[Federal Register Volume 62, Number 93 (Wednesday, May 14, 1997)]
[Notices]
[Pages 26545-26550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12429]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[MB-103-NC]
RIN 0938-AH90
Medicaid Program; Allocation of Enhanced Federal Matching Funds
for Increased Administrative Costs Resulting From Welfare Reform
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice with comment period.
-----------------------------------------------------------------------
SUMMARY: This notice with comment period announces the methodology used
to determine the allocation, among the States and certain Territories,
of a $500 million fund to assist them with the additional expenses
attributable to eligibility determinations incurred as a result of the
provisions of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, which decouples Medicaid eligibility from
receipt of cash assistance for families and children. Also, it
announces the actual allocation amount for each State and Territory.
The special fund is available for matching a State's or Territory's
allowable administrative expenditures incurred only during Federal
fiscal years 1997 through 2000, and only during the first 12 calendar
quarters in which the State's Temporary Assistance to Needy Families
program, which replaced the Aid to Families with Dependent Children
program, is in effect after August 21, l996.
DATES: Effective Date: This notice is effective on May 14, 1997.
Comment Period: Written comments will be considered if we receive
them at the appropriate address, as provided below, no later than 5
p.m. on June 13, 1997.
ADDRESSES: Mail comments (one original and three copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: MB-103-NC, P.O. Box 7517,
Baltimore, MD 21207-0517.
If you prefer, you may deliver your written comments (one original
and three copies) to one of the following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20221, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. When you comment, please
refer to file code MB-103-NC. Comments received timely will be
available for public inspection as they are received, generally
beginning approximately 3 weeks after publication of a document, in
Room 309-G of the Department's offices at 200 Independence Avenue, SW.,
Washington, DC, on Monday through Friday of each week from 8:30 a.m. to
5 p.m. (phone: (202) 690-7890).
Copies: To order copies of the Federal Register containing this
document, send your request to: New Orders, Superintendent of
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date
of the issue requested and enclose a check or money order payable to
the Superintendent of Documents, or enclose your Visa or MasterCard
number and expiration date. Credit card orders can also be placed by
calling the order desk at (202) 512-1800 or by faxing to (202) 512-
2250. The cost for each copy is $8. As an alternative, you can view and
photocopy the Federal Register document at most libraries designated as
Federal Depository Libraries and at many other public and academic
libraries throughout the country that receive the Federal Register.
FOR FURTHER INFORMATION CONTACT: Richard Strauss, (410) 786-2019.
SUPPLEMENTARY INFORMATION:
I. Background
Under title XIX of the Social Security Act (the Act), Federal funds
are available at specified Federal matching rates for expenditures for
medical assistance and administrative expenditures under the States'
approved Medicaid plans. State Medicaid agencies are required to submit
quarterly reports of expenditures (on Form HCFA-64) in order to claim
Federal financial participation (FFP), that is, Federal matching funds
for these expenditures.
II. Recent Legislation
The Personal Responsibility and Work Opportunity Reconciliation Act
of 1996 (PRWORA) amended title IV-A of the Act to repeal the Aid to
Families with Dependent Children (AFDC) program. The AFDC program
provided an entitlement to cash assistance for eligible families with
dependent children and was funded by an openended, jointly funded
Federal-State program. PRWORA replaced AFDC with a program of block
grants for States for Temporary Assistance for Needy Families (TANF).
The repeal of AFDC becomes effective not later than July 1,
[[Page 26546]]
1997, or for most purposes on the date that the Secretary receives a
State's TANF plan. Under TANF, States have broad flexibility to provide
assistance for the purpose of ending the dependence of needy parents on
government benefits by promoting job preparation, work, and marriage;
preventing out-of-wedlock pregnancies; and encouraging the formation
and maintenance of two-parent families. Prior to the passage of PRWORA,
Medicaid eligibility for families with children receiving AFDC was
automatic.
With the implementation of each State's TANF program, there is no
longer an automatic link between eligibility for cash assistance under
the AFDC program and eligibility under the Medicaid program. Section
114(a) of PRWORA amended title XIX of the Act to add a new section 1931
that, in general, requires State agencies to provide Medicaid
eligibility to low income families, if they had been eligible under the
AFDC plan in effect on July 16, 1996. With the advent of the TANF
program, State Medicaid agencies are expected to incur additional
administrative costs related to the need to determine Medicaid
eligibility for individuals in accordance with section 1931 of the Act.
These expenditures include the costs of outreach to potential eligible
individuals who will no longer receive automatic Medicaid eligibility
through the cash assistance linkage. It is essential that State
Medicaid agencies ensure and protect continued Medicaid eligibility for
current Medicaid recipients who would have been eligible under the July
16, 1996 AFDC rules or who are otherwise eligible under section 1931 of
the Act, and that the State agencies successfully implement new
procedures for identifying potential new Medicaid recipients and
determining their eligibility.
To assist State agencies with additional administrative costs
involved in this transition, section 114(a) of PRWORA created a new
section 1931(h) of the Act, which establishes a $500 million fund that
is available as Federal matching funds for the State Medicaid agencies'
administrative costs of Medicaid eligibility determinations incurred as
a result of the delinking of Medicaid eligibility from eligibility for
cash assistance under title IV-A of the Act. The additional Federal
funds will be provided to State agencies through an enhanced Federal
matching rate for the applicable administrative expenditures. A State
agency is eligible to claim the enhanced Federal matching funds for
allowable expenditures incurred during the first 12 calendar quarters
(3 years) in which the State's TANF program is in effect. Furthermore,
the enhanced Federal matching funds are only available for allowable
expenditures for the period beginning with Federal fiscal year 1997
(that is October 1, 1996) and ending with Federal fiscal year 2000
(that is September 30, 2000). The law requires the Secretary to
increase the usual Federal matching percentage of 50 percent for
States' claims for administrative expenditures from this fund and to
ensure the equitable distribution of the increased matching funds.
Under section 1931(h) of the Act, the $500 million fund is
available only for the administrative costs of Medicaid eligibility
determinations attributable to the application of the requirements of
section 1931 of the Act, that is, the rules of the States' former AFDC
programs. The fund is not available for the costs of determining
Medicaid eligibility for individuals with respect to other provisions
of PRWORA, such as those related to alien and immigration status or the
Supplemental Security Income (SSI) program, unless those individuals
are screened for Medicaid eligibility through provisions of section
1931 of the Act. HCFA estimates that $500 million provide adequate
funds to offset additional administrative costs that States will incur
attributable to the requirements of section 1931 of the Act.
III. Provisions of the Notice
This notice with comment period announces the enhanced Federal
matching rates, the allocation formula and the factors included in that
formula, the dollar amounts allocated to each State, and the activities
for which FFP will be available at enhanced matching rates, which are
established under section 1931(h) of the Act. Specifically, sections
1931 (h)(1), (h)(2), and (h)(3) of the Act, respectively, authorize the
Secretary to: specify the enhanced Federal matching rates; determine
the allowable expenditures; and ensure the equitable distribution of
the funds among States by establishing the allocation formula and
factors included in the formula, and the dollar amounts allocated to
each State.
We are allocating two amounts to each State agency from the $500
million fund: A minimum (base) allocation, which is generally the same
for all States; and an additional allocated amount (secondary
allocation), which differs by State and is determined by a formula
using factors discussed in detail in section VI. of this notice. State
agencies may claim Federal funding for allowable activities against the
base allocation at a 90-percent matching rate. State agencies may claim
Federal funding against the secondary allocation at one of two Federal
matching rates: A 90-percent enhanced matching rate for specified
activities considered critical to protecting beneficiaries (for example
outreach and beneficiary education); and a 75-percent enhanced rate for
other allowable activities. In claiming Federal matching for
expenditures for these activities, States must identify them separately
on the form HCFA-64. States may draw down funds for their allocation as
they incur allowable expenditures.
IV. Activities Subject to Enhanced Funding
Under section 1931(h) of the Act, the $500 million fund may only be
used for administrative expenditures shown by State agencies to be
attributable to the administrative costs of Medicaid eligibility
determinations required as a result of the TANF legislation and the
delinking of Medicaid eligibility from AFDC status. The following
activities are those for which Federal funding is already available and
for which additional funding is available at one of the enhanced
Federal matching rates, 90 percent or 75 percent. States can claim 90-
percent matching for any of the allowable activities listed below, up
to the basic allocation for the State. For the States' secondary
allocation, items indicated by an asterisk may be claimed at a 90-
percent matching rate and items not noted with an asterisk can be
claimed at the 75-percent matching rate.
We established the higher 90-percent enhanced Federal matching rate
associated with the base allocation in recognition that there are
pressing startup and other common costs among States related to the
transition from AFDC to the TANF program. The higher Federal matching
rate for the base allocation serves to expedite funds to States for
such costs.
We established the two enhanced Federal matching rates associated
with the secondary allocation to recognize two priorities of activities
related to this provision. The first priority, with the higher 90-
percent Federal matching rate, is associated with beneficiary oriented
activities such as outreach, public service announcements, and
education. The higher enhanced rate encourages such activities and
recognizes the importance of ensuring that individuals do not lose
their eligibility inappropriately, are correctly determined (or
redetermined) eligible, and understand program requirements during the
critical period of transition to TANF. Each of these higher rate (90
percent) activities is indicated below by
[[Page 26547]]
an asterisk. The lower 75-percent enhanced Federal matching rate
addresses the other activities performed during the transition period.
Allowable Activities
Educational activities (relating to current or potential
beneficiaries).*
Public service announcements (PSAs).*
Outstationing of eligibility workers (more workers or new
locations, for example, churches, day care centers, WIC offices, health
care providers).*
Training related to the section 1931 provisions--*
Eligibility workers.
Providers.
Outstationed eligibility workers and others.
Community.
Outreach activities (for example, general or targeted
mailing campaigns, contracts to assist beneficiaries with the
redetermination process).*
Developing and disseminating new publications (targeted to
at-risk populations).*
Local community activities (for example, meetings with
community leaders and speeches to community groups).*
Hiring new Medicaid eligibility workers (related to
section 1931 determinations).
Designing new eligibility forms, for example, a single
application for TANF and Medicaid whether eligibility is linked or not.
Identification of ``at-risk'' TANF recipients (in this
context, at-risk refers to vulnerability to losing Medicaid eligibility
as a result of the TANF provisions).
State and local government organizational changes related
to the section 1931 provisions.
Intergovernmental activities.
Eligibility systems related changes.
Other activities identified by States and approved by the
Secretary as applicable to the enhanced matching fund provisions.
In order for State agencies to claim Federal funds at the
appropriate enhanced rates associated with the two allocated amounts
for allowable activities, they will need to identify and report the
administrative expenditures for such activities to HCFA on specified
lines on the States' quarterly medical assistance expenditure report
(Form HCFA-64), in accordance with HCFA guidance and instructions
related to the form HCFA-64.
V. Special Issues
We conducted a series of consultations with advocacy, provider, and
intergovernmental groups to gather suggestions and recommendations on
how to equitably distribute the enhanced matching funds. These groups
included the National Governors' Association, the American Public
Welfare Association, and the National Conference of State Legislatures.
The criteria and requirements included in this notice reflect
consideration of their suggestions and recommendations.
A. Federal Matching Rate To Be Increased
Under section 1931(h)(2) of the Act, the Federal matching rate,
which will be used for State claims related to the $500 million fund,
applies only to those administrative expenditures of a State agency's
Medicaid program described in section 1903(a)(7) of the Act
(administrative expenditures that are Federally matched at a 50-percent
rate). These administrative expenditures include the costs associated
with eligibility determination activities.
Because of the specific reference to section 1903(a)(7) of the Act,
section 1931(a) of the Act precludes the $500 million fund from being
available for matching expenditures referenced in other sections of
section 1903(a) of the Act. For example, section 1903(a)(3) of the Act
refers to administrative activities related to electronic claims
processing systems and the associated Federal matching rates of 90 and
75 percent. Section 1903(a)(4) refers to the costs of systems for
verifying immigration status and the associated Federal matching rate
of 100 percent. The $500 million fund is not available for these
categories of administrative expenditures or others referenced in
sections 1903 (a)(1) through (a)(6) of the Act.
We note that, under existing Medicaid regulations published in
1989, the administrative costs associated with automated eligibility
systems are not considered part of the mechanized claims process and
information retrieval systems, and therefore are not eligible for the
75-percent or 90-percent Federal matching rate referred to in section
1903(a)(3) of the Act. Therefore, these costs are matched at the 50
percent rate under section 1903(a)(7) of the Act, and may be claimed
against the State's allocation from the $500 million fund at the higher
matching rate if they meet the other requirements.
B. Retroactive Claims
Under sections 1931 (h)(3) and (h)(4) of the Act, the $500 million
dollar fund is only available for claims for administrative costs
incurred during Federal fiscal years 1997 through 2000 (that is,
October 1, 1996 through September 30, 2000), and with respect to any
specific State, only during the first 12 calendar quarters that the
TANF program is in effect in that State beginning no earlier than
October 1, 1996. As long as claims of that State are for expenditures
incurred during this period and meet timely filing and other relevant
requirements, they would not be precluded from being submitted and
allowed retroactively.
C. Equitable Distribution of Funds Among All States
Section 1931(h)(3) of the Act requires the Secretary to ``ensure
the equitable distribution'' of the $500 million dollar fund among the
States. We interpret this to mean that all States should receive an
equitable share of the fund unless the State does not incur any cost
associated with the implementation of section 1931 of the Act. Through
the consultive process, discussed earlier in this section, States and
other groups have expressed the position that every State agency should
be able to receive at least some portion of the fund. We agree that the
requirement for an equitable distribution must result in each State
receiving a portion of the fund against which qualifying expenditures
would be claimed. For purposes of the Medicaid program, the definition
of ``State'' includes the District of Columbia and the five Territories
of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and
the Virgin Islands. However, we have not provided an allocation for the
Northern Mariana Islands or American Samoa because they do not have an
AFDC program and did not have an AFDC program at the time of the
enactment of PRWORA. Therefore, only three Territories, Guam, Puerto
Rico and the Virgin Islands, will incur administrative expenditures as
a result of the transition from AFDC to TANF.
The three Territories affected by section 1931 of the Act are still
subject to the existing cap on Federal Medicaid expenditures for the
Territories at section 1108(c) of the Act. This cap will not increase
with the availability of a portion of the $500 million fund. However,
these Territories could still receive benefits under the $500 million
fund provisions because, with an enhanced Federal matching rate, less
total territorial matching funds would be required for a given level of
administrative costs unless the Territory exceeded its cap. Since these
Territories, like the other States, will likely incur additional
Medicaid expenditures due to the transition to TANF, a portion of the
$500 million
[[Page 26548]]
enhanced Federal matching fund should be available to them.
D. Reduction of States' Allocations as Claims Are Made
Section 1931(h) of the Act provides for enhanced Federal matching
for States' claims against the additional $500 million fund. The
enhanced rates and additional Federal funds are in addition to those
that would otherwise be Federally matched at the usual 50-percent rate.
States' claims for allowable administrative activities will reduce
their base and secondary allocations only by the amounts that are in
excess of the usual 50-percent FFP and not by the entire Federal
matching amount. Specifically, States' allocations will be reduced by
the amount of the claim multiplied by the difference between the
enhanced Federal matching rate percentage and 50 percent.
To illustrate how State claims against the allocations would work,
we provide the following example: The State claim for allowable
outreach expenditures is $500,000. This claim would usually be
Federally matched at 50 percent, and the usual FFP amount for this
claim would be $250,000 (50 percent of $500,000). Assuming the State is
claiming these expenditures against the $2 million base allocation, the
enhanced Federal matching rate would be 90 percent. Thus, the enhanced
FFP amount would be $450,000 (90 percent of 500,000). However, the base
allocation would not be reduced by the entire $450,000. Rather, for
this claim the base allocation would be reduced by $200,000, which is
40 percent of $500,000. Forty percent represents the excess of the
enhanced Federal matching rate amount (90 percent) above the usual
Federal matching rate amount (50 percent). If the amount of the State's
base allocation was at $2 million prior to this claim, there would be
$1.8 million remaining after the claim ($2 million-$200,000).
VI. Factors for Determining State Allotments
We have established several factors that will be considered in
determining the allotment for each State from the $500 million fund. We
have divided the fund into two parts, an allocation of minimum State
amounts and an allocation of the remainder of the fund. These two parts
are discussed below.
A. Base Allocation Amount
The first part of the distribution will consist of a minimum
allocation amount of $2 million set aside for each State, the District
of Columbia and Puerto Rico. Guam and the Virgin Islands will receive a
lesser amount proportionate to the level of their administrative
expenditures. This base allocation recognizes that States will incur
certain costs that will not vary by the size of their Medicaid
programs. The total of the base allocations for all States and
Territories is $104,352,470.
B. Secondary Allocation Amount
The amount of the $500 million fund remaining after distribution of
the base allocations to each State will be allocated among the States
according to a formula designed to ensure equity. As indicated in the
previous section, the total base allocations for all States and
Territories is $104,352,470. Therefore the total amount to be
distributed to the States and Territories as secondary allocations is
$395,647,530. This secondary allocation will be allocated based on the
following four factors and weights.
------------------------------------------------------------------------
Weight
Factor (percent)
------------------------------------------------------------------------
State AFDC-Related Caseload.................................. 60
State Medicaid Administrative Expenditures................... 20
SSI Childhood Disability Case Reevaluations.................. 10
SSI Immigrant Caseload....................................... 10
------------------------------------------------------------------------
With respect to Factor 1, State AFDC-related caseload, each State
was credited with the higher of their caseloads for FY 1995 and FY
1994, or the arithmetic average of their caseloads for FY 1992, FY
1993, and FY 1994. This served as the basis for allocating
$237,388,518, which represents 60 percent of the States' total
secondary allocations.
With respect to Factor 2, State Medicaid administrative
Expenditures, each State was credited with the higher of certain of its
administrative expenditures related to these provisions for FY 1995, FY
1994, or the arithmetic average of its expenditures for FYs 1992, 1993,
and 1994. Specifically, we are using a State's Medicaid administrative
expenditures reported on its expenditure report (Form HCFA-64) in
categories related to operation of systems, third party liability and
assignment of rights activities, systems for verification of
immigration status, outstationed eligibility workers, and other
administrative costs Federally matched at 50 percent. This served as a
basis for allocating $79,129,506, which represents 20 percent of the
States' total secondary allocations.
With respect to Factors 3 and 4, SSI childhood disability case
reevaluations (in States requiring reevaluation under PWRORA) and SSI
immigrant caseload, respectively, each State was credited with
appropriate caseloads, as provided by the Social Security
Administration for FY 1996. The caseload estimates are proxy estimates
intended to show the relative administrative burden that each State
agency faces under welfare reform. This served as the basis for
allocating $39,564,753, which represents 10 percent of the State's
total secondary allocations for each of Factors 3 and 4.
The allocations for each State agency are as follows:
State Allocations for Enhanced Matching
----------------------------------------------------------------------------------------------------------------
Base Secondary Total
STATE allocation allocation allocation
----------------------------------------------------------------------------------------------------------------
Alabama......................................................... $2,000,000 $4,504,897 $6,504,897
Alaska.......................................................... 2,000,000 1,039,335 3,039,335
Arizona......................................................... 2,000,000 5,961,603 7,961,603
Arkansas........................................................ 2,000,000 3,095,513 5,095,513
California...................................................... 2,000,000 81,719,458 83,719,458
Colorado........................................................ 2,000,000 3,166,316 5,166,316
Connecticut..................................................... 2,000,000 3,756,737 5,756,737
Delaware........................................................ 2,000,000 801,757 2,801,757
Dis. Columbia................................................... 2,000,000 1,259,072 3,259,072
Florida......................................................... 2,000,000 20,262,23 22,262,239
Georgia......................................................... 2,000,000 9,591,549 11,591,549
Hawaii.......................................................... 2,000,000 1,435,742 3,435,742
[[Page 26549]]
Idaho........................................................... 2,000,000 1,288,535 3,288,535
Illinois........................................................ 2,000,000 17,363,894 19,363,894
Indiana......................................................... 2,000,000 5,545,162 7,545,162
Iowa............................................................ 2,000,000 2,782,362 4,782,362
Kansas.......................................................... 2,000,000 2,496,386 4,496,386
Kentucky........................................................ 2,000,000 5,269,014 7,269,014
Louisiana....................................................... 2,000,000 7,029,185 9,029,185
Maine........................................................... 2,000,000 1,569,238 3,569,238
Maryland........................................................ 2,000,000 5,595,943 7,595,943
Massachusetts................................................... 2,000,000 7,463,490 9,463,490
Michigan........................................................ 2,000,000 13,975,445 15,975,445
Minnesota....................................................... 2,000,000 5,708,769 7,708,769
Missouri........................................................ 2,000,000 6,561,956 8,561,965
Mississippi..................................................... 2,000,000 4,617,604 6,617,604
Montana......................................................... 2,000,000 764,134 2,764,134
Nebraska........................................................ 2,000,000 1,308,247 3,308,247
Nevada.......................................................... 2,000,000 1,258,808 3,258,808
New Hampshire................................................... 2,000,000 875,952 2,875,952
New Jersey...................................................... 2,000,000 9,012,253 11,012,253
New Mexico...................................................... 2,000,000 2,860,333 4,860,333
New York........................................................ 2,000,000 35,034,556 37,034,556
North Carolina.................................................. 2,000,000 9,550,703 11,550,703
North Dakota.................................................... 2,000,000 537,922 2,537,922
Ohio............................................................ 2,000,000 14,909,161 16,909,161
Oklahoma........................................................ 2,000,000 3,938,082 5,938,082
Oregon.......................................................... 2,000,000 3,740,656 5,740,656
Pennsylvania.................................................... 2,000,000 15,553,339 17,553,339
Rhode Island.................................................... 2,000,000 1,459,771 3,459,771
South Carolina.................................................. 2,000,000 4,221,783 6,221,783
South Dakota.................................................... 2,000,000 642,597 2,642,597
Tennessee....................................................... 2,000,000 7,250,889 9,250,889
Texas........................................................... 2,000,000 25,523,806 27,523,806
Utah............................................................ 2,000,000 2,006,172 4,006,172
Vermont......................................................... 2,000,000 891,672 2,891,672
Virginia........................................................ 2,000,000 6,531,522 8,531,522
Washington...................................................... 2,000,000 8,443,170 10,443,170
West Virginia................................................... 2,000,000 3,420,593 5,420,593
Wisconsin....................................................... 2,000,000 5,023,766 7,023,766
Wyoming......................................................... 2,000,000 475,344 2,475,344
Guam............................................................ 176,235 94,204 270,439
Puerto Rico..................................................... 2,000,000 6,325,084 8,325,084
Virgin Islands.................................................. 176,235 131,810 308,045
-----------------------------------------------
Total....................................................... 104,352,470 395,647,530 500,000,000
----------------------------------------------------------------------------------------------------------------
VII. Alternative Approaches
We considered an alternative approach to set aside a portion of the
variable amount of each State agency's allocation (for example, 20
percent) and earmark the funds for specified activities. States and
intergovernmental groups did not support this approach because it
restricted their flexibility to respond to their different
circumstances across States. We also considered tying receipt of some
or all of each State's allocation to successful performance in
transitioning their determination of eligibility processes in response
to their eligibility for cash assistance and TANF. States and
intergovernmental groups also did not support this approach because it
would restrict State flexibility. Furthermore, HCFA and the States and
intergovernmental groups were not able to arrive at an appropriate
measure which accurately correlated successful performance with receipt
of allocation funds.
VIII. Waiver of Proposed Notice and Delay in Effective Date
While the Administrative Procedure Act generally requires a 30-day
delayed effective date for all rules and also requires an opportunity
for public comment prior to the effective date of a rule, it also
provides that we may waive those procedures if we find good cause that
notice and comment are impracticable, unnecessary, or contrary to the
public interest. Similarly, title 5 U.S.C. 801 provides for a 60 day
delayed effective date for a major rule until the later of the receipt
by Congress of a report on the rule or publication of the rule in the
Federal Register. This delay provides Congress with an opportunity to
review a major rule prior to its implementation. However, title 5
U.S.C. 808 also provides that the rule may take effect without regard
to the delay period if the agency finds good cause that notice and
public procedure on the rule are impracticable, unnecessary, or
contrary to the public interest.
We are making the terms of this notice effective without
publication of a proposed notice because we believe it would be
impractical and contrary to public interest to delay its effective date
in order to consider public comments. States have been implementing
their TANF programs since the enactment of PRWORA and more States
continue to do so each day. We believe that it is imperative that these
States be able to receive the enhanced Federal matching funds as soon
as possible so that they
[[Page 26550]]
are able to make an effective transition to the post-AFDC environment
at the time they incur the additional administrative expenses resulting
from the decoupling of Medicaid eligibility from receipt of cash
assistance under title IV-A of the Act. Further delays in furnishing
States with this funding could result in delays in making the
determination that individuals are entitled to necessary medical
services, with the attendant severe consequences for individuals who
need them. It is also similarly important and in the public interest
that States are able to conduct outreach efforts to prevent eligible
needy individuals losing contact with the Medicaid program which they
would otherwise have established because of its previous connection to
cash assistance. Moreover, in developing the terms of this notice we
have actively worked with intergovernmental and other interested groups
to obtain their counsel. Accordingly, we find that good cause exists to
waive prior notice and comment, the 30 day delay, and the 60 day delay
for advance Congressional review.
IX. Impact Statement
Consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612), we prepare a regulatory flexibility analysis unless we
certify that a notice such as this will not have a significant economic
impact on a substantial number of small entities. For purposes of the
RFA, individuals and States are not included in the definition of a
small entity.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a notice such as this 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.
The fund distribution announced by this notice is required by the
Personal Responsibility and Work Opportunity Reconciliation Act of
1996. In addition, the amount of money involved, $500 million divided
among 50 States, the District of Columbia, and 3 Territories over a
period of 3 years will not have a significant effect on any State or
Territory, or the Medicare program.
For these reasons, we are not preparing analyses for either the RFA
or section 1102(b) of the Act because we have determined, and we
certify, that this notice will not have a significant economic impact
on a substantial number of small entities or a significant impact on
the operations of a substantial number of small rural hospitals.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget. Costs
attributable to State activities covered by this notice will be paid
for by Federal funds according to the matching rates outlined in the
allocation formula analysis described earlier. Further, States will
incur some additional costs based on the State share associated with
these matching rates.
X. Information Collection Requirements
This document does not impose new information collection
requirements that are subject to review by the Office of Management and
Budget under the provisions of the Paperwork Reduction Act of 1995.
States will be required to claim FFP for administrative expenditures
attributable to the eligibility determination activities resulting from
enactment of PRWORA. The only information that is required will be
reported on existing Form HCFA-64. This form has been approved by the
Office of Management and Budget under approval number 0938-0067, which
expires on March 30, 1998.
Authority: Secs. 1102 and 1931(h) of the Social Security Act (42
U.S.C. 1302 and 1396uu).
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
Dated: March 24, 1997.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: April 11, 1997.
Donna E. Shalala,
Secretary.
[FR Doc. 97-12429 Filed 5-13-97; 8:45 am]
BILLING CODE 4120-01-P