(A) Definition of payment error rate In this paragraph, the term “payment error rate” has the meaning given the term in section 2025(c)(2) of this title .
(B) State cost share (i) In general Subject to clause (iii), beginning in fiscal year 2028, if the payment error rate of a State as determined under clause (ii) is— (I) less than 6 percent, the Federal share of the cost of the allotment described in paragraph (1) for that State in a fiscal year shall be 100 percent, and the State share shall be 0 percent; (II) equal to or greater than 6 percent but less than 8 percent, the Federal share of the cost of the allotment described in paragraph (1) for that State in a fiscal year shall be 95 percent, and the State share shall be 5 percent; (III) equal to or greater than 8 percent but less than 10 percent, the Federal share of the cost of the allotment described in paragraph (1) for that State in a fiscal year shall be 90 percent, and the State share shall be 10 percent; and (IV) equal to or greater than 10 percent, the Federal share of the cost of the allotment described in paragraph (1) for that State in a fiscal year shall be 85 percent, and the State share shall be 15 percent. (ii) Elections (I) Fiscal year 2028 For fiscal year 2028, to calculate the applicable State share under clause (i), a State may elect to use the payment error rate of the State from fiscal year 2025 or 2026. (II) Fiscal year 2029 and thereafter For fiscal year 2029 and each fiscal year thereafter, to calculate the applicable State share under clause (i), the Secretary shall use the payment error rate of the State for the third fiscal year preceding the fiscal year for which the State share is being calculated. (iii) Delayed implementation (I) Fiscal year 2025 If, for fiscal year 2025, the payment error rate of a State multiplied by 1.5 is equal to or above 20 percent, the implementation date under clause (i) for that State shall be fiscal year 2029. (II) Fiscal year 2026 If, for fiscal year 2026, the payment error rate of a State multiplied by 1.5 is equal to or above 20 percent, the implementation date under clause (i) for that State shall be fiscal year 2030.
