Substance Use Prevention, Treatment, and Recovery Services Block Grant Maintenance of Effort

General Information

As a condition of receiving an annual Notice of Block Grant Award from Substance Abuse and Mental Health Services Administration (SAMHSA), the States and Jurisdictions are required to demonstrate compliance with MOE requirement. Title XIX, Part B, Subpart II of the Public Health Service Act (42 USC 300x-30) and the Substance Use Prevention, Treatment, and Recovery Services Block Grant; Interim Final Rule (45 C.F.R. 96.134) require the principal agency of a State (or Jurisdiction), i.e., the Single State Agency (SSA) for substance abuse prevention and treatment services, to maintain aggregate State expenditures for authorized activities to prevent and treat substance abuse at a level that is greater than or equal to the average level of such expenditures maintained by the State for the 2-year period preceding the year for which the State is applying for a grant.

Medicaid Co-Designation

There may be some instances in which a state expands their Medicaid eligibility as part of the Medicaid Expansion portion of the Affordable Care Act. In these cases the state may see a reorganization of funds as state Medicaid match funding is removed from the SSA’s office and appropriated to the Medicaid agency, resulting in a shortfall for the MOE requirement. In these cases, the state has a couple of options- they may either choose to co-designate the state Medicaid agency with the SSA’s office SOLELY for the purpose of calculating the MOE requirement (as normally all funds included in the MOE requirement MUST flow through the SSA’s office) and including client service levels funded by appropriate (substance misuse related) state Medicaid match dollars or the state can request a determination of material compliance for any shortfall (which may or may not be granted) if they choose not to co-designate. In order to co-designate with the state Medicaid agency the state must submit the following documentation:

• A signed and dated memorandum of understanding (MOU) or interagency agreement (IAA) between the two agencies indicating the intent to co-designate which should outline the responsibilities of each agency, how data sharing will be facilitated for the purpose of calculating and reporting national outcome measures (NOMS), outline the services to be included (must be appropriate to SUBG funding), how the MOE expenditures will be calculated and the length of the agreement. This must be signed either by the governor or their appointed designee for SUBG grant purposes.
• A document showing how the state uses generally accepted accounting principles (45 CFR 96.134(d)) to reflect aggregate state expenditures and that the state can demonstrate sufficient fiscal control that allows them to permit the tracing of funds to a level of expenditures that adequately establishes that such funds have not been used in violation of the restrictions and prohibitions of the statute authorizing the block grant (45 C.F.R. § 96.30(a)(b))
• A sample of the Medicaid database showing that the SSA’s office has access to client level information for the purpose of calculating expenditures and NOMS. This can be accomplished via a de-identified screenshot or listing of patient services that clearly identifies individual services by date, cost and procedure code.

When the SSA chooses to co-designate with the Medicaid agency for the purposes of calculating the MOE requirement for the SUBG, it is important to note that the SSA’s office is NOT giving up their role in the behavioral health system for the state, they are merely seeking to adequately account for funding and services being provided by state dollars for substance use disorder (SUD) services. If a state wishes to co-designate with their Medicaid agency, they should contact their state project officer in order to begin the process.

Deficiencies

In the event that a State or Jurisdiction reports a Maintenance of Effort (MOE) deficiency (shortfall) in the Annual Uniform Application for the Substance Use Prevention, Treatment, and Recovery Services Block Grant (SUBG) that is submitted to SAMHSA on or before October 1 of the Federal fiscal year for which a State or Jurisdiction is applying for Block Grant funds, SAMHSA’s Center for Substance Abuse Treatment (CSAT) disseminates a letter to the State or Jurisdiction indicating that the reported expenditures for authorized activities to prevent and treat substance abuse for the State fiscal year (SFY) involved are less than the amount required by Title XIX, Part B, Subpart II of the PHS Act and the Interim Final Rule. The letter also provides guidance to the State or Jurisdiction regarding the procedure to follow regarding the submission of a request for waiver to the SAMHSA Administrator.

Non-Compliance Remedies

Waivers

A State or Jurisdiction may request a waiver of the MOE requirement if the State can demonstrate that the MOE deficiency was the result of extraordinary economic conditions in the State during the State fiscal year(s) (SFY) involved (See 42 U.S.C. 300x-30(c), Waiver, and 45 C.F.R. 96.134(d)). In order to demonstrate that such conditions existed, a State or Jurisdiction must provide the economic data for the SFY involved and the immediate preceding SFY. The State’s waiver request must include a narrative description and summary statistics prepared by the units of State government responsible for collecting, analyzing, and reporting such data.

The Secretary of the Department of Health and Human Services (HHS) has delegated the authority to the Administrator of SAMHSA to make eligibility determinations for waiver of the MOE requirement. SAMHSA/CSAT review the supporting documentation submitted by a State or Jurisdiction as well performing confirmatory analysis of economic data reported by the Bureau of the Census within the U.S. Department of Commerce and the Bureau of Labor Statistics within the U.S. Department of Labor. If a State or Jurisdiction can demonstrate that extraordinary economic conditions existed during the applicable SFY involved and SAMHSA/CSAT confirms such conditions existed, SAMHSA/CSAT prepares and submits a decision memorandum to the SAMHSA Administrator with a recommendation to approve the request for waiver. Waivers can be requested as the result of economic conditions that impact either the whole state or a portion of the state.

Special Considerations- Section 1957 Waivers

The Public Health Services Act Section 1957 allows the Secretary to waive requirements of a grant in the event of a declared public health emergency. In this case it would permit SAMHSA to grant determinations of material compliance based on the public health emergency if a state would normally be found out of compliance. Section 1957 public health emergencies may arise from a variety of natural or man-made disasters and will require the state to justify how the disaster has impacted their program and why it has caused them to not meet the requirements of the SUBG. Requests for determinations of material compliance under this type of waiver will only be handled on a case by case and year by year basis, there will be no blanket waiver.

Determinations of Material Compliance

Further, the Secretary delegated the authority to the SAMHSA Administrator to make determinations of material compliance with the MOE requirement when any State or Jurisdiction reports a MOE deficiency (shortfall) for authorized activities which are < 3 percent of the amount required by Title XIX, Part B, Subpart II of the PHS Act and the Interim Final Rule.

In the event that any State or Jurisdiction reports a MOE deficiency (shortfall) for such activities which are ≥ 3 percent than the amount required by Title XIX, Part B, Subpart II of the PHS Act and the Interim Final Rule, SAMHSA/CSAT prepares and submits a decision memorandum from the SAMHSA Administrator to the HHS Secretary is prepared and submitted to the Office of the Secretary. Determinations of material compliance generally involve consideration of three main factors; state expenditure history, client service levels, and future funding commitments.

Non-Compliance Penalties

If the Secretary makes a determination that a State or Jurisdiction failed to comply with the MOE requirement, a State or Jurisdiction may be penalized in an amount equal to the amount of the MOE deficiency (shortfall) for the applicable fiscal year. Any amount of Federal SAPT Block Grant funds withheld from a State or Jurisdiction for non-compliance with the MOE requirement are re-distributed to the other States and Jurisdictions in accordance with the formula (See 42 USC 300x-33, Determination of Amount of Allotments and 42 U.S.C. 300x-54(b)(4), Specification of Amounts). The Secretary must provide a State or Jurisdiction with an opportunity for a hearing prior to making a final determination of non-compliance with the MOE requirement. SAMHSA published a notice in the April 10, 1995 edition of the Federal Register (See 60 FR 18137, Hearing Procedures for Certain Issues Related to the Substance Use Prevention, Treatment, and Recovery Services and Community Mental Health Services Block Grant Programs) which describes the procedures and timeline for making determinations of non-compliance and penalties. A state can request to enter into a negotiated agreement in lieu of a non-compliance decision. All cases are subject to determinations of material compliance decisions and any such corrective action plan entered into will be proposed by the state and authorized by SAMHSA staff.

Resources

1. Section 1916(c)(11)(A) of Title XIX, Part B, Subpart I of the Public Health Service Act (See 42 USC 300x- 4(c)(11)(A))
2. Section 1930(a) of Title XIX, Part B, Subpart II of the Public Health Service Act (See 42 U.S.C. 300x-30, Maintenance of Effort regarding State Expenditures)
3. Section 1933 of Title XIX, Part B, Subpart II of the Public Health Service Act (See 42 U.S.C. 300x-33, Determination of Allotments)
4. Section 1944(b) of Title XIX, Part B, Subpart III of the Public Health Service Act (See 42 U.S.C. 300x- 54(b), Specification of Amounts)
5. March 31, 1993 notice published in the Federal Register Substance Use Prevention, Treatment, and Recovery Services Block Grant; Interim Final Rule (See 45 C.F.R. 96.134, Maintenance of Effort Regarding State Expenditures)
6. MOE Deficiency Notification Letter Template
7. Addendum to the MOE Deficiency Notification Letter Template
8. August 20, 2013 Delegation of Authority Letter