Common use of Enforcement of Budget Neutrality Clause in Contracts

Enforcement of Budget Neutrality. CMS shall enforce budget neutrality over the life of the demonstration rather than on an annual basis. However, if the state’s expenditures exceed the calculated cumulative budget neutrality limit by the percentage identified below for any of the demonstration years, the state must submit a corrective action plan to CMS for approval. The state will subsequently implement the approved corrective action plan. Year Cumulative target definition Percentage DY 1 Cumulative budget neutrality limit plus: 2.0 percent DY 2 Cumulative budget neutrality limit plus: 1.5 percent DY 3 Cumulative budget neutrality limit plus: 1.0 percent DY 4 Cumulative budget neutrality limit plus: 0.5 percent DY 5 Cumulative budget neutrality limit plus: 0 percent

Enforcement of Budget Neutrality. CMS shall enforce budget neutrality over the life of the demonstration demonstration, rather than on an annual basis. However, if the state’s expenditures exceed the calculated cumulative budget neutrality limit expenditure cap by the percentage identified below for any of the demonstration years, the state must submit a corrective action plan to CMS for approval. The state will subsequently implement the approved corrective action plan. Demonstration Year Cumulative target definition Target Definition Percentage DY 1 6 Cumulative budget neutrality limit plus: 2.0 percent DY 2 7 Cumulative budget neutrality limit plus: 1.5 percent DY 3 8 Cumulative budget neutrality limit plus: 1.0 percent DY 4 9 Cumulative budget neutrality limit plus: 0.5 percent DY 5 10 Cumulative budget neutrality limit plus: 0 percent

Enforcement of Budget Neutrality. CMS shall enforce budget neutrality over the life of the demonstration rather than on an annual basis. However, if the state’s expenditures exceed the calculated cumulative budget neutrality limit expenditure cap by the percentage identified below for any of the demonstration years, the state must submit a corrective action plan to CMS for approval. The state will subsequently implement the approved corrective action plan. Year Cumulative target definition Percentage DY 1 19 Cumulative budget neutrality limit plus: 2.0 percent DY 2 19 & 20 Cumulative budget neutrality limit plus: 1.5 percent DY 3 19 through 21 Cumulative budget neutrality limit plus: 1.0 percent DY 4 19 through 22 Cumulative budget neutrality limit plus: 0.5 percent DY 5 19 through 23 Cumulative budget neutrality limit plus: 0 percent

Enforcement of Budget Neutrality. CMS shall enforce budget neutrality over the life of the demonstration rather than on an annual basis. However, if the state’s expenditures exceed the calculated cumulative budget neutrality limit by the percentage identified below for any of the demonstration years, the state must submit a corrective action plan to CMS for approval. The state will subsequently implement the approved corrective action plan. Year Cumulative target definition Percentage DY 1 Cumulative budget neutrality limit for DY 1 plus: 2.0 percent DY 2 Cumulative budget neutrality limit for DY 1 + DY 2 plus: 1.5 percent DY 3 Cumulative budget neutrality limit for DY 1 – DY 3 plus: 1.0 percent DY 4 Cumulative budget neutrality limit for DY 1- DY 4 plus: 0.5 percent DY 5 Cumulative budget neutrality limit plusfor DY 1 – DY 5plus: 0 percent