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Federal Register / Vol. 86, No. 127 / Wednesday, July 7, 2021 / Rules and Regulations trended forward. We believe that the payment rates can still be developed accurately using either the prior year QHP premiums or the current program year premiums and that it is appropriate to continue to provide the states these options.
Many of the factors in this final methodology are specified in statute;
therefore, for these factors we are limited in the alternative approaches we could consider. We do have some choices in selecting the data sources used to determine the factors included in the methodology. Except for statespecific RPs and enrollment data, we
will use national rather than statespecific data. This is due to the lack of currently available state-specific data needed to develop the majority of the factors included in the methodology.
We believe the national data will produce sufficiently accurate determinations of payment rates. In addition, we believe that this approach will be less burdensome on states. In many cases, using state-specific data would necessitate additional requirements on the states to collect, validate, and report data to CMS. By using national data, we are able to collect data from other sources and limit
the burden placed on the states. For RPs and enrollment data, we will use statespecific data rather than national data, as we believe state-specific data will produce more accurate determinations than national averages. Our responses to public comments on these alternative approaches are in section II of this final notice.
E. Accounting Statement and Table In accordance with OMB Circular A
4, Table 3 depicts an accounting statement summarizing the assessment of the transfers associated with these payment methodologies.

TABLE 3ACCOUNTING STATEMENT CHANGES TO FEDERAL PAYMENTS FOR THE BASIC HEALTH PROGRAM FOR 2022
Units Category
Estimates
Discount rate %

Year dollar Transfers: Annualized/Monetized $million/year
From Whom to Whom

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F. Regulatory Flexibility Act RFA
The Regulatory Flexibility Act 5
U.S.C. 601 et seq. RFA requires agencies to prepare a final regulatory flexibility analysis to describe the impact of the final rule on small entities, unless the head of the agency can certify that the rule will not have a significant economic impact on a substantial number of small entities.
The RFA generally defines a small entity as 1 a proprietary firm meeting the size standards of the Small Business Administration SBA; 2 a not-forprofit organization that is not dominant in its field; or 3 a small government jurisdiction with a population of less than 50,000. Individuals and states are not included in the definition of a small entity.
Because this final methodology is focused solely on federal BHP payment rates to states, it does not contain provisions that would have a direct impact on hospitals, physicians, and other health care providers that are designated as small entities under the RFA. Accordingly, we have determined that the methodology, like the previous methodology and the final rule that established the BHP program, will not have a significant economic impact on a substantial number of small entities.
Therefore, the Secretary has determined that this final rule will not have a significant economic impact on a substantial number of small entities.
Section 1102b of the Act requires us to prepare a regulatory impact analysis
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$1,114
1,114

G. Unfunded Mandates Reform Act UMRA
Section 202 of the Unfunded Mandates Reform Act UMRA of 2005
requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995
dollars, updated annually for inflation, by state, local, or tribal governments, in the aggregate, or by the private sector. In 2021, that threshold was approximately $158 million. States have the option, but are not required, to establish a BHP.
Further, the methodology would establish federal payment rates without requiring states to provide the Secretary with any data not already required by other provisions of the Patient Protection and Affordable Care Act or its implementing regulations. Thus, the final payment methodology does not
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From the Federal Government to States Operating BHPs.

if a methodology may have a significant economic impact on the operations of a substantial number of small rural hospitals. For purposes of section 1102b of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100
beds. For the preceding reasons, we have determined that the methodology will not have a significant impact on a substantial number of small rural hospitals. Therefore, the Secretary has determined that this final rule will not have a significant impact on the operations of a substantial number of small rural hospitals.

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mandate expenditures by state governments, local governments, or tribal governments.
H. Federalism Executive Order 13132 establishes certain requirements that an agency must meet when it issues a final rule that imposes substantial direct effects on states, preempts state law, or otherwise has federalism implications.
The BHP is entirely optional for states, and if implemented in a state, provides access to a pool of funding that would not otherwise be available to the state.
Accordingly, the requirements of Executive Order 13132 do not apply to this final methodology.
I. Conclusion Overall, federal BHP payments are expected to increase by $1,114 million in 2022 as a result of the changes to the payment methodology. The analysis above, together with the remainder of this preamble, provides an RIA.
This final regulation is subject to the Congressional Review Act 5 U.S.C. 801
et seq. and has been transmitted to the Congress and the Comptroller General for review.
Dated: June 30, 2021.
Xavier Becerra, Secretary, Department of Health and Human Services.
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