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incorporate the “Schedule C Report” for monitoring actual expenditures subject to budget neutrality.

61. Risk. The Commonwealth will be at risk for the per capita cost (as determined by the method described below) for state plan and demonstration populations enrolled in the demonstration for the 12-month postpartum extension, but not at risk for the number of participants enrolled in the demonstration. By providing FFP without regard to enrollment for all demonstration populations, CMS will not place the Commonwealth at risk for changing economic conditions. However, by placing the Commonwealth at risk for the per capita costs of the demonstration populations, CMS assures that the demonstration expenditures do not exceed the levels that would have been realized had there been no demonstration.

62. Impermissible DSH, Taxes, or Donations. CMS reserves the right to adjust the budget neutrality ceiling to be consistent with enforcement of laws and policy statements, including regulations and letters regarding impermissible provider payments, health care related taxes, or other payments (if necessary adjustments must be made). CMS reserves the right to make adjustments to the budget neutrality limit if any health care related tax that was in effect during the base year, or provider-related donation that occurred during the base year, is determined by CMS to be in violation of the provider donation and health care related tax provisions of section 1903(w) of the Social Security Act. Adjustments to annual budget targets will reflect the phase out of impermissible provider payments by law or regulation, where applicable.

63. Enforcement of Budget Neutrality. If the Commonwealth exceeds the calculated cumulative target limit by the percentage identified below for any of the demonstration years (DYs), the Commonwealth must submit a corrective action plan to CMS for approval.

Year Cumulative target definition Percentage

DY17 DY 17 budget limit amount +1.75 percent

DY18 DY 17 through DY 18 combined +1.50 percent budget limit amount

DY19 DY 17 through DY 19 combined +1.25 percent budget limit amount

DY20 DY 17 through DY 20 combined +1.00 percent budget limit amount

DY21 DY 17 through DY 21 combined +.75 percent budget limit amount

DY22 DY 17 through DY 22 combined +.50 percent budget limit amount

DY23 DY 17 through DY 23 combined +0.25 percent budget limit amount

DY24 DY 17 through DY 24 combined +0.00 percent budget limit amount

Virginia FAMIS MOMS and FAMIS Select Section 1115 Demonstration Demonstration Period: October 25, 2019 through June 30, 2029; Amended November 18, 2021 Page 29 of 61