dissenting:
I respectfully dissent from my colleagues’ conclusion that the views of the state and federal administrative officers, appellees here, are at odds with the thrust of the legislative purpose. In a climate of budgetary constraint, appellee Commissioner Perales of New York promulgated a regulation, which was approved by appellee Secretary Sullivan of the U.S. Department of Health and Human Services, that saves public money in the delivery of medical care. My colleagues find the regulation at issue contrary to both the Medicare and Medicaid Acts facially and when viewed in light of legislative history. They also believe the Secretary’s policy in this area has been inconsistent and is therefore entitled to little or no deference. It is my belief that appellees each acted well within their discretionary authority and consistent with legislative aims.
The thrust of appellants’ argument is that New York’s 18 NYCRR § 360.10 fails to satisfy the reimbursement requirements of the Medicare Act. The Secretary, on the other hand, has determined that crossovers and QMBs are “primarily Medicaid patients,” and accordingly § 360.10 need satisfy only the lesser reimbursement requirements of the Medicaid Act. The majority has adopted appellants’ position as their premise, that is, crossovers and QMBs are for all purposes Medicare beneficiaries. It is conceded that were crossovers and QMBs to be classified for all purposes as Medicare beneficiaries, § 360.10 would violate the Medicare Act because it operates to preclude service providers treating such dual eligibles from collecting 100 percent of their reasonable costs or charges. But since whether dual eligibles should be classified for all purposes as Medicare beneficiaries is the precise question we have been called upon to decide, it is inappropriate to adopt appellants’ view as a premise. Before analyzing the manner in which § 360.10 affects reimbursement of providers treating crossovers or QMBs, it must first be determined whether that effect should be analyzed under the Medicare Act or the Medicaid Act.
A. Deference to Administrative Agency Generally
It has long been recognized that it is inappropriate for courts to resolve competing legislative policy objectives and that latitude must therefore be accorded an agency’s determination of how best to exercise the authority delegated to it. See, e.g., Chevron USA Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984) (quoting Morton v. Ruiz, 415 U.S. 199, 231, 94 S.Ct. 1055, 1072, 39 L.Ed.2d 270 (1974)); United States v. Shimer, 367 U.S. 374, 383, 81 S.Ct. 1554, 1560, 6 L.Ed.2d 908 (1961). In the instant case the majority’s statement that “there is nowhere articulated in the Medicare Act or regulations an exception for dual eligibles or QMBs or any limitation on providers’ express statutory right to recover their full reasonable costs or charges” effectively places the burden on the Secretary to identify an express delegation of authority. This view ignores the well-settled standard for determining when authority has been delegated to an agency. The test is not whether the Medicare Act explicitly allows crossovers and QMBs to be classified for purposes of Part B service provider reimbursement as primarily Medicaid recipients. Rather, the appropriate inquiry is whether there is anything in the statutes or the legislative history clear*864ly evincing a contrary congressional purpose. See United States v. Fulton, 475 U.S. 657, 666, 106 S.Ct. 1422, 1427, 89 L.Ed.2d 661 (1986) (reasonable agency interpretation of statute to be upheld absent “definitive contrary legislative command”); Chevron, 467 U.S. at 843, 104 S.Ct. at 2782 (court may not impose its own construction of statute in place of agency’s if “Congress has not directly addressed the precise question at issue”) (emphasis added); accord Weeks v. Quinlan, 838 F.2d 41, 44 (2d Cir.1988).
My colleagues’ approach on this point overlooks the fact that a delegation of agency authority may be implicit rather than explicit. Chevron, 467 U.S. at 844, 104 S.Ct. at 2782. Consequently, “if the statute is silent or ambiguous with respect to the specific issue,” deference is warranted. Id. at 843, 104 S.Ct. at 2782 (emphasis added); see also Fulton, 475 U.S. at 666-67, 106 S.Ct. at 1428 (statute addressing “rate[s]” did not specifically address interim rates, thus deference to agency warranted). Nothing in the language of these Acts itself fairly supports an inference that Congress specifically intended crossover and QMB Part B service providers to be reimbursed at the Medicare reasonable cost/charge level. In fact, the majority’s efforts to construe ambiguous and conflicting provisions of the Medicare and Medicaid Acts as precluding limiting crossover and QMB Part B service provider reimbursement to Medicaid levels demonstrate this. The majority’s interpretation of these Acts simply does not lay out a “clear” plan of Congress contrary to the Secretary’s construction of the same statutes.
B. Legislative History
Appellants rely on legislative history that they contend demonstrates Congress’ purpose to classify similarly all Medicare beneficiaries. Citing legislative history, the majority suggests that Congress wanted to avoid a “wealth-based, two-tiered system of health care” for those eligible for Medicare. The cited legislative history addresses only Medicare Part A. The relevant portion of the Senate report is as follows:
A. HEALTH CARE
* * * * * *
The first of the two insurance programs [i.e., Medicare Part A] consists of protection against the costs of hospital and related care....
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The second of the two insurance programs [i.e., Medicare Part B] is a voluntary supplementary medical insurance plan that would cover a substantial part of the cost of physicians’ services and a number of other health items and services not covered under the hospital insurance program_ The combined cover-
age of the two insurance plans would result in protection for the elderly of a quality that only a few older people can now afford. Most elderly people can be expected to have the protection of both of these insurance programs.
The provision of insurance [i.e., Part A and Part B] against the covered costs would encourage participating institutions, agencies, and individuals to make the best of modern medicine more readily available to the aged.
* * * * * *
1. BASIC PLAN — HOSPITAL INSURANCE
* * * * * *
(b) Benefits
* * sit * * *
(1) Inpatient hospital benefits
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Covered Services. — The reasonable cost of service ordinarily provided to inpatients by hospitals ... would be paid for.... Since the reasonable cost of the services would be covered, hospitals would not be deterred, because of nonpaying or underpaying patients in this aged group, from trying to provide the best of modern care ...
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*865Payments would not be made under the hospital insurance plan for the services of physicians ...
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2. VOLUNTARY SUPPLEMENTARY PLAN
♦ * * * * >¡c
(b) Benefits under the voluntary supplementary plan
The voluntary supplementary plan would provide protection that builds upon the protection provided by the hospital insurance plan. It would cover physicians’ services, additional home health visits, and a variety of other health services, not covered under the hospital insurance plan. The beneficiary would pay the first $50 of expenses he incurs each year for services of the type covered under the plan. Above this deductible amount, the plan would pay 80 percent of the reasonable costs in the case of services provided by an institution or home health agency and 80 percent of reasonable charges for other covered services, with normally 20 percent being paid by the beneficiary.
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(c) Method of payment under the voluntary supplementary plan
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... In general, under the supplementary plan a provider of services ... could charge a beneficiary the $50 deductible and 20 percent of the reasonable charges (in excess of the $50 deductible) for the covered services.
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5. ACTUARIAL COST ESTIMATES FOR THE VOLUNTARY SUPPLEMENTARY MEDICAL INSURANCE SYSTEM
******
(b) Financing policy
(1) Self-supporting nature of system
The committee has recommended the establishment of a supplementary medical insurance program that can be voluntarily elected, on an individual basis, by virtually all persons aged 65 and over ...
This program is intended to be completely self-supporting from the contributions of covered individuals and from the equal-matching contributions from the general fund of the Treasury. ...
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S.Rep. No. 404, 89th Cong., 1st Sess., reprinted in 1965 U.S.Code & Cong.Admin.News 1943, 1964-2011 (emphasis added).
Reading this Senate Report it is difficult to accept the majority’s implicit assertion that the legislative history “clearly” shows Congress aimed for crossover and QMB Part B service providers to be reimbursed by the state at the Medicare reasonable cost/charge level. Quite the contrary, to the extent that Congress desired to ensure reasonable cost/charge reimbursement in order to encourage “the best of modern care,” such concern seems to have been directed to the Part A program. This is understandable. As the legislative history indicates, Congress distinguished between the services covered under Part A and Part B, probably based on the varying “medical necessity” of the services covered. Compare id. at 1966-69, with id. at 1982-83; see also id. at 2019-20; cf. Schweiker v. Hogan, 457 U.S. 569, 590, 102 S.Ct. 2597, 2610, 73 L.Ed.2d 227 (1982) (public assistance programs often cannot provide everyone with meaningful benefits in equal measure). From this distinction it follows that the legislature’s desire to ensure reasonable cost/charge reimbursement in order to encourage the best of medical care as to Part A services does not control in the context of the “less medically necessary” services covered in Part B. Moreover, the legislative history demonstrates that in discussing the Part B program Congress envisioned coinsurance, deductible and premium payments would be made by the beneficiary. In light of the fact that crossovers and QMBs cannot pay such charges, it is disingenuous to suggest that in discussing full reasonable cost/charge reimbursement for Part B service providers Congress had within its contemplation crossovers and *866QMBs. See Chevron, 467 U.S. at 862, 104 S.Ct. at 2791.
The dichotomy between the Part A and Part B programs with respect to dual eligi-bles is also logical in light of the programs’ differing qualification requirements. A Medicare beneficiary — either pure or dual eligible — is automatically entitled to Part A services. Consequently, classifying dual eligibles differently than pure Medicare beneficiaries with respect to Part A services would be arbitrary, insofar as their status as dual eligibles is irrelevant with respect to their entitlement to such services. But neither pure nor dual eligible Medicare beneficiaries are automatically entitled to Part B services. A pure Medicare beneficiary is entitled to Part B services because he or she pays the enrollment premiums; a dual eligible is entitled to such services because — by virtue of his or her status as a Medicaid recipient — the state pays the enrollment premiums. Thus, there is a difference between pure and dual eligible Medicare beneficiaries in respect to Part B services. See Schweiker, 457 U.S. at 588, 102 S.Ct. at 2609 (inconsistent to require comparable treatment among two groups participating in a program when one group may be excluded entirely from participation).
The majority’s concern that crossovers and QMBs not be deprived of important medical care is misplaced. First, it does not follow that because crossover and QMB Part B service providers are reimbursed at the Medicaid rather than the Medicare rate there will be inadequate financial incentive to provide such care. Although admittedly with less incentive fewer providers will offer such care, that is not the crucial question. What is critical is whether reimbursement at the Medicaid level is so low that an “insufficient” number of providers will have a financial incentive to provide services. See 42 C.F.R. § 447.204. Nothing in the record supports such a dire conclusion. See Samuel v. Cal. Dep’t of Health Servs., 570 F.Supp. 566, 573-74 (N.D.Cal.1983); see also Mass. Medical Soc’y v. Dukakis, 815 F.2d 790, 794-95 (1st Cir.), cert. denied, 484 U.S. 896, 108 S.Ct. 229, 98 L.Ed.2d 188 (1987) (upholding state statute forbidding doctors to bill Medicare patients for fees beyond those reimbursed by Medicare against challenge based on theory that doctors might find Medicare “reasonable” charge unreasonably low, thereby refusing to treat Medicare patients). Moreover, the disincentive theory seems intuitively untenable since, were it true, no doctors or hospitals would ever treat Medicaid patients.
Second, as a result of the majority’s holding, it appears if it cannot afford to provide reimbursement up to the Medicare level, New York now has the following three options: (1) permit service providers to bill crossovers and QMBs directly for the coinsurance and deductible amounts — as with pure Medicare beneficiaries. But because, unlike pure Medicare beneficiaries, crossovers and QMBs are by definition unable to pay even the Part B enrollment premiums on their own, this option will not “help” these beneficiaries; (2) discontinue its payment of Part B enrollment premiums for crossovers and QMBs. This option also will not help to ensure that these individuals receive the “best of medical care;” or (3) simply terminate enrollment in the Part B program for dual eligibles and provide the same services for them directly under the umbrella of the Medicaid program. See Samuel, 570 F.Supp. at 573. In that case those providing the services would be reimbursed only at the Medicaid rate and the recipients would receive precisely the same care as presently. Thus, it appears that in focusing on the fact that the services at issue are nominally part of the Medicare program — rather than recognizing that the beneficiaries actually receive these services through the Medicaid program— the majority has elevated judicial form over the substance of what the State of New York is doing and continues to have the option to do.
Further, in relying on the legislative history, my colleagues fail to cite provisions of the 1965 Senate Report that support the proposition that Congress did not aim to require crossover and QMB Part B service providers be reimbursed by the state at the *867Medicare rate. In discussing the Medicaid Act, the report states:
No deduction, cost sharing or similar charge may be imposed with respect to inpatient hospital services furnished under the plan. This provision is related to another provision in the bill which requires States to pay reasonable costs for inpatient hospital services provided under the plan. Taken together, these provisions give assurance that the hospital bill incurred by a needy individual [i.e., Medicaid recipient] shall be paid in full under the provisions of the State plan ... and that the States may not expect to require the individual to use his income or resources ... toward that bill_
For any other items of medical assistance furnished under the plan, a charge of any kind may be imposed only if the State so chooses, and the charge must be reasonably related to the recipient’s income or his income and resources. The same limitations apply in the case of any enrollment fee, premium, or similar charge imposed with respect to inpatient hospital services....
The hospital insurance benefit program included under other provisions of the bill [i.e., Medicare Part A] provides for a deductible which must be paid in connection with the individual’s claim for hospitalization benefits. The committee is concerned that hospitalization be readily available to needy persons and that the necessity of their paying deductibles or cost sharing shall not be a hardship on them or a factor which may prevent their receiving the hospitalization they need. For this reason, the committee’s bill provides that the State make provisions, for individuals 65 years or older who are included in the [Medicaid] plan [i.e., crossovers], of the cost of any deductible or cost sharing imposed with respect to individuals under the program established by the hospital insurance [i.e., Part A] provisions of the bill.
A State medical assistance plan may provide for the payment in full of any deductibles or cost sharing under the insurance program established by Part B of title XVIII. In the event, however, the State plan provides for the individual to assume a portion of such costs, such portion shall be determined on a basis reasonably related to the individual’s income, or income and resources ...
S.Rep. No. 404, 89th Cong., 1st Sess., reprinted in 1965 U.S.Code & Cong.Admin.News 1943, 2019-20 (emphasis added).
Consequently, while the legislative history cited by the majority may suggest that Congress did not distinguish between pure and dual eligible Medicare beneficiaries in order to assure equal care, when read in its entirety this same history equally demonstrates Congress’ purpose was limited at most to Part A services. In fact, while explicitly commanding states to pay dual eligibles’ Part A cost sharing and deductible amounts (and providing its reasons for this direction), the Senate Report contains no comparable direction with respect to Part B charges, though states were free not to impose such charges on the recipient. Therefore, it seems incorrect to state that the statutes or their legislative history “clearly” or “demonstrably” indicate a specific congressional aim contrary to the Secretary’s interpretation on the issue presented — whether crossover and QMB Part B service providers must be reimbursed by the state at the Medicare reasonable cost/ charge level.
C. Secretary’s View
The majority further states that “where the Secretary’s policy is inconsistent with an earlier policy, that inconsistency is a ground for rejecting a claim for deference.” Again, this formulation of the relevant inquiry seems to me to miss the point. That an agency has changed its interpretation of the statute it is charged with administering is itself not dispositive on the question of whether deference should be accorded the new interpretation. See, e.g., Chevron, 467 U.S. at 863-64, 104 S.Ct. at 2792. What is more important is whether the agency’s change in position rests on a “well-considered basis.” See Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 355-56, 109 S.Ct. 1835, 1848, 104 *868L.Ed.2d 351 (1989). In the instant case, the Secretary having been advised by the District Court for the Northern District of California in Samuel that he erroneously discerned Congress’ purpose provides powerful support for concluding that the Secretary’s changed interpretation is well-considered. It is ironic that today’s holding tells the Secretary he must forbid in New York what he has previously been ordered to permit in California.
D. Reasonableness
Once it is determined that the Secretary’s interpretation of the statute he is charged with administering is entitled to deference because of an implicit delegation of authority, judicial review is limited to asking whether that interpretation is “reasonable” or “permissible.” See, e.g., Clarke v. Securities Indus. Ass’n, 479 U.S., 388, 403-04, 107 S.Ct. 750, 759, 93 L.Ed.2d 757 (1987); Weeks, 838 F.2d at 44. Because we need only ask whether the Secretary’s interpretation is a reasonable or permissible construction of the statute, the fact that the Secretary’s interpretation leads to “some oddities” or is in some respects “counter-intuitive” is not grounds for failing to accord it deference. See, e.g., Chevron, 467 U.S. at 843 n. 11, 104 S.Ct. at 2782 n. 11. Moreover, the reasonableness of the Secretary’s interpretation should be analyzed in light not only of the purposes underlying the Medicare Act, but also with regard to the purposes underlying the Medicaid Act. See N.Y. State Dep’t of Social Servs. v. Bowen, 846 F.2d 129, 133 (2d Cir.1988).
Medicaid is a joint state-federal program under which states choosing to participate receive federal funding to help subsidize the states’ costs in providing Medicaid services. Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671, 2680, 65 L.Ed.2d 784 (1980). Reimbursement under Medicaid need not amount to the providers’ Medicare-level reasonable cost/charge. See, e.g., 42 U.S.C. § 1320a-7b(d); 42 C.F.R. § 447.15. Rather, in part due to both the states’ and the federal government’s interest in containing Medicaid costs, see, Schweiker, 457 U.S. at 590, 102 S.Ct. at 2610; State of N.Y. by Perales v. Bowen, 811 F.2d 776, 779 (2d Cir.1987), state funding determinations need only accord with “reasonable standards ... for determining ... the extent of medical assistance under [its] plan which ... are consistent with the objectives” of Medicaid. Harris, 448 U.S. at 302, 100 S.Ct. at 2680 (quoting 42 U.S.C. § 1396a(a)(17)); see also State of N.Y. by Perales v. Sullivan, 894 F.2d 20, 22 (2d Cir.1990); 42 U.S.C. §§ 1396a(a)(13)(A), 1396a(a)(3). That general objective is “as far as practicable, to furnish medical assistance to individuals whose income and resources are insufficient to meet the costs of necessary medical services.” Beal v. Doe, 432 U.S. 438, 444, 97 S.Ct. 2366, 2371, 53 L.Ed.2d 464 (1977) (emphasis added); see also Alexander v. Choate, 469 U.S. 287, 303, 105 S.Ct. 712, 721, 83 L.Ed.2d 661 (1985) (Medicaid provides a particular package of health services; package has general aim of assuring individuals receive necessary medical care, but the benefit provided remains individual services offered — not “adequate health care”).
Thus, because of the purpose of Medicaid and its structure as a cooperative federal and state endeavor, Harris, 448 U.S. at 308, 100 S.Ct. at 2683, it has long been accepted that states have substantial discretion in determining the amount and scope of services to provide. E.g., Schweiker, 457 U.S. at 589-91, 102 S.Ct. at 2609-10; Alexander, 469 U.S. at 303, 105 S.Ct. at 721. Necessarily, this discretion allows the states latitude to balance medical and economic concerns in light of that state’s particular circumstances in establishing Medicaid rates. See State of Wis. Dep’t of Health v. Bowen, 797 F.2d 391, 397 (7th Cir.1986), cert. dismissed, 485 U.S. 1017, 108 S.Ct. 1495, 99 L.Ed.2d 883 (1988); State of N.Y. by Perales, 894 F.2d at 24; Miss. Hosp. Ass’n, Inc. v. Heckler, 701 F.2d 511, 515 (5th Cir.1983); see also Mass. Medical Soc’y, 815 F.2d at 795.
In this case, the Secretary was called upon to resolve the competing policy concerns expressed in the Medicare and Medicaid Acts and determine the extent to which allowing the state to limit crossover *869and QMB Part B service providers to Medicaid-level reimbursement impacts upon the availability of such services for those individuals in that state in light of that state’s fiscal condition. It is not up to the majority to substitute its view for the Secretary’s as to how best to accommodate these concerns. E.g., Shimer, 367 U.S. at 383, 385, 81 S.Ct. at 1560, 1561; Chevron, 467 U.S. at 864-66, 104 S.Ct. at 2792-93.
In my view there simply are no compelling indications that appellees’ view is wrong. Hence, I vote to affirm the district court’s grant of summary judgment in their favor.