Bill would let states keep part of recovered fraud overpayments

The federal government would exclude some recovered fraud overpayments from the amount it adjusts. This applies when a State recovers money during a quarter that was overpaid to a person or other entity because of fraud. A State may elect to exclude up to 25 percent of the federal share it would otherwise owe back. The State must use excluded amounts for program integrity work and report their use to the federal government at least once a year. The rule would apply to quarters beginning on or after 18 months after enactment.