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Audit (A-09-09-00075)

05-22-2009
Review of the Calculations of Temporary Increases in Federal Medical Assistance Percentages Under the American Recovery and Reinvestment Act

Executive Summary

The Office of the Assistant Secretary for Planning and Evaluation (ASPE) calculated temporary Federal medical assistance percentage (FMAP) increases for the first and second quarters of Federal fiscal year (FY) 2009 for the 50 States and the District of Columbia in accordance with the American Recovery and Reinvestment Act (ARRA). The ARRA, enacted February 17, 2009, provides fiscal relief to States to protect and maintain State Medicaid programs in a period of economic downturn. For the recession adjustment period (October 1, 2008, through December 31, 2010), the ARRA provides $87 billion in additional Medicaid funding based on temporary increases in States' FMAPs. The Federal Government pays its share of States' medical assistance expenditures based on the FMAP, which varies depending on each State's relative per capita income.

ASPE calculates the temporary FMAP increases quarterly. ASPE then provides these FMAPs to the Centers for Medicare & Medicaid Services, which uses them to determine the amount of Federal funds to award to States through the Medicaid grant process. For the first two quarters of FY 2009, ASPE identified the correct FMAP "hold harmless" (the higher of the published FMAPs for FYs 2008 and 2009 for each State and the District of Columbia), added an across-the-board increase of 6.2 percentage points, and properly calculated additional relief based on increases in States' average monthly unemployment rates. Consequently, this report contains no recommendations.

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