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Medicaid is a co-operative Federal and State Program

Medicaid is a cooperative venture of the state and federal governments. If a state chooses to participate in the Medicaid program, it submits a state plan for the funding of medical services for the needy. The State plan must be approved by the Centers for Medicare and Medicaid Services (CMS). The federal government then subsidizes a certain portion of the financial obligations which the state has agreed to bear. A state participating in Medicaid must comply with the applicable statute, Title XIX of the Social Security Act of 1965, as amended, 42 U.S.C. §§ 1396, et seq., and the applicable regulations. Ga. Dep’t of Cmty. Health v. Freels, 258 Ga. App. 446 (2002).

In Douglas v. Indep. Living Ctr. of S. Cal., Inc., 565 U.S. 606 (2012), the Supreme Court stated:

Medicaid is a cooperative federal-state program that provides medical care to needy individuals. To qualify for federal funds, States must submit to a federal agency (CMS, a division of the Department of Health and Human Services) a state Medicaid plan that details the nature and scope of the State’s Medicaid program. It must also submit any amendments to the plan that it may make from time to time. And it must receive the agency’s approval of the plan and any amendments. Before granting approval, the agency reviews the State’s plan and amendments to determine whether they comply with the statutory and regulatory requirements governing the Medicaid program. See 79 Stat. 419, 344, as amended, 42 U. S. C. §§ 1316(a)(1), (b), 1396a(a), (b); 42 CFR §430.10 et seq. (2010); Wilder v. Virginia Hosp. Ass’n, 496 U. S. 498, 502, 110 S. Ct. 2510, 110 L. Ed. 2d 455 (1990). And the agency’s director has specified that the agency will not provide federal funds for any state plan amendment until the agency approves the amendment. See Letter from Timothy M. Westmoreland, Director, Center for Medicaid & State Operations, Health Care Financing Admin., U. S. Dept. of Health and Human Servs., to State Medicaid Director (Jan. 2, 2001), online at (as visited October 24, 2022, and available in Clerk of Court’s case file).

In Pharmaceutical Research and Mfrs. of America v. Walsh, 538 US 644 (2002), the Supreme Court said:

Congress created the Medicaid program in 1965 by adding Title XIX to the Social Security Act. The program authorizes federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons. In order to participate in the Medicaid program, a State must have a plan for medical assistance approved by the Secretary of Health and Human Services (Secretary). 42 U. S. C. § 1396a(b). A state plan defines the categories of individuals eligible for benefits and the specific kinds of medical services that are covered. §§ 1396a(a)(10), (17). The plan must provide coverage for the “categorically needy” and, at the State’s option, may also cover the “medically needy.

Footnote 4 states: The “categorically needy” groups include individuals eligible for cash benefits under the Aid to Families with Dependent Children (AFDC) program, the aged, blind, or disabled individuals who qualify for supplemental security income (SSI) benefits, and other low-income groups such as pregnant women and children entitled to poverty-related coverage. § 1396a(a)(10)(A)(i).

Footnote 5 states: The “medically needy” are individuals who meet the nonfinancial eligibility requirements for inclusion in one of the groups covered under Medicaid, but whose income or resources exceed the financial eligibility requirements for categorically needy eligibility. § 1396a(a)(10)(C). Individuals are typically “entitled to medically needy protection when their income and resources, after deducting incurred medical expenses, falls [sic] below the medically needy standards.” House Subcommittee on Health and the Environment of the Committee on Energy and Commerce, Medicaid Source Book: Background Data and Analysis, 103d Cong., 1st Sess., 167 (Comm. Print 1993).

In Bruns v. Mayhew, 750 F.3d 61 (1st Cir. 2014), the Court stated:

Medicaid is a cooperative federal-state program created in 1965 as an amendment to the Social Security Act in order to help states provide publicly-funded medical assistance to certain needy citizens. See Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2581, 183 L. Ed. 2d 450 (2012). A state’s participation in the Medicaid program is voluntary, but once a state chooses to participate it must comply with federal statutory and regulatory requirements in order to receive federal matching funds. See 42 U.S.C. §§ 1396-1, 1396a, 1396b, 1396c; id. at 2581; id. at 2601, 2604 (Roberts, C.J., joined by Breyer and Kagan, JJ.); Frew ex rel. Frew v. Hawkins, 540 U.S. 431, 433, 124 S. Ct. 899, 157 L. Ed. 2d 855 (2004). The eligibility requirements for Medicaid coverage are governed by federal law. Under the Medicaid Act, participating states must provide full Medicaid services under the approved state plan to certain groups of individuals who meet the eligibility criteria, including “categorically needy” groups. See 42 U.S.C. §§ 1396a(a)(10)(A)(I), 1396d(a); Lewis v. Thompson, 252 F.3d 567, 570 (2d Cir. 2001). For years, federal Medicaid extended medical assistance to eligible individuals without regard to citizenship status or durational residency. By act of Congress, however, the alien eligibility requirements for publicly-funded benefits, including Medicaid, changed dramatically in 1996. See 8 U.S.C. §§ 1601-1646.

In Ramey v. Reinertson, 268 F.3d 955 (10th Cir. 2001), the Court stated:

The Medical Assistance program, commonly known as “Medicaid,” “is a cooperative federal-state venture designed to afford medical assistance to persons whose income and resources are insufficient to meet the financial demands of necessary care and services.” New Mexico Dep’t of Human Servs. v. Department of Health & Human Servs. Health Care Fin. Admin., 4 F.3d 882, 883 (10th Cir. 1993). Under this federal program administered by the states, participating states receive partial reimbursement for the costs of providing medical services as well as reimbursement for the costs of administering the program.

Each participating State develops a plan containing reasonable standards . . . for determining eligibility for and the extent of medical assistance. An individual is entitled to Medicaid if he fulfills the criteria established by the State in which he lives. State Medicaid plans must comply with requirements imposed both by the Act itself and by the Secretary of Health and Human Services [“Secretary of HHS”] . . . .

Gray Panthers, 453 U.S. at 36-37 (internal quotation marks and citations omitted) (emphasis added). Participation in the program is optional, see Colorado Health Care Ass’n v. Colorado Dep’t of Social Servs., 842 F.2d 1158, 1164 (10th Cir. 1988) (“While participation in the Medicaid program is optional, once a State elects to participate, it must comply with federal statutory requirements.”) Colorado is currently a participant in the Medicaid program. See Hern v. Beye, 57 F.3d 906, 913 (10th Cir. 1995) (observing that “because Colorado has decided to participate and accept federal Medicaid funds, it must do so on the terms established by Congress”).

In Lisnitzer v. Zucker, 983 F.3d 578 (2nd Cir. 2020), the Court stated:

Medicaid is a cooperative federal-state program designed to assist needy individuals and families “whose income and resources are insufficient to meet the costs of necessary medical services.” 42 U.S.C. § 1396-1. States opt into the program, but once a state chooses to participate, it must comply with the requirements of Title XIX of the Social Security Act (“Medicaid Act”), 42 U.S.C. § 1396 et seq., and with regulations promulgated by the Secretary of the United States Department of Health and Human Services (“HHS”), 42 C.F.R. pts. 430-56. HHS has published a State Medicaid Manual (“Manual”) interpreting the requirements.

To receive federal funding for Medicaid, a state must submit a Medicaid state plan (“MSP”) to HHS for approval. See 42 U.S.C. §§ 1396-1, 1396a(b), 1396b; 42 C.F.R. §§ 430.10-.25. That plan must designate “a single State agency to administer or to supervise the administration of the plan.” 42 U.S.C. § 1396a(a)(5). If a state chooses—as it may—to administer Medicaid through various political subdivisions of the state, the single state agency has the responsibility to ensure local conformity with state and federal rules, regulations, and policies. See § 1396a(a)(1); 42 C.F.R. § 431.10.



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