Reinstitutes (Boren amendment) payment methodology, providing for payment of Medicaid services through the use of rates determined pursuant to the criteria under state Medicaid plan requirements as in effect on August 1, 1997. Establishes safe harbor rates.

Provides a permanent 1.5% increase of the Medicaid federal medical assistance percentage (FMAP) for a state beginning with FY 2006.

Authorizes inclusion of: (1) financial accountability requirements in the survey and certification process with respect to facilities receiving Medicare or Medicaid payments; and (2) professionals trained in financial accounting and auditing in the multidisciplinary survey teams of professionals under Medicare and Medicaid.