[Federal Register Volume 59, Number 21 (Tuesday, February 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-2278]
[[Page Unknown]]
[Federal Register: February 1, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[MB-079-N]
RIN: 0938-AG61
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 preliminary 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. The
preliminary FFY 1994 State DSH allotments published in this notice will
be superseded by final FFY 1994 DSH allotments to be published in the
Federal Register by April 1, 1994.
EFFECTIVE DATE: The preliminary 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). (See 57 FR 55118, November
24, 1992 and 58 FR 43156, August 13, 1993.) 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. Preliminary amounts must be published 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 FFP 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. 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 the
State of Rhode Island.
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.
We are publishing in this notice the preliminary FFY 1994 national
DSH target and State DSH allotments based on the best available data we
have at this time from the States as adjusted by HCFA. This data is
taken from each State's August 1993 Form HCFA-37 and is adjusted as
necessary. The final FFY 1994 DSH allotments will be published in the
Federal Register by April 1, 1994.
II. Calculations of the Preliminary FFY 1994 DSH Limits
We have calculated the preliminary FFY 1994 State DSH allotments in
this notice in accordance with section 1923(f) of the Act and the
applicable regulations. The results of these calculations are presented
in chart format in section III. of this notice.
The total of the preliminary 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.
We classified States as high-DSH or low-DSH States. If a State's
base allotment exceeded 12 percent of its total unadjusted medical
assistance expenditures (excluding administrative costs) projected to
be made under the State's approved plan in FFY 1994, we classified that
State as a ``high-DSH'' State. If a State's base allotment was 12
percent or less of its total unadjusted medical assistance expenditures
projected to be made under the State's approved State plan under title
XIX of the Act in FFY 1994, we classified that State as a ``low-DSH''
State. There were 35 low-DSH States and 15 high-DSH States for FFY 1994
as a result of this classification.
We estimated the preliminary FFY 1994 national total medical
assistance expenditures for these States to be $145,839,070,000. The
expenditures were estimated using the August 1993 State budget
projections (Form HCFA-37) for FFY 1994. Thus, the overall preliminary
national FFY 1994 DSH expenditure target is approximately $17.5 billion
(12 percent of $145.8 billion).
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 $0.5 billion over the FFY 1994 preliminary
national DSH target amount.
In addition, we have provided a total of $623,650,000 ($357,351,000
Federal share) in growth amounts for the 35 low-DSH States. The growth
factor percentage for each of the low-DSH States was determined by
calculating the Medicaid program growth percentage for each low-DSH
State between FFY 1993 and FFY 1994. To compute this percentage, we
first ascertained each low-DSH State's estimate of total FFY 1993
medical assistance and administrative expenditures as reported on the
State's Medicaid Budget Report (Form HCFA-37) submitted in August 1993.
Next, we compared those estimates to each low-DSH State's total
estimated unadjusted FFY 1994 medical assistance and administrative
expenditures as reported to HCFA on the State's August 1993 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
preliminary 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 the previous FFY
for low-DSH States ($17,977,185,000) is greater than the preliminary
FFY 1994 national target ($17,500,688,000), there is no preliminary 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
preliminary total low-DSH State DSH allotment for FFY 1994. As noted
above, if a 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, the State received a partial growth amount
which, when added to its final FFY 1993 allotment, made its total State
DSH allotment for FFY 1994 equal to 12 percent of its estimated FFY
1994 medical assistance expenditures. For this reason, eight of the
low-DSH States received partial growth amounts.
As explained above, Rhode Island's preliminary 1994 DSH allotment
is lower than its FFY 1993 DSH allotment because the State experienced
a decrease in its program between years and its prior FFY DSH allotment
is greater than 12 percent of the total projected medical assistance
expenditures for the current year.
In summary, the total of all preliminary State DSH allotments for
FFY 1994 is $18,598,427,000 ($10,656,898,000 Federal share). This total
is composed of $17,977,185,000 in base allotments plus $623,650,000 in
growth amounts for all low-DSH States plus $0 in supplemental amounts
for low-DSH States. The total of all preliminary 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 total of all preliminary DSH allotments
for FFY 1994 is $1,097,739,000 over the FFY 1994 preliminary national
target amount of $17,500,688,000.
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 which will be published by April 1, 1994. 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. In addition, 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. Preliminary FFY 1994 DSH Allotments Under Public Law 102-234
Key to Chart
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Column Description
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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=.... Preliminary 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, from column D.
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.
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Preliminary Federal Fiscal Year 1994 Disproportionate Share Hospital Allotments Under Public Law 102-234
[Amounts are State and Federal Shares Dollars are in Thousands (000)]
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Final FFY 93 Preliminary
DSH allotments Growth amounts for low DSH FFY 94 state High or low
State for all states states(\1\) DSH allotments DSH state
designation
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(A) (B) (C)....................... (D) (E)
AL..................................... $417,458 Not Applicable............ $417,458 High.
AK..................................... 17,830 $781...................... 18,611 Low.
AR..................................... 2,806 210....................... 3,016 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..................................... 5,194 372....................... 5,565 Low.
DC..................................... 38,000 2,823..................... 40,823 Low.
FL..................................... 239,693 61,520.................... 301,213 Low.
GA..................................... 343,078 53,121.................... 396,199 Low.
HI..................................... 45,844 5,411..................... 51,256 Low.
ID..................................... 1,659 402....................... 2,060 Low.
IL..................................... 381,534 20,290.................... 401,824 Low.
IN..................................... 320,475 Not Applicable............ 320,475 Low.
IA..................................... 5,027 538....................... 5,565 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 12,659.................... 132,040 Low.
MA..................................... 489,547 66,987.................... 556,534 Low.
MI..................................... 559,732 62,577.................... 622,309 Low.
MN..................................... 48,579 5,393..................... 53,971 Low.
MS..................................... 152,342 6,122..................... 158,464 Low.
MO..................................... 731,894 Not Applicable............ 731,894 High.
MT..................................... 1,154 153....................... 1,307 Low.
NE..................................... 3,730 574....................... 4,304 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 2,063..................... 15,575 Low.
NY..................................... 2,784,477 91,455.................... 2,875,932 Low.
NC..................................... 345,545 67,705.................... 413,251 Low.
ND..................................... 1,086 8......................... 1,094 Low.
OH..................................... 509,924 74,440.................... 584,364 Low.
OK..................................... 23,568 Not Applicable............ 23,568 Low.
OR..................................... 20,279 2,814..................... 23,093 Low.
PA..................................... 967,407 Not Applicable............ 967,407 High.
RI(\2\)................................ 97,160 Not Applicable............ 94,751 Low.
SC..................................... 439,759 Not Applicable............ 439,759 High.
SD..................................... 1,163 235....................... 1,397 Low.
TN..................................... 430,611 18,562.................... 449,173 Low.
TX..................................... 1,513,029 Not Applicable............ 1,513,029 High.
UT..................................... 5,003 701....................... 5,704 Low.
VT..................................... 24,403 1,585..................... 25,988 Low.
VA..................................... 174,251 21,287.................... 195,537 Low.
WA..................................... 270,374 34,501.................... 304,875 Low.
WV..................................... 121,883 7,097..................... 128,980 Low.
WI..................................... 9,325 1,108..................... 10,433 Low.
WY..................................... 1,216 158....................... 1,374 Low.
Total.............................. 17,977,185 623,650................... 18,598,427 ...........
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Notes: (1) There were 3 low DSH states which had negative growth and 8 low DSH states which got partial growth
up to 12% of FFY 94 map.
(2) Prior year's allotment exceeded 12 percent of FFY 94 map so allotment was reduced to 12 percent of FFY 94
map.
IV. Regulatory Impact Statement
We generally prepare a regulatory 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 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 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 preliminary FFY
1994 national aggregate DSH target and the preliminary 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 with Executive Order 12886, this
notice was reviewed by the Office of Management and Budget.
(Catalog of Federal Assistance Program No. 93.778, Medical
Assistance Program)
Dated: October 8, 1993.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: November 23, 1993.
Donna E. Shalala,
Secretary.
[FR Doc. 94-2278 Filed 1-31-94; 8:45 am]
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