KEITH, Circuit Judge.
Appellants, Medicaid recipients from the State of Tennessee, challenge the State’s attempt to restructure its Medicaid Plan. Appellants contend that Tennessee’s proposed reduction in the number of hospital days covered by Medicaid from twenty to fourteen per annum violates Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 and Section 1902(a)(19) of the Medicaid Act, 42 U.S.C. § 1396a(a)(19). They also argue that any reduction must be approved by the Secretary of Health and Human Services. After a bench trial, the district court dismissed each of Appellants’ claims. For the reasons set forth below, we vacate the district court’s order and remand this case for further consideration not inconsistent with this opinion.
This action was originally brought in the United States District Court for the Middle District of Tennessee on behalf of all the State’s Medicaid recipients. It challenged an array of proposed reductions by the State designed to save money on the State’s share of Medicaid expenditures.1 The proposed reductions included, inter alia, deletion of certain drugs from the Medicaid formulary, reductions.in the level of reimbursement for health care providers, reduction of inpatient hospitalization coverage, and reduction of outpatient hospitalization services. Appellants also sought to enjoin the proposed reductions because they had not been approved by a valid Medicaid Medical Care Advisory Committee as pre[1039]*1039scribed by federal regulations. 42 C.F.R. § 431.12.
On September 3, 1980, the district court enjoined the State’s promulgation of the proposed reductions until a validly constituted Medical Care Advisory Committee had reviewed them. On December 12,1980, the State petitioned the district court to set aside the preliminary injunction. The State argued that a properly constituted committee had not acted after having sufficient time to do so. The court did not rule on this motion.
By the time of the March 13, 1981 bench trial, the validity of only two proposed reductions were at issue: the deletion of certain drugs from the Medicaid formulary and the reduction in the number of inpatient days for which Medicaid would pay. Prior to the district court’s opinion on June 17, 1981, the parties settled the former issue. Only the validity of the State’s reduction in hospitalization coverage remained to be resolved by the court.
In its opinion, the district court held (1) that the proposed reduction did not violate Section 504 of the Rehabilitation Act of. 1973, (2) that the proposed reduction was not inconsistent with the best interests of the recipients in contravention of 42 U.S.C. § 1396a(a)(19), and (3) approval from the Secretary of Health and Human Services was not needed to implement the changes. However, the court found that the State had failed to comply with the procedures outlined in 42 C.F.R. § 447.205 which establish guidelines for providing public notice of proposed changes. Therefore, the court refused to set aside its September 3, 1980 preliminary injunction.
I.
The initial question for review is whether the district court erred in holding that the proposed reduction from twenty to fourteen days per annum does not violate Section 504. The district court held that the appellants had not made a showing of discrimination against the handicapped because there had been no showing of disparate impact upon handicapped persons. Furthermore, the court held that even if Appellants had proved disparate impact, the disparate impact was not discrimination against the handicapped as contemplated by the Rehabilitation Act of 1973. We disagree.
A.
29 U.S.C. § 794 provides in relevant part:
No otherwise qualified handicapped individual in the United States, as defined in section 706(7) of this title, shall, solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance or under any program or activity conducted by any Executive agency or by the United States Postal Service.2 [1040]*1040The courts which have considered the issue have uniformly held that Section 504 creates a private cause of action for those who are its intended beneficiaries. See infra note 4 and accompanying text. Although the Supreme Court did not address this issue in Southeastern Community College v. Davis, 442 U.S. 397, 99 S.Ct. 2361, 60 L.Ed.2d 980 (1981), its actions in several cases suggest that the Court has assumed that a private cause of action exists in Section 504 cases. Id.3
Though a thorough examination of this issue has already been provided by several circuit courts, we note our agreement that sound judicial analysis supports implying a private cause of action for injunctive relief. In its discussion of the Technical and Clarifying Amendments to the Rehabilitation Act, the Senate Report explained:
Section 504 was patterned after and is almost identical to, the antidiscrimination language of section 601 of the Civil Rights Act of 1964, 42 U.S.C. 2000d-l (relating to race, color, or national origin) and section 901 of the Education Amendments of 1972, 42 U.S.C. 1683 (relating to sex). The section therefore constitutes the establishment of a broad government policy that programs receiving Federal financial assistance shall be operated without discrimination on the basis of handicap. It does not specifically require the issuance of regulations or expressly provide for enforcement procedures, but it is clearly mandatory in form, and such regulations and enforcement are intended.
The language of section 504, in following the above-cited Acts, further envisions the implementation of a compliance program which is similar to those Acts, including promulgation of regulations providing for investigation and review of recipients of Federal financial assistance, attempts to bring non-complying recipients into voluntary compliance through informal efforts such as negotiation, and the imposition of sanctions against recipients who continue to discriminate against otherwise qualified handicapped persons on the basis of handicap. Such sanctions would include, where appropriate, the termination of Federal financial assistance to the recipient or other means otherwise authorized by law. Implementation of section 504 would also include pre-grant analysis of recipients to ensure that Federal funds are not initially provided to those who discriminate against handicapped individuals. Such analysis would include pre-grant review procedures and a requirement for assurances of compliance with section 504. This approach to implementation of section 504, which closely follows the models of the above-cited anti-discrimination provisions, would ensure administrative due process (right to hearing, right to review), provide for administrative consistency within the Federal government as well as relative ease of implementation, and permit a judicial remedy through a private action.
S.Rep. No. 1297, 93d Cong., 2d Sess. reprinted in 1974 U.S.Code Cong. & Ad.News 6373, 6390-91.
The guidelines enunciated in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975) for implying a private cause of action are clearly met. First, Section 504 was enacted for the special benefit of handicapped persons as defined in the Rehabilitation Act. Second, there is express language in the legislative history which supports a congressional intent to imply a private cause of action. Third, the structure and underlying purpose of the Act is consistent with the implication of a private judicial remedy. Finally, the cause of action is not one generally relegated to the states and inappropriate for federal law. We, therefore, agree with the other circuits that have considered the issue and hold that Section [1041]*1041504 creates a private cause of action for its intended beneficiaries.4
B.
Section 504 is “part of the general corpus of discrimination law.” New York State Association for Retarded Children v. Carey, 612 F.2d 644 (2d Cir.1979). It is predicated on Title VI of the Civil Rights Act, 42 U.S.C. § 2000d et seq., and is intended to prohibit the expenditure of public funds in programs that discriminate against the handicapped. See Sen.Rep. 1297, supra. Courts have generally applied the same tests of discrimination law to Section 504 as are applied to Title VI.
In N.A.A.C.P. v. The Medical Center, Inc., 657 F.2d 1322 (3d Cir.1981) (en banc), the Third Circuit exhaustively considered the evidence needed to prove a prima facie violation of Title VI. Having concluded that Title VI requires only that a plaintiff prove disparate impact in the application of federal funds, the court concluded, “The Rehabilitation Act and the Age Discrimination Act of 1975 provide equally strong cases for application of an impact test since both are patterned after Title VI.” Id. at 1331. See also Bryan v. Koch, 627 F.2d 612, 621 (2d Cir.1980).
Both Bryan and The Medical Center involved the use of federal funds by a state or municipal government to implement a facially neutral policy which affected certain protected groups more harshly than others. As Judge Kearse noted in Bryan, the regulatory agencies responsible for effectuating Title VI-type statutes have applied “a broad ‘disparate impact,’ or ‘effects,’ test.” (Separate Opinion of Judge Kearse at 621). Indeed, the regulations promulgated under Section 504 specifically forbid the use of federal funds for programs which have discriminatory effects against the handicapped.5 Regulations by the enforcing agency are entitled to great weight. Brennan v. Owensboro-Davies County Hospital, 523 F.2d 1013, 1028 (6th Cir.1975), cert, denied, 425 U.S. 973, 96 S.Ct. 2170, 48 L.Ed.2d 798 (1976).
The district court acknowledged authority for applying an effects test in this case. It then proceeded to distinguish cases applying an effects test, most notably the district court opinion in The Medical Center.6 The district court concluded that The Medical Center was not applicable. We disagree.
[1042]*1042The factual distinction between this case and The Medical Center is not analytically significant for purposes of determining what constitutes a prima facie case. The Medical Center involved the relocation of a hospital from an inner-city location to a suburban site. This was challenged as having an adverse effect upon minorities and the aged as well as the handicapped. The district court concluded that an effects test should be applied. After extensive litigation, the Third Circuit, sitting en banc, affirmed the application of an adverse effects test, but found that the plaintiff had not produced enough evidence to prove a prima facie case. See also Prewitt v. United States Postal Service, 662 F.2d 292 (5th Cir.1981) (application of a discriminatory impact test when federal government is the employer in handicapped discrimination case); Bryan v. Koch, 627 F.2d 612 (2d Cir.1980) (expressing no view on issue, the court assumed disparate impact test to be appropriate but found city had met its burden of rebuttal).
We think the district court erred by confusing the prima facie case with a decision on the ultimate outcome. The district court, seeking to minimize the importance of the The Medical Center district court, opined:
Thus, it is far from clear that the The Medical Center court intended to adopt as strict an “impact test” as the plaintiffs contend. Rather, it would appear that the court recognized that a program need not be equally productive for handicapped and nonhandicapped alike, as long as the program is equally accessible to both groups.
518 F.Supp. 877 (M.D.Tenn.1981). But the appellate opinions in The Medical Center hold that the establishment of a prima facie case is merely a prelude to the court’s assessment of whether the alternative chosen is discriminatory against the handicapped. The establishment of disparate impact is not determinative of whether the defendant is guilty of discrimination. It merely requires the defendant to rebut the inference of discriminatory action. We therefore hold that the showing of disparate impact proved a prima facie case and required the state to explain its choice.
C.
Alternatively, the district court held that even if discriminatory impact had been shown, the plaintiffs had failed to prove a prima facie case. The court reasoned:
For example, there was no attempt to show what percentage of handicapped users required inpatient hospital treatment as a result of their handicapping condition. It seems likely that some handicaps, such as blindness, would rarely require hospitalization, while others, such as mental illness, might well require frequent hospitalization. Without some such evidence, the court is left to speculate on what extent the existence of handicaps in the broad sense of § 504 affects the statistical disparity shown for the study year. Indeed, the actual impact of the proposed limitation, even in the study year, should be kept in perspective. Since only 18.586% of handicapped eligibles used any inpatient hospital services, and 27.4% of those needed more than 14 days of hospital treatment. Thus, 95% would have been fully served at 14 days.
518 F.Supp. at 883 n. 6. Again, we disagree. We agree with the district court that the statistical evidence was not perfect. But we also note that since a significant number of Medicaid recipients have been omitted from the statistics, it is much more likely that the numbers understate the disparity between handicapped and non-handicapped Medicaid users.7
Furthermore, the district court’s statement that no evidence was presented which would suggest that the disparity would con[1043]*1043tinue is clearly erroneous. Along with their statistical evidence, the plaintiffs presented medical testimony which described the inpatient hospitalization pattern of patients with certain handicaps. For example, Dr. Samuel Marney, who specializes in the treatment of pulmonary ailments, testified upon deposition that patients suffering from asthma, emphysema, chronic bronchitis, or other obstructive lung diseases often “require longer hospitalization for intensive therapy than fourteen days.” Dr. Georgia Montouris, a neurologist, testified upon deposition that, “Degenerative diseases of neurology often require hospitalizations.” She further testified that fourteen days a year would not adequately take care of such patients’ needs. Dr. Joseph Stinson stated in his deposition that in his experience the average asthma patient requires hospitalization four to five times a year with an average stay of ten to fourteen days. Dr. Gordon Turner, a surgeon, testified upon deposition that limitations on the number of days rather than number of admissions often caused handicapped persons to delay surgery until minor surgery became major surgery.
Even if we were not persuaded by the bare statistical evidence, the opinions of these medical experts along with other expert testimony would convince us that the plaintiffs presented a prima facie violation of Section 504. The medical evidence buttresses the position that these statistics are probative of discrimination against the handicapped.8
D.
Having found a prima facie violation of Section 504, we now find it appropriate to consider the justification offered by the State for adopting the fourteen day inpatient maximum. We consider this justification along with the plaintiff’s contention that an alternative was available which would save the State the same amount of money and have a less discriminatory effect on the handicapped.
We begin our analysis with an acknowledgement that the State has a great deal of latitude in structuring the services it provides to its citizens. But it may not use federal funds in a program which discriminates against a racial group (Title VI), a particular sex (Title IX), or individuals with handicaps (Section 504). Moreover, we agree with the court’s opinion in New York State Association for Retarded Children v. Carey at 650:
Requiring governmental agencies to rebut in court a prima facie case of discrimination against the handicapped does not mean that the expertise of responsible administrators is to be denigrated. When the validity of challenged governmental action turns on an assessment of technical matters foreign to the experience of most courts, it may be entirely appropriate to resolve closely contested disputes in favor of the responsible administrators.
The State clearly proved that it was justified in attempting to reduce its Medicaid expenses. “No one would contest that the [State] must assign priorities among com[1044]*1044peting economic demands and evaluate political and economic alternatives.” Bryan at 621 (Separate Opinion of Judge Kearse). The evidence presented showed that the Medicaid program would have required $42,000,000 additional dollars to maintain the same level of services during fiscal year 1980-81 as were provided in fiscal year 1979-80. Since the State of Tennessee is prohibited by statute from deficit spending in its Medicaid program, it must provide services within the means granted by its General Assembly. The plaintiffs do not dispute this, and this court accepts these parameters.
But the plaintiffs contend that the State could achieve the same level of savings by an alternative method. They argue that the State could achieve the desired level of savings by limiting the total number of visits per annum rather than the number of days. According to plaintiffs, this alternative is preferable because the handicapped would not be deterred from going to the hospital earlier. Thus, the illness could be diagnosed and treated at an earlier stage, decreasing the need for long periods of hospitalization. Moreover, testimony was presented that, in individual cases, hospitals are not likely to eject Medicaid patients who exhaust their Medicaid days while in the hospital. But many hospitals will refuse entrance to sick persons who have no Medicaid days left. Dr. Mamey, Dr. Turner, and Dr. Stein all indicated in their testimony that it would be better for the patients to have a system where they could come to the hospital on numerous occasions than to have a fixed number of days.
On the other hand, the State produced no evidence to rebut the plaintiffs claim. Rather, the evidence indicated that the State only considered two alternatives. The first was a change in the reimbursement method for health care providers. This was hastily withdrawn when the providers protested and it was learned that such a change would require approval from the Department of Health, Education and Welfare. A reduction in the services provided to Medicaid patients was instituted in its place. The testimony of Mr. James E. Word, Deputy Commissioner of Public Health, indicated that no attention was given to the discriminatory impact this might have on the handicapped or any group.
Federal courts are not empowered to substitute their judgments for that of State officials charged with administrative fact-finding and decision making having to do with the state. New York State Association for Retarded Children v. Carey, 612 F.2d at 648; Bryan v. Koch, 627 F.2d at 619; The Medical Center, 657 F.2d at 1338.
However, the courts are .... assigned a sensitive task, and that task is to ensure that the established legal standards — constitutional and statutory — are followed by government agencies. To permit the factual determinations of these agencies to go unchallenged may be to neglect this task, for the facts will often be dispositive, and the question of compliance with legal standards will often be determined by the manner in which the agency has found the facts.
Carey, 612 F.2d at 648.
In this case, the plaintiffs proved a prima facie case of discrimination against the handicapped and purported to present an alternative which had a less discriminatory impact and would meet the State’s need to save money. When a recipient of federal funds uses the money in a manner which has a disparate impact, Section 504 requires, at the least, that the State show that its decision-making process was a rational one. Bryan v. Koch, 627 F.2d at 621 (Separate Opinion of Judge Kearse) (in the context of Title VI and racial discrimination).
This is not an onerous burden. It merely requires the recipient to present some evidence that its decision is the product of lawful process which complies with minimum statutory standards. Courts are not free to ignore claims of discrimination merely because they are against a state. As the Second Circuit has noted:
Clearly, deference to a state agency’s fact finding is inappropriate once that agency is the defendant in a discrimination suit. The agency is required to come forward in the district court with sufficient evi[1045]*1045dence to rebut the plaintiffs prima facie case (footnote omitted).
Carey, 612 F.2d at 649.9
Because the State failed to present any evidence to rebut the plaintiff’s prima facie case, we must remand. Plaintiffs have established a prima facie case of discrimination against the handicapped. The State now has the burden of coming forward with some substantial justification for the adoption of the plan with the greater discriminatory impact. Or the State may demonstrate that the alternative method offered by Appellants will not accomplish the State’s objective of cost-saving.10
II.
Appellants also maintain that the State’s decision is contrary to the best interests of Tennessee Medicaid recipients. Thus, it is contended, the reduction violates Section 1902(a)(19) of the Medicaid Act, 42 U.S.C. § 1396a(a)(19).11
The only authority cited by appellants is Budnicki v. Beal, 450 F.Supp. 546 (E.D.Pa. 1978). In Budnicki, the court held that an alteration in a state’s Medicaid program will meet 1396a(a)(19)’s standards if it is “not irrational, or arbitrary and counterproductive to the medical well-being of all Medicaid recipients.” Id. at 557. Accord Philadelphia Welfare Rights Organization v. O’Bannon, 517 F.Supp. 501, 508 (E.D.Pa. 1981) aff’d, 681 F.2d 808 (3rd Cir.1982).
Assuming that this is the correct standard, there is no basis for finding the State’s proposed reductions to be arbitrary or counterproductive to the interests of all Medicaid recipients. If the fourteen day per annum limitation is implemented, ninety-five percent of all Medicaid recipients will have their hospitalization needs met. Though this court might have fashioned a different set of priorities, the best interests criteria do not transform this court into an administrative body.
III.
The final issue on appeal is whether the State was required to obtain approval from the Secretary of Health and Human Services before adopting the new changes. The parties stipulated that the reduction in hospital coverage had not been approved. [1046]*1046The district court held that prior approval was not required. Jennings, 518 F.Supp. at 888. We agree.
42 U.S.C. § 1396c provides that the Secretary may terminate federal funding for the Medicaid program of a state if he finds:
(1) that the plan has been so changed that it no longer complies with the provisions of section 1396a ...; or
(2) that in the administration of the plan there is a failure to comply substantially with any such provision.
This standard clearly contemplates the adoption of changes in the original plan without prior approval from the Secretary. However, if the changes are subsequently determined to place the State out of compliance with federal regulations, the Secretary may impose sanctions on the State’s entire Medicaid program or that portion which is unsatisfactory. Only when the proposed alteration involves a change in the reimbursement method is prior approval necessary. 42 U.S.C. § 447.261.
As the district court noted, the states have wide latitude in the modification of their plans. Only when the plan is out of conformity with federal statutory requirements will the federal administrators intervene. While “Congress could easily have provided that no state plan could be modified without prior approval of the Secretary, [it] instead authorized the Secretary to invoke sanctions when modifications were found to be out of compliance with the statute.” Jennings, 518 F.Supp. at 888.
IV.
In sum, we vacate the district court’s judgment and remand for a determination in the following manner. The State should be required to provide a substantial justification for its choice of a reduction in inpatient hospital days when equal savings could be achieved by limiting the number of admissions covered by Medicaid. Kampmeier v. Nyquist, 553 F.2d 296, 299 (2d Cir.1977) (“substantial justification” for the policy); New York State Association for Retarded Children v. Carey, 612 F.2d at 650 (“must make at least some substantial showing in court that its plan is justified”). The State could also meet its burden by proving that a limit on the number of admissions will not yield the same amount of cost savings achieved by the State’s per day restriction.12 Second, we hold that Appellants have not established that the proposed changes are inconsistent with the best interests of Medicaid recipients. If the changes are eventually implemented, ninety-five percent of the State’s Medicaid recipients will be served. Though we do have some concerns about the manner in which [1047]*1047the original changes were adopted, we cannot say that the changes were irrational or arbitrary. Finally, we hold that the State is not required to obtain approval from the Secretary of Health and Human Services before the proposed changes become final.
Accordingly, the case is remanded for further proceedings not inconsistent with this opinion.