The federal anti-lien provision pre-empts North Carolina's irrebuttable statutory presumption that one-third of a tort recovery is attributable to medical expenses, where: 1) a State is prevented from taking any portion of a Medicaid beneficiary's tort judgment or settlement not designated as payments for medical care under the federal statute and Arkansas Dept. of Health and Human Servs. v. Ahlborn; 2) the North Carolina statute is in direct conflict with the federal Medicaid statute insofar as it attempts to recover one-third of a tort recovery even if the settlement or verdict expressly allocates a lower percentage of the judgment to medical expenses; 3) the North Carolina statute sets forth no process for determining what portion of a beneficiary's tort recovery is attributable to medical expenses; and 4) a judicial or administrative proceeding may be necessary where a beneficiary and the State are unable to agree on what portion of a settlement represents compensation for medical expenses.