Opinion ID: 574343
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Heading Rank: 1

Heading: The Parties and Pennsylvania's Medicaid Program

Text: 5 ECGC is a non-profit, long-term care nursing home providing both skilled nursing and intermediate care services to approximately 550 elderly indigent patients in Erie, Pennsylvania. The Center maintains close ties with the plaintiff, Erie County, from whom it receives financial support. The County guarantees all of ECGC's indebtedness and is required to make up any shortfall in the Center's operating costs. 6 ECGC relies substantially on reimbursements provided by the State through the Medicaid program. See 42 U.S.C.A. § 1396 et seq. States are not required to participate in the Medicaid program but if a state chooses to do so, it must comply with applicable federal law. Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671, 2680, 65 L.Ed.2d 784 (1980). The Medicaid statute requires each participating state to submit a state plan containing a comprehensive description of the nature and scope of the state's Medicaid program for approval by the Secretary. 42 U.S.C.A. § 1396a(a). A state submits its plan to the Health Care Financing Administration (HCFA), the agency within HHS that Congress has designated to administer the Secretary's Medicaid responsibilities at the federal government level. Upon HCFA's approval of the plan, a state is entitled to federal government reimbursement for a percentage of the funds it has paid to health care facilities servicing Medicaid recipients. 42 U.S.C.A. § 1396b(a). Medicaid programs are administered by states, not the federal government, and so long as a state complies with the requirements of the Medicaid Act, it has wide discretion in administering its local program. Lewis v. Hegstrom, 767 F.2d 1371, 1373 (9th Cir.1985). 7 In Pennsylvania, the Department of Public Welfare is the agency charged with administering the Medicaid program. Under Medicaid, the State reimburses county nursing homes for their actual allowable costs on a per diem basis up to a ceiling set by DPW. The method that DPW selects for calculating payment rate ceilings can have a substantial financial impact upon nursing home facilities; if the payment rate for a particular facility is less than its actual costs, the facility loses money. In turn, in the case of ECGC, Erie County must make up the fiscal shortfall. 8