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Approval Period: April 1, 2019 through December 31, 2028 Page 18 of 28
44. Budget Neutrality Annual Expenditure Limits. For each DY, an annual budget limit will be calculated for the demonstration. For the purposes of this demonstration, the DY is based off the calendar year (CY) of January 1 to December 31. The budget limit is calculated as the projected per member/per month (PMPM) cost times the actual number of member months for the demonstration multiplied by the Composite Federal Share.
PMPM Cost. The following table gives the PMPM (Total Computable) costs for the calculation described above by DY. The PMPM cost was constructed based on state expenditures for DY 6 and increased by the rate of growth included in the President’s federal fiscal year 2015 budget for DYs 10 through 14 as outlined below.
Trend Rate DY 8 (CY19) DY 9 (CY20) DY 10 (CY21) DY 11 (CY22) DY 12 (CY23) Demonstration PMPM 4.7 % $14.80 $15.50 $16.22 $16.99 $17.78
DY 13 (CY24) DY 14 (CY25) DY 15 (CY26) DY 16 (CY27) DY 17 (CY28) $18.62 $19.50 $20.41 $21.37 $22.38
a) Composite Federal Share. The Composite Federal Share is the ratio calculated by dividing the sum total of FFP received by the state on actual demonstration expenditures during the approval period, as reported on the forms listed in STC 33 above, by total computable demonstration expenditures for the same period as reported on the same forms. Should the demonstration be terminated prior to the end of the approval period (see STCs 8 and 9), the Composite Federal Share will be determined based on actual expenditures for the period in which the demonstration was active. For the purpose of interim monitoring of budget neutrality, a reasonable Composite Federal Share may be used. b) Structure. The demonstration is structured as a “pass-through” or “hypothetical” population. Therefore, the state may not derive savings from the demonstration. c) Application of the Budget Limit. The budget limit calculated above will apply to demonstration expenditures, as reported by the state on the CMS-64 forms. If at the end of the demonstration period, the costs of the demonstration services exceed the budget limit, the excess federal funds will be returned to CMS.
45. Future Adjustments to the Budget Neutrality Expenditure Limit. CMS reserves the right to adjust the budget neutrality expenditure limit to be consistent with enforcement of impermissible provider payments, health care related taxes, new federal statutes, or policy interpretations implemented through letters, memoranda, or regulations with respect to the provision of services covered under the demonstration.