Wednesday, November 10, 2010

HHS Publishes FMAP rates for 2012

One of the most important numbers for state budgeting and other purposes is the Federal Medical Assistance Percentage, or FMAP. At its core, this number represents the rate at which the federal government will reimburse states for medical services they provide through Medicaid, but FMAP rates also are used in a number of other federal programs, including the Children's Health Insurance Program, support to states for child support enforcement, some payments to states through the Child Care and Development Fund, and some assistance to states for foster care and related programs.

Because these programs, especially Medicaid, represent huge portions of states' budgets, FMAP-based reimbursements loom large in state budgeting. As a result, state agencies and their partners are taking note of a notice published today (November 10) by the US Dept of Health and Human Services, establishing the FMAP rates that will be in effect from October 1, 2011, through September 30, 2012. FMAP rates are calculated every year. Current and historical rates are posted on-line by the HHS Assistant Secretary for Planning and Evaluation (ASPE). The rates for FY 2012 appear in the November 10, 2010, Federal Register, but soon will make their way to the ASPE web site.

For transportation providers, FMAP rates may be behind-the-scenes, but are significant. States spend close to $3 billion a year on non-emergency transportation through their Medicaid programs, much of which is provided by public and community transportation services. Since the overwhelming majority of states claim these transportation expenses as a "medical" expense, reimbursed by the federal government at the FMAP rate, any change in those percentages will affect the bottom line of states' Medicaid budgets, and can influence the ways in which states procure and pay for their Medicaid non-emergency transportation.

If you are unfamiliar with FMAP rates, here's a bit of background. They are calculated annually using a formula based on each state's average per capita income. The lower a state's per capita income, the higher its FMAP. By law, no state FMAP can be lower than 50 percent, nor higher than 83 percent (14 states have FMAPs of 50 percent; Mississippi's FMAP is the highest, at 74.73 percent in FY 2011 (going down to 74.18 percent in FY 2012). The District of Columbia's FMAP is set at 70 percent; the FMAP in territories and possessions is fixed at 50 percent. Under the American Recovery and Reinvestment Act, there was a temporary increase of at least 6.2 percentage points in every state's FMAP, which has steered nearly $92 billion of additional federal investments into state Medicaid coffers.

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