The state shall be held harmless for any federal disallowance resulting from this chapter and any other expenses or liabilities, including, but not limited to, the cost of processing or granting appeals, unless the department is acting pursuant to Section 15850.5. An applicant receiving supplemental reimbursement pursuant to this chapter shall be liable for any reduced federal financial participation, and any other expenses or liabilities, including, but not limited to, the costs of processing or granting appeals, resulting from the implementation of this chapter with respect to that applicant. The state may recoup any federal disallowance from the applicant for which it can be held harmless.