as of January 1, 1997. The lesser of these
two amounts was the State's limitation on total computable IMD/DSH
expenditures for FFY 2003 and following fiscal years.
Charts 4 through 6 of the Addendum to this notice detail each
State's final IMD/DSH limitation for FFYs 2003 and 2004, and the
preliminary IMD/DSH limitation for FFY 2005, respectively, in
accordance with section 1923(h) of the Act.
IV. Collection of Information Requirements
This document does not impose 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. 3501).
V. Regulatory Impact Statement
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 through 612,
requires a regulatory flexibility analysis for every rule subject to
proposed rulemaking procedures under the Administrative Procedure Act,
5 U.S.C. 553, unless we certify that the rule will not have a
significant economic impact on a substantial number of small entities.
For purposes of the RFA, States and individuals are not considered
small entities. However, providers with receipts ranging from less than
$6 million to less than $29 million depending on their provider type
are considered small entities (65 FR 69432, November 17, 2000). Due to
the various controlling statutes, the effects on providers are not a
result of any independent regulatory impact and not this notice. The
purpose of the notice is to simply announce the latest distributions as
required by the statute.
Additionally, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a notice may have a significant impact on
the operations of a substantial number of small rural hospitals. Such
an analysis must conform to the provisions of section 604 of the RFA.
For purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds.
The BBA and the BBRA set statutorily defined limits on the amount
of Federal share DSH expenditures available for FFYs 1998 through 2002.
The BIPA amended sections of the Act that set forth these
statutorily defined Federal DSH allotments.
Based on these amendments to the DSH allotment provisions of the
Medicaid statute, the limits initially imposed by the BBA and the BBRA
had a negative impact on the availability of FFP to States by reducing
the DSH allotments available to States, thus potentially negatively
impacting the availability of Medicaid expenditures to hospitals,
especially IMDs. However, the BIPA reduced the Federal savings, thus
increasing the amount of Federal funding available to States under the
DSH program. Finally, section 1001 of the MMA increased the DSH
allotment for States beginning with fiscal year 2004. While overall the
statute mandated some reduction in DSH payments, we do not believe that
this notice will have a significant economic impact on a substantial
number of small entities because it reflects no new policies or
procedures.
In section 202, the Unfunded Mandates Reform Act requires that
agencies prepare an assessment of anticipated costs and benefits for
any rule that may result in an annual expenditure by State, local, or
tribal governments, in the aggregate, or by the private sector, of $110
million or more. This notice has no consequential effect on State,
local, or tribal governments, or the private sector, and will not
create an unfunded mandate.
We have reviewed this notice under the threshold criteria of
Executive Order 13132, Federalism. We have determined that it does not
significantly affect the rights, roles, and responsibilities of States.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
Addendum
This addendum contains the charts 1 through 6 (including associated
keys) that are referred to in the preamble of this notice.
[[Page 50363]]
Chart 1.--Final 2003 DSH Allotments
[Key to the chart of the final FFY 2003 DSH Allotments]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A.......................... State
Column B.......................... FY 2003 FMAPS--FFY 2003 Federal
Medical Assistance Percentage
(FMAP).
Column C.......................... FY 2002 Federal Share DSH Allotment--
This column contains the final FFY
2002 DSH allotments from section
1923(f)(2) of the Act.
Column D.......................... FY 2002 DSH Allotment INCR. By CPIU.
This column contains the FFY 2002
DSH allotments in Column C
increased by the CPIU for that
fiscal year.
Column E.......................... FY 2003 TC MAP EXP including DSH.
This column contains the total
computable medical assistance
expenditures including DSH for FFY
2003.
Column F.......................... FY 2003 TC DSH Expenditures. This
column contains the actual total
computable DSH expenditures for FFY
2003.
Column G.......................... FY 2003 TC MAP EXP. Net of DSH. This
column contains the total
computable medical assistance
expenditures, net of DSH
expenditures, for FFY 2003.
Column H.......................... 12 Percent Limit (IN FS). This
column contains the 12 Percent
Limit; this is a Federal share
amount.
Column I.......................... Greater of COL H OR COL C. This
column contains an amount which is
the greater of Column H (the 12
percent limit) or Column C (the
Federal share FFY 2002 DSH
allotment).
Column J.......................... FY 2003 DSH Allotments Federal
Share. This column contains the
lesser of Column I or Column D This
is the final Federal share DSH
Allotment for FY 2003.
------------------------------------------------------------------------
Chart 2.--Final DSH Allotments for Fiscal Year 2004
[Key to the chart of the final FFY 2004 DSH Allotments. The final FFY
2004 DSH allotments for the regular States are presented in the top
section of this chart and the final FFY 2004 DSH allotments for the Low-
DSH States are presented in the bottom section of the chart.]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A.......................... State.
Column B.......................... FY 2003 Final Federal Share DSH
Allotment. This column contains the
final FFY 2003 DSH allotments.
Column C.......................... FY 2004 FS DSH Allotment = COL B x
116. This column contains the FFY
2003 DSH allotments in Column C
increased by 16 percent.
Column D.......................... MMA Low DSH Status. This column
indicates the LOW DSH Status of
each State.
------------------------------------------------------------------------
Chart 3.--Preliminary DSH Allotments for FY 2005
[Key to the Chart of the Preliminary FFY 2005 DSH Allotments. The
preliminary FFY 2005 DSH Allotments for the regular States are presented
in the top section of this chart and the preliminary FFY 2005 DSH
Allotments for the Low-DSH States are presented in the bottom section of
the chart.]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
For Non-Low-DSH States:
Column A...................... State.
Column B...................... Final FY 2004 DSH Allotment Federal
Share--This column contains the
final FFY 2004 DSH Allotments.
Column C...................... FY 2005 DSH Allotment Federal Share--
This column contains the
preliminary FFY 2005 DSH
Allotments.
Column D...................... MMA Low-DSH Status--This column
indicates the MMA Low-DSH Status of
each State.
For Low-DSH States:
Column A...................... State.
Column B...................... Prior FY DSH Allotment--This column
contains the final FFY 2004 DSH
Allotments.
Column C...................... FY 2005 DSH Allotments Federal
Share--This column contains the
preliminary FFY 2005 DSH Allotments
= Column B multiplied by 1.16.
Column D...................... MMA Low-DSH Status--This column
indicates the MMA Low-DSH Status of
each State.
------------------------------------------------------------------------
Chart 4.--Final FFY 2003 IMD DSH Limits
[Key to the Chart of the FFY 2003 IMD Limitations]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A.......................... State.
Column B.......................... Inpatient Hospital Services FY 95
DSH Total Computable. This column
contains the States' total
computable FFY 1995 inpatient
hospital DSH expenditures as
reported on the Form CMS-64.
Column C.......................... IMD and Mental Health Services FY 95
DSH Total Computable. This column
contains the total computable FFY
1995 mental health facility DSH
expenditures as reported on the
Form CMS-64 as of January 1, 1997.
Column D.......................... Total Inpatient & IMD & Mental
Health FY 95 DSH Total Computable,
Col. B + C. This column contains
the total computation of all
inpatient hospital DSH expenditures
and mental health facility DSH
expenditures for FFY 1995 as
reported on the Form CMS-64 as of
January 1, 1997 (representing the
sum of Column B and Column C).
[[Page 50364]]
Column E.......................... Applicable Percentage Col. C/D. This
column contains the ``applicable
percentage'' representing the total
computable FFY 1995 mental health
facility DSH expenditures divided
by total computable all inpatient
hospital and mental health facility
DSH expenditures for FFY 1995 (the
amount in Column C divided by the
amount in Column D). Per section
1923(h)(2)(A)(ii)(II) of the Act,
for FFYs after FY 2002, the
applicable percentage can be no
greater than 33 percent.
Column F.......................... FY 2003 Federal Share DSH Allotment.
This column contains the States'
final FFY 2003 DSH Allotments.
Column G.......................... FFY 2003 FMAP.
Column H.......................... FY 2003 DSH Allotment Total
Computable Col. F/G. This column
contains FFY 2003 total computable
DSH Allotment (determined as Column
F/Column G).
Column I.......................... Applicable Percent of FY 2003 DSH
Allotment. Col. E x H. This column
contains the applicable percent of
FFY 2003 total computable DSH
Allotment (calculated as Column E x
Column H).
Column J.......................... FY 2003 IMD DSH Limit Total
Computable Lesser of Col. C or I.
The column contains the lesser of
the lesser of Column I or C.
Column K.......................... FY 2003 IMD DSH Limit Federal Share,
Col. G x J. This column contains
the total computable IMD DSH Limit
from Col. J and converts that
amount into a Federal share
(calculated as Col. G x Col. J).
------------------------------------------------------------------------
Chart 5.--Final FFY 2004 IMD DSH Limits
[Key to the Chart of the FFY 2004 IMD Limitations.--The final FFY 2004
IMD DSH Limits for the regular States are presented in the top section
of this chart and the final FFY IMD DSH Limits for the Low-DSH States
are presented in the bottom section of the chart.]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A.......................... State.
Column B.......................... Inpatient Hospital Services FY 95
DSH Total Computable. This column
contains the States' total
computable FFY 1995 inpatient
hospital DSH expenditures as
reported on the Form CMS-64.
Column C.......................... IMD and Mental Health Services FY 95
DSH Total Computable. This column
contains the total computable FFY
1995 mental health facility DSH
expenditures as reported on the
Form CMS-64 as of January 1, 1997.
Column D.......................... Total Inpatient & IMD & Mental
Health FY 95 DSH Total Computable,
Col B + C. This column contains the
total computation of all inpatient
hospital DSH expenditures and
mental health facility DSH
expenditures for FFY 1995 as
reported on the Form CMS-64 as of
January 1, 1997 (representing the
sum of Column B and Column C).
Column E.......................... Applicable Percentage Col C/D. This
column contains the ``applicable
percentage'' representing the total
computable FFY 1995 mental health
facility DSH expenditures divided
by total computable all inpatient
hospital and mental health facility
DSH expenditures for FFY 1995 (the
amount in Column C divided by the
amount in Column D) Per section
1923(h)(2)(A)(ii)(II) of the Act,
for FFYs after FY 2002, the
applicable percentage can be no
greater than 33 percent.
Column F.......................... FY 2004 Federal Share DSH Allotment.
This column contains the States'
final FFY 2004 DSH allotments.
Column G.......................... FFY 2004 FMAP.
Column H.......................... FY 2004 DSH Allotment Total
Computable. Col. F/G. This column
contains FFY 2004 total computable
DSH allotment (determined as Column
F/Column G).
Column I.......................... Applicable Percent of FY 2004 DSH
Allotment. Col. E x H. This column
contains the applicable percent of
FFY 2004 total computable DSH
allotment (calculated as Column E x
Column H).
Column J.......................... FY 2004 IMD DSH Limit Total
Computable. Lesser of Col. C or I.
The column contains the lesser of
the lesser of Column I or C.
Column K.......................... FY 2004 IMD DSH Limit Federal Share,
Col. G x J. This column contains
the total computable IMD DSH Limit
from Col. J and converts that
amount into a Federal share
(calculated as Col. G xCol. J).
Column L.......................... LOW DSH Status. This column contains
Low DSH status for each State.
------------------------------------------------------------------------
Chart 6.--Preliminary FFY 2005 IMD DSH Limits
[Key to the Chart of the FFY 2005 IMD Limitations.--The preliminary FFY
2005 IMD DSH Limits for the regular States are presented in the top
section of this chart and the preliminary FFY 2005 IMD DSH Limits for
the Low-DSH States are presented in the bottom section of the chart.]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A.......................... State.
Column B.......................... Inpatient Hospital Services FY 95
DSH Total Computable. This column
contains the States' total
computable FFY 1995 inpatient
hospital DSH expenditures as
reported on the Form CMS-64.
Column C.......................... IMD and Mental Health Services FY 95
DSH Total Computable. This column
contains the total computable FFY
1995 mental health facility DSH
expenditures as reported on the
Form CMS-64 as of January 1, 1997.
Column D.......................... Total Inpatient & IMD & Mental
Health FY 95 DSH Total Computable,
Col. B + C. This column contains
the total computation of all
inpatient hospital DSH expenditures
and mental health facility DSH
expenditures for FFY 1995 as
reported on the Form CMS-64 as of
January 1, 1997 (representing the
sum of Column B and Column C).
[[Page 50365]]
Column E.......................... Applicable Percentage Col. C/D. This
column contains the ``applicable
percentage'' representing the total
computable FFY 1995 mental health
facility DSH expenditures divided
by total computable all inpatient
hospital and mental health facility
DSH expenditures for FFY 1995 (the
amount in Column C divided by the
amount in Column D) Per section
1923(h)(2)(A)(ii)(II) of the Act,
for FFYs after FY 2002, the
applicable percentage can be no
greater than 33 percent.
Column F.......................... FY 2005 Federal Share DSH Allotment.
This column contains the States'
final FFY 2005 DSH allotments.
Column G.......................... FFY 2005 FMAP.
Column H.......................... FY 2005 DSH Allotment Total
Computable Col. F/G. This column
contains FFY 2005 total computable
DSH allotment (determined as Column
F/Column G).
Column I.......................... Applicable Percent of FY 2005 DSH
Allotment Col. E x H. This column
contains the applicable percent of
FFY 2004 total computable DSH
allotment (calculated as Column E x
Column H)
Column J.......................... FY 2005 IMD DSH Limit Total
Computable. Lesser of Col. C or I.
The column contains the lesser of
the lesser of Column I or C.
Column K.......................... FY 2005 IMD DSH Limit Federal Share,
Col. G x J. This column contains
the total computable IMD DSH Limit
from Col. J and converts that
amount into a Federal share
(calculated as Col. G x Col. J).
Column L.......................... Low DSH Status. This column contains
Low DSH status for each State.
------------------------------------------------------------------------
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BILLING CODE 4120-01-C
[[Page 50372]]
Authority: Section 1923(a)(2), (f), and (h) of the Social
Security Act (42 U.S.C. 1396r-4(a)(2), (f), and (h), and Pub. L.
105-33).
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
Dated: May 6, 2005.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
Approved: May 20, 2005.
Michael O. Leavitt,
Secretary.
[FR Doc. 05-16997 Filed 8-25-05; 8:45 am]
BILLING CODE 4120-01-P