Children's Health Insurance Program (CHIP); Final Allotments to States, the District of Columbia, and U.S. Territories and Commonwealths for Fiscal Year 2012, 43290-43301 [2012-17953]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 77, Number 142 (Tuesday, July 24, 2012)]
[Notices]
[Pages 43290-43301]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-17953]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2383-N]
RIN 0938-AR45


Children's Health Insurance Program (CHIP); Final Allotments to 
States, the District of Columbia, and U.S. Territories and 
Commonwealths for Fiscal Year 2012

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice sets forth the final allotments of Federal funding 
available to each State, the District of Columbia, and each U.S. 
Territory and Commonwealth for fiscal year 2012 (with the qualification 
that potential increases in such allotments may be available for 
certain States). Title XXI of the Social Security Act (the Act) 
authorizes payment of Federal matching funds to States, the District of 
Columbia, and the U.S. Territories and Commonwealths to initiate and 
expand health insurance coverage to uninsured, low-income children 
under the Children's Health Insurance Program (CHIP). The fiscal year 
allotments contained in this notice were determined in accordance with 
the funding provisions and final regulations published in the February 
17, 2011 Federal Register.

DATES: This notice is effective on August 23, 2012. Final allotments 
may be available for expenditure by States beginning with October 1, 
2011.

FOR FURTHER INFORMATION CONTACT: Richard Strauss, (410) 786-2019.

SUPPLEMENTARY INFORMATION:

I. Purpose of This Notice

    This notice sets forth the allotments available to each State, the 
District of Columbia, and each U.S. Territory and Commonwealth for 
fiscal year (FY) 2012 under title XXI of the Social Security Act (the 
Act). States may implement Children's Health Insurance Program (CHIP) 
through a separate State program under title XXI of the Act, an 
expansion of a State Medicaid program under title XIX of the Act, or a 
combination of both. CHIP allotments for FY 2009 and subsequent fiscal 
years are available to match expenditures under an approved State child 
health plan for 2 fiscal years, including the year for which the 
allotments were provided. As specified by the Act, the allotments are 
available to States for FY 2012, and the unexpended amounts of such 
allotments for a State may be carried over to FY 2013 for use by the 
State. Federal funds appropriated for title XXI of the Act are limited, 
and the law specifies a methodology to divide the total fiscal year 
appropriation into individual allotments available for each State, the 
District of Columbia, and each U.S. Territory and Commonwealth with an 
approved child health plan.
    Section 2104(b) of the Act requires States, the District of 
Columbia, and U.S. Territories and Commonwealths to have an approved 
child health plan for the fiscal year in order for the Secretary to 
provide an allotment for that fiscal year. All States, the District of 
Columbia, and U.S. Territories and Commonwealths have approved plans 
for FY 2012. Therefore, the FY 2012 allotments contained in this notice 
pertain to all States, the District of Columbia, and U.S. Territories 
and Commonwealths.
    In general, funding is appropriated under section 2104(a) of the 
Act for purposes of providing allotments to States under CHIP for each 
fiscal year. However, title XXI of the Act as amended by section 
10203(d)(1) of the Patient Protection and Affordable Care Act of 2010 
(Pub. L. 111-148, enacted on March 23, 2010) (the Affordable Care Act) 
appropriates funding for CHIP fiscal year allotments through FY 2015.

II. Methodology for Determining CHIP Fiscal Year Allotments for the 50 
States, the District of Columbia, and the U.S. Territories and 
Commonwealths

A. Funding Authority for the CHIP Fiscal Year Allotments

    Section 2104(a)(1) through (18) of the Act appropriates Federal 
funds for providing States' allotments for FYs 2009 through 2015. In 
particular, the appropriated amounts available for allotments for FYs 
2009 through 2015, are as follows: $10,562,000,000 for FY 2009; 
12,520,000,000 for FY 2010; $13,459,000,000 for FY 2011; 
$14,982,000,000 for FY 2012; $17,406,000,000 for FY 2013, 
$19,147,000,000 for FY 2014, and $2,850,000,000 for each of the first 
and second half of FY 2015. Also, section 108 of the Children's Health 
Insurance Program Reauthorization Act of 2009 (Pub. L. 111-3, enacted 
on February 4, 2009) (CHIPRA), as amended by section 10203(d) of the 
Affordable Care Act, provides for a one-time appropriation of 
$15,361,000,000 for allotments for the first half of FY 2015. 
Therefore, the total appropriation for providing allotments during FY 
2015 is $21,061,000,000 (determined as the sum of $2,850,000,000, 
$15,361,000,000, and $2,850,000,000).

B. Methodology For Determining State's Fiscal Year Allotments

1. General
    Section 2104(m) of the Act sets forth the methodology for 
determining States' CHIP allotments for each of FYs 2009 through 2015. 
In general, the States' fiscal year allotments are provided from the 
appropriation for the respective fiscal year allotment, subject to a 
proration adjustment described in section II.B.7. of this notice.
2. FY 2009 Through FY 2011 Allotments
    On February 17, 2011 we published a final rule in the Federal 
Register (76 FR 9233), that set forth the methodologies and procedures 
to determine the fiscal year allotments of Federal funds under title 
XXI of the Act. In particular, the methodologies for determining the 
CHIP allotments for fiscal year FY 2009 through FY 2011 were contained 
in the final regulations published in that Federal Register 
publication.

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3. FY 2012 Allotments
    The FY 2012 allotments for the 50 States and the District of 
Columbia, and the Commonwealths and Territories, are provided from the 
FY 2012 appropriation ($14,982,000,000), and are subject to a proration 
adjustment described in section II.B.7. of this notice, if necessary. 
The FY 2012 allotment for each State is determined by multiplying the 
allotment increase factor for FY 2012 for the State, by the sum of: the 
State's FY 2011 allotment and any contingency fund payment made to the 
State for FY 2011, as determined by section 2104(n) of the Act.
    For the 50 States and the District of Columbia, in accordance with 
section 2104(m)(6) of the Act, the FY 2012 allotment may also include 
additional amounts under specified conditions for which States have 
submitted an expansion allotment adjustment request before August 31, 
2011.
4. FY 2013 Allotments
    The FY 2013 allotments for the 50 States and the District of 
Columbia, and the Commonwealths and Territories, are provided from the 
FY 2013 appropriation ($17,406,000,000). The amounts of these 
allotments are subject to a proration adjustment described in section 
II.B.7. of this notice, if necessary. Section 2104(m)(2)(B)(i) of the 
Act, as amended by the Affordable Care Act requires a ``rebasing'' 
process be used for determining the FY 2013 allotments; the rebasing 
methodology means the States' payments rather than their allotments for 
FY 2012 must be considered in calculating the FY 2013 allotments. In 
particular, the FY 2013 allotments are determined by multiplying the 
allotment increase factor for FY 2013 for the State by the sum of: Any 
Federal payments made from the States' available allotments in FY 2012; 
any amounts provided as redistributed allotments in FY 2012 to the 
State; and any Federal payments attributable to any contingency fund 
payments made to the State for FY 2012 determined under section 2104(n) 
of the Act.
5. FY 2014 Allotments
    The FY 2014 allotments for the 50 States and the District of 
Columbia, and the Commonwealths and Territories, are provided from the 
FY 2014 appropriation of $19,147,000,000, and are subject to a 
proration adjustment described in section II.B.7. of this notice, if 
necessary. Under section 2104(m)(2)(B)(ii) of the Act, as amended by 
the Affordable Care Act, the FY 2014 allotment for each State is 
determined by multiplying the allotment increase factor for FY 2014 for 
the State, by the sum of: the State's FY 2013 allotment; and any 
contingency fund payment made to the State for FY 2013, as determined 
in section 2104(n) of the Act.
    For the 50 States and the District of Columbia, under section 
2104(m)(6) of the Act, the FY 2014 allotment may include additional 
amounts in situations where such States have submitted an expansion 
allotment adjustment request before August 31, 2013.
6. FY 2015 Allotments
    Under section 2104(m)(3) of the Act, the FY 2015 allotments for the 
50 States and the District of Columbia, and the Commonwealths and 
Territories, are comprised of two components related to the first half 
of FY 2015 (that is, the period of October 1, 2014 through March 31, 
2015) and second half of FY 2015 (that is, April 1, 2015 through 
September 30, 2015). The FY 2015 allotments for the first and second 
half of FY 2015 are subject to a proration adjustment described in 
section II.B.7. of this notice, as necessary.
    The allotments for the first half of FY 2015 are provided from a 
total available appropriation of $18,211,000,000, comprised of 
$2,850,000,000 appropriated under section 2104(a)(18)(A) of the Act, 
and $15,361,000,000 appropriated by section 108 of CHIPRA, as amended 
by the Affordable Care Act. The allotments for the first half of FY 
2015 are equal to the ``first half ratio'' multiplied by the allotment 
increase factor for FY 2015 multiplied by the sum of any Federal 
payments made from the States' available allotments in FY 2014; any 
amounts provided as redistributed allotments in FY 2014 to the State; 
and any Federal payments attributable to any contingency fund payments 
made to the State for FY 2014 as determined under section 2104(n) of 
the Act. The first half ratio is the percentage determined by dividing 
$18,211,000,000 (calculated as the sum of $2,850,000,000 (the 
appropriation for the first half of FY 2015) and 15,361,000,000 (the 
one-time appropriation for the first half of the FY 2015)) by 
$21,061,000,000 (calculated as the sum of $2,850,000,000 (the 
appropriation for the second half of FY 2015) and $18,211,000,000).
    The States' CHIP allotments for the second half of FY 2015 are 
provided from a total available appropriation of $2,850,000,000, 
appropriated under section 2104(a)(18)(B) of the Act. The allotments 
for the second half of FY 2015 are equal to $2,850,000,000 multiplied 
by a percentage equal to the amount of the allotment for the State for 
the first half of FY 2015 divided by the sum of all such first half of 
FY 2015 allotments for all States.
7. Proration Rule
    Under section 2104(m)(4) of the Act, if the amount of States' 
(including the 50 States, the District of Columbia, and the 
Commonwealths and Territories) allotments for a fiscal year, or in the 
case of FY 2015, the amount of an allotment for each half of the fiscal 
year, exceeds the total appropriations available for such periods, the 
total allotments for each of these periods will be reduced on a 
proportional basis. The total amount available nationally for the 
period is multiplied by a proration percentage determined by dividing 
the amount determined for the period by the sum of such amounts.
8. The Allotment Increase Factor for a Fiscal Year
    Under section 2104(m)(5) of the Act, the allotment increase factor 
for a fiscal year is equal to the product of 2 amounts for the fiscal 
year: the per capita health care growth factor and the child population 
growth factor.
    The per capita health care growth factor for a fiscal year is equal 
to 1 plus the percentage increase in the projected per capita amount of 
the National Health Expenditures from the calendar year in which the 
previous fiscal year ends to the calendar year in which the fiscal year 
involved ends, as most recently published by CMS before the beginning 
of the fiscal year involved.
    In general, for the 50 States and the District of Columbia, the 
Child Population Growth Factor (CPGF) for a fiscal year is equal to 1 
plus the percentage increase (if any) in the population of children in 
the State from July 1 in the previous fiscal year to July 1 in the 
fiscal year involved, as determined by CMS based on the most recent 
published estimates of the Census Bureau available before the beginning 
of the fiscal year involved, plus 1 percentage point. In the 
determination of the CPGF, section 2104(m)(5)(B) of the Act refers to 
``the percentage increase (if any)'' of the population of children in 
the State. In this regard, CPGF refers only to increases in the 
population of children. Thus, if there was a decrease in the population 
of children over the indicated period, the CPGF for such State would be 
0.0 percent plus one percentage point; that is, negative growth in the 
children population

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would not result in the growth factor being less than 101 percent.
9. Allotments for the Commonwealths and Territories
    Section 2104(m)(1)(B) of the Act provided for 2009 allotments for 
the commonwealths and territories based upon the highest amount 
available for any fiscal year from 1999 through 2008, multiplied by the 
allotment increase factor with the term ``United States'' substituted 
for the term ``the State'' (so that the increase for the commonwealths 
and territories will be based on the CPFG rate for the entire country 
rather than specific to the commonwealth or territory). For fiscal 
years after FY 2009, using the same methodology described above for the 
50 States and District of Columbia. The 2009 change to the allotment 
increase factor does not apply, and thus we will determine a 
commonwealth or territory-specific allotment increase factor, based on 
the CPFG for each commonwealth or territory, based on the most recent 
published estimates of the Census Bureau. In accordance with section 
602(b) of the CHIPRA, which added a new section 2109(b)(2)(B) of the 
Act, we will be working with the Secretary of the Commerce Department 
on appropriate adjustments to improve the Current Population Survey 
(CPS), or develop other data, to determine the CPGF.

C. FY 2012 Allotments Determined in Accordance With Such Methodologies 
and Procedures

    We calculated the FY 2012 allotments as discussed in section 
II.B.3. of this notice and in accordance with section 2104(m) of the 
Act and final regulations at 42 CFR 457.609 (published in the February 
17, 2011 Federal Register. That calculation is presented in 2 tables 
described in section III. of this notice. Table 1 provides the 
calculation of the allotment increase factor for FY 2012, and Table 2 
provides the calculation of the FY 2012 allotment.
    At this time, table 2 does not contain the amounts of increases, if 
any, to the FY 2012 allotments for certain States that applied for such 
increases in accordance the provisions of section 2104(m)(6) of the 
Act. The amounts of such increases to the FY 2012 allotments for any 
affected States will be determined at a later date.

III. Tables

    Following are the keys and associated tables for the CHIP funding 
provisions as discussed in previous sections (note that for purposes of 
presentation and due to rounding, not all numbers following decimals 
are shown in the following tables):
    Table 1--Allotment Increase Factor for 2012
    Table 2--FY 2012 Children's Health Insurance Program Allotments 
Under the Children's Health Insurance Program

A. Table 1--Allotment Increase Factor for 2012

Key to Table 1
    Column/Description

    Column A = State. Column A contains the name of the State, District 
of Columbia, U.S. Commonwealth or Territory.
    Column B = PCNHE 2011, PCNHE 2012, PCHCG Factor. Column B contains 
the calculation of the per Capita Health Care Growth (PCHCG) Factor for 
FY 2012, determined as 1 plus the percentage increase in the per 
Capital National Health Expenditures (PCNHE) from calendar year 2011 to 
calendar year 2012.
    Columns C through F = Calculation of the Child Population Growth 
Factor (CPGF) for FY 2012:
    Column C = July 1, 2011 Child Population. Column C contains the 
population of children in each State or the United States as of July 1, 
2011, as provided by the most recent published data of the Census 
Bureau before the beginning of FY 2012.
    Column D = July 1, 2012 Child Population. Column D contains the 
population of children in each State or the United States as of July 1, 
2012, as provided by the most recent published data of the Census 
Bureau before the beginning of FY 2012.
    Column E = Percent Increase 2011-2012. Column E contains the 
percentage increase, if any, of the population of children in each 
State, or the United States, from July 1, 2011 to July 1, 2012, 
calculated as the difference between the number in Column D minus the 
number in Column C divided by the number in Column C.
    Column F = FY 2012 Child Population Growth Factor. Column F 
contains the Child Population Growth Factor (CPGF) for each State, 
determined as 1.01 plus the percent in Column E for the State.
    Column G = FY 2012 Allotment Increase Factor. Column G contains the 
FY 2012 Allotment Increase Factor, calculated as the PCHCG factor in 
Column B multiplied by the CPGF percent in Column F.
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B. Table 2--FY 2012 Children's Health Insurance Program

Key to Table 2
Column/Description

    Column A = State. Column A contains the name of the State, District 
of Columbia, U.S. Commonwealth or Territory.
    Column B = FY 2011 CHIP Allotments. Column B contains, for the 50 
States and the District of Columbia only, the States' FY 2011 CHIP 
allotments, as were published in the February 17, 2011 Federal Register 
(76 FR 9233).
    Column C = FY 2011 Contingency Fund Payments. Column C contains the 
amounts of any contingency funds payments made to a State for FY 2011 
determined in accordance with the provisions of section 2104(n) of the 
Act.
    Column D = Total. Column D contains the total of the amounts in 
Columns B and C.
    Column E = FY 2012 Allotment Increase Factor. Column E contains the 
Allotment Increase Factor for each State as contained in Column G of 
Table 1.
    Column F = FY 2012 Total x Increase Factor. Column F contains the 
product of the total amount in Column D and the amount of the FY 2012 
Allotment Increase Factor in Column E. This amount represents the FY 
2012 CHIP allotment without the inclusion of any additional amounts 
available for the FY 2012 allotment indicated in Column G.
    Column G = Additional Amount Available for FY 2012 Allotment. 
Column G contains, for the 50 States and the District of Columbia only, 
the amount of additional amounts available to increase the FY 2012 
allotment, if any, as determined under the provisions of section 
2014(m)(6) or (7) of the Act. Amounts of additional CHIP allotments, if 
any, will be determined at a later date based on updated information 
that must be obtained from affected States.
    Column H = Total FY 2012 Allotment. Column H contains the total FY 
2012 CHIP allotment, determined as the sum of the amounts in Column F 
and Column G, if any.
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IV. Collection of Information Requirements

    This document does not impose any information collection or 
recordkeeping requirements. Consequently, it is not subject to Office 
of Management and Budget review under the authority of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

V. Waiver of Notice With Comment

    We ordinarily publish a notice with comment in the Federal Register 
and invite public comment. This procedure can be waived, however, if an 
agency finds good cause that a notice-and-comment procedure is 
impracticable, unnecessary, or contrary to the public interest and 
incorporates a statement of the finding and its reasons in the notice 
issued.
    On February 17, 2011 we issued a final rule in the Federal Register 
(76 FR 9233) that set forth the methodologies and procedures to 
determine CHIP allotments in accordance with applicable Federal laws on 
that date. The CHIP allotments for FY 2012 contained in this Federal 
Register notice were determined in accordance with the existing statute 
and the final regulations.
    Therefore, we find good cause to waive the notice with comment and 
to issue this final notice.

VI. Regulatory Impact Analysis

A. Overall

    We have examined the impacts of this notice as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. 
L. 96-354), section 1102(b) of the Act, section 202 of the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4) (UMRA), Executive Order 
13132 on Federalism (August 4, 1999), and the Congressional Review Act 
(5 U.S.C. 804(2)).
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). We have 
determined that this final notice is not economically significant, 
since it does not provide the methodologies under which State 
allotments for FY 2012 are calculated; rather, this notice contains the 
FY 2012 CHIP allotments determined in accordance with existing statute 
and regulations.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, we estimate that 
most hospitals and most other providers and suppliers are small 
entities as that term is used in the RFA nonprofit organizations. The 
great majority of hospitals and most other health care providers and 
suppliers are small entities, either by being nonprofit organizations 
or by meeting the SBA definition of a small business having revenues of 
less than $7.0 million to $34.5 million in any 1 year. Individuals and 
States are not included in the definition of a small entity. We are not 
preparing an analysis for the RFA because we have determined that this 
final notice will not have a significant economic impact on a 
substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. We 
are not preparing an analysis for section 1102(b) of the Act because we 
have determined that this final notice will not have a significant 
impact on the operations of a substantial number of small rural 
hospitals.
    Section 202 of the UMRA also requires that agencies assess 
anticipated costs and benefits before issuing any rule whose mandates 
require spending in any 1 year of $100 million in 1995 dollars, updated 
annually for inflation. In 2012, that threshold is approximately $139 
million. This notice will not create an unfunded mandate on States, 
tribal, or local governments in the aggregate, or by the private sector 
in the amount of $139 million in any one year.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. We have determined that this final notice will not 
significantly affect States' rights, roles, and responsibilities.
    Low-income children will benefit from payments under this program 
through increased opportunities for health insurance coverage. We 
believe this notice will have an overall positive impact by informing 
States, the District of Columbia, and Commonwealths and Territories of 
the extent to which they are permitted to expend funds under their 
child health plans using the additional funds provided by the FY 2009 
allotment amounts.

B. Anticipated Effects

1. Effects on the CHIP Program
    This notice provides the FY 2012 CHIP allotments determined in 
accordance with the CHIP statute and regulations. States will be able 
to administer their CHIP programs with the appropriate levels of 
funding made available by such allotments.
2. Effects on Other Entities
    This notice will have no effects on other entities; it is only 
promulgating the FY 2012 CHIP allotments determined in accordance with 
existing statute and regulations.

C. Alternatives Considered

    The FY 2012 CHIP allotments contained in this notice were 
determined in accordance with existing statute and regulations; 
accordingly, no alternatives were considered.

D. Accounting Statement

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a-4.pdf), in table 3, we have prepared an accounting statement showing 
the classification of the expenditures associated with the provisions 
of this rule. This table provides our best impact estimate of the rule, 
as it implements the CHIP, under which approximately up to $8.9 billion 
in additional Federal funds is made available for FY 2012. All 
expenditures are classified as transfers from the Federal Government to 
States.

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                Table 3--Accounting Statement: Classification of Estimated Expenditures, FY 2012
                                                 [In $billions]
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----------------------------------------------------------------------------------------------------------------
Category                                                                        TRANSFERS
----------------------------------------------------------------------------------------------------------------
                                                           Year                                  Period covered
                                                          dollar       Units discount rate
                                                        --------------------------------------------------------
Annualized Monetized Transfers.........................  ........           7%            3%   .................
                                                        --------------------------------------------------------
                                                            2012          $8.9          $8.9            FY-2012
----------------------------------------------------------------------------------------------------------------
From Whom To Whom?.....................................  Federal Government to States.
----------------------------------------------------------------------------------------------------------------

    In accordance with the provisions of Executive Order 12866, this 
final notice was reviewed by the Office of Management and Budget.

    Authority: Section 1102 of the Social Security Act (42 U.S.C. 
1302)

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program)
(Catalog of Federal Domestic Assistance Program No. 93.767, State 
Children's Health Insurance Program).

    Dated: May 14, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.

    Dated: June 11, 2012.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2012-17953 Filed 7-20-12; 11:15 am]
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