delivered the opinion of the Court.
A federal statute prohibits States from attaching a lien on the property of a Medicaid beneficiary to recover benefits
f—4
When respondent E. M. A. was born in February 2000, she suffered multiple serious birth injuries which left her deaf, blind, and unable to sit, walk, crawl, or talk. The injuries also cause her to suffer from mental retardation and a seizure disorder. She requires between 12 and 18 hours of skilled nursing care per day. She will not be able to work, live independently, or provide for her basic needs. The cost of her ongoing medical care is paid in part by the State of North Carolina’s Medicaid program.
In February 2003, E. M. A. and her parents filed a medical malpractice suit in North Carolina state court against the physician who delivered E. M. A. at birth and the hospital where she was born. The expert witnesses for E. M. A. and her parents in that proceeding estimated damages in excess of $42 million for medical and life-care expenses, loss of future earning capacity, and other assorted expenses such as architectural renovations to their home and specialized transportation equipment. App. 91-112. By far the largest part of this estimate was for “Skilled Home Care,” totaling more than $37 million over E. M. A.’s lifetime. Id., at 112. E. M. A. and her parents also sought damages for her pain and suffering and for her parents’ emotional distress. Id., at 64-65, 67-68, 72-73, 75-76. Their experts did not estimate the damages in these last two categories.
Assisted by a mediator, the parties began settlement negotiations. E. M. A. and her parents informed the North Carolina Department of Health and Human Services of the negotiations. The department had a statutory right to intervene in the malpractice suit and participate in the settlement negotiations in order to obtain reimbursement for the medical expenses it paid on E. M. A.’s behalf, up to one-third of the total recovery. See N. C. Gen. Stat. Ann. §§ 108A-57, 108A-59. It elected not to do so, though its representative informed E. M. A. and her parents that the State’s Medicaid program had expended $1.9 million for E. M. A.’s medical care, which it would seek to recover from any tort judgment or settlement.
In November 2006, the court approved a $2.8 million settlement. The amount, apparently, was dictated in large part by the policy limits on the defendants’ medical malpractice insurance coverage. See Brief for Respondents 5. The settlement agreement did not allocate the money among the different claims E. M. A. and her parents had advanced. In approving the settlement the court placed one-third of the $2.8 million recovery into an interest-bearing escrow account “until such time as the actual amount of the lien owed by [E. M. A.] to [the State] is conclusively judicially determined.” App. 87.
E. M. A. and her parents then filed this action under Rev. Stat. § 1979, 42 U. S. C.
The Court of Appeals for the Fourth Circuit vacated and remanded. E. M. A. v. Cansler,
To resolve the conflict between the opinion of the Court of Appeals in this case and the decision of the North Carolina Supreme Court in Andrews, this Court granted certiorari.
t—( K-i
At issue is the interaction between certain provisions of the federal Medicaid statute and state law. Congress has directed States, in administering their Medicaid programs, to seek reimbursement for medical expenses incurred on behalf of beneficiaries who later recover from third-party tort-feasors. States must require beneficiaries “to assign the State any rights ... to support (specified as support for the purpose of medical care by a court or administrative order) and to payment for medical care from any third party.” 42 U. S. C. § 1396k(a)(l)(A). States receiving Medicaid funds must also
“ha[ve] in effect laws under which, to the extent that payment has been made under the State plan for medical assistance for health care items or services furnished to an individual, the State is considered to have acquired the rights of such individual to payment by any other party for such health care items or services.” § 1396a(a)(25)(H).
A separate provision of the Medicaid statute, however, exists in some tension with these requirements. It says that, with exceptions not relevant here, “[n]o lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan.” § 1396p(a)(l).
In Ahlborn, the Court addressed this tension and held that the Medicaid statute sets both a floor and a ceiling on a State’s potential share of a beneficiary’s tort recovery. Federal law requires an assignment to the State of “the right to recover that portion of a settlement that represents payments for medical care,” but it also “precludes attachment or encumbrance of the remainder of the settlement.”
A question the Court had no occasion to resolve in Ahl-bom is how to determine what portion of a settlement represents payment for medical care. The parties in that case stipulated that about 6 percent of respondent Ahlborn’s tort recovery (approximately $35,600 of a $550,000 settlement) represented compensation for medical care. Id., at 274. The Court nonetheless anticipated the concern that some settlements would not include an itemized allocation. It also recognized the possibility that Medicaid beneficiaries and tortfeasors might collaborate to allocate an artificially low portion of a settlement to medical expenses. The Court noted that these problems could “be avoided either by obtaining the State’s advance agreement to an allocation or, if necessary, by submitting the matter to a court for decision.” Id., at 288.
North Carolina has attempted a different approach. Its statute provides:
“Notwithstanding any other provisions of the law, to the extent of payments under this Part, the State, or the county providing medical assistance benefits, shall be subrogated to all rights of recovery, contractual or otherwise, of the beneficiary of this assistance .... The county attorney, or an attorney retained by the county or the State or both, or an attorney retained by the beneficiary of the assistance if this attorney has actual notice of payments made under this Part shall enforce this section. Any attorney retained by the beneficiary of the assistance shall, out of the proceeds obtained on behalf of the beneficiary by settlement with, judgment against, or otherwise from a third party by reason of injury or death, distribute to the Department the amount of assistance paid by the Department on behalf of or to the beneficiary, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, but the amount paid to the Department shall not exceed one-third of the gross amount obtained or recovered.” N. C. Gen. Stat. Ann. § 108A-57(a).
Before Ahlborn was decided, North Carolina and the state courts interpreted this statute to allow the State to “recover the costs of medical treatment provided . . . even when the funds received by the [beneficiary] are not reimbursement for medical expenses.” Campbell v. North Carolina Dept. of Human Resources, 153 N. C. App. 305, 307-308,
In response to Ahlborn, the State advanced—and the North Carolina Supreme Court in Andrews accepted—a new interpretation of its statute. Under this interpretation the statute “defines ‘the portion of the settlement that represents payment for medical expenses’ as the lesser of the State’s past medical expenditures or one-third of the plaintiff’s total recovery.” Andrews,
⅜—Í I—(
A
Under the Supremacy Clause, “[w]here state and federal law ‘directly conflict,’ state law must give way.” PLIVA, Inc. v. Mensing,
And it is pre-empted for that reason. The defect in § 108A-57 is that it sets forth no process for determining what portion of a beneficiary’s tort recovery is attributable to medical expenses. Instead, North Carolina has picked an arbitrary number—one-third—and by statutory command labeled that portion of a beneficiary’s tort recovery as representing payment for medical care. Pre-emption is not a matter of semantics. A State may not evade the preemptive force of federal law by resorting to creative statutory interpretation or description at odds with the statute’s intended operation and effect.
A similar issue was presented last Term, in National Meat Assn. v. Harris,
The Court rejected that argument. It recognized that if the argument were to prevail, “then any State could impose any regulation on slaughterhouses just by framing it as a ban on the sale of meat produced in whatever way the State disapproved. That would make a mockery of the [Act’s] preemption provision.” Id., at 464. In a preemption case, the Court held, a proper analysis requires consideration of what the state law in fact does, not how the litigant might choose to describe it.
That reasoning controls here. North Carolina’s argument, if accepted, would frustrate the Medicaid anti-lien provision in the context of tort recoveries. The argument lacks any limiting principle: If a State arbitrarily may designate one-third of any recovery as payment for medical expenses, there is no logical reason why it could not designate half, three-quarters, or all of a tort recovery in the same way. In Ahlborn, the State of Arkansas, under this rationale, would have succeeded in claiming the full amount it sought from the
Here the State concedes that it would be “difficult ... to defend” a law purporting to allocate most or all of a beneficiary’s tort recovery to medical expenses. Tr. of Oral Arg. 20. That is true; but, as a doctrinal matter, it is no easier to defend North Carolina’s across-the-board allocation of one-third of all beneficiaries’ tort recoveries to medical expenses. The problem is not that it is an unreasonable approximation in all cases. In some cases, it may well be a fair estimate. But the State provides no evidence to substantiate its claim that the one-third allocation is reasonable in the mine run of cases. Nor does the law provide a mechanism for determining whether it is a reasonable approximation in any particular case.
In some instances, no estimate will be necessary or appropriate. When there has been a judicial finding or approval of an allocation between medical and nonmedical damages— in the form of either a jury verdict, court decree, or stipulation binding on all parties—that is the end of the matter. Ahlborn was a case of this sort. All parties (including the State of Arkansas) stipulated that approximately 6 percent of the plaintiff’s settlement represented payment for medical costs.
North Carolina’s statute, however, operates to allow the State to take one-third of the total recovery, even if a proper stipulation or judgment attributes a smaller percentage to medical expenses. Consider the facts of Ahlborn. There, only $35,581.47 of the beneficiary’s settlement “constituted reimbursement for medical payments made.” Ibid. North Carolina’s statute, had it been applied in Ahlborn, would have allowed the State to claim $183,333.33 (one-third of the beneficiary’s $550,000 settlement). A conflict thus exists between North Carolina’s law and the Medicaid anti-lien provision.
The instant case, to be sure, is not quite so clear cut; for there was no allocation of the settlement by either judicial decree or binding stipulation of the parties. But the reasoning of Ahlborn and the design of the federal statute contemplate that possibility. When the State and the beneficiary are unable to agree on an allocation, Ahlborn noted, the parties could “submi[t] the matter to a court for decision.” Id., at 288.
The facts of the present case demonstrate why Ahlborn anticipated that a judicial or administrative proceeding would be necessary in that situation. Of the damages stemming from the injuries E. M. A. suffered at birth, it is apparent that a quite substantial share must be allocated to the skilled home care she will require for the rest of her life. See App. 112. It also may be necessary to consider how much E. M. A. and her parents could have expected to receive as compensation for their other tort claims had the suit proceeded to trial. An irrebuttable, one-size-fits-all statutory presumption is incompatible with the Medicaid Act’s clear mandate that a State may not demand any portion of a beneficiary’s tort recovery except the share that is attributable to medical expenses.
B
North Carolina offers responses to this reasoning, but none is persuasive.
Second, North Carolina contends that its law falls within the scope of a State’s traditional authority to regulate tort actions, including the amount of damages that a party may recover. This argument begins from a correct premise: In our federal system, there is no question that States possess the “traditional authority to provide tort remedies to their citizens” as they see fit. Silkwood v. Kerr-McGee Corp.,
Third, North Carolina suggests that even though its allocation of one-third of a tort recovery to medical expenses may be arbitrary, other methods for allocating a recovery would be just as arbitrary. In the State’s view there is no “ascertainable ‘true value’ of [a] case that should control what portion of any settlement is subject to the State’s third-party recovery rights.” Brief for Petitioner 26-27. As explained earlier, allocations, while to some extent perhaps not precise, need not be arbitrary. See supra, at 638. In some cases a judgment or stipulation binding on all parties will allocate the plaintiff’s recovery across different claims. Where no such judgment or stipulation exists, a fair allocation of such a settlement may be difficult to determine. Trial judges and trial lawyers, however, can find objective benchmarks to make projections of the damages the plaintiff likely could have proved had the case gone to trial.
In the instant case, for example, the North Carolina trial court approved the settlement only after finding that it constituted “fair and just compensation” to E. M. A. and her parents for her “severe and debilitating injuries”; for “medical and life care expenses” her condition will require; and for “severe emotional distress” from her injuries. App. 82. What portion of this lump-sum settlement constitutes “fair and just compensation” for each individual claim will depend both on how likely E. M. A. and her parents would have been to prevail on the claims at trial and how much they reasonably could have expected to receive on each claim if successful, in view of damages awarded in comparable tort cases.
The task of dividing a tort settlement is a familiar one. In a variety of settings, state and federal courts are called upon to separate lump-sum settlements or jury awards into categories to satisfy different claims to a portion of the moneys recovered. See supra, at 640. See also, e. g., Green v. Commissioner,
“consider the anticipated amount of prospective compensation the employer or workers’ compensation carrier is likely to pay to the employee in the future, the net recovery to plaintiff, the likelihood of the plaintiff prevailing at trial or on appeal, the need for finality in the litigation, and any other factors the court deems just and reasonable.” N. C. Gen. Stat. Ann. §97-10.2(j) (Lexis 2011).
North Carolina would be on sounder footing had it adopted a similar procedure for allocating Medicaid beneficiaries’ tort recoveries. It might also consider a different one along the lines of what other
The State thus has ample means available to allocate Medicaid beneficiaries’ tort recoveries in an efficient manner that complies with federal law. Indeed, if States are concerned that .case-by-case judicial allocations will prove unwieldy, they may even be able to adopt éx ante administrative criteria for allocating medical and nonmedical expenses, provided that these criteria are backed by evidence suggesting that they are likely to yield reasonable results in the mine run of cases. What they cannot do is what North Carolina did here: adopt an arbitrary, one-size-fits-all allocation for all cases.
Fifth, and finally, North Carolina contends that in two documents—a July 2006 memorandum and a December 2009 letter responding to an inquiry from a member of North Carolina’s congressional delegation—the federal Centers for Medicare & Medicaid Services approved of North Carolina’s statutory scheme for Medicaid reimbursement. In the State’s view, these agency pronouncements are entitled to deference. See Brief for Petitioner 33-36 (citing Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc.,
The 2006 and 2009 documents, however, no longer reflect the agency’s position. See Brief for United States as Ami-cus Curiae 8-34. And at any rate, the documents are opinion letters, not regulations with the force of law. We have held that “[interpretations such as those in opinion letters— like interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law—do not warrant Chevron-style deference.” Christensen v. Harris County,
* * *
The law here at issue, N. C. Gen. Stat. Ann. § 108A-57, reflects North Carolina’s effort to comply with federal law and secure reimbursement from third-party tortfeasors for medical expenses paid on behalf of the State’s Medicaid beneficiaries. In some circumstances, however, the statute would permit the State to take a portion of a Medicaid beneficiary’s tort judgment or settlement not “designated as payments for medical care.” Ahlborn,
The judgment of the Court of Appeals for the Fourth Circuit is affirmed.
It is so ordered.
Concurrence Opinion
concurring.
I join the Court’s opinion with one qualification: My concurrence in the Court’s views rests in part upon the fact that the federal agency that administers the Medicaid statute, known as the Centers for Medicare & Medicaid Services, has reached the same conclusion.
The question before us is how to measure what share of a judgment or settlement of an accident victim’s lawsuit represents payment (or reimbursement) for health care items (or services) for which a State has already paid on behalf of the victim. The statute is silent on the question. It simply says that a State may recover the amount of “payment” that the State has made on behalf of the victim “for medical assistance for health care items or
Here, however, the agency did not engage in rulemaking procedures, it did not carefully consider differing points of view of those affected, it did not set forth its views in a manual intended for widespread use, nor has it in any other way announced an interpretation that Congress would have “intended ... to carry the force of law.” United States v. Mead Corp., 533 U. S. 218, 221 (2001). Indeed, the agency does not claim that it exercised any delegated legislative power.
Neither do the documents in which the agency set forth its position (a memorandum and a letter) have much “ ‘power to persuade.’ ” Christensen v. Harris County,
Nonetheless, the Administrative Procedure Act is not the Tax Code. And cases that seek to determine whether Congress intended courts to give weight to agency views provide rules of thumb, general principles meant to guide interpretation, not rigid rules that narrowly confine it. They seek to advance Congress’ intent as embodied in particular statutory schemes by helping courts to determine whether, and how, Congress intended those courts to respect an agency’s expertise when reasonably exercised in particular cases. They seek to allocate the law-interpreting function between court and agency in a way likely to work best within any particular statutory scheme. But they do not purport to do more than that. In particular, they do not set forth all-encompassing absolute rules, impervious to nuance and admitting of no exceptions. Felix Frankfurter’s observation, made many years ago, remains valid today: “The problems subsumed by . . . ‘administrative discretion’... must be related to ... the particular interest... as to which ‘administrative discretion’ is exercised.” The Task of Administrative Law, 75 U. Pa. L. Rev. 614, 619-620 (1927). That is to say, “the standard doctrines of administrative law . . . should not be taken too rigidly.” Jaffe, Comment, Administrative Law: Burden of Proof and Scope of Review, 79 Harv. L. Rev. 914, 918 (1966).
Thus, even though this case does not fall directly within a case-defined category, such as “Chevron deference,” “Skid-more deference,” “Beth Israel deference,” “Seminole Rock deference,” or deference as defined by some other case, I believe the agency, in taking a position, nonetheless retains some small but special “power to persuade.” Skidmore, supra, at 140. See generally Eskridge &
I cannot measure the degree of deference with the precision of a mariner measuring a degree of latitude. But it is still worth noting that the agency’s determination has played some role in my own decision. That is because the agency, after looking into the matter more thoroughly (perhaps after notice-and-comment rulemaking), might change its mind. Given the nature of the question and of the agency’s expertise, courts, I believe, should then give weight to that new and different agency decision. Cf. National Cable & Telecommunications Assn. v. Brand X Internet Services,
With that understanding, I join the Court’s opinion.
Dissenting Opinion
with whom Justice Scalia and Justice Thomas join, dissenting.
The State of North Carolina paid for E. M. A.’s medical expenses under its Medicaid plan. E. M. A. sued those alleged to have caused her injuries, eventually settling for an amount that included, among other things, medical expenses already covered by North Carolina. The federal Medicaid statute requires North Carolina to recoup those expenses. But neither the Act nor the regulations issued under it tell States how to determine what portion of a third-party recovery should be attributed to medical expenses. The Court concludes that North Carolina’s law addressing that question is nonetheless preempted by the Act.
The Court’s reading of the Act, while plausible, is not compelled by the statutory text or our precedent. It has the unfortunate consequence of denying flexibility to the States—and, by necessary implication, the Secretary of Health and Human Services—in resolving a policy question with broad significance for this complicated program. In short, the result is both unnecessary and unwise. I therefore respectfully dissent.
H-Í
Medicaid is a cooperative federal-state program designed to provide medical assistance to certain needy populations. The basic idea is simple: The statute—as interpreted by the Secretary of HHS—sets out the requirements for an eligible Medicaid program. If States decide to enroll and comply with those requirements, they get federal money. If they don’t, they don’t. The federal contribution is not enough to fully fund any State’s program; States contribute anywhere from 17 to 50 percent of the costs. See 42 U. S. C. § 1396d(b) (2006 ed., Supp. V). The States have considerable discretion in structuring and administering their programs, subject of course to federal law and regulations.
In practice, it’s not always so simple. The books are thick with federal regulations that States must interpret and reconcile. By my count, at least 39 federal-court opinions, including one of our own, have reiterated Judge Friendly’s observation that Medicaid law is “almost unintelligible to the uninitiated.” See Schweiker v. Gray Panthers,
The relevant provisions here require that North Carolina (1) pay for certain people’s medical care, (2) make reasonable efforts to recoup from liable third parties (such as tortfeasors and insurers) any medical expenses it paid, and (3) not recoup such payments by imposing a lien on the beneficiary’s property. See ante, at 633; see also 42 U. S. C. § 1396a(a) (25)(B) (2006 ed.). To comply, North Carolina pays for a beneficiary’s medical expenses on the condition that any such expenses the beneficiary recovers from third parties will go toward repaying the State. See N. C. Gen. Stat. Ann. § 108A-59(a) (Lexis 2011).
The difficulty, however, is that tort victims seldom seek only medical expenses. Take this case: E. M. A. and her parents sought damages not only for medical expenses, but for lost income, pain and suffering, and other things, and ended up settling all these claims for a lump sum of $2.8 million. Such a situation poses the question of how much North Carolina can recoup—indeed, under federal law, must recoup—from a lump sum that reflects more than just medical expenses.
This puts North Carolina in a tight spot. If it fails to recover what it must, it violates federal law. If it takes a beneficiary’s property beyond medical expenses, it violates federal law. Trying to navigate between these competing requirements—with no interpretive guidance from the Secretary of HHS—North Carolina elected to resolve the problem by laying out ground rulés in advance, conditioning a beneficiary’s right to recover from third parties on the beneficiary’s willingness to fully repay the State, or, at a minimum, define one-third of her damages as “medical expenses,” whichever is less. N. C. Gen. Stat. Ann. §§ 108A-59(a), 108A-57(a); see also Andrews v. Haygood,
J—j I—I
The Court states that “[t]he problem” with North Carolina’s designation—actual expenses or one-third of the recovery, whichever is less—“is not that it is an unreasonable approximation in all cases,” and acknowledges that “[i]n some cases, it may well be a fair estimate.” Ante, at 637. According to the Court, however, because North Carolina’s law provides no “mechanism for determining whether it is a reasonable approximation in any particular case,” ibid, (emphasis added), it “directly conflict[s]” with the “clear mandate” of the federal Medicaid statute, and is therefore preempted, ante, at 636 (quoting PLIVA, Inc. v. Mensing,
The problem is that the Court can point to no statutory or regulatory requirement, much less an unambiguous one, requiring such an approach. The federal statute, which provides that States must
Nor does our case law. As the Court acknowledges, our decision in Arkansas Dept. of Health and Human Servs. v. Ahlborn,
The Court recognizes that Ahlborn “had no occasion to resolve” the question “how to determine what portion of a settlement represents payment for medical care,” ante, at 634, but then promptly proceeds as if Ahlborn had done just that. The Court quotes Ahlborn for the proposition that a State may not claim any portion of a tort recovery “not ‘designated as payments for medical care,’ ” and then faults North Carolina’s law because it “sets forth no process for determining what portion” is “attributable to medical expenses.” Ante, at 635 (quoting
The nature of the “process” contemplated by the majority is unclear, but it must involve an effort to determine what claims would have succeeded had there been a trial, what the damages would have been for the separate claims, and so on—the very sort of inquiries settlement is intended to obviate. The Court talks of addressing these concerns through “rebuttable presumptions and adjusted burdens of proof to ensure that speculative assessments of a plaintiff’s likely recovery do not defeat the State’s right to recover medical costs,” but ominously declines to give any assurance “that these rules are necessarily compliant with the federal statute.” Ante, at 641.
Nothing in Ahlborn requires all this, and North Carolina has taken a different approach. It has adjusted its tort law to account for its obligations under federal Medicaid law by requiring that beneficiaries pay the State back in full or designate one-third of any recovery as “medical expenses,” whichever is less. This approach
There’s nothing unusual about such an approach. States define the contours of their own tort law all the time, setting rules about who may recover in particular circumstances, what claims may be alleged, which parties are liable, what defenses may be asserted, what damages are recoverable, and so on. Doing so does not amount to imposing a lien on any property to which an individual has a vested right under state tort law. The Court says North Carolina cannot rely on its “traditional authority to regulate tort actions” because its rule in this case is not an exercise of its “general authority.” Ante, at 639-640. The Court cites no support for this vague new limitation on a State’s power to define tort remedies under state law, and I am aware of none.
In fact, federal law says nothing about how States must define the recovery available to a Medicaid beneficiary suing a third party. That silence is a good indication that Congress did not mean to strip States of their traditional authority to regulate torts. See Wyeth v. Levine,
The majority nonetheless dismisses North Carolina’s solution as an arbitrary “one-size-fits-all” approach, ante, at 639, that has no “logical” endpoint; one that, if accepted, could permit States to “designate half, three-quarters, or all of a tort recovery in the same way,” ante, at 637. This is an age-old objection to any line drawing, to which Justice Holmes provided a familiar response: “Neither are we troubled by the question where to draw the line. That is the question in pretty much everything worth arguing in the law.” Irwin v. Gavit,
The majority points out that nearly one-third of the States conduct hearings of the sort it contemplates. Ante, at 641. Good for them. The whole point of our federal system is that different States may reach different judgments about how to run their own different programs. Such flexibility is particularly important in this context, where Medicaid spending is the largest component of most state budgets. The Court also notes that, in other areas, courts have undertaken the work of “separating] lump-sum settlements or jury awards into categories to satisfy different claims.” Ante, at 642. My point is not that the work required by the Court cannot be done—just that it has not been required by Congress or the Secretary.
On that note, it’s bad enough that the Court finds the State’s reasonable effort to reconcile its competing obligations preempted. What is doubly unfortunate is that the Court’s analysis necessarily implies that the Secretary’s hands are also tied. The Medicaid Act is Spending Clause legislation, and such legislation is binding on States only insofar as it is “unambiguous.” See Pennhurst State School and Hospital v. Halderman,
The concurrence wishes this were not so, see ante, at 646 (“today’s decision does not freeze the Court’s present interpretation of the statute permanently into law”), but fails to acknowledge the express rationale of the Court’s opinion. There is no other way to read the majority opinion than as foreclosing what the concurrence would like to leave open.
Or is there? In exactly two sentences, the Court seems to falter and lose the courage of its conviction that a State must have a process in place for an individual
I am not sure whether this is a concession that individualized hearings may not be required after all, but if it is, it is flatly contrary to the rest of the opinion. It is also quite odd to suggest that the problem with North Carolina’s law would go away if only the State provided some sort of study substantiating the idea that one-third was a good approximation in most cases. North Carolina is not a federal agency, whose actions are subject to review under the Administrative Procedure Act’s “substantial evidence” test. See 5 U. S. C. § 706(2)(E). We have never before, in a preemption ease, put the burden on the State to compile an evidentiary record supporting its legislative determination. The burden is, of course, on those challenging the law. See Pharmaceutical Research and Mfrs. of America v. Walsh,
Keep in mind that the basis for all this is a federal law that prohibits liens for medical assistance, but says nothing about how medical and nonmedical expenses are to be allocated. It is hard enough to figure out what the Medicaid Act means by what it says; we should not read so much into its silence.
Ultimately, it is a basic policy judgment whether the Medicaid program is best served in this instance by post hoc individualized determinations, or whether the issue may be addressed in advance, through a general rule, as North Carolina has done here. See ante, at 644 (Breyer, J., concurring) (“any of several different answers to the question would seem reasonable”). The Court can point to nothing that delegates to it the prerogative to make that judgment. Rather, States and the Secretary—working together— should be afforded the leeway to make their joint venture a workable one.
Because North Carolina's law does not conflict with federal law, I would let it be. I respectfully dissent.