(c) If any payments made as a result of the requirements of this Article are subject to a disallowance, deferral, or adjustment of federal matching funds then: (1) the Department shall recoup the payments related to those federal matching funds paid by the Department from the parties paid by the Department;(2) if the payments that are subject to a disallowance, deferral, or adjustment of federal matching funds were made to MCOs, the Department shall recoup the payments related to the disallowance, deferral, or adjustment from the MCOs no sooner than the Department is required to remit federal matching funds to the Centers for Medicare and Medicaid Services or any other federal agency, and hospitals that received payments from the MCOs that were made with such disallowed, deferred, or adjusted federal matching funds must return those payments to the MCOs at least 10 business days before the MCOs are required to remit such payments to the Department; and(3) any assessment paid to the Department by hospitals under this Article that is attributable to the payments that are subject to a disallowance, deferral, or adjustment of federal matching funds, shall be refunded to the hospitals by the Department. If an MCO is unable to recoup funds from a hospital for any reason, then the Department, upon written notice from an MCO, shall work in good faith with the MCO to mitigate losses associated with the lack of recoupment. Losses by an MCO shall not exceed 1% of the total payments distributed by the MCO to hospitals pursuant to the Hospital Assessment Program.