ACYF-CB-PI-09-03

ACF Administration for Children and Families	U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Administration for Children, Youth and Families Office of Administration
	1. Log No.: ACYF-CB-PI-09-03	2. Issuance Date: March 16, 2009
	3. Originating Office: Children's Bureau; Office of Grants Management
	4. Key Words: FMAP Rates, Form ACF-IV-E-1, "Title IV-E Foster Care and Adoption Assistance Financial Report"

Program Instruction

To: State and Territorial agencies administering or supervising the administration of the Foster Care, Adoption Assistance and Guardianship Assistance programs under Title IV-E of the Social Security Act.

Subject: Federal Medical Assistance Percentage (FMAP) Rates affecting programs under title IV-E of the Social Security Act

Legal and Related References: Section 5001 of Public Law 111-5, the "American Recovery and Reinvestment Act of 2009."

Background: The Federal Medical Assistance Percentage (FMAP) rates are published annually in the Federal Register. These rates, which vary by State, are used for title IV-E purposes to compute the Federal share of maintenance assistance payments made under the Foster Care, Adoption Assistance and Guardianship Assistance programs.

Under Public Law 111-5, the FMAP rates are being temporarily increased to provide additional funding to States and Territories. These temporary increases will affect rates for FY 2009, FY 2010 and the first quarter of FY 2011 only (i.e., October 1, 2008 - December 31, 2010).

There are four basic provisions in the law to increase the FMAP rates:

Hold Harmless: The "regular" FMAP rate for FYs 2009, 2010 and 2011 will be compared to the "regular" rates for the prior one, two or three fiscal years, respectively, and the highest rate of that comparison will be used for FYs 2009, 2010 and the first quarter of FY 2011, respectively;
Across-the-Board: After the hold harmless provision (above) is applied, an increase of 6.2 percent will be added to the FMAP rate of every State;
State Unemployment Adjustment: (This provision is not applicable to title IV-E programs.)
Medicaid Eligibility: The State Medicaid program must meet certain conditions under Section 5001 of PL 111-5 in order for the State to be eligible for the increased FMAP. Title IV-E access to the increased FMAP is also contingent upon the State Medicaid program satisfying these conditions. If the State is currently ineligible because it does not meet these conditions, the State may be retroactively eligible if it comes into compliance prior to July 1, 2009. State child welfare directors are strongly advised to ensure that the State Medicaid program is compliant and eligible for the increased FMAP prior to submitting claims under title IV-E.

The State will receive additional Federal funds for this program for the State's estimates of maintenance assistance payments during the quarter. Under Section 5001(a) and (b) of ARRA, the FMAP rate was temporarily increased for this program, retroactive to October 1, 2008.

A further provision that currently only applies to Puerto Rico requires it to make an election to accept a smaller increase in the additional FMAP rate (based on increases in unemployment) applicable for title XIX purposes in order to receive the across the board 6.2 percent increase for title IV-E purposes.

Effective Date:
This rate change will affect the Federal share of maintenance assistance payments made under the Foster Care, Adoption Assistance or Guardianship Assistance programs on or after October 1, 2008 and through and including December 31, 2010.

Action Required/Financial Reporting:

Both the Total amount and Federal share of maintenance assistance payments made by the State under both Foster Care and Adoption Assistance are reported for each program on the respective Line 1, Columns A and B of Part 1 of Form ACF-IV-E-1, the "Title IV-E Foster Care and Adoption Assistance Financial Report."
This statute was enacted after the submission deadline for these reports for the 1st quarter, FY 2009 (quarter ended December 31, 2008). Therefore, States have already reported the total amount of maintenance assistance payments made during the quarter and the Federal share of those payments, calculated using the "regular" FMAP rates.
The American Recovery and Reinvestment Act of 2009 (ARRA) related awards to the States for the 1st quarter have been based on the submitted estimates and the new FMAP rates. Resubmission of these estimates is not necessary because any differences in the original 1st Quarter awards and the revised 1st Quarter awards can be adjusted in the 3rd Quarter Adjustment (comparing estimates to actuals). The related awards to the States for the Second quarter can be similarly resolved with the 4th Quarter Adjustment rather than resubmission. If needed, States could revise the 2nd quarter estimates for assistance payment.
States must use the new FMAP rates in submitting estimates and claims for subsequent quarters through December 31, 2010.
When reporting prior quarter adjustments in Part 2 of Form ACF-IV-E-1 for assistance payments, States should be careful to apply the proper FMAP rate applicable to the FY in which the cost was incurred.
The new FMAP rates are also applicable to assistance payments under the Guardianship Assistance Program. States should refer to ACYF-CB-PI-08-07 for more information on program and reporting requirements.

Inquiries To: Children's Bureau Regional Program Managers or ACF Regional Grants Officers

Attachment: New Estimated FMAP rates for FY2009 and 2010. (PDF - 43 KB)

/s/
Maiso Bryant, Ed.D.
Acting Commissioner