To clarify the authority of States to use funds as the non-Federal share of Medicaid expenditures for certain regional medical centers.

Provides for certain treatment of state authority to use federal funds received under title XIX (Medicaid) of the Social Security Act, notwithstanding the limitation on the use of provider-specific health care related taxes to obtain federal financial participation under Medicaid.

Declares that nothing in such limitation shall be construed by the Secretary of Health and Human Services as prohibiting a state's use of funds as the nonfederal share of Medicaid expenditures where they are transferred from or certified by a publicly-owned regional medical center located in another state, so long as the Secretary determines that such use is proper and in the interest of the Medicaid program.