In the case of Otis R. Bowen, Secretary of Health and Human Services v. Kenneth Kizer, Director of California Department of Health Services et al., 1987, the U.S Supreme Court ruled that federal law preempted a California statute which required physicians to bill Medi-Cal (California's Medicaid program) directly for medical services provided to welfare recipients. The court held that this state requirement was inconsistent with federal Medicaid regulations allowing patients freedom to choose their own doctors and pay them directly if they wished. This decision reaffirmed the supremacy clause in matters where state laws conflict with federal ones.

In the dissenting opinion for Bowen v. Kizer, Justice Blackmun argued that the majority's decision was inconsistent with both congressional intent and previous court rulings. He believed that Congress intended to allow states to receive federal funding for home health care services under Medicaid even if those services were provided by non-licensed individuals, as long as they were supervised by licensed healthcare professionals. The majority's interpretation of the law would effectively deny many low-income patients access to necessary medical care because they could not afford licensed providers. Furthermore, he pointed out that this ruling contradicted a previous Supreme Court case (Beal v Doe) which held that Medicaid should be interpreted broadly in favor of coverage. Therefore, he concluded that California’s program should have been allowed under federal law.