A Medicaid State Plan is an official document that specifies the structure and extent of the Medicaid program in a state. As required by Section 1902 of the Social Security Act (the Act), each state designs its own plan, which is subsequently authorized by the federal Department of Health and Human Services (DHHS). States must comply with certain requirements in order to receive federal funds under Medicaid. For example, states must provide medical assistance to individuals who are below the federal poverty level. They also need to take into account an individual's income from all sources when determining whether they are eligible for Medicaid. If an individual's income is greater than some specified amount, they will not be eligible for Medicaid unless they qualify for an exemption or exclusion. Further, states must establish a process to review their plans periodically. This process may include having an independent party conduct a compliance audit of the plan. If a state fails to comply with any requirement of the Act or its regulations, it can be subject to a penalty. These penalties can be as high as 10% of the total amount of funding that the state received in that year. However many times have been noted on plans that if the state agency fails to comply within 30 days after notice from DHHS then the plan is approved for such period/months. After these periods end the state must either comply or remove itself from the Medicaid program.