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TEAMKY Demonstration

Approval Period: January 1, 2025 through December 31, 2029

Page 64 of 155 known until the end of the demonstration’s approval period, for the purpose of interim monitoring of budget neutrality, a reasonable estimate of Composite Federal Share may be developed and used through the same process or through an alternative mutually agreed to method. Each Budget Neutrality Test has its own Composite Federal Share, as defined in the paragraph pertaining to each particular test.

94. Exceeding Budget Neutrality. CMS will enforce the budget neutrality agreement over the demonstration period, which extends from 1/1/2025 to 12/31/2029. The Main Budget Neutrality Test for this demonstration period may incorporate carry-forward savings, that is, net savings from up to 10 years of the immediately prior demonstration approval period(s) (1/1/2025 to 12/31/2029). If at the end of the demonstration approval period the Main Budget Neutrality Test or a SHAC Budget Neutrality Test has been exceeded, the excess federal funds will be returned to CMS. If the Demonstration is terminated prior to the end of the budget neutrality agreement, the budget neutrality test shall be based on the time elapsed through the termination date.

95. Corrective Action Plan. If at any time during the demonstration approval period CMS determines that the demonstration is on course to exceed its budget neutrality expenditure limit, CMS will require the state to submit a corrective action plan for CMS review and approval. CMS will use the threshold levels in the tables below as a guide for determining when corrective action is required.

Table 11: Budget Neutrality Test Corrective Action Plan Calculation DY 9 Cumulative budget neutrality limit plus: 2.0% DY 9 through DY 10 Cumulative budget neutrality limit plus: 1.5% DY 9 through DY 11 Cumulative budget neutrality limit plus: 1.0% DY 9 through DY 12 Cumulative budget neutrality limit plus: 0.5% DY 9 through DY 13 Cumulative budget neutrality limit plus: 0% DY 9 through DY 14 Cumulative budget neutrality limit plus: 0%

XII. CHIP MONITORING ALLOTMENT NEUTRALITY

96. Reporting Expenditures Subject to the Title XXI Allotment Neutrality Agreement. The following describes the reporting of expenditures subject to the allotment neutrality agreement for this demonstration:

a) Tracking Expenditures. In order to track expenditures under this demonstration, the state must report demonstration expenditures through the Medicaid and State Children’s Health Insurance Program Budget and Expenditure System (MBES/CBES),