Final answer:
The Medicare definition of medical necessity dictates coverage eligibility, and states must adhere to this when seeking federal funding for healthcare services, showcased in the National Federation of Independent Business v. Sebelius case.
Step-by-step explanation:
The Medicare definition of medical necessity is a concept crucial to determining which medical procedures, services, or supplies are covered under Medicare. To qualify for funding, state governments must comply with the terms set by Medicare regarding medical necessity. This concept was a part of the broader discussions in the National Federation of Independent Business v. Sebelius case, which examined the extent of the federal government's power in enforcing mandates such as the expansion of Medicare and the individual mandate. The case concluded that the federal government had the authority under its power to tax to enforce the individual mandate, but it could not withhold all Medicare funding from states refusing the expansion. This indicates that while the expansion and mandates were constitutionally valid, there are restrictions on how the federal government can enforce compliance within states.