Department of Health and Human Services 

American Recovery and Reinvestment Act 
Improving and Preserving Health Care

Office of the Secretary: Implementation of Increased Medicaid

Federal Medical Assistance Percentage (FMAP)
A. Funding Table
(Dollars in Thousands)
Project/Activity Program FY 2009 FY 2010 –
Level FY 2019
CMS $3,450.0 $1,104.0 $2,346.0
ACF 1,400.0 546.0 854.0
ASPE 150.0 60.0 90.0
Total Amount 5,000.0 1,710.0 3,290.0

B. Objectives
The purpose of the funds is for implementing section 5001- Temporary Increase of
the Federal Medical Assistance Percentage (FMAP) for Medicaid, Foster Care, and
Adoption Assistance. Generally, Section 5001 of the Recovery Act provided for an
increase in the States’ FMAPs during a 9 calendar quarter recession adjustment
period beginning October 1, 2008 and ending December 31, 2010. The Recovery
Act provides $5 million to the Office of the Secretary of HHS for implementation of
the increased FMAP provision. The Secretary will allocate to the Center for
Medicare and Medicaid Services (CMS), the Administration for Children and Families
(ACF), and the Office of the Assistant Secretary for Planning and Evaluation (ASPE)
for costs associated with implementing the provision on a quarterly basis for FY
2009, FY 2010, and FY 2011.

C. Activities
The following activities will be needed to implement section 5001. For ACF, funds
will be needed for staff and overhead (1 full time equivalent or FTE in 2009 & 2010;
0.5 FTE in 2011), IT, grant making (the GATES system), reporting, and PSC
Charges. For CMS, funds will be used for the costs of employees working on the
implementation of Recovery Act provisions related to Medicaid and SCHIP; for the
costs of employees (4 FTE) needed for continued oversight and reporting on the
increased FMAP; and to make the systems changes to CMS accounting/payment
systems necessary to make the increased FMAP grant awards. CMS has the
additional responsibility of working with States to ensure that they meet the
requirements of Section 5001(f) (Maintenance of Eligibility) and Section 5001(f)(2)
(States Prompt-Pay for Providers). ASPE obtains annual State and National per
capita income data and quarterly unemployment data from other Federal agencies in
order to calculate the FMAP for each State. Funds will be needed for staff to
coordinate the receipt of this information (e.g., BLS for unemployment data). ASPE
is also responsible for publishing the rates in the Federal Register. Funds will be
needed for the calculations and reporting of adjustments on a quarterly basis (0.25
FTE in each year of ARRA).
 Department of Health and Human Services 
American Recovery and Reinvestment Act 
Improving and Preserving Health Care

D. Characteristics
Section 5007 of the Recovery Act appropriated $5 million to the Secretary. Funds
from the Secretary will be allocated to CMS, ACF, and ASPE for costs of
implementation activities.

E. Delivery Schedule
Funds will be allocated to ASPE, CMS, and ACF upon submission and approval of
request for funds to carry out Section 5007(b) of the Recovery Act for FY 2009, FY
2010, and FY 2011.

F. Environmental Review Compliance

In general, the use of these funds: (1) mitigates social and environmental impacts;
(2) does not include facility construction or alterations of the human environment;
and (3) have no anticipated individual or cumulative significant effect on natural or
cultural assets.

The environmental impact for acquisition and use of IT and other products and
equipment will be mitigated by compliance with criteria described in Executive Order
13423 and the HHS Affirmative Procurement Plan (APP).

The E.O. 13423 requires that preference be given to the purchase of EPEAT-
registered electronic products and at least 95 percent of electronic products be
EPEAT-registered unless there is no EPEAT standard. When available, the
purchase of EPEAT Silver-rated electronic products or higher is required.

The APP has five major objectives: 1) Inform all appropriate HHS employees on the
requirements of the Federal green procurement preference programs, their roles and
responsibilities relevant to these programs and the opportunities to purchase green
products and services; 2) Promote purchase of green products and services to the
maximum extent practicable, consistent with the demands of mission, efficiency,
cost-effectiveness, and performance with continual improvement toward meeting
federally established procurement goals; 3) Reduce the amount of solid and
hazardous waste generated; 4) Reduce the consumption of energy and natural
resources; and, 5) Expand markets for green products and services.

The distribution of additional funds for FMAP as a result of the Recovery Act is
determined to categorically excluded based on a Category 2.f - :Functional
Exclusion: Grants for Social Services” and Category 2.c “Functional Exclusion:
Information Technology Management” under Chapter 30-20-30 of the HHS General
Administration Manual. .

To fulfill the environmental review process, the program manager under consultation
with the DHHS Environmental Program Manager, will document the categorical
exclusions through a memorandum to the record.

This activity is funded under the Recovery Act Division B and is not subject to
Section 1609(c) reporting requirements.
 Department of Health and Human Services 
American Recovery and Reinvestment Act 
Improving and Preserving Health Care

G. Measures
ASPE, CMS, and ACF will report quarterly on the use of the funds related to the
implementation of the increased FMAP. Compliance with the implementation of
Section 5001 will be evaluated on a quarterly basis. This will be in addition to the
regular quarterly expenditure reporting and will provide specific detail on how the
operating divisions are using these funds and ensuring they are meeting all
applicable requirements of the Recovery Act.

Output Measure: Number of quarters that the FMAP is calculated and published in
the Federal Register in a timely fashion.

Target: Nine quarters.

H. Monitoring and Evaluation

All Recovery Act programs will be assessed for risk and to ensure that appropriate
internal controls are in place throughout the entire funding cycle. These
assessments will be done consistent with the statutory requirements of the Federal
Manager’s Financial Integrity Act and the Improper Payments Information Act, as
well as OMB’s circular A-123 “Management’s Responsibility for Internal Control.” In
addition, ACF will work on an ongoing basis with the OIG and GAO to coordinate
oversight and audit activity.

The recipients organizations involved will provide to ASRT periodic reports of staff
work needed to implement the increased FMAP provisions. ASRT will analyze the
reports and determine whether the fund allocation is appropriate and adjust it as
necessary.

I. Transparency
The Office of the Assistant Secretary for Planning and Evaluation will be open and
transparent in all of its Recovery Act expenditures consistent with statutory and OMB
guidance.

Quarterly reporting on the use of the funds related to the implementation of the
increased FMAP from ASPE, CMS, and ACF.

J. Accountability
To ensure that managers are held to high standards of accountability in achieving
program goals under the Recovery Act, The Office of the Assistant Secretary for
Planning and Evaluation will build on and strengthen existing processes. Senior
ASPE, CMS, and ACF officials will meet regularly with senior Department officials to
ensure that projects are meeting their program goals, assessing and mitigating risks,
ensuring transparency, and incorporating corrective actions. The personnel
performance appraisal system will also incorporate Recovery Act program
stewardship responsibilities for program and business function managers.

ASPE, CMS, and ACF will continue to use its existing internal control infrastructure
to implement this provision. Standard FTE accountability measures will apply to the
 Department of Health and Human Services 
American Recovery and Reinvestment Act 
Improving and Preserving Health Care

use of these funds. To the extent that ASPE, CMS, and ACF find expenditures that
are not allowable or in excess of what is needed for implementation, ASPE, CMS,
and ACF will initiate recovery of any unallowable funds.

In addition, performance measures associated with the Medicaid FMAP increase and
the Title IV-E FMAP increase can be found those respective implementation plans.

K. Barriers to Effective Implementation

Effectively reconciling grant awards requires the cooperation of States.

L. Federal Infrastructure
The agency plans to spend funds effectively to comply with energy efficiency and to
demonstrate Federal leadership in sustainability, energy efficiency and reducing the
agency’s environmental impact. The acquisition and use of IT and other products
and equipment will be compliant with criteria described in Executive Order 13423
and the HHS Affirmative Procurement Plan (APP).

The E.O. 13423 requires that preference be given to the purchase of EPEAT-
registered electronic products and at least 95 percent of electronic products be
EPEAT-registered unless there is no EPEAT standard. When available, the
purchase of EPEAT Silver-rated electronic products or higher will be required. The
EPEAT is intended to help purchasers in the public and private sectors evaluate,
compare and select desktop computers, notebooks and monitors based on their
environmental attributes. The EPEAT website is: http://www.epeat.net/.

The APP has five major objectives: 1) Inform all appropriate HHS employees on the
requirements of the Federal green procurement preference programs, their roles and
responsibilities relevant to these programs and the opportunities to purchase green
products and services; 2) Promote purchase of green products and services to the
maximum extent practicable, consistent with the demands of mission, efficiency,
cost-effectiveness, and performance with continual improvement toward meeting
federally established procurement goals; 3) Reduce the amount of solid and
hazardous waste generated; 4) Reduce the consumption of energy and natural
resources; and, 5) Expand markets for green products and services.

The HHS Affirmative Procurement Plan (APP) applies to: a) All agency acquisitions,
including micro-purchases and purchase card transactions, in which an EPA-
designated item is acquired; b) Contractor Operated, Government-owned (GOCO)
HHS facilities; and c) State and local recipients of assistance funding. The latest
version (April 2009) of the HHS’ APP is available from Division of Acquisition
Program Support.