[Code of Federal Regulations]
[Title 12, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR433.10]

[Page 67]
 
                         TITLE 42--PUBLIC HEALTH
 
  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 
                 HEALTH AND HUMAN SERVICES--(Continued)
 
PART 433--STATE FISCAL ADMINISTRATION--Table of Contents
 
    Subpart A--Federal Matching and General Administration Provisions
 
Sec. 433.10  Rates of FFP for program services.

    (a) Basis. Sections 1903(a)(1), 1903(g), and 1905(b) provide for 
payments to States, on the basis of a Federal medical assistance 
percentage, for part of their expenditures for services under an 
approved State plan.
    (b) Federal medical assistance percentage (FMAP)--Computations. The 
FMAP is determined by the formula described in section 1905(b) of the 
Act. Under the formula, if a State's per capita income is equal to the 
national average per capita income, the Federal share is 55 percent. If 
a State's per capita income exceeds the national average, the Federal 
share is lower, with a statutory minimum of 50 percent. If a State's per 
capita income is lower than the national average, the Federal share is 
increased, with a statutory maximum of 83 percent. The formula used in 
determining the State and Federal share is as follows:

State Share = [(State per capita income) \2\/(National per capita 
    income) \2\] x 45 percent
Federal share=100 percent minus the State share (with a minimum of 50 
    percent and a maximum of 83 percent)


The formula provides for squaring both the State and national average 
per capita incomes; this procedure magnifies any difference between the 
State's income and the national average. Consequently, Federal matching 
to lower income States is increased, and Federal matching to higher 
income States is decreased, within the statutory 50-83 percent limits. 
The FMAP for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana 
Islands, and American Samoa is set by statute at 50 percent and is 
subject to dollar limitations specified in section 1108 of the Act.
    (c) Special provisions. (1) Under section 1903(a)(5) of the Act, the 
Federal share of State expenditures for family planning services is 90 
percent.
    (2) Under section 1905(b), the Federal share of State expenditures 
for services provided through Indian Health Service facilities is 100 
percent.
    (3) Under section 1903(g), the FMAP is reduced if the State does not 
have an effective program to control use of institutional services.
    (4) Under section 1905(b) of the Social Security Act, the Federal 
share of State expenditures described in Sec. 433.11(a) for services 
provided to children, is the enhanced FMAP rate determined in accordance 
with Sec. 457.622(b) of this chapter, subject to the conditions 
explained in Sec. 433.11(b).

[43 FR 45201, Sept. 29, 1978, as amended at 46 FR 48559, Oct. 1, 1981; 
51 FR 41350, Nov. 14, 1986; 54 FR 21066, May 16, 1989; 66 FR 2666, Jan. 
11, 2001]

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