Title I, SEC. 1512. FAILURE OF PARTICIPATING STATES TO MEET CONDITIONS FOR 
COMPLIANCE. 
      (a) In General. In the case of a participating State, if the Board 
    determines that the operation of the State system under subtitle C fails to 
    meet the applicable requirements of this Act, sanctions shall apply against 
    the State in accordance with subsection (b). 

      (b) Type of Sanction Applicable. The sanctions applicable under this part 
    are as follows: 

        (1) If the Board determines that the State's failure does not 
      substantially jeopardize the ability of eligible individuals in the State 
      to obtain coverage for the comprehensive benefit package 

          (A) the Board may order a regional alliance in the State to comply 
        with applicable requirements of this Act and take such additional 
        measures to assure compliance with such requirements as the Board may 
        impose, if the Board determines that the State's failure relates to a 
        requirement applicable to a regional alliance in the State, or 

          (B) if the Board does not take the action described in subparagraph 
        (A) (or if the Board takes the action and determines that the action 
        has not remedied the violation that led to the imposition of the 
        sanction), the Board shall notify the Secretary of Health and Human 
        Services, who shall reduce payments with respect to the State in 
        accordance with section 1513. 

        (2) If the Board determines that the failure substantially jeopardizes 
      the ability of eligible individuals in the State to obtain coverage for 
      the comprehensive benefit package 

          (A) the Board shall terminate its approval of the State system; and 

          (B) the Board shall notify the Secretary of Health and Human 
        Services, who shall assume the responsibilities described in section 
        1522. 

      (c) Termination of Sanction. 

        (1) Compliance by State. A State against which a sanction is imposed 
      may submit information at any time to the Board to demonstrate that the 
      failure that led to the imposition of the sanction has been corrected. 

        (2) Termination of sanction. If the Board determines that the failure 
      that led to the imposition of a sanction has been corrected 

          (A) in the case of the sanction described in subsection (b)(1)(A), 
        the Board shall notify the regional alliance against which the sanction 
        is imposed; or 

          (B) in the case of any other sanction described in subsection (b), 
        the Board shall notify the Secretary of Health and Human Services. 

      (d) Protection of Access to Benefits. The Board and the Secretary of 
    Health and Human Services shall exercise authority to take actions under 
    this section with respect to a State only in a manner that assures the 
    continuous coverage of eligible individuals under regional alliance health 
    plans.