Savings Gained from the Enhanced Federal Medical Assistance Percentage

Federal Medical Assistance Percentage

The Federal Medical Assistance Percentage (FMAP) determines the state and federal shares of funding for Medicaid, Adoption Assistance, and Foster Care. It is determined annually by the Secretary of Health and Human Services and is based on each state’s per capita personal income compared to the average per capita personal income in other states.

Enhanced Federal Medical Assistance Percentage

The Families First Coronavirus Response Act (FFCRA) provides a temporary 6.2 percentage point increase to the FMAP for the duration of the federal public health emergency (PHE). This means that the federal government pays an additional 6.2 percent of the state’s Medicaid expenditures. The State saves an additional 6.2 percent from the State General Fund (SGF) on its Medicaid program for the duration of the PHE.
The increase became effective on January 1, 2020, and extends through the quarter in which the PHE ends. The current PHE was renewed effective October 15, 2021, and will be in effect for 90 days. This extension would move the anticipated end date of the PHE to January 2022, unless extended further. Therefore, the savings are anticipated to continue through March 2022.

The Kansas Department of Health and Environment (KDHE) has provided the information in the following tables. The first table describes the savings accumulated thus far due to the 6.2 percent increase to the federal share and also includes the savings due to the increased enhanced FMAP (eFMAP). The eFMAP applies to Medicaid Services such as the Children’s Health Insurance Program (CHIP) and is calculated using a different formula than the regular FMAP. The eFMAP gains 4.34 percentage points during the PHE. The total SGF savings for the last two quarters of FY 2020, the entirety of FY 2021 and one quarter of FY 2022 has been calculated to be $449.6 million.

The second table shows the savings from the 6.2 percentage point increase for the three agencies impacted by the Medicaid FMAP increase: KDHE, Kansas Department for Aging and Disability Services (KDADS), and the Kansas Department of Corrections (KDOC).

Federal Medical Assistance Percentage Increase for Home and Community-Based Services Waivers

The American Rescue Plan Act of 2021 (ARPA) provides a 10.0 percent increase for home and community-based services (HCBS) provided between April 1, 2021, and March 31, 2022. These funds are intended to supplement, not supplant, state funds.

KDADS anticipates it should receive approximately $80.3 million in additional federal funds for HCBS-related initiatives. KDADS currently plans to utilize these funds in improving three areas:

• $57.1 million for workforce initiatives in an attempt to improve direct support worker retention and training;
• $2.0 million to support HCBS participants find integrated jobs; and
• $20.7 million to expand accessibility to HCBS services through waiting list studies, transition services, and agency staffing to assist the HCBS wavier programs.

SGF Savings