OPINION AND ORDER
Plaintiffs in Civil Action 83-3534 filed a complaint on behalf of themselves and those similarly situated challenging the validity of the Pennsylvania Department of Welfare's recently adopted amendments to the regulations regarding skilled nursing care under Title XIX of the Social Security Act (commonly called Medicaid), 42 U.S.C. § 1396-1396p. The gravamen of plaintiffs' complaint is that the state's new definition of skilled care is impermissibly stricter than that provided by federal law, thus resulting in the reduction in the level of nursing care to thousands of low income elderly nursing home patients. Subsequent to the filing of the complaint in Civil Action 83-3534, a related action was filed and assigned to me under our local rules. This later case, Holland v. Cohen, Civil Action 83-5983, challenges the same regulations but the crux of the complaint is directed at various alleged infirmities in the administrative hearing process by which patients can challenge adverse decisions regarding the level of care to which they are entitled under state and federal law.
Presently before the court is plaintiffs' application for a preliminary injunction which seeks an order directing defendants to continue certain interim measures that recently expired which, in effect, had allowed reimbursement to nursing homes for both skilled care and intermediate care patients at the skilled care rate and increased certain reimbursement ceilings.
The Medicaid program is a cooperative federal-state program set up to provide medical services to the poor. It is a system for federal funding of state plans to furnish health care to needy persons through agreements with private and public individuals and institutions capable of providing those services. Harris v. McRae, 448 U.S. 297, 308-09, 65 L. Ed. 2d 784, 100 S. Ct. 2671 (1980). The program was created in 1965 when Congress added Title XIX to the Social Security Act, 79 Stat. 343, as amended, 42 U.S.C. § 1396-1396p, for the purpose of providing federal financial assistance to states that chose to reimburse certain costs of medical treatment for needy individuals. Id. at 301. Participation in the Medicaid program by the individual states is entirely optional. When a state chooses to participate, it must comply with the requirements of Title XIX.
Once a state elects to participate, it must submit a plan which, in order to be approved by the Secretary of Health and Human Services (Secretary), must conform to the extensive specific requirements set forth in 42 U.S.C. § 1396a(a). One such requirement is that a participating state must provide financial assistance to the "categorically needy,"
with respect to five general areas of medical treatment. One of the five mandatory services, and the only one involved in these actions, is skilled nursing facility services. 42 U.S.C. § 1396a(a)(10)(A). Although Title XIX does not require states to provide funding for all medical treatment falling within the five general categories, it does require that state plans establish "reasonable standards . . . for determining . . . the extent of medical assistance under the plan which . . . are consistent with the objectives of [Title XIX]." 42 U.S.C. § 1396(a)(17). Further, the state plan must provide:
For payment of the . . . skilled nursing facility, and intermediate care facility services provided under the plan through the use of rates . . . which the State finds, and makes assurances satisfactory to the Secretary, are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities in order to provide care and services in conformity with applicable State and Federal laws, regulations, and quality and safety standards.