Virginia Department of Medical Assistance Services v. United States Department of Health

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 14, 2012 Decided May 8, 2012
No. 11-5161
VIRGINIA DEPARTMENT OF M EDICAL ASSISTANCE SERVICES ,
APPELLANT
v.
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN
SERVICES AND KATHLEEN SEBELIUS, SECRETARY OF THE
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN
SERVICES ,
APPELLEES
Consolidated with 11-5242
Appeals from the United States District Court
for the District of Columbia
(No. 1:09-cv-00392)
(No. 1:09-cv-01587)
Caroline M. Brown argued the cause for the appellants.
Laura E. Schattschneider was on brief.
Dana Kaersvang, Attorney, United States Department of
Justice, argued the cause for the appellees. Tony West, Assistant
Attorney General, Ronald C. Machen, Jr., United States
Attorney, and Michael S. Raab, Attorney, were on brief. R.

-- 1 of 16 --

2
Craig Lawrence, Assistant United States Attorney, entered an
appearance.
Before: HENDERSON , ROGERS and GRIFFITH , Circuit
Judges.
Opinion for the Court filed by Circuit Judge HENDERSON .
KAREN LE CRAFT HENDERSON, Circuit Judge: The Virginia
Department of Medical Assistance Services and the Kansas
Health Policy Authority (collectively, States) both appeal the
district court’s grants of summary judgment in favor of the U.S.
Department of Health and Human Services and the Secretary of
Health and Human Services (HHS or Secretary). See Va. Dep’t
of Med. Assistance Servs. v. U.S. Dep’t of Health & Human
Servs., 779 F. Supp. 2d 129 (D.D.C. 2011) (Virginia v. HHS);
Kan. Health Policy Auth. v. U.S. Dep’t of Health & Human
Servs., 798 F. Supp. 2d 162 (D.D.C. 2011) (Kansas v. HHS).
The district court upheld HHS’s disallowance of certain
Medicaid claims for Federal Financial Participation (FFP) as
ineligible for “medical assistance” under the “Institution for
Mental Diseases” (IMD) exclusion set forth in section 1905(a)
of 42 U.S.C. §§ 1396 et seq. (Medicaid Statute). 1 The IMD
exclusion generally carves out from FFP any claims for
1 The Medicaid Statute “defines ‘medical assistance’ as ‘payment
of part or all of the cost’ of medical ‘care and services’ for a defined
set of individuals.” Adena Reg’l Med. Ctr. v. Leavitt, 527 F.3d 176,
180 (D.C. Cir. 2008) (quoting 42 U.S.C. § 1396d(a)). Under the
Medicaid program, each state furnishes medical assistance to its
eligible residents and the federal government covers a portion of the
state’s costs through FFP. Bowen v. Massachusetts, 487 U.S. 879,
883-84 (1988) (noting, although “federal contribution to a State’s
Medicaid program is referred to as a ‘reimbursement,’ the stream of
revenue is actually a series of huge quarterly advance payments that
are based on the State’s estimate of its anticipated future expenditures
. . . . periodically adjusted to reflect actual experience”).

-- 2 of 16 --

3
“payments with respect to care or services for any individual
who has not attained 65 years of age and who is a patient in an
institution for mental diseases.” 42 U.S.C. § 1396d(a)(B). In
particular, HHS excluded the States’ claims as outside the
narrow statutory exception to the IMD exclusion for “inpatient
psychiatric hospital services for individuals under age 21”
(under-21 exception). Id. § 1396d(a)(B), (16). Because HHS
correctly concluded that the disputed claims are not eligible for
FFP under the plain language of the IMD exclusion and the
under-21 exception, we affirm the court’s grants of summary
judgment in HHS’s favor.
I.
The Congress enacted the Medicaid Statute in 1965 to
provide federal financial assistance to states that reimburse
certain costs of medical treatment for needy persons pursuant to
an approved state medical assistance plan, which plan identifies
the groups of individuals eligible for assistance as well as the
services that are covered. Pharm. Research & Mfrs. of Am. v.
Walsh, 538 U.S. 644, 650-51 (2003). Section 1905(a) of the
Medicaid Statute, 42 U.S.C. § 1396d(a), sets out which “care
and services” are eligible for “medical assistance” (and
consequently for FFP) under a state plan. Since its enactment in
1965, section 1905(a) has generally excluded from medical
assistance any services provided to individuals in an IMD who
are not age 65 or older. Social Security Amendments of 1965,
Pub. L. No. 89-97, title I, § 121(a)(B), 79 Stat. 286, 351-52
(1965) (codified at 42 U.S.C. § 1396d(a)(B)).
In 1972, the Congress added an exception to the IMD
exclusion aimed at individuals under age 21. Section
1905(a)(B) now excludes services for individuals under 65
“except as otherwise provided in paragraph (16).” 42 U.S.C.
§ 1396d(a)(B). Paragraph (16) identifies “inpatient psychiatric
hospital services for individuals under age 21, as defined in
subsection (h),” as among the services for which medical

-- 3 of 16 --

4
assistance is expressly authorized. Id. § 1396d(a)(16).
Subsection (h), in turn, defines “inpatient psychiatric hospital
services for individuals under age 21” in some detail, to
include[] only—
(A) inpatient services which are provided
in an institution (or distinct part thereof)
which is a psychiatric hospital as defined in
section 1395x(f) of this title or in another
inpatient setting that the Secretary has
specified in regulations;
(B) inpatient services which, in the case
of any individual (i) involve active treatment
which meets such standards as may be
prescribed in regulations by the Secretary,
and (ii) a team, consisting of physicians and
other personnel qualified to make
determinations with respect to mental health
conditions and the treatment thereof, has
determined are necessary on an inpatient
basis and can reasonably be expected to
improve the condition, by reason of which
such services are necessary, to the extent that
eventually such services will no longer be
necessary; and
(C) inpatient services which, in the case
of any individual, are provided prior to (i) the
date such individual attains age 21, or (ii) in
the case of an individual who was receiving
such services in the period immediately
preceding the date on which he attained age
21, (I) the date such individual no longer
requires such services, or (II) if earlier, the
date such individual attains age 22; . . . .

-- 4 of 16 --

5
42 U.S.C. § 1396d(h)(1)(A)-(C) (emphasis added).
In 2001-02, the HHS Inspector General audited Medicaid
claims for IMD residents under age 21 in several
states—including Virginia. As a result of the audit, the Centers
for Medicare and Medicaid Services (CMS) 2 disallowed FFP
claims totaling $3,948,532 from Virginia as not authorized by
the under-21 exception because they were not documented to be
for “psychiatric hospital services provided in and by an IMD.”
Letter from Ted Gallagher, Assoc. Rgn’l Adm’r, Div. of
Medicaid & Children’s Health Operations, CMS, to Patrick W.
Finnerty, Dir., Va. Dep’t of Med. Assistance Servs., at 2 (Feb.
29, 2008) (CMS Virginia Letter). 3 Subsequently, following an
audit of Kansas’s 2007-08 claims, CMS similarly disallowed
$3,883,143 of FFP claims because they were for “services other
than inpatient psychiatric services to residents of a [Psychiatric
Residential Treatment Facility (PRTF)].” Letter from James G.
Scott, Assoc. Rgn’l Adm’r, Div. of Medicaid & Children’s
Health Operations, CMS, to Marcia J. Nielsen, Exec. Dir.,
Kansas Health Policy Auth., at 2 (Oct. 20, 2008) (CMS Kansas
Letter).4 Virginia and Kansas both appealed to HHS’s
2 CMS is the agency that administers the Medicaid program on
behalf of the Secretary. Pharm. Research & Mfrs. of Am. v. Walsh,
538 U.S. at 650 n.3.
3 Virginia’s disallowed claims included claims for “physician
services, pharmacy, outpatient hospital clinics, inpatient acute care,
and a miscellaneous category including primarily laboratory, x-ray and
community mental health and mental retardation services.” CMS
Virginia Letter at 2.
4 PRTFs “are non-hospital facilities that, by regulation, may
provide inpatient psychiatric treatment to children in Medicaid.”
Kansas v. HHS, 798 F. Supp. 2d at 164 n.3. All of Kansas’s
disallowed claims were for services provided to residents of PRTFs.
CMS Kansas Letter at 1.

-- 5 of 16 --

6
Departmental Appeals Board (DAB).
The DAB rejected Virginia’s challenge to “CMS’s
determination that the exception applies only to ‘inpatient
psychiatric services.’ ” Va. Dep’t of Med. Assistance, DAB
Dec. No. 2222, at 1 (App. Div. Dec. 31, 2008). In particular, the
DAB declined Virginia’s invitation to reconsider its earlier
decision in New York State Department of Health, DAB Dec.
No. 2066 (App. Div. Feb. 8, 2007). Va. Dep’t of Med.
Assistance, DAB Dec. No. 2222, at 2-3. In New York State,
which arose from the multi-state 2001-02 audit, the DAB upheld
CMS’s interpretation of the IMD exception’s “plain language,”
as applied by the HHS Inspector General, that paragraph (16)
“provides for only one category of Medicaid service—inpatient
psychiatric hospital services for individuals under age 21 as
defined in subsection (h)” and that subsection (h) “in turn
defines those services to mean ‘only’ those inpatient services
that are provided under the direction of a physician in an
institution that qualifies and that meet other specified
requirements.” New York State, Dec. No. 2066, at 9-10.
Accordingly, the DAB rejected New York’s contention that “ ‘if
the eligible individuals happen to be under the age of 21, in
addition to the other benefits set out in the statute, they are also
entitled to receive inpatient psychiatric hospital services.’ ” Id.
at 9 (quoting New York State brief). Consistent with New York
State, the DAB upheld CMS’s disallowance of Virginia’s IMD
claims. Id. at 26. In the Kansas appeal, the DAB likewise
upheld the disallowance explaining that it “ha[d] previously held
that the statutory exception to the IMD exclusion is available
only for services, provided in and by a qualifying facility,
meeting the statutory and regulatory requirements for ‘inpatient
psychiatric facility services’ ” and that CMS had “determined
that the health care services at issue were not part of [such]
inpatient services.” Kan. Health Policy Auth., DAB Decision
No. 2255, at 1-2 (App. Div. June 23, 2009).

-- 6 of 16 --

7
Virginia and Kansas then filed these actions in the district
court, challenging HHS’s interpretation of the IMD exclusion
and its under-21 exception and the disallowance of the States’
claims based thereon. The district court granted summary
judgment in favor of HHS in both cases. In Virginia v. HHS, the
district court agreed with HHS that “the relevant statutory
language is unambiguous.” 779 F. Supp. 2d at 135. The court
specifically found that (1) the IMD exclusion “is clear: except
as provided in paragraph (16), FFP is not available for any
medical care for any individual under age 65 who is a patient in
an IMD” and (2) the “ ‘under–21 exception’ to the IMD
exclusion is equally clear: FFP is only available for inpatient
psychiatric hospital services for individuals under age 21 that
are provided in an IMD.” Id. at 135-36. In Kansas v. HHS, the
court summarily rejected Kansas’s challenge, declining to
“revisit its ruling on this issue” in Virginia v. HHS. 798 F. Supp.
2d at 164. Virginia and Kansas both filed timely notices of
appeal and the two appeals were consolidated.
II.
“We review the district court’s grant of summary judgment
de novo pursuant to the Administrative Procedure Act and
therefore will uphold the Secretary’s decision unless it is
‘arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law,’ 5 U.S.C. § 706(2)(A).” Pharm.
Research & Mfrs. of Am. v. Thompson, 362 F.3d 817, 821 (D.C.
Cir. 2004). We review the Secretary’s interpretation of the
Medicaid Statute under the familiar two-step framework set out
in Chevron U.S.A. Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984). Id. at 821-22.
Under Chevron step 1, if the “Congress has directly
spoken to the precise question at issue . . . , that is the
end of the matter; for the court, as well as the agency,
must give effect to the unambiguously expressed intent
of Congress.” Under Chevron step 2, “if the statute is

-- 7 of 16 --

8
silent or ambiguous with respect to the specific issue,
the question for the court is whether the agency’s
answer is based on a permissible construction of the
statute.”
U.S. Postal Serv. v. Postal Regulatory Comm’n, 640 F.3d 1263,
1266 (D.C. Cir. 2011) (quoting Chevron, 467 U.S. at 842-43)
(citation omitted). We stop, as did the district court, at Chevron
step 1 because we conclude the unambiguous statutory language
excepts from the IMD exclusion only “inpatient psychiatric
hospital services” as defined in subsection (h).
As we noted above, section 1905(a) sets out a list of
services eligible for “medical assistance” for which FFP is
available, 42 U.S.C. § 1396d(a)(1)-(29), and expressly excludes
therefrom “any [] payments with respect to care or services for
any individual . . . who is a patient in an institution for mental
diseases,” id. § 1396d(a)(B)—with two specific exceptions: (1)
the broad exception for any individual who “has . . . attained 65
years of age,” id.; and (2) the narrow exception “as otherwise
provided in paragraph (16),” id., that is, “effective January 1,
1973, inpatient psychiatric hospital services for individuals
under age 21, as defined in subsection (h).” Id. § 1396d(a)(16).
Subsection (h), quoted supra p. 4, establishes in its three
separate subsections three discrete criteria that specific services
must meet to qualify as “inpatient psychiatric hospital services”
eligible for medical assistance: they must (1) be “inpatient”
services “provided in . . . a psychiatric hospital” or regulatory
equivalent; (2) “involve active treatment” which is “determined
[to be] necessary on an inpatient basis and can reasonably be
expected to improve the [mental health] condition, by reason of
which such services are necessary, to the extent that eventually
such services will no longer be necessary”; and (3) be performed
before the patient turns 21 or, if performed immediately before
he turns age 21, cease no later than the date he turns 22. 42
U.S.C. § 1396d(h)(1)(A)-(C). Given the unambiguous meaning

-- 8 of 16 --

9
of the first two requirements, HHS correctly disallowed
Virginia’s claims for which Virginia “did not document that the
. . . costs were for ‘inpatient psychiatric hospital services,’ ”
CMS Virginia Letter at 3, and Kansas’s claims that were “for
services other than inpatient psychiatric services to residents of
a PRTF.” CMS Kansas Letter at 2.
The States assert the IMD exception is indeed ambiguous
“as to whether the phrase ‘except as otherwise provided in
paragraph (16)’ refers to the services described in that paragraph
or to the individuals receiving those services.” Appellants’ Br.
25. If the latter, they contend, the requirement that services be
those defined in subsection (h) may be read simply to establish
a baseline for a patient in an IMD to receive all manner of FFP-
eligible medical assistance set out in section
1905(a)(1)-(29)—so long as the patient receives any qualifying
“inpatient psychiatric hospital services,” the States maintain, all
of his medical services are then eligible for medical assistance
and FFP. See Appellants’ Br. 32-33 (“In the States’ view,
therefore, far from limiting the scope of the exception to just
that one service, the initial prepositional phrase of the exclusion
ensures that Medicaid would pay for services for children in
IMDs only when the inpatient psychiatric services they received
met the high treatment standard set forth in Section 1396d(h).”).
We disagree. The excepting language refers quite specifically
to an “except[ion] as otherwise provided in paragraph (16)” and
paragraph (16) simply and unambiguously lists among the
services eligible for medical assistance “effective January 1,
1973, inpatient psychiatric hospital services for individuals
under age 21, as defined in subsection (h).” Such services
therefore are the only ones covered by the language of the
under-21 exception—all other services to individuals in IMDs
and under age 65 remain excluded. This is what the Congress
said and this is therefore what we presume the Congress meant.
See Conn. Nat’l Bank v. Germain, 503 U.S. 249, 253-54 (1992)
(“[C]ourts must presume that a legislature says in a statute what

-- 9 of 16 --

10
it means and means in a statute what it says there. When the
words of a statute are unambiguous, then, this first canon [of
construction] is also the last: judicial inquiry is complete.”
(citations and quotation marks omitted)). To overcome this
plain meaning presumption, the States “must ‘show either that,
as a matter of historical fact, Congress did not mean what it
appears to have said, or that, as a matter of logic and statutory
structure, it almost surely could not have meant it.’ ”
Performance Coal Co. v. Fed. Mine & Health Review Comm’n,
642 F.3d 234, 238 (D.C. Cir. 2011) (quoting Engine Mfrs. Ass’n
v. U.S. EPA, 88 F.3d 1075, 1089 (D.C. Cir. 1996)). The States
have not made such a showing.
The States first assert that the structure of the Medicaid
Statute supports their interpretation, pointing to the
“comparability principle” embodied in section 1396a(a)(10),
which, inter alia, requires that the medical assistance to any
individual meeting listed eligibility requirements “shall not be
less in amount, duration, or scope than the medical assistance
made available to any other such individual.” 42 U.S.C.
§ 1396a(a)(10)(B)(i). They contend that if the Congress had
wanted to limit IMD services to inpatient psychiatric hospital
services, it would have done so expressly in the comparability
provision—section 1396a(a)(10)—as it did when establishing
other exceptions thereto. See, e.g., id. § 1396a(a)(10)(G)(VII)
(limiting medical assistance available to certain women during
pregnancy to “medical assistance for services related to
pregnancy (including prenatal, delivery, postpartum, and family
planning services) and to other conditions which may
complicate pregnancy”). Notwithstanding its practice in other
contexts, however, in this instance, logically enough, the
Congress set out the exception in the subsection already
containing the exclusion itself—42 U.S.C. § 1396d(a)—and it
did so in unambiguous terms.

-- 10 of 16 --

11
The States next contend the legislative history supports its
interpretation but we find the cited history at best inconclusive.
The committee report on the 1972 act on which the States rely
expresses an intent to “authorize Federal matching under
medicaid for eligible children, age 21 or under, receiving active
care and treatment for mental diseases in an accredited medical
institution” (with controls “to assure that the new Federal dollars
are utilized to improve and expand treatment of mentally-ill
children”) in an “effort to restore mentally ill children to a point
where they may very well be capable of rejoining and
contributing to society as active and constructive citizens.” S.
Rep. No. 92-1230, at 281 (U.S. Sen. Comm. on Fin.). This
language sheds little light on whether, as the States contend,
matching funds are available for services other than those
expressly cited: “active care and treatment for mental diseases
in an accredited medical institution.” Thus, “[t]his case does not
present the very rare situation where the legislative history of a
statute is more probative of congressional intent than the plain
text.” Consumer Elecs. Ass’n v. FCC, 347 F.3d 291, 298 (D.C.
Cir. 2003); see also Natural Res. Def. Council v. EPA, 489 F.3d
1250, 1259 (D.C. Cir. 2007) (“It is true . . . that we may examine
the statute’s legislative history in order to shed new light on
congressional intent, notwithstanding statutory language that
appears superficially clear. But the bar is high . . . .” (first
ellipsis in original; internal quotation marks and citations
omitted)).
The States also assert HHS’s own regulations are consistent
with—and therefore support—the States’ interpretation of the
under-21 exception. The recent regulations they cite, however,
are no more compelling than the legislative history as they too
are fully consistent with HHS’s narrow, plain meaning
interpretation of the exception to include only inpatient
psychiatric hospital services. See 42 C.F.R. § 441.13(a)(2)
(“FFP is not available in expenditures for services for . . . [a]ny
individual who is under age 65 and is in an institution for mental

-- 11 of 16 --

12
diseases, except an individual who is under age 22 and receiving
inpatient psychiatric services under Subpart D of this part.”)
(emphasis added); 42 C.F.R. § 435.1009(a)(2) (“FFP is not
available in expenditures for services provided to . . .
[i]ndividuals under age 65 who are patients in an institution for
mental diseases unless they are under age 22 and are receiving
inpatient psychiatric services under § 440.160 of this
subchapter.”) (emphasis added). The regulations are “eligibility
provision[s] which simply recognize[] that the broad ineligibility
that results from the IMD exclusion does not apply to children
receiving inpatient psychiatric services authorized under section
1905(a)(16) of the Act” and are “silent on whether, once a child
is receiving those services, FFP is available for other services as
well.” Va. Dep’t of Med. Assistance, DAB Dec. No. 2222, at
15. As we have explained, this question is answered by the
unambiguous language of paragraph (16) and subsection (h). 5
5 Moreover, HHS has plainly expressed its interpretation of the
under-21 exception in rulemakings and in its own manual. See
Medicaid Program; Federal Financial Participation for Inmates in
Public Institutions and Individuals in an Institution for Mental Disease
or Tuberculosis, 48 Fed. Reg. 13,446, 13,446 (Mar. 31, 1983)
(“Section 1905(a) of the Social Security Act prohibits Federal
payments for services provided to inmates of public institutions, or
individuals under age 65 who are patients in an institution for mental
diseases or tuberculosis except for inpatient psychiatric services
received by individuals under age 22.”); Medicaid Program; Inpatient
Psychiatric Services for Individuals Under Age 21, 59 Fed. Reg.
59,624, 59,625 (Nov. 17, 1994) (“Under section 1905(a) of the Act,
Medicaid payment is generally not available for any services provided
to individuals under age 65 who are patients in [IMDs]. . . . The
psychiatric\21 benefit, at section 1905(a)(16) of the Act, is the only
statutory exception to the IMD exclusion.”); State Medicaid Manual
§ 4390.A.2 (1994) (“The IMD exclusion . . . states that FFP is not
available for any medical assistance under title XIX for services
provided to any individual who is under age 65 and who is a patient

-- 12 of 16 --

13
Finally, the States argue that the Secretary’s narrow
interpretation of the under-21 exception is at odds with other
provisions of the Medicaid Statute. We again find their
arguments unpersuasive. None of the statutory provisions they
cite suggests we should ignore the plain meaning of the statutory
IMD exclusion and its under-21 exception. See U.S. ex rel.
Totten v. Bombardier Corp., 380 F.3d 488, 494 (D.C. Cir. 2004)
(“ ‘[W]hen the statute’s language is plain, the sole function of
the courts—at least where the disposition required by the text is
not absurd—is to enforce it according to its terms.’ ” (quoting
Lamie v. United States Tr., 540 U.S. 526, 534 (2004))).
The States first cite Medicare provisions which authorize
FFP for “early and periodic screening, diagnostic, and treatment
services [EPSDT] . . . for individuals who are eligible under the
plan and are under the age of 21,” 42 U.S.C. § 1396d(a)(4)(B);
see also id. § 1396d(r)(5); and one provision which previously
imposed a financial penalty on any state failing to provide such
services. See Social Security Amendments of 1972, Pub. L. No.
92-603, § 299F, 86 Stat. 1329, 1463 (1972) (formerly codified
at 42 U.S.C. § 403(g)). That the Medicaid Statute generally
encourages or even requires such screening does not negate the
unambiguous exclusion from FFP of all IMD services for
individuals under 65 except “inpatient psychiatric hospital
services for individuals under age 21.” 42 U.S.C.
§ 1396d(a)(16). The statutory language makes no exception for
EPSDT services. 6
in an IMD unless the payment is for inpatient psychiatric services for
individuals under age 21.”). Based on these documents, we reject the
States’ assertion that HHS failed to provide sufficient notice of its
interpretation. See Appellants’ Br. 52-53.
6 In fact, when the Congress first enacted EPSDT coverage for
eligible children in 1968 (effective July 1, 1969), it is undisputed that
the IMD exclusion prohibited all medical assistance to IMD residents

-- 13 of 16 --

14
The States also rely on section 1396a(a)(10)(C)(iv), which
provides that if a state plan provides medical assistance for any
of the eligible groups listed in section 1396d(a) that includes
“services in institutions for mental diseases or in an intermediate
care facility for the mentally retarded (or both) for any such
group, it also must include for all groups covered at least the
care and services listed in [paragraphs (1)-(5) and (17) of 42
U.S.C. § 1396d(a)] or the care and services listed in any 7 of
[paragraphs 1-24] of such section.” The States interpret this
language to mean that if they provide any services in an IMD to
a specific covered group, they must also provide the additional
referenced services set out in section 1396d to the same
group—contrary to HHS’s claimed limitation of IMD services
to inpatient psychiatric hospital services. Appellants’ Br. 43-44.
HHS, however, reasonably reads the same provision—consistent
with the IMD exclusion—to require that “[s]tates may only use
federal funding for services in institutions for mental diseases if
they already cover a wide range of services for ‘all groups
covered.’ ” Appellees’ Br. 21. We think HHS’s interpretation,
which maintains the integrity of each provision, is the better
reading. See Ricci v. DeStefano, 129 S.Ct. 2658, 2699 (2009)
(“Our task in interpreting separate provisions of a single Act is
to give the Act the most harmonious, comprehensive meaning
possible in light of the legislative policy and purpose.” (internal
quotation marks and alteration omitted)). In any event, the
language of section 1396a(a)(10)(C)(iv) does not plainly
contravene the unambiguous language of the IMD exclusion and
its exception.
under age 65—including EPSDT—and that remained the case until
1972 when the Congress added the limited under-21 exception for
“inpatient psychiatric hospital services” only. See Social Security
Amendments of 1967, Pub. L. No. 90-248, § 302(a), 81 Stat. 821, 929
(1968).

-- 14 of 16 --

15
Finally, the States argue that HHS’s single-service
restriction for IMD funding frustrates the Congress’s intent in
authorizing waivers for individuals with chronic mental illness
to receive care in a home- and community-based treatment
environment in lieu of an IMD—provided the alternative care is
cost-neutral. See 42 U.S.C. § 1396n(c). Because the home- or
community-based care is provided outside an IMD and is
therefore not subject to the IMD exclusion, such alternative care,
the States contend, necessarily provides more services at a
higher cost than the limited services HHS allows pursuant to the
under-21 exception. Thus, they maintain, obtaining a waiver
cannot be cost neutral. HHS responds, however, that the cost of
the additional services available in home- or community-based
care might be offset by the elimination of room-and-board costs
incurred in an IMD. In short, we cannot know from the present
record how often waivers may be cost-neutral and therefore
permissible. What we do know is that the plain language of the
provision that directly addresses services to IMD residents under
age 21—namely, the narrow under-21 exception to the IMD
exclusion which was already well-established when the waiver
provision was extended to cover “chronic mental illness” in
1986—unambiguously limits IMD medical assistance to
inpatient psychiatric hospital services. See Omnibus Budget
Reconciliation Act of 1986, Pub. L. No. 99-509, § 9411(d), 100
Stat. 1874, 2061-62 (1986). There is no indication, that the
Congress intended to alter the exception’s established scope at
that time.
In sum, the longstanding IMD exclusion, as amended by
paragraph (16)’s under-21 exception, plainly and unequivocally
limits Medicaid medical assistance for individuals in IMDs
under age 21 to claims for “inpatient psychiatric hospital
services” as defined in subsection (h) of section 1396d(a). This
restriction may not reflect the most compassionate or even the
most prudent approach to treating young patients in IMDs but it
marks the extent of assistance the Congress unambiguously

-- 15 of 16 --

16
authorized in 1972 when it first decided to fund such services.
Our role is “not to ‘correct’ the text so that it better serves the
statute’s purposes”; nor under Chevron, may we “avoid the
Congressional intent clearly expressed in the text simply by
asserting that [our] preferred approach would be better policy.”
Engine Mfrs. Ass’n v. U.S. EPA, 88 F.3d 1075, 1089 (D.C. Cir.
1996). The Congress has spoken plainly and our function is to
“give effect to the unambiguously expressed intent of
Congress.” Chevron, 467 U.S. at 843. Accordingly, we affirm
the district court’s grants of summary judgment to HHS.
So ordered.

-- 16 of 16 --