concurring in part and dissenting in part:
I join in affirming the judgments in favor of the hospital, its officers, and the *614state and county officials. The evidence did not prove them to be willful participants in Dr. Pierce’s practice of sterilizing Medicaid patients.
I dissent from the reversal of the judgment against Dr. Pierce. The facts and the law fully justify the district judge’s ruling that Dr. Pierce was acting under color of state law within the meaning of 42 U.S.C. § 1983.
At the outset, it is necessary to note the distinction between Dr. Pierce’s professional role as a physician treating Medicaid patients and his role as a participant in the fiscal and administrative aspects of the Medicaid program. Title 42 U.S.C. § 1396a, dealing with state plans for the Medicaid program, is designed to avoid governmental intrusion in the doctor-patient relationship. “[T]he very heart of the congressional scheme is that the physician and patient should have complete freedom to choose those medical procedures for a given condition which are best suited to the needs of the patient.” Beal v. Doe,-U.S.-, -, 97 S.Ct. 2366, 2374, 53 L.Ed.2d 464 (1977) (Brennan, J., dissenting). Thus, a physician paid by Medicaid does not act as an agent of the state or under color of its laws when he decides what medical care and services his patient’s health requires. Cf. Byrne v. Kysar, 347 F.2d 734, 736 (7th Cir. 1965); Duzynski v. Nosal, 324 F.2d 924, 929 (7th Cir. 1963). Consequently, it is necessary to ascertain whether Dr. Pierce’s policy of sterilizing Medicaid patients was based on considerations of their health.
When Dr. Pierce treated a patient who could pay for delivery of her child, he did not exact consent for sterilization regardless of the number of her children. If, however, the patient already had more than two children and her bill was to be paid by Medicaid, he refused to treat her unless she consented to sterilization. One witness testified:
He came in and he hadn’t examined me or anything. I was laying on the table. And, he said, “Listen here young lady.” He said, “This is my tax money paying for something like this.” He said, “I am tired of people going around here having babies and my tax money paying for it.” He said, “So, if you don’t want this'done, you go and find yourself another doctor.”
Dr. Pierce’s policy of requiring sterilization of Medicaid patients is also illustrated by his treatment of Mrs. Shirley Brown. As long as it appeared that her expenses were being paid from private funds, Dr. Pierce was content to accept her as a patient without conditioning either his services or her hospitalization on her consent to sterilization. When he learned from hospital records that her hospital bill was being paid by Medicaid, he directed a nurse to obtain her consent to sterilization. Upon Mrs. Brown’s refusal, he ordered her discharged from the hospital.
Had Dr. Pierce’s decisions to sterilize his patients been based on their medical needs, he would not have acted under color of state law within the meaning of § 1983. See, e. g., Byrne v. Kysar, 347 F.2d 734 (7th Cir. 1965); Duzynski v. Nosal, 324 F.2d 924 (7th Cir. 1963). However, the foregoing evidence establishes beyond doubt that Dr. Pierce’s policy pertaining to sterilization was based on economic factors instead of the health of his Medicaid patients. It is clear that he undertook to grant or deny Medicaid benefits for reasons unrelated to his patients’ health. It therefore becomes necessary to determine next whether Dr. Pierce’s policy of sterilization for economic reasons establishes that he was acting under color of state law.
There is no litmus test for ascertaining whether an ostensibly private person is in fact acting under color of state law. “Only by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance.” Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 81 S.Ct. 856, 860, 6 L.Ed.2d 45 (1961). This inquiry must determine “whether there is a sufficiently close nexus between the State and the challenged action of . [the person under scrutiny] so that the action of the latter may be fairly treated as that of the State itself.” Jackson v. Metropolitan *615Edison Co., 419 U.S. 345, 351, 95 S.Ct. 449, 453, 42 L.Ed.2d 477 (1974). Action under color of law may be found when (A) the state is involved in the questioned activity, or (B) the private actor has assumed a state or public function. See Greco v. Orange Memorial Hospital Corp., 513 F.2d 873, 878 (5th Cir. 1975). Among the significant factors to be considered are the private person’s operation as an integral part of a comprehensive governmental program and his consequent receipt of substantial public funds. Sams v. Ohio Valley General Hospital Assoc., 413 F.2d 826, 828 (4th Cir. 1969); Simkins v. Moses H. Cone Memorial Hospital, 323 F.2d 959, 967 (4th Cir. 1963). Applying these principles, I believe Dr. Pierce acted under color of state law.
In this case, the state’s involvement is readily apparent. The questioned activity is the grant or denial of Medicaid benefits for fiscal reasons unrelated to a patient’s health. Under the Medicaid statute, the state is responsible for ascertaining which women are entitled to receive Medicaid benefits for the delivery of their children. Because the state is involved in the activity under scrutiny, one criterion for applying § 1983 is satisfied.
Furthermore, the evidence discloses that Dr. Pierce assumed a state function. South Carolina does not contract directly with physicians to participate in Medicaid; rather, qualified doctors are free to accept Medicaid patients, if they choose. Under this arrangement, a pregnant woman can select a participating doctor of her choice, and the doctor can accept or reject the patient. Freedom of choice on the part of both physician and patient is assured as an essential part of the program. When a physician accepts a Medicaid patient, the state is not made aware of the relationship until the doctor’s bill is presented to the state’s agent (a private insurance company) for processing and payment. By these procedures the state delegates much of its administrative responsibility for the operation of the Medicaid program to individual doctors. Therefore, a doctor who represents himself to the public as a qualified Medicaid practitioner assumes a state or public administrative function when he conditions the grant or denial of Medicaid benefits on requirements not connected with the patient’s health.
Dr. Pierce was free to decline to treat any or all persons dependent on Medicaid. He opted to participate in the program and accepted patients entitled to receive Medicaid. He undertook an administrative function when he insisted for economic reasons unrelated to health that a patient otherwise entitled to the delivery of her child by the physician of her choice at Medicaid expense should be sterilized. Finally, as further indication of his operation as an integral part of a comprehensive governmental program, Medicaid paid Dr. Pierce more than $60,000 during the time when the events giving rise to this suit occurred.
These facts and circumstances fully warrant the district judge’s conclusion that Dr. Pierce was acting under color of state law. The nexus between the state and Dr. Pierce was sufficient to establish that his sterilization of Medicaid patients for economic reasons not related to their health can be fairly treated as the action of the state. In fact, Dr. Pierce was his patients’ most important contact with the state program. Therefore, I would affirm the district judge’s ruling that Dr. Pierce was acting under color of law within the meaning of 42 U.S.C. § 1983.