‘‘(II) 
INTERGOVERNMENTAL 
TRANSFERS.—An expenditure that is 
attributable to an intergovernmental 
transfer. 
‘‘(III) PROVIDER
TAXES.—If a 
provider paid the State health care re-
lated taxes (as defined in section 
1903(w)(3)(A)), expenditures made 
for services furnished by such provider 
up to the amount of such taxes paid 
by such provider. 
‘‘(IV) CERTIFIED
PUBLIC
EX-
PENDITURES.—An expenditure that is 
attributable to certified public expend-
itures. 
‘‘(iii) CREDITING FRAUD AND ABUSE 
RECOVERIES.—Amounts recovered by a 
State through the operation of its Medicaid 
fraud and abuse control unit described in 
section 1903(q) shall be fully counted to-
ward the State share under subparagraph 
(A). 
‘‘(F) CONSTRUCTION.—Nothing in the 
paragraph shall be construed as preventing a 
State from expending, from non-Federal funds, 
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an amount under this title in excess of the 
amount of the State share. 
‘‘(G) DETERMINATION BASED UPON SUB-
MITTED CLAIMS.—In applying this paragraph 
with respect to expenditures of a State for a 
quarter, the determination of the expenditures 
for such State for such quarter shall be made 
after the end of the period (which, as of the 
date of the enactment of this section, is 2 
years) for which the Secretary accepts claims 
for payment under this title with respect to 
such quarter. 
‘‘(3) USE OF FEDERAL PAYMENTS.— 
‘‘(A) APPLICATION OF MEDICAID LIMITA-
TIONS.—A State may only use Federal pay-
ments received under this section for expendi-
tures for which Federal funds would have been 
payable under this title but for this section. 
‘‘(B) LIMITATION
FOR
CERTAIN
ELIGI-
BLES.— 
‘‘(i) APPLICATION
OF
100
PERCENT 
FEDERAL POVERTY LINE LIMIT ON ELIGI-
BILITY.—Subject to clause (ii), a State 
may not use such Federal payments to 
provide medical assistance for an indi-
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vidual who has an income (as determined 
under clause (iii)) that exceeds 100 percent 
of the poverty line (as defined in section 
2110(c)(5)) applicable to a family of the 
size involved. 
‘‘(ii) DETERMINATION
OF
INCOME 
USING
MODIFIED
ADJUSTED
GROSS
IN-
COME
WITHOUT
ANY
PERCENT
IN-
CREASE.—In determining income for pur-
poses 
of 
clause 
(i) 
under 
section 
1902(e)(14) (relating to modified adjusted 
gross income), the following rules shall 
apply: 
‘‘(I) APPLICATION
OF
SPEND 
DOWN.—The State shall take into ac-
count the costs incurred for medical 
care or for any other type of remedial 
care recognized under State law in the 
same manner and to the same extent 
that such State takes such costs into 
account 
for 
purposes 
of 
section 
1902(a)(17). 
‘‘(II) DISREGARD OF 5 PERCENT 
INCREASE.—Subparagraph (I) of sec-
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tion 1902(e)(14) (relating to a 5 per-
cent reduction) shall not apply. 
‘‘(iii) EXCEPTION.—Clause (i) shall 
not apply to an individual who is— 
‘‘(I) a woman described in clause 
(i) of section 1903(v)(4)(A); 
‘‘(II) a child who is an individual 
described in clause (i) of section 
1905(a); 
‘‘(III) enrolled in a State plan 
under this title as of the date of the 
enactment of this section for the pe-
riod of continuous enrollment; or 
‘‘(IV) 
described 
in 
section 
1902(e)(14)(D) (relating to modified 
adjusted gross income). 
‘‘(iv) CLARIFICATION
RELATED
TO 
COMMUNITY
SPOUSE.—Nothing in this 
subparagraph shall supersede the applica-
tion of section 1924 (related to community 
spouse income and assets). 
‘‘(4) EXCEPTIONS
FOR
PASS-THROUGH
PAY-
MENTS.— 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply, and amounts shall continue to be 
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payable under this title (and not under this sec-
tion), in the case of the following payments 
(and related administrative costs and expendi-
tures): 
‘‘(i) PAYMENTS
TO
TERRITORIES.— 
Payments to a State other than the 50 
States and the District of Columbia. 
‘‘(ii) MEDICARE
COST
SHARING.— 
Payments attributable to Medicare cost 
sharing under section 1905(p). 
‘‘(iii) 
PEDIATRIC
VACCINES.—Pay-
ments attributable to section 1928. 
‘‘(iv) EMERGENCY SERVICES FOR CER-
TAIN
INDIVIDUALS.—Payments for treat-
ment of emergency medical conditions at-
tributable to the application of section 
1903(v)(2). 
‘‘(v) INDIAN
HEALTH
CARE
FACILI-
TIES.—Payments for medical assistance 
described in the third sentence of section 
1905(b). 
‘‘(vi) EMPLOYER-SPONSORED
INSUR-
ANCE (ESI).—Payments for medical assist-
ance attributable to payments to employers 
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for employer-sponsored health benefits cov-
erage. 
‘‘(vii) OTHER
POPULATIONS
WITH 
LIMITED BENEFIT COVERAGE.—Other pay-
ments that are determined by the Sec-
retary to be related to a specified popu-
lation for which the medical assistance 
under this title is limited and does not in-
clude any inpatient, nursing facility, or 
long-term care services. 
‘‘(B) CERTAIN EXPENSES.—Paragraph (1) 
shall not apply, and amounts shall continue to 
be payable under this title (and not under this 
section), in the case of the following: 
‘‘(i) ADMINISTRATION
OF
MEDICARE 
PRESCRIPTION DRUG BENEFIT.—Expendi-
tures described in section 1935(b) (relating 
to administration of the Medicare prescrip-
tion drug benefit). 
‘‘(ii) PAYMENTS FOR HIT BONUSES.— 
Payments under section 1903(a)(3)(F) (re-
lating to payments to encourage the adop-
tion and use of certified EHR technology). 
‘‘(iii) PAYMENTS FOR DESIGN, DEVEL-
OPMENT, AND INSTALLATION OF MMIS AND 
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