25 USC 1642 - Treatment of payments under medicaid program

(a) Payments to special fund 
Notwithstanding any other provision of law, payments to which any facility of the Service (including a hospital, nursing facility, intermediate care facility for the mentally retarded, or any other type of facility which provides services for which payment is available under title XIX of the Social Security Act [42 U.S.C. 1396 et seq.]) is entitled under a State plan by reason of section 1911 of such Act [42 U.S.C. 1396j] shall be placed in a special fund to be held by the Secretary and used by him (to such extent or in such amounts as are provided in appropriation Acts) exclusively for the purpose of making any improvements in the facilities of such Service which may be necessary to achieve compliance with the applicable conditions and requirements of such title. In making payments from such fund, the Secretary shall ensure that each service unit of the Service receives at least 80 percent of the amounts to which the facilities of the Service, for which such service unit makes collections, are entitled by reason of section 1911 of the Social Security Act.
(b) Determination of appropriations 
Any payments received by such facility for services provided to Indians eligible for benefits under title XIX of the Social Security Act [42 U.S.C. 1396 et seq.] shall not be considered in determining appropriations for the provision of health care and services to Indians.