Pharmaceutical Research and Mfrs. of America v. Walsh, 538 U.S. 644, 43 (2003)

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686

PHARMACEUTICAL RESEARCH AND MFRS. OF AMERICA v. WALSH

Opinion of O'Connor, J.

inherent in the purpose and structure of the Medicaid Act. As the District Court recognized, a contrary rule would permit Maine to use prior authorization to raise funds for "highway and bridge construction or school funding," and presumably any other purpose, so long as the Secretary of Health and Human Services took no action to prevent it. App. to Pet. for Cert. 68. The purpose and structure of the Medicaid Act make clear that Congress did not intend such an absurd result.

Congress created the Medicaid program to "enabl[e] each State, as far as practicable under the conditions in such State, to furnish . . . medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services." 42 U. S. C. § 1396. Consistent with that purpose, Congress has imposed income and resource limitations on many of the groups eligible for assistance under the Act. See, e. g., §§ 1396a(a)(10)(A)(i) (IV), (VI), and (VII); § 1396b(f).

A requirement that prior authorization be used only where it furthers a Medicaid purpose is reinforced by the structure of the Medicaid Act. Congress has afforded States broad flexibility in tailoring the scope and coverage of their Medicaid programs, see Alexander v. Choate, 469 U. S. 287, 303 (1985), but the Act establishes a number of prerequisites for approval of a state plan by the Secretary. 42 U. S. C. §§ 1396a(a)(1)-(65). Two such requirements are of particular relevance here. First, a state plan must contain safeguards to ensure covered services are provided in a manner consistent with "the best interests of the [Medicaid] recipients." § 1396a(a)(19). Second, a state plan must "safeguard against unnecessary utilization" of services and ensure that "payments are consistent with efficiency, economy, and quality of care." § 1396a(a)(30)(A). These provisions confirm Congress' intent that state Medicaid initiatives not burden

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