number of states that participate in the medicaid program were able to increase their credible funding for their program by increasing their payment rates for various categories of health care providers like hospitals and nursing homes and other entities the incredible regulations established what is known as an upper limit upper payment level at which the federal government will match payments made to those providers most states have not been paying anywhere near that five increasing the payments to that a prepayment limit and then receiving transfers from those providers who were public in nature which is permissible under the law all states would capture the federal dollars at the same time without any increased cost to the states themselves number of states plans were submitted to the federal agency for approval of such transactions and were more or less routinely approved proximately the several years after this practice was in place it began to be reviewed by inspector general and various other overseeing agencies which in many cases criticized these practices as causing an increase in federal outlays consistently  entirely legal and that there was nothing he could do to prevent reporting agencies nonetheless pursued this and at some point in the year two thousand i believe the agency proposed some rules that would modify these practices the nature of the proposed rule was to redefine or modify the definition of what these offer payment limits w y did adopt its modified regulation in early two thousand and one one of the elements of that modification was to change the application o upper payment limit for tribal facilities tribal facilities that exist in the restaurant and in a number of the lower forty eight states that have significant american american indian populations that change subjects in the payments to tribal facilities to the upper payment limit that is contained in a regulation section for forty seven point and brought to its attention the opportunity to earn more federal dollars in this way and shortly after the regulation was modified and alaska stalled what the new upper payment limit it was really dealing with costs cost can go up somewhere the manufacturing costs to take advantage of more money either that or the facilities weren't getting enough money to do their job and they just got realistic and paid them more money to do the job except for in fact in this case the facility only gets ten percent the rest is going back to that his think itself when i say manufactured this is a total mystery to me because money from rolling around like crazy and now the question is whether  think can be some review of what is being done with the city the costs which starts this program going what's the sense of cost of the reimbursement costs that this program starts rolling including that the ninety percent kickback and on and on so i mean i'm if the federal government had told them there's more according to what you're telling us if the federal government hadn't told them and c m s had not said oh you can get more money apparently there would have been no adjust element of this program has turned out to be that it is possible to earn more money within the limits established by federal regulations by whatever those hospital charges are that's market rate there anything from analogy in this game is very difficult to the chargers are like a price list it's like if you go to a hospital and you haven't got insurance and you're not on medicaid or medicare you're going to get a bill that's going to show what the hospitals charges are that's probably going to be more than their cost effective invariably is well quite a bit more than are cost and there are reasons for that percent back as you vary that it varies the flow into the general fund medicaid fund for the state and so in doing so the issue was you did the wrong you picked the wrong grade when you went to the private hospital and and my problem in analyzing this case was i was trying to figure out what would you be it's a very difficult thing because it was a rural issue that was you verb an issue it was the issue of whether you use a private hospital or public and it derives an average prevailing charge for those resources and that's going to be using upper limit for the for the payments to the tribal facilities in that locality under this plan in the city of anchorage there's one trival facility changed since that time it continues to tell us office of inspector general that these payments are legal and it is inappropriate to tell the state of alaska that are spouting here i've been hearing this from the beginning and i  don't want to be flip about this but almost say the feds created this problem they told us what to do so little in other words it sounds like the state is not doing anything more than what the feds told them to do and authorize them to do so therefore if if we approach sort of like that structures of federal structure how do we review the ministry to research and if we're going to use the a p a standard how do we look at and i would agree with you that that that's an appropriate an good enough and then section three o four steps are part of the requirement is the medicare agency must not pay more than the upper limits described in the some part  federal funds is available and expenditures for payments for services that do not exceed the upper limits so there are the agencies telling you in the regulations if you will match your payments a here's what i'm finding out as i understand your argument i think you're telling us that if the state decides to pay to ask for the first from the federal government after the national available there's nothing the federal government can do about like to provide just a little bit of background but i think focused in a very different way not on the intergovernmental transfer aspect of this matter that mr miller emphasizes i think there can be overemphasized here again you have on the other hand you have the government a little bit without the intergovernmental transfer then the system would provide a lot of money for indian services i mean a lot of money i mean they're getting ten percent now if that's the intergovernmental that it would be one hundred percent but of course the issue is should the amendment be approved in the first place and that really is what the final agency's solution is a violent the administrator goes to the lawfulness the full literally of the proposed methodology it does it does not turn on primarily the air governmental transfer aspect of th s i think in other words i think the same decision would have been reached even if there were no ten percent ninety percent intergovernmental transfer as passed back to the case to take money out of the reimbursement cost of public facilities paid back and then put into the general it's not peace spent on travel and and wine and women it's being spent on subsidizing the medicaid system how does that not satisfy economy inefficiency and if so isn't this new amendment just another degree level change from what was being done before or my miss and that's what bothers me it's a political issue and yet you using economy and efficiency to say that we've got to go around the volatile political issue that allows this the intergovernmental transfer to exist which apparently nobody wants to right term prevailing charged to a private hospital then the indian facility gets reimbursed on the basis of a private hospital that's the lack of patients v n economy that's the fact that ninety percent go scooping out that's correct their review and in looking this over there's got to be something deficient in the way they went to this analysis not the fact that that in the past they've paid it or in the past they did certain things with regard to court no doubt knows there there would seem to be some tension between the take on of subsection eight thirty eight the third circuit's opinion versus the take on the same  vision and this court's decision an orthopedic hospital that's a case where the federal government was not a party but rather  provider litigated against the state of california and in the end that decision this court interpreted i think so subsection