See 42 U.S.C. § 1396. Like with Medicare, for those insured through Medicaid, care and treatment at skilled nursing facilities are reimbursed on a per diem—not per service—basis.

In addition, the State must ensure that Medi-Cal recipients have access to Medi-Cal services to the same extent as persons in the geographic area with private health coverage. 42 U.S.C. § 1396(a)(30)(A); 42 C.F.R. § 447.204.

The Federal Programs Involved Here A. The Medicaid Program And Federal Financial Participation The Medicaid program, established in 1965 as Title XIX of the Social Security Act, is a cooperative federal-state public assistance program that provides federal financial participation (“FFP”) (i.e., federal matching funds) to States that elect to pay for medical services on behalf of certain needy individuals. See 42 U.S.C. § 1396 et seq.; Wilder v. Virginia Hosp. Ass’n, 4963 U.S. 498, 502 (1990); Rio Grande Community Health Center, Inc. v. Rullan, 397 F.3d 56, 61 (1st Cir. 2005). See also 42 C.F.R. §§ 430.0 et seq. (implementing regulations); House Comm. on Ways and Means, 2004 Green Book, 108th Cong., 2d Sess. 15-26 -- 15-70 (Comm.

Defendants’ failure to authorize Supported Living services is a constructive denial of community-based residential habilitation services. In failing to issue notices to DDA clients who request Supported Living services, Defendants are violating the Medicaid due process requirements in 42 U.S.C. § 1396(a)(3). 8.

The plain language of 42 U.S.C. § 1396a(bb)(5) is silent as to the rate a state may require contracted Managed Care Organizations (“MCO”) to pay Federally- qualified Health Centers, providing only that “[i]n the case of services furnished by a Federally-qualified health center…pursuant to a contract between the center… and a managed care entity…, the State plan shall provide for payment…of a supplemental payment equal to the amount (if any)…” 42 U.S.C. § 1396a(bb)(5)(emphasis added). The conforming language found in 42 U.S.C. § 1396(m)(2)(A)(ix) requires managed 4 care organizations to “provide payment that is not less than the level and amount of payment which the [managed care organization] would make for the services if the services were furnished by a provider which is not a Federally-qualified health center.” Three Lower Counties v. State of Maryland, 498 F.3d 294, 305 (4th Cir. 2007) (emphasis in the original).

Id. (citing 42 U.S.C. §§ 1396(b)(I)(10), 1396r-8(k)(2)-(3), 1396r-8(k)(3)). A medically accepted indication is a use that is listed in the labeling approved by the FDA, or that is included in one of the drug compendia identified in the Medicaid statute.

See 42 U.S.C. § 1396(s). Thus, federal program funds may not be used to pay a provider for DHS performed in violation of the Stark statute.

Among the stated purposes of the Medicaid Act is ―to furnish … services to help [low income] families and individuals attain or retain capacity for independence or self-care.‖ 42 U.S.C. § 1396(2). Preserving Plaintiffs‘ health, well-being, and independence is thus squarely in the public interest.

...........................................................................32, 33 21 U.S.C. § 360aaa(b), (c) .............................................................................................................34 21 U.S.C. § 393(b)(2)(B) ...............................................................................................................33 21 U.S.C. §§ 301-97 ......................................................................................................................32 28 U.S.C. § 1367(c) .......................................................................................................................67 31 U.S.C. § 3729 et seq.......................................................................................................... passim 42 U.S.C. § 1320a-7b(b) ..........................................................................................................53, 54 Case 2:06-cv-03213-GP Document 45 Filed 07/01/11 Page 9 of 81 ix 42 U.S.C. § 1396 ......................................................................................................................35, 47 REGULATIONS 21 C.F.R. ' 201 ........................................................................................................................33, 34 68 Fed. Reg. 23731, 23734 & 23737 (May 5, 2003) .....................................................................56 OTHER AUTHORITIES S. Rep. No. 99-345 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5274 .....................................56 W. Page Keeton, et al., Prosser & Keeton on the Law of Torts §§ 44 and 106 (5th ed. 1984) ..............................................................................................37 59 Fed. Reg. 65372, Special Fraud Alert, Joint Venture Arrangements (December 19, 1994) ...........................................................56 Case 2:06-cv-03213-GP Document 45 Filed 07/01/11 Page 10 of 81 x INDEX OF

Second, Congress requires states to seek recovery of Medicaid funds from liable third parties. 42 U.S.C. § 1396(a)(25). Taken together, these two facts are dispositive evidence of a congressional determination that section 1331 does not encompass State Medicaid recovery actions.