(dissenting).
We cannot join in the judgment being entered today.
Fundamentally, we dissent because provision of the testing materials which are available over-the-counter is not “treatment” and is not mandated either by the statutes or by pertinent regulations.
Somewhere a line must be drawn. Utilizing its expertise in dealing with these problems, the agency, as a matter of administrative convenience, drew the line between drugs and materials available only on prescription, on the one hand, and drugs and materials available over-the-counter, on the other hand. It is not clear whether the majority would jettison this whole administrative scheme or would create a limited exception where by regulation none existed heretofore. The difficulty with this ad hoc approach we foresee is that the agency has no principle or rule to guide it.
Today’s majority would impose the requirement of either referral assistance or a provision of these materials under a federal regulation which speaks, not of testing materials sold over-the-counter such as these, but only of “treatment” not covered by the State’s plan. 42 C.F.R. § 441.85. We disagree with their expansive interpretation of this rule. We would give “treatment” its plain meaning.
We agree with the United States Court of Appeals for the First Circuit that a state which elects to participate in the Medicaid program is not required to fund all “medically necessary” services. Preterm, Inc. v. Dukakis, 591 F.2d 121 (1st Cir.), cert. denied, 441 U.S. 952, 99 S.Ct. 2182, 60 L.Ed.2d 1057, reh’g denied, 444 U.S. 888, 100 S.Ct. 187, 62 L.Ed.2d 122 (1979).1
We submit that a state is entitled to balance its fiscal and administrative concerns against its interest in providing for the health care needs of its indigent residents. See Note, State Restrictions on Medicaid Coverage of Medically Necessary Services, 78 Colum.L.Rev. 1491 (1978). We perceive the failure to apply this balancing test as another basic error of today’s majority.
*103While the denial of the material sought by Mrs. Biewald for her son may seem unfortunate, we find nothing in the statutes or regulations which proscribes the ae-tions taken by the state agency in this case.
The standard for review of agency action is established by 5 M.R.S.A. § 11007(4)(C) (1979). Here the action was not arbitrary, capricious or characterized by abuse of discretion. Rather, the policy of disallowing payment for over-the-counter drugs was clearly articulated in the Medical Assistance Manual approved by the Department of Health and Human Services.2 This policy was in accordance with federal statutes and regulations, and, as applied to the case before us, it was properly implemented.
The exclusion of such over-the-counter materials from those which are provided by the agency was born of administrative convenience. Whether this exclusion should be allowed to continue is appropriately a matter of legislative, not judicial, concern.
We would deny both the appeal and the cross-appeal.
. Most courts which ordered states to provide specific services under Medicaid have found those services to be required by the express terms of the federal statutes or regulations. See, e.g., Buhs v. State, 306 N.W.2d 127 (Minn. 1981) (chiropractic X-rays); Philadelphia Welfare Rights Organization v. Shapp, 602 F.2d 1114 (3d Cir. 1979), cert. denied, 444 U.S. 1026, 100 S.Ct. 689, 62 L.Ed.2d 660 (1980) (dental care); White v. Beal, 413 F.Supp. 1141 (E.D.Pa. 1976), aff'd, 555 F.2d 1146 (3d Cir. 1977) (eyeglasses).
. The Manual specifically states that:
Artificial tears and insulin are the only covered “over the counter” (OTC) drugs.
MMAM Ch. II, § 80.04-l(D) (1979). Likewise, over-the-counter drugs are nowhere included within the list of covered medical supplies. See MMAM Ch. II, § 60.04 (1979).