[Federal Register Volume 59, Number 83 (Monday, May 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10417]
[[Page Unknown]]
[Federal Register: May 2, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[MB-088-N]
RIN: 0938-AG
Medicaid Program; Limitations on Aggregate Payments to
Disproportionate Share Hospitals: Federal Fiscal Year 1994
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the final Federal fiscal year (FFY) 1994
national target and individual State allotments for Medicaid payment
adjustments made to hospitals that serve a disproportionate number of
Medicaid recipients and low-income patients with special needs. We are
publishing this notice in accordance with the provisions of section
1923(f)(1)(C) of the Social Security Act (the Act) and implementing
regulations at 42 CFR 447.297 through 447.299.
EFFECTIVE DATE: The final DSH payment adjustment expenditure limits
included in this notice apply to Medicaid DSH payment adjustments that
are applicable to FFY 1994.
FOR FURTHER INFORMATION CONTACT: Richard Strauss, (410) 966-2019
SUPPLEMENTARY INFORMATION:
I. Background
Section 1923(f) of the Social Security Act and implementing
Medicaid regulations at 42 CFR 447.297 through 447.299 require us to
estimate and publish in the Federal Register the national target and
each State's allotment for disproportionate hospital share (DSH)
payments for each Federal fiscal year (FFY). DSH payments are payment
adjustments made to Medicaid-participating hospitals that serve a large
number of Medicaid recipients and other low-income individuals with
special needs. Our regulations provide for publication of preliminary
amounts by October l of each FFY and final amounts by April l of each
FFY.
The implementing regulations provide that the national aggregate
DSH limit for a FFY specified in the Act is a target rather than an
absolute cap when determining the amount that can be allocated for DSH
payments. The national DSH target is 12 percent of the total amount of
medical assistance expenditures (excluding total administrative costs)
that are projected to be made under approved Medicaid State plans
during the FFY.
(Note: Whenever the phrases ``total medical assistance
expenditures'' or ``total administrative costs'' are used in this
notice, they mean both the State and Federal share of expenditures
or costs.)
In addition to the national DSH target, there is a specific State
DSH limit for each State for each FFY. The State DSH limit is a
specified amount of DSH payment adjustments applicable to a FFY above
which Federal financial participation will not be available. This is
called the ``State DSH allotment''.
Each State's DSH allotment for FFY 1994 is calculated by first
determining whether the State is a ``high-DSH State,'' or a ``low-DSH
State.'' This is determined by using the State's ``base allotment.'' A
State's base allotment is the greater of: (1) the total amount of the
State's actual and projected DSH payment adjustments made under the
State's approved State plan applicable to FFY 1992, as adjusted by
HCFA; or (2) $1,000,000.
A State whose base allotment exceeds 12 percent of the State's
total medical assistance expenditures (excluding administrative costs)
projected to be made in FFY 1994 is referred to as a ``high-DSH
State.'' The FFY 1994 State DSH allotment for a high-DSH State is
limited to the State's base allotment.
A State whose base allotment is equal to or less than 12 percent of
the State's total medical assistance expenditures (excluding
administrative costs) projected to be made in FFY 1994 is referred to
as a ``low-DSH State.'' The FFY 1994 State DSH allotment for a low-DSH
State is equal to the State's DSH allotment for FFY 1993 increased by
growth amounts and supplemental amounts, if any. However, the FFY 1994
DSH allotment for a low-DSH State cannot exceed 12 percent of the
State's total medical assistance expenditures for FFY 1994 (excluding
administrative costs).
The growth amount for FFY 1994 is equal to the projected percentage
increase (the growth factor) in a low-DSH State's total Medicaid
program expenditures between FFY 1993 and FFY 1994 multiplied by the
State's final DSH allotment for 1993. Because the national DSH limit is
considered a target, low-DSH States whose programs grow from one year
to the next can receive growth that would not be permitted if the
national limit was viewed as an absolute cap.
There is no growth factor and no growth amount for any low-DSH
State whose Medicaid program does not grow (that is, stayed the same or
declined) between fiscal years FFY 1993 and FFY 1994. This is the case
for Oklahoma, Rhode Island, and West Virginia. Furthermore, because a
low-DSH State's FFY 1994 DSH allotment cannot exceed 12 percent of the
State's total medical assistance expenditures, it is possible for its
FFY 1994 DSH allotment to be lower than its FFY 1993 DSH allotment.
This situation occurs when the State experiences a decrease in its
program expenditures between years and its prior FFY DSH allotment is
greater than 12 percent of the total projected medical assistance
expenditures for the current FFY. This is the case for Rhode Island.
The DSH allotments for Oklahoma and West Virginia remained unchanged
from FFY 1993 since each State's prior year DSH allotment is less than
12 percent of its projected FFY 1994 medical assistance expenditures.
There is no supplemental amount available for redistribution for
FFY 1994. The supplemental amount, if any, is equal to a low-DSH
State's proportional share of a pool of funds (the redistribution
pool). The redistribution pool is equal to the national 12-percent DSH
target reduced by the total of the base allotments for high-DSH States,
the total of the State DSH allotments for the previous FFY for low-DSH
States, and the total of the low-DSH State growth amounts. Since the
sum of these amounts is above the projected FFY 1994 national 12
percent DSH target, there is no redistribution pool and, therefore, no
supplemental amounts for FFY 1994.
As prescribed in the law and regulations, no State's DSH allotment
will be below a minimum of $1 million. As an exception to the above
requirements, section 1923(f)(1)(A)(i)(II) of the Act and regulations
at 42 CFR 447.296(b)(5), allow a State to increase its aggregate DSH
payments for a FFY to meet the minimum payment adjustments required by
Medicare methodology described in section 1923(c)(1) of the Act.
Nebraska meets this exception criteria. We are, therefore, revising
Nebraska's final FFY 1993 and 1994 State DSH allotments.
We are publishing in this notice the final FFY 1994 national DSH
target and State DSH allotments based on the best available data we
have received, as of March 18, 1994, from the States as adjusted by
HCFA. These data are taken from each State's actual Medicaid
expenditures reported on the quarterly Form HCFA-64 submissions for FFY
1993 and the projected Medicaid expenditures reported on the February
1994 Form HCFA-37 for FFY 1994 and are adjusted as necessary. The final
FFY 1994 State DSH allotments published in this notice supersede the
preliminary FFY 1994 DSH allotments that were published in the Federal
Register on February 1, 1994 (59 FR 4717).
II. Calculations of the Final FFY 1994 DSH Limits
The total of the final State DSH allotments for FFY 1994 is equal
to the sum of the base allotments for all high-DSH States, the FFY 1993
State DSH allotments for all low-DSH States, and the growth amounts for
all low-DSH States. A State-by-State breakdown is presented in section
III of this notice.
There are 34 low-DSH States and 16 high-DSH States for FFY 1994.
This change from the preliminary notice which listed 35 low-DSH States
and 15 high-DSH States for FFY 1994 is due to the reclassification of
Tennessee as a high-DSH State.
Using the most recent data from the February 1994 budget
projections (Form HCFA-37), we estimate the FFY 1994 national total
medical assistance expenditures for the States to be $144,326,703,000.
Thus, the overall final national FFY 1994 DSH expenditure target is
approximately $17.3 billion (12 percent of $144.3 billion). This is a
decrease of approximately $0.2 billion from the $17.5 billion
preliminary target (12 percent of $145.8 billion) in the preliminary
notice.
The high-DSH States' base allotments and the final low-DSH States'
DSH allotments for 1993 total approximately $18.0 billion. This amount,
which does not include growth or any State supplemental amounts for FFY
1994, is approximately $0.7 billion over the final FFY 1994 national
DSH target amount.
In addition, in the final FFY 1994 State DSH allotments we provide
a total of $511,372,000 ($287,455,000 Federal share) in growth amounts
for the 34 low-DSH States. To compute the growth factor percentage, we
first ascertained each low-DSH State's total FFY 1993 medical
assistance and administrative expenditures as reported on the State's
quarterly expenditure reports (Form HCFA-64) for FFY 1993. Next, we
compared the FFY 1993 reported expenditures to each low-DSH State's
total estimated unadjusted FFY 1994 medical assistance and
administrative expenditures as reported to HCFA on the State's February
1994 Form HCFA-37 submission.
The growth factor percentage was multiplied by the low-DSH State's
final FFY 1993 DSH allotment amount to establish the State's final
growth amount for FFY 1994.
Since the sum of the total of the base allotments for high-DSH
States and the total of the State DSH allotments for FFY 1993 for low-
DSH States ($17,981,455,000) is greater than the final FFY 1994
national target ($17,319,204,000), there is no final FFY 1994
redistribution pool.
The low-DSH State's growth amount was then added to the low-DSH
State's final FFY 1993 DSH allotment amount to establish the final
total low-DSH State DSH allotment for FFY 1994. Six States received
partial growth amounts because each State's growth amount, when added
to its final FFY 1993 DSH allotment amount, exceeded 12 percent of its
FFY 1994 estimated medical assistance expenditures.
As explained above, Rhode Island's final 1994 DSH allotment is
lower than its final FFY 1993 DSH allotment.
As explained above, we revised Nebraska's final FFY 1993 State DSH
allotment to $8,000,000 and its final FFY 1994 State DSH allotment to
$11,000,000.
In summary, the total of all final State DSH allotments for FFY
1994 is $18,490,099,000 ($10,614,651,000 Federal share). This total is
composed of the prior FFY's DSH allotments ($17,981,455,000) plus the
growth amounts for all low-DSH States ($511,372,000) minus the
reduction in Rhode Island's FFY 1993 DSH allotment ($2,728,000
decrease). The total of all final FFY 1994 State DSH allotments is
12.81 percent of the total medical assistance expenditures (excluding
administrative costs) projected to be made by these States in FFY 1994.
The $18,490,099,000 total of all final DSH allotments for FFY 1994 is
$1,170,895,000 over the FFY 1994 final national target amount of
$17,319,204,000.
Each State should monitor and make any necessary adjustments to its
DSH spending during FFY 1994 to ensure that its actual FFY 1994 DSH
payment adjustment expenditures do not exceed its final State DSH
allotment for FFY 1994 published in this notice. As the ongoing
reconciliation between actual FFY 1994 DSH payment adjustment
expenditures and the final FFY 1994 DSH allotments takes place, each
State should amend its plans as may be necessary to make any
adjustments to its FFY 1994 DSH payment adjustment expenditure patterns
so that the State will not exceed its final FFY 1994 DSH allotment.
The FFY 1994 reconciliation of DSH allotments to actual
expenditures will take place on an ongoing basis as States file
expenditure reports with HCFA for DSH payment adjustment expenditures
applicable to FFY 1994. Additional DSH payment adjustment expenditures
made in succeeding FFYs that are applicable to FFY 1994 will continue
to be reconciled back to each State's final FFY 1994 DSH allotment as
additional expenditure reports are submitted to ensure that the final
FFY 1994 DSH allotment is not exceeded. Any DSH payment adjustment
expenditures in excess of the final DSH allotment will be disallowed.
Any DSH expenditures that are disallowed will be subject to the
normal Medicaid disallowance procedures.
III. Final FFY 1994 DSH Allotments Under Public Law 102-234
Key to Chart:
Column Description
Column A..... = Name of State.
Column B..... = Final FFY 1993 DSH Allotments For All States. For a
high-DSH State, this is the State's base allotment
which is the greater of the State's FFY 1992
allowable DSH payment adjustment expenditures
applicable to FFY 1992, or $1,000,000. For a low-DSH
State, this is equal to the final DSH allotment for
FFY 1993 which was published in the Federal Register
on August 13, 1993.
Column C..... = Growth Amounts For Low-DSH States. This is an
increase in a low-DSH State's final FFY 1993 DSH
allotment to the extent that the State's Medicaid
program grew between FFY 1993 and FFY 1994.
Column D..... = Final FFY 1994 State DSH Allotments. For high DSH
States this is equal to the base allotment from
column B. For low-DSH States, this is equal to the
final State DSH allotments for FFY 1993 from column
B plus the growth amounts from column C and the
supplemental amounts, if any.
Column E..... = High or Low DSH State Designation. ``High'' indicates
the State is a high-DSH State and a ``Low''
indicates the State is a low-DSH State.
Final Federal Fiscal Year 1994 Disproportionate Share Hospital Allotments Under Public Law 102-234
[Amounts Are State and Federal Shares--Dollars Are in Thousands (000)]
----------------------------------------------------------------------------------------------------------------
Final FFY
93 DSH Growth amounts Final FFY High or low DSH
State allotments for low DSH 94 state state
for all states\1\ DSH designation
states allotments
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A B C D E
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AL................................................. $417,458 Not applicable $417,458 High
AK................................................. 17,830 $1,759 19,589 Low
AR................................................. 2,806 232 3,039 Low
CA................................................. 2,191,451 Not applicable 2,191,451 High
CO................................................. 302,014 Not applicable 302,014 High
CT................................................. 408,933 Not applicable 408,933 High
DE................................................. 5,194 730 5,924 Low
DC................................................. 38,000 3,039 41,039 Low
FL................................................. 239,693 46,785 286,478 Low
GA................................................. 343,078 39,266 382,344 Low
HI................................................. 45,844 18,233 64,078 Low
ID................................................. 1,659 327 1,985 Low
IL................................................. 381,534 13,459 394,993 Low
IN................................................. 320,475 16,324 336,799 Low
IA................................................. 5,027 470 5,497 Low
KS................................................. 188,935 Not applicable 188,935 High
KY................................................. 264,289 Not applicable 264,289 High
LA................................................. 1,217,636 Not applicable 1,217,636 High
ME................................................. 165,317 Not applicable 165,317 High
MD................................................. 119,381 10,162 129,543 Low
MA................................................. 489,547 77,580 567,128 Low
MI................................................. 559,732 57,968 817,700 Low
MN................................................. 48,579 6,815 55,394 Low
MS................................................. 152,342 6,122 158,464 Low
MO................................................. 731,894 Not applicable 731,894 High
MT................................................. 1,154 145 1,300 Low
NE\2\.............................................. 8,000 3,000 11,000 Low
NV................................................. 73,560 Not applicable 73,560 High
NH................................................. 392,006 Not applicable 392,006 High
NJ................................................. 1,094,113 Not applicable 1,094,113 High
NM................................................. 13,512 2,245 15,757 Low
NY................................................. 2,784,477 47,387 2,831,864 Low
NC................................................. 345,545 43,721 389,266 Low
ND................................................. 1,086 69 1,155 Low
OH................................................. 509,924 57,001 566,925 Low
OK................................................. 23,568 Not applicable 23,568 Low
OR................................................. 20,279 4,778 25,058 Low
PA................................................. 967,407 Not applicable 967,407 High
RI\3\.............................................. 97,160 Not applicable 94,432 Low
SC................................................. 439,759 Not applicable 439,759 High
SD................................................. 1,163 140 1,302 Low
TN................................................. 430,611 Not applicable 430,611 High
TX................................................. 1,513,029 Not applicable 1,513,029 High
UT................................................. 5,003 511 5,514 Low
VT................................................. 24,403 2,259 26,662 Low
VA................................................. 174,251 11,496 185,746 Low
WA................................................. 270,374 37,618 307,993 Low
WV................................................. 121,883 Not applicable 121,883 Low
WI................................................. 9,325 1,556 10,881 Low
WY................................................. 1,216 173 1,389 Low
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Total.......................................... 17,981,455 511,372 18,490,099 ................
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Notes:
\1\There were 3 low DSH states which had negative growth and 6 low DSH states which got partial growth up to 12%
of FFY 94 map.
\2\Allotment based upon minimum payment adjustment amount.
\3\Prior year's allotment exceeded 12 percent of FFY 94 map so allotment was reduced to 12 percent of FFY 94
map.
IV. Impact Statement
We generally prepare a flexibility analysis that is consistent with
the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 through 612), unless
the Administrator certifies that a notice would not have a significant
economic impact on a substantial number of small entities. For purposes
of a RFA, States and individuals are not considered small entities.
However, providers are considered small entities. Additionally, section
1102(b) of the Act requires the Secretary to prepare an 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 50 beds.
This notice does not contain rules; rather, it reflects the DSH
allotments for each State as determined in accordance with
Secs. 447.297 through 447.299.
We have discussed the method of calculating the final FFY 1994
national aggregate DSH target and the final FFY 1994 individual State
DSH allotments in the previous sections of this preamble. These
calculations should have a positive impact on payments to DSHs.
Allotments will not be reduced for high-DSH States since we are now
interpreting the 12-percent limit as a target. Low-DSH States will get
their base allotments plus their growth amounts.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
(Catalog of Federal Assistance Program No. 93.778, Medical
Assistance Program)
Dated: March 30, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: April 12, 1994.
Donna E. Shalala,
Secretary.
[FR Doc. 94-10417 Filed 4-26-94; 1:21 pm]
BILLING CODE 4120-01-P