Title IV, SEC. 4231. DISCONTINUATION OF MEDICAID DSH PAYMENTS. (a) Elimination of Specific Obligation. Section 1923(a) (42 U.S.C. 1396r 4(a)) is amended by adding at the end the following new paragraph: ``(5) Notwithstanding any other provision of this title, the requirement of this subsection shall not apply ``(A) with respect to a State for any portion of a fiscal year during which the State is a participating State within the meaning of section 1200 of the Health Security Act; or ``(B) with respect to any State for any months beginning on or after January 1, 1997.''. (b) Elimination of State Plan Requirement. Section 1902(a)(13)(A) (42 U.S.C. 1396a(a)(13)(A)) is amended by inserting after ``special needs'' the following: ``(but only with respect to a quarters during which the State is not a participating State within the meaning of section 1200 of the Health Security Act or with respect to any quarters ending on or before December 31, 1996)''. (c) Elimination of State DSH Allotments and Federal Financial Participation. Section 1923(f) (42 U.S.C. 1396r 4(f)) is amended (1) in paragraph (2), by inserting ``and paragraph (5)'' after ``subparagraph (B)'', and (2) by adding at the end the following new paragraph: ``(5) Elimination of allotments for participating States and sunset for all States. ``(A) In general. Notwithstanding any other provision of this section , the State DSH allotment shall be zero with respect to ``(i) any participating State within the meaning of section 1200 of the Health Security Act; and ``(ii) any State for any portion of a fiscal year that occurs on or after January 1, 1997. ``(B) No redistribution of reductions. In the computation of State supplemental amounts under paragraph (3), the State DSH allotments shall be determined under subparagraph (A)(ii) of such paragraph as if this paragraph did not apply.''.