Common use of Enforcement of Budget Neutrality Clause in Contracts

Enforcement of Budget Neutrality. CMS will enforce budget neutrality over the life of the demonstration, rather than annually. However, no later than 6 months after the end of each DY or as soon thereafter as the data are available, the state will calculate annual expenditure targets for the completed year. This amount will be compared with the actual claimed FFP for Medicaid. Using the schedule below as a guide, if the state exceeds these targets, it will submit a corrective action plan to CMS for approval. The state will subsequently implement the approved corrective action plan. DY 2015 DY 4 budget limit amount +2 percent DY 2016 DYs 4 through 5 combined budget limit amount +1.5 percent DY 2017 DYs 5 through 6 combined budget limit amount +0 percent

Enforcement of Budget Neutrality. CMS will enforce budget neutrality over the life of the demonstration, rather than annually. However, no later than 6 months after the end of each DY or as soon thereafter as the data are available, the state will calculate annual expenditure targets for the completed year. This amount will be compared with the actual claimed FFP for Medicaid. Using the schedule below as a guide, if the state exceeds these targets, it will submit a corrective action plan to CMS for approval. The state will subsequently implement the approved corrective action plan. DY 2015 DY 4 10 budget limit amount +2 percent DY 2016 DYs 4 10 through 5 11 combined budget limit amount +1.5 percent DY 2017 DYs 5 11 through 6 12 combined budget limit amount +0 percent