Opinion ID: 3033871
Heading Depth: 4
Heading Rank: 4

Heading: IGTs

Text: We acknowledge, as has the Agency, that the use of IGTs has a statutory basis. See 42 U.S.C. § 1396b(w)(6)(A) (providing that, subject to certain exceptions, “the Secretary may not restrict States’ use of funds where such funds are derived from State or local taxes . . . transferred from . . . units of government within a State as the non-Federal share of expenditures”); see also 66 Fed. Reg. at 3148-49. Thus, there is perhaps some tension, as the State suggests, between the Agency’s recognition that IGTs are generally permissible and “fit within the structure of . . . current regulations,” id. at 3164, and its conclusion that their “excessive and abusive” use is “not consistent with the statutory requirements that Medicaid payments be economical and efficient,” id. at 3150. This does not, however, change our decision here. [8] In this case, the Administrator did not disapprove the State’s use of IGTs as a financing mechanism; rather, she concluded, based partly on the fact that tribal hospitals would 3 Section § 30(A) was amended in 1989 to include what is known as the “equal access to care” provision. Orthopaedic Hosp., 103 F.3d at 1498. That amendment is not directly relevant to this case. ALASKA DEP’T OF HEALTH v. CENTERS FOR MEDICARE 13043 retain just 10% of the increased federal payments, that the proposed amendment was not consistent with efficiency and economy. See Louisiana v. United States Dep’t of Health & Human Servs., 905 F.2d 877, 881 (5th Cir. 1990) (applying a similar analysis to reject Louisiana’s contention that the Administrator’s ruling was a “veiled attempt” to prohibit the use of average wholesale price as a proxy for the estimated acquisition cost of Medicaid-covered drugs). We note that, following its investigation into financing schemes similar to this one, the General Accounting Office testified before Congress that such uses of IGTs “violate the basic integrity of Medicaid as a joint Federal/State program” and allow states effectively “to replace State Medicaid dollars with Federal Medicaid dollars.” 66 Fed. Reg. at 3150. Even assuming that under these circumstances an IGT would fall within the protection of § 1396b(w)(6), the State is not relieved from complying with the numerous other requirements of the Medicaid Act, such as those in § 30(A) that were the basis for disapproval here. [9] In sum, because the Administrator’s construction of § 30(A) is consistent with its text, context, and purpose, it merits Chevron deference. She did not rely on inappropriate factors or overlook an important aspect of the problem, and her decision was not implausible or counter to the evidence. See State Farm, 463 U.S. at 43. Thus, we hold that her disapproval of the State’s proposed amendment based on § 30(A) was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. See 5 U.S.C. § 706(2)(A).