title, including payments attributable to 
disproportionate share hospital payments 
under section 1923, for each of the cat-
egories of beneficiaries under subsection 
(b)(2) for the base fiscal year for each of 
the 50 States and the District of Colum-
bia. 
‘‘(ii) BEST
AVAILABLE
DATA.—The 
determination under clause (i) shall ini-
tially be estimated by the Secretary, based 
upon the best available data at the time 
the determination is made. 
‘‘(iii) UPDATES.—The determination 
under clause (i) shall be updated by the 
Secretary on an annual basis based upon 
improved data. The Secretary shall adjust 
the amounts under subsection (a)(1)(A) to 
reflect changes in the amounts so deter-
mined based on such updates. 
‘‘(B) EXCLUSION OF PASS-THROUGH PAY-
MENTS.—In computing base per capita, per cat-
egory amounts under subparagraph (A)(i) the 
Secretary shall exclude payments described in 
subsection (a)(4). 
‘‘(C) STANDARDIZATION.— 
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‘‘(i) IN GENERAL.—In computing each 
such amount, the Secretary shall stand-
ardize the amount in order to remove the 
variation attributable to the following: 
‘‘(I) RISK FACTORS.—Such risk 
factors as age, health and disability 
status (including high cost medical 
conditions), gender, institutional sta-
tus, and such other factors as the 
Secretary determines to be appro-
priate, so as to ensure actuarial 
equivalence. 
‘‘(II) 
GEOGRAPHIC.—Variations 
in costs on a county-by-county basis. 
‘‘(ii) 
APPLICATION
OF
MEDICARE 
METHODOLOGY.— 
‘‘(I) METHOD FOR RISK STAND-
ARDIZATION.—In carrying out clause 
(i)(I), the Secretary may apply the 
hierarchal condition category method-
ology under section 1853(a)(1)(C). If 
the Secretary uses such methodology, 
the Secretary shall adjust the applica-
tion of such methodology to take into 
account the differences in services 
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provided under this title compared to 
title XVIII, such as the coverage of 
long term care, pregnancy, and pedi-
atric services. 
‘‘(II) METHOD FOR GEOGRAPHIC 
STANDARDIZATION.—The 
Secretary 
shall apply the standardization under 
clause (i)(II) in a manner similar to 
that 
applied 
under 
section 
1853(c)(4)(A)(iii). 
‘‘(iii) APPLICATION ON A NATIONAL, 
BUDGET NEUTRAL BASIS.—The standard-
ization under clause (i) shall be designed 
and implemented on a uniform national 
basis and shall be budget neutral so as to 
not result in any aggregate change in pay-
ments under this section. 
‘‘(iv) RESPONSE TO NEW RISK.—Sub-
ject to clause (iii), the Secretary may ad-
just the standardization under clause (i) to 
respond promptly to new instances of com-
municable diseases and other public health 
hazards. 
‘‘(D) ADJUSTMENT FOR TEMPORARY FMAP 
INCREASES.—In computing each such amount 
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the Secretary shall disregard portions of pay-
ments that are attributable to a temporary in-
crease in the Federal matching rates, including 
those attributable to the following: 
‘‘(i) PPACA DISASTER
FMAP.—Sec-
tion 1905(aa). 
‘‘(ii) ARRA.—Section 5001 of the 
American Recovery and Reinvestment Act 
of 2009 (42 U.S.C. 1396d note). 
‘‘(iii) 
EXTRAORDINARY
EMPLOYER 
PENSION CONTRIBUTION.—Section 614 of 
the Children’s Health Insurance Program 
Reauthorization Act of 2009 (42 U.S.C. 
1396d note). 
‘‘(3) ALLOCATION OF NONMEDICAL ASSISTANCE 
PAYMENTS.—The Secretary shall establish rules for 
the allocation of payments under this title (other 
than those payments described in paragraph (1) or 
(5) of section 1903(a) and including such payments 
attributable to section 1923)— 
‘‘(A) among different categories of bene-
ficiaries; and 
‘‘(B) between payments included under 
this section and payments described in sub-
section (a)(4). 
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‘‘(4) TRANSITION TO A CORRIDOR AROUND THE 
NATIONAL AVERAGE.— 
‘‘(A) DETERMINATION OF NATIONAL AVER-
AGE
BASE
PER
CAPITA, 
PER
CATEGORY 
AMOUNT.—Subject to subparagraph (C), the 
Secretary shall determine a national average 
base per capita, per category amount equal to 
the average of the base per capita, per category 
amounts for each of the 50 States and the Dis-
trict of Columbia determined under paragraph 
(2), weighted by the average number of bene-
ficiaries in each such category and State as de-
termined by the Secretary consistent with sub-
section (d) for the base fiscal year. 
‘‘(B) TRANSITION ADJUSTMENT.— 
‘‘(i) HIGH PER CAPITA STATES.—In 
the case of a high per capita State (as de-
fined in clause (iii)(I)) for a category, the 
per capita quarterly amount for such State 
and category for a quarter in a fiscal year 
(beginning with fiscal year 2017 and end-
ing with fiscal year 2024) is equal to the 
sum of— 
‘‘(I) the product of the State-spe-
cific factor for such fiscal year (as de-
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fined in clause (iv)) and the per capita 
quarterly amount that would other-
wise be determined under paragraph 
(1) for such State and category if 
clause (i) of paragraph (1)(C) did not 
apply; and 
‘‘(II) the product of 1 minus the 
State-specific factor for such fiscal 
year and the per capita quarterly 
amount that would otherwise be deter-
mined under paragraph (1) for a 
State and category if the base per 
capita, per category amount deter-
mined under paragraph (2) for the 
State and category were equal to 110 
percent of the national average base 
per capita, per category amount deter-
mined under subparagraph (A) for 
such category. 
‘‘(ii) LOW
PER
CAPITA
STATES.—In 
the case of a low per capita State (as de-
fined in clause (iii)(II)) for a category, the 
per capita quarterly amount for such State 
and category for a quarter in a fiscal year 
(beginning with fiscal year 2017 and end-
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ing with fiscal year 2024) is equal to the 
sum of— 
‘‘(I) the product of the State-spe-
cific factor for such fiscal year and 
the per capita quarterly amount that 
would otherwise be determined under 
paragraph (1) for such State and cat-
egory if clause (i) of paragraph (1)(C) 
did not apply; and 
‘‘(II) the product of 1 minus the 
State-specific factor for such fiscal 
year and the per capita quarterly 
amount that would otherwise be deter-
mined under paragraph (1) for a 
State and category if the base per 
capita, per category amount deter-
mined under paragraph (2) for the 
State and category were equal to 90 
percent of the national average base 
per capita, per category amount deter-
mined under subparagraph (A) for 
such category. 
‘‘(iii) HIGH
AND
LOW
PER
CAPITA 
STATES DEFINED.—In this subparagraph: 
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