A bill to amend title XIX of the Social Security Act to provide criteria for making determinations of denial of payment to States under such Act.

Amends title XIX (Medicaid) of the Social Security Act to revise the process under which the Secretary of Health and Human Services (HHS) may disallow a State's claim for Medicaid matching funds to: (1) give States the opportunity to come into compliance with Medicaid procedural requirements on a prospective basis before the Secretary may disallow the claim involved; (2) allow the HHS Appeals Board, if it upholds a disallowance, to reduce its amount; (3) prohibit disallowances if the State is in compliance with its HHS approved plan; (4) require interest to be paid to States by the Federal Government for disallowances for which they elected to repay, but were later overturned on appeal; and (5) prohibit disallowances three years after the filing of the State's claim.