; and (III) in accordance with the guidance issued under subparagraph (A)(ii), establish a prospective payment system which States must use for making payments to freestanding birth centers participating in the demonstration program. (3) State demonstration programs (A) In general Not later than 24 months after the date of the enactment of this subsection, from among the States awarded a planning grant under paragraph (2)(B), the Secretary shall select not more than 6 such States to conduct demonstration programs that meet the requirements of this paragraph. (B) Application requirements (i) In general The Secretary shall solicit applications to conduct a demonstration program under this subsection from States awarded planning grants under paragraph (2)(B). (ii) Required information A State application to conduct a demonstration program under this paragraph shall include the following: (I) A description of the target Medicaid population to be served under the demonstration program. (II) A list of the participating freestanding birth centers in the State. (III) Verification that each participating freestanding birth center meets the participation criteria established in paragraph (2)(A)(i). (IV) A description of the scope of the freestanding birth center services available under the State Medicaid program for women with a low-risk pregnancy that will be paid for under the prospective payment system tested in the demonstration program. (V) Verification that the State has agreed to pay for such services at the rate established under the prospective payment system. (VI) An assurance that the State will require freestanding birth centers to submit to the State, and that the State will submit to the Secretary, such information and data as the State or Secretary may require relating to the demonstration program or an episode of care for such a pregnant woman or newborn. (VII) Such other information as the Secretary may require relating to the demonstration program, including with respect to determining the soundness of