eral Medicaid program, the Secretary, and the eligible en-
tities with a contract under subsection (b) in the same 
manner as such provisions apply with respect to State 
plans under this title (or waiver of such plans) and the 
State or local agency administering such plan (or waiver). 
The Secretary may specify a timeline (which may include 
a phase-in) for implementing this subsection. 
‘‘(h) FRAUD AND ABUSE PROVISIONS.—Provisions of 
law (other than criminal law provisions) identified by the 
Secretary by regulation, in consultation (as appropriate) 
with the Inspector General of the Department of Health 
and Human Services, that impose sanctions with respect 
to waste, fraud, and abuse under this title or title XI, such 
as the False Claims Act, as well as provisions of law (other 
than criminal law provisions) identified by the Secretary 
that provide oversight authority, shall also apply to the 
Federal Medicaid program. 
‘‘(i) MAINTENANCE OF EFFORT.— 
‘‘(1) PAYMENT.— 
‘‘(A) IN GENERAL.—In the case of a State 
that, as of January 1, 2027, is expending 
amounts for all individuals described in section 
1902(a)(10)(A)(i)(VIII) under the State plan 
(or waiver of such plan) and that stops expend-
ing amounts for all such individuals under the 
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State plan (or waiver of such plan), such State 
shall for each quarter beginning after January 
1, 2027, during which such State does not ex-
pend amounts for all such individuals provide 
for payment under this subsection to the Sec-
retary of the product of— 
‘‘(i) 10 percent of, subject to subpara-
graph (B), the average monthly per capita 
costs expended under the State plan (or 
waiver of such plan) for such individuals 
during the most recent previous quarter 
with respect to which the State expended 
amounts for all such individuals; and 
‘‘(ii) the sum, for each month during 
such quarter, of the number of individuals 
enrolled under such program in such State. 
‘‘(B) ANNUAL INCREASE.—For purposes of 
subparagraph (A), in the case of a State with 
respect to which such subparagraph applies 
with respect to a period of consecutive quarters 
occurring during more than one calendar year, 
for such consecutive quarters occurring during 
the second of such calendar years or a subse-
quent calendar year, the average monthly per 
capita costs for each such quarter for such 
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State determined under subparagraph (A)(i), or 
this subparagraph, shall be annually increased 
by the Secretary by the percentage increase in 
Medicaid spending under this title during the 
preceding year (as determined based on the 
most recent National Health Expenditure data 
with respect to such year). 
‘‘(2) FORM AND MANNER OF PAYMENT.—Pay-
ment under paragraph (1) shall be made in a form 
and manner specified by the Secretary. 
‘‘(3) COMPLIANCE.—If a State fails to pay to 
the Secretary an amount required under paragraph 
(1), interest shall accrue on such amount at the rate 
provided under section 1903(d)(5). The amount so 
owed and applicable interest shall be immediately 
offset against amounts otherwise payable to the 
State under section 1903(a), in accordance with the 
Federal Claims Collection Act of 1996 and applica-
ble regulations. 
‘‘(4) DATA MATCH.—The Secretary shall per-
form such periodic data matches as may be nec-
essary to identify and compute the number of indi-
viduals enrolled under the Federal Medicaid pro-
gram under section 1948 in a coverage gap State (as 
referenced in subsection (a) of such section) for pur-
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poses of computing the amount under paragraph 
(1). 
‘‘(5) NOTICE.—The Secretary shall notify each 
State described in paragraph (1) not later than a 
date specified by the Secretary that is before the be-
ginning of each quarter (beginning with 2027) of the 
amount computed under paragraph (1) for the State 
for that year. 
‘‘(j) APPROPRIATIONS.—There is appropriated, out of 
any funds in the Treasury not otherwise appropriated, for 
each fiscal year such sums as are necessary to carry out 
subsections (a) through (i) of this section.’’. 
(b) DRUG REBATE CONFORMING AMENDMENT.— 
Section 1927(a)(1) of the Social Security Act (42 U.S.C. 
1396r–8(a)(1)) is amended in the first sentence— 
(1) by striking ‘‘or under part B of title XVIII’’ 
and inserting ‘‘, under the Federal Medicaid pro-
gram under section 1948, or under part B of title 
XVIII’’; and 
(2) by inserting ‘‘including as such subsection is 
applied pursuant to subsections (a)(2)(C) and (d) of 
section 1948 with respect to the Federal Medicaid 
program,’’ before ‘‘and must meet’’. 
Æ 
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