42 C.F.R. § 430.104 : Public Health — CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES — MEDICAL ASSISTANCE PROGRAMS — GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS — HEARINGS ON CONFORMITY OF STATE MEDICAID PLANS AND PRACTICE TO FEDERAL REQUIREMENTS — Decisions that affect FFP

(a) Scope of decisions. If the Administrator concludes that withholding of FFP is necessary because a State is out of compliance with Federal requirements, in accordance with §430.35, the decision also specifies-
(1) Whether no further payments will be made to the State or whether payments will be limited to parts of the program not affected by the noncompliance; and
(2) The effective date of the decision to withhold.
(b) Consultation. The Administrator may ask the parties for recommendations or briefs or may hold conferences of the parties on the question of further payments to the State.
(c) Effective date of decision. The effective date of a decision to withhold Federal funds will not be earlier than the date of the Administrator's decision and will not be later than the first day of the next calendar quarter. The provisions of this section may not be waived under §430.64.

42 C.F.R. § 430.104