Visiting Nurse Ass'n of North Shore, Inc. v. Bullen

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 95-1849

VISITING NURSE ASSOCIATION OF NORTH SHORE, INC., ET AL.,

Plaintiffs, Appellees,

v.

BRUCE M. BULLEN, ET AL.,

Defendants, Appellants.

No. 95-1999

VISITING NURSE ASSOCIATION OF NORTH SHORE, INC., ET AL.,

Plaintiffs, Appellants,

v.

BRUCE M. BULLEN, ET AL.,

Defendants, Appellees.

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nancy Gertner, U.S. District Judge]

Cyr, Boudin and Stahl,

Circuit Judges.

Douglas H. Wilkins, Assistant Attorney General, with whom Scott

Harshbarger, Attorney General, and William L. Pardee, Assistant

Attorney General, were on brief for appellants Bullen, et al.
Richard P. Ward, with whom John H. Mason, Susan T. Nicholson and

Ropes & Gray were on brief for appellees Visiting Nurse Association of

North Shore, Inc., et al.

August 22, 1996

2

CYR, Circuit Judge. Nine Massachusetts health care
CYR, Circuit Judge.

providers initiated this civil rights action under 42 U.S.C.

1983, alleging substantive and procedural violations of the

Medicaid Act, see 42 U.S.C. 1396a(a)(30) ("Act"), by the named

defendants, various officials of the Massachusetts Medicaid

program. The district court granted partial summary judgment for

plaintiffs, declaring defendants in noncompliance with certain

procedural requirements relating to the establishment of

reimbursement rates for health care services provided to Medicaid

recipients. Defendants appealed. Plaintiffs cross-appealed a

district court ruling dismissing their remaining claims. We

reverse the district court judgment against defendants and

dismiss the cross-appeal.

I
I

BACKGROUND
BACKGROUND

Medicaid is a joint federal-state program designed to

afford medical benefits to low-income individuals. See 42 U.S.C.

1396 et seq.; Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498, 502

(1990). A State which elects to participate in Medicaid is

eligible to receive federal funds only if its State Plan is

approved by the Federal Health Care Financing Administration

("HCFA").1 Among the sixty-two criteria for HCFA approval, see

1Authority to administer the Medicaid program and promulgate
implementing regulations has been delegated to HCFA, a
constituent agency of the Department of Health and Human
Services. See 42 U.S.C. 1302; 49 Fed. Reg. 35,247, 35,249

(1984); see also Elizabeth Blackwell Health Ctr. for Women v.

Knoll, 61 F.3d 170, 174 (3d Cir. 1995), cert. denied, 116 S. Ct.

816 (1996).

3

42 U.S.C. 1396a(a)(1)-(62), is the so-called "equal access"

clause:

[A State plan for medical assistance must]
provide such methods and procedures relating

to the utilization of, and the payment for,
care and services available under the plan
(including but not limited to utilization re-
view plans as provided for in section 1396b
(i)(4) of this title) as may be necessary to
safeguard against unnecessary utilization of
such care and services and to assure that

payments are consistent with efficiency,

economy, and quality of care and are suffi-

cient to enlist enough providers so that care

and services are available under the plan at

least to the extent that such care and ser-

vices are available to the general population

in the geographic area.

Id. 1396a(a)(30) (emphasis added); 42 C.F.R. 447.201(b) ("The

plan must describe the policy and the methods to be used in

setting payment rates for each type of service . . . .").

Massachusetts establishes its reimbursement rates

through the Massachusetts Rate Setting Commission, with the

approval of the Division of Medical Assistance of the Massachu-

setts Executive Office of Health and Human Services ("DMA"). See

Mass. Gen. L. ch. 6A, 32, 36. Before 1991, Massachusetts

used a "cost-based" methodology for setting reimbursement rates,

laconically described in its approved plan as "fixed negotiated

fee schedules." Ostensibly, the term "negotiated" connoted an

intent to calculate a different rate for each individual health

care provider, based on its reported costs for delivering five

different categories of medical services (skilled nursing,

occupational, physical and speech therapy, and home-health-aide

services) during the preceding fiscal year, adjusted for such

4

uniform factors as inflation and allowing for incentive caps

(e.g., to promote efficiency). See Mass. Regs. Code tit. 114.3,

3.00.

In 1991, however, Massachusetts decided to convert its

rate-setting methodology to a so-called "class rate" system.

Rather than basing reimbursement rates on the individual health

care provider's idiosyncratic costs for the previous year, DMA

decided to propose a single, fixed reimbursement rate for each of

the five medical services categories, supra, which would be

applied across-the-board to all in-state health care providers,

without regard to their individual costs. During the transition

to the new "class rate" system, a series of "interim" and "phase-

in" rates were to be utilized.

Under the Medicaid Act and regulations, a State must

meet two conditions before instituting "material" or "signifi-

cant" changes in its Medicaid program:2 i.e., (1) submit a Plan

amendment to HCFA for approval, "describ[ing]" the methods used

to set rates under 42 U.S.C. 1396a(a)(30), see 42 C.F.R.

447.201(b) (emphasis added), and (2) provide public notice

"describing the proposed change[s]" and "[e]xplain[ing] why [it]

is changing its methods and standards," see id. 447.205(c)(1),

(3) (emphasis added).

During a thirty-month period beginning in June 1991,

Massachusetts issued public notices relating to the proposed

2We accept, arguendo, defendants' concession that the

conversion to a "class rate" system constituted a "significant"
and "material" change.

5

change, and published a series of regulations, setting forth the

interim, phase-in, and final class rates in "bottom-line" dollar

figures for each of the five medical service categories, without

detailing the particular formula and factors used to arrive at

the proposed "bottom-line" rate figures. Thereafter, DMA

conducted a series of public meetings to explain the proposed

changes to health care providers, including appellees, and other

interested parties. On January 1, 1994, the final class rates

took effect, superseding the interim and phase-in rates.

Plaintiffs soon filed this section 1983 action,

alleging that the DMA commissioner and its members had violated

various substantive and procedural requirements prescribed by 42

U.S.C. 1396a(a)(30).3 By way of procedural violations, the

complaint alleged that the pre-January 1994 public notices issued

by defendants contained legally deficient "descriptions" of the

proposed new methods and procedures, by failing to disclose the

formula defendants used to arrive at either the interim, phase-

in, or final class rates. The complaint further alleged that

3As substantive violations, plaintiffs first alleged that
the State had adopted its new methodology solely for the
impermissible purpose of limiting its financial outlays under the
Medicaid program, contrary to 42 U.S.C. 1396a. See Amisub

(PSL), Inc. v. Colorado Dep't of Social Servs., 879 F.2d 789,

800-01 (10th Cir. 1989), cert. denied, 496 U.S. 935 (1990).

Second, plaintiffs alleged that the class rates arrived at under
the new fixed-rate methodology were so arbitrary and unreasonably
low that many health care providers would have no financial
incentive to participate in the Massachusetts Medicaid program,
thereby ensuring that "equal access" to needed medical services
could not be provided to all low-income individuals in all
geographical areas at the same level as the general population.
See 42 U.S.C. 1396a(a)(30).

6

defendants failed to file an appropriate amendment to the

Massachusetts Plan, "describing" the "material" changes in its

reimbursement rate methodology. Plaintiffs moved for partial

summary judgment on their two procedural claims.

Massachusetts filed a Plan amendment ("Amendment 003")

with the HCFA regional office in March 1994.4 The amendment

indicated the proposed change from a cost-based to a "class rate"

system by deleting a single word from the original Plan descrip-

tion: "fixed negotiated fee schedules" now became simply "fixed

fee schedules." Although a Plan amendment is deemed approved

unless HCFA acts within ninety days of its filing, see 42 C.F.R.

430.16(a), HCFA tolled the ninety-day period by advising

defendants that additional information was needed i.e., "the

methodology or formula for the calculation of the fixed rate"

to enable a final approval determination. See id.

430.16(a)(ii).

Prior to the time DMA responded to the HCFA request for

information, and before any final HCFA decision on Amendment 003,

the district court granted partial summary judgment for

plaintiffs on their procedural claims, ruling that neither

Amendment 003 nor defendants' pre-January 1994 public notices

provided adequate detail on the proposed "methods and procedures"

for calculating final class rates. See Visiting Nurse Ass'n of

4Retroactive effect to "the first day of the quarter,"
viz., January 1, 1994 is accorded any "approvable plan [amend-

ment] . . . submitted to [the HCFA] regional office." 42 C.F.R.
430.20(b) (emphasis added); see also id. 447.256(c).

7

N. Shore, Inc. v. Bullen, 866 F. Supp. 1444, 1459-62 (D. Mass.

1994). The court concluded that these procedural lapses rendered

the final class rates invalid, thus obviating any need to

determine whether the proposed new methodology or rates

reasonably ensured compliance with the substantive requirement

"equal access" to medical care imposed by section 1396(a)(30).

Id. at 1462.

Without conceding any procedural lapse, defendants

issued another public notice on September 23, 1994, containing a

detailed description of the methodology used to calculate the

"new" final class rates, which were to take effect on November 1,

1994. In December 1994, defendants filed a second Plan amendment

with HCFA ("Amendment 023"), which provided the same level of

detail as the September 24, 1994 public notice. Defendants then

asked the district court to declare them in compliance with the

procedural requirements of section 1396a(a)(30). Then, in April

1995, while Amendments 003 and 023 remained pending, HCFA was

notified that defendants wished to revise and update Amendment

003 to include the detailed information contained in Amendment

023. Defendants thus sought to make any HCFA Plan-amendment

approval fully retroactive to January 1, 1994, rather than

October 1994. See supra note 4. Three days later, HCFA approved

Amendment 003, as revised, retroactive to January 1, 1994.

The district court entered final judgment, based on

four essential holdings. Visiting Nurse Ass'n of N. Shore, Inc.

v. Bullen, No. 94-10123-NG (D. Mass. June 30, 1995). First, the

8

court reaffirmed its August 1994 declaratory ruling that defen-

dants' initial implementation of the final class rates on January

1, 1994 was invalid for failure to comply with the public notice

and Plan amendment requirements of section 1396a(a)(30), and

directed entry of its declaratory judgment nunc pro tunc (i.e.,

effective September 30, 1994), the date on which its initial stay

of the judgment expired. Id., slip op. at 2. Second, defendants

were found to have been in compliance with the section

1396a(a)(30) procedural requirements as of November 1, 1994,

after providing detailed descriptions of the new rate-setting

methodology in their September 1994 public notice and in

Amendment 023. Id. Third, the district court ruled that

defendants had never violated the section 1396a(a)(30) public

notice and Plan amendment requirements relating to their pre-

January 1994 imposition of the interim and phase-in rates,

presumably because these transitional rates, unlike the final

class rates, did not effect a "material" or "significant" change

from pre-1991 "cost-based" methods and procedures. Id. at 2-3.

Finally, the district court dismissed plaintiffs' remaining

claims alleging that the new final class rates violated the

substantive requirements of the section 1396a(a)(30) "equal

access" clause since its decision invalidating the rates due

to procedural defects rendered further decision on the alleged

substantive violations unnecessary. Id. at 3.

II
II

DISCUSSION
DISCUSSION

9

A. Standards of Review
A. Standards of Review

We review the grant of summary judgment de novo, to

determine whether the pleadings, depositions, answers to

interrogatories, admissions on file, and affidavits, as well as

any reasonable inferences therefrom, when viewed in the light

most favorable to the nonmoving party, demonstrate that there is

no genuine issue as to any material fact and that the moving

party is entitled to judgment as a matter of law. See McCabe v.

Life-Line Ambulance Serv., Inc., 77 F.3d 540, 544 (1st Cir.),

petition for cert. filed, 64 U.S.L.W. 3808 (U.S. May 29, 1996)

(No. 95-1929).

Normally, we accord plenary review to the district

court's statutory and regulatory interpretations. See Nowd v.

Rubin, 76 F.3d 25, 26 n.1 (1st Cir. 1996). When a federal agency

charged with administering a particular program interprets its

own enabling statute, however, we engage in a two-tiered review:

"First, always, is the question whether Con-
gress has directly spoken to the precise
question at issue. If the intent of Congress
is clear, that is the end of the matter; for
the court, as well as the agency, must give
effect to the unambiguously expressed intent
of Congress. If, however, the court deter-
mines Congress has not directly addressed the
precise question at issue, the court does not
simply impose its own construction on the
statute, as would be necessary in the absence

of an administrative interpretation. Rather,

if the statute is silent or ambiguous with
respect to a specific issue, the question for
the court is whether the agency's answer is
based on a permissible construction of the
statute."

Heno v. FDIC, 20 F.3d 1204, 1208-09 (1st Cir. 1994) (quoting

10

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837, 842-43 (1984)) (emphasis added) ("Chevron").

As a federal agency charged with administering the

Medicaid program, see supra note 1, HCFA plainly is entitled to

Chevron deference in its interpretations of the Act and the

implementing regulations. See North Carolina v. United States

Dep't of Health and Human Servs., 999 F.2d 767, 769-70 (4th Cir.

1993) (noting that an HCFA interpretation of its own regulations

is entitled to "considerable deference"); Folden v. Washington

State Dep't of Social and Health Servs., 981 F.2d 1054, 1058 (9th

Cir. 1992); Missouri Dep't of Social Servs. v. Sullivan, 957 F.2d

542, 544 (8th Cir. 1992). Indeed, when a federal agency has

promulgated and published a regulation pursuant to its own

enabling statute, we review its interpretation of that regulation

under a standard even "more deferential . . . than that afforded

under Chevron" to the agency's interpretation of the Statute.

National Med. Enters. v. Shalala, 43 F.3d 691, 697 (D.C. Cir.

1995); e.g. Indiana Ass'n of Homes for the Aging, Inc. v. Indiana

Office of Medicaid Policy and Planning, 60 F.3d 262, 266 (7th

Cir. 1995) (applying heightened deference to HCFA regulations);

see Thomas Jefferson Univ. v. Shalala, 114 S. Ct. 2381, 2386

(1994) (deferring to HHS interpretation of Medicare regulation);

Stinson v. United States, 508 U.S. 36, 44 (1993); Johnson v.

Watts Regulator Co., 63 F.3d 1129, 1134-35 (1st Cir. 1995); see

also Consarc Corp. v. United States Treasury Dep't, 71 F.3d 909,

915 (D.C. Cir. 1995). "[P]rovided an agency's interpretation of

11

its own regulation does not violate the Constitution or a federal

statute, it must be given `controlling weight unless it is

plainly erroneous or inconsistent with the regulation.'"

Stinson, 508 U.S. at 44 (citation omitted) (emphasis added); see

Loma Linda Univ. v. Schweiker, 705 F.2d 1123, 1126 (9th Cir.

1983) (noting that an HCFA interpretation of its own regulation

is entitled to deference "if it is within the range of reasonable

meanings the words permit").

B. Defendants' Appeal
B. Defendants' Appeal

Defendants appeal from that portion of the final

judgment declaring them in violation of the section 1396a(a)(30)

procedural requirements during the period January 1 through

October 31, 1994. Defendants claim, alternatively, that (1) the

procedural requirements imposed by section 1396a(a)(30) are not

enforceable by health care providers, (2) even if enforceable,

however, defendants violated neither procedural requirement cited

by plaintiffs, (3) the district court abused its discretion in

August 1994 by ruling that defendants had violated section

1396a(a)(30), rather than staying the district court proceedings

while Amendment 003 remained pending before HCFA, or (4) the

declaratory judgment entered by the district court granted retro-

spective relief barred by the Eleventh Amendment, see U.S. Const.

amend. XI.

1. Standing: Enforceable Rights
1. Standing: Enforceable Rights

Section 1983 enables a private action against a State

official to vindicate federal statutory rights enforceable by the

12

plaintiff. See 42 U.S.C. 1983; Albiston v. Maine Comm'r of

Human Servs., 7 F.3d 258, 261 (1st Cir. 1993). Whether section

1396a(a)(30) creates "enforceable" procedural and substantive

rights

turns on "whether [it] was intend[ed] to
benefit the putative plaintiff[s]." If so,
the provision creates an enforceable right
unless it reflects merely a "congressional
preference" for a certain kind of conduct
rather than a binding obligation on the
governmental unit, or unless the interest the
plaintiff asserts is "'too vague and
amorphous'" such that it is "'beyond the
competence of the judiciary to enforce.'"

Wilder, 496 U.S. at 509 (citations omitted).5

a) Substantive Rights6
a) Substantive Rights

Section 1396a(a)(30) arguably describes two distinct

substantive "equal access" rights: the right to require a State

medicaid program to use reimbursement "methods and procedures"

5In January 1996, Congress enacted 42 U.S.C. 1320a-2 (a
Medicaid Act provision will "not [] be deemed unenforceable
because of its inclusion in a section . . . requiring a State
plan or specifying the required contents of a State plan"), which
overturned, in part, the Supreme Court decision in Suter v.

Artist M., 503 U.S. 347 (1992). Before 1320a-2 was enacted,

some commentators had suggested that Suter's rationale supplanted

the traditional Wilder test. But see, e.g., Albiston, 7 F.3d at

262-63 (holding that Suter did not overturn Wilder, but merely

superimposed an additional threshold test). Consequently, we
assume that Congress intended that 1320a-2 serve to resurrect
the Wilder test, with no Suter overlay.

6We address the enforceability of the 1396a(a)(30)
substantive requirements as a threshold issue because the
district court judgment dismissed plaintiffs' substantive claims,
albeit on other grounds. See infra Section II.B.2(b). Even

though we find those other grounds infirm, we may uphold the
district court ruling on any ground supported by the record. See

Four Corners Serv. Station, Inc. v. Mobil Oil Corp., 51 F.3d 306,

314 (1st Cir. 1995).

13

which (1) will "safeguard against unnecessary utilization of such

[medical] care and services and [] assure that payments are

consistent with efficiency, economy, and quality of care," and

(2) are "sufficient to enlist enough providers so that care and

services are available under the plan at least to the extent that

such care and services are available to the general population in

the geographic area." 42 U.S.C. 1396a(a)(30).

In Wilder, the Supreme Court held that comparable

provisions of section 1396a(a)(13) ("the Boren Amendment") did

create enforceable substantive rights for institutional health

care providers. See Wilder, 496 U.S. at 520. Section

1396a(a)(13) mandates that the State Plan provide:

(A) for payment . . . of the hospital servic-

es, nursing facility services, and services

in an intermediate care facility for the

mentally retarded provided under the plan
through the use of rates (determined in

accordance with methods and standards
developed by the State . . .) which the State
finds, and makes assurances satisfactory to

the Secretary, are reasonable and adequate to

meet the costs which must be incurred by
efficiently and economically operated
facilities in order to provide care and
services in conformity with applicable State
and Federal laws, regulations, and quality
and safety standards and to assure that
individuals eligible for medical assistance
have reasonable access . . . to inpatient

hospital services of adequate quality.

42 U.S.C. 1396a(a)(13) (emphasis added).

Every court that has considered whether the Wilder

rationale likewise applies to the second "equal access" right

described in section 1396(a)(30) has determined that health care

providers were intended beneficiaries under both the Boren

14

Amendment and section 1396(a)(30), since health care providers,

as payees, obviously are affected by substantive changes in State

reimbursement schemes under Medicaid. See, e.g., Arkansas Med.

Soc'y, Inc. v. Reynolds, 6 F.3d 519, 528 (8th Cir. 1993); Sobky

v. Smoley, 855 F. Supp. 1123, 1137-38 (E.D. Cal. 1994); Oklahoma

Nursing Home Ass'n v. Demps, 792 F. Supp. 721, 727 (W.D. Okla.

1992); Illinois Hosp. Ass'n v. Edgar, 765 F. Supp. 1343, 1348-49

(N.D. Ill. 1991). Without citation to supporting authority,

defendants nonetheless insist that section 1396(a)(30) and the

Boren Amendment are distinguishable.

i) Intended Beneficiaries
i) Intended Beneficiaries

The Wilder Court reasoned that because the Boren

Amendment "establishes a system for reimbursement of providers

and is phrased in terms benefiting health care providers . . .

[in that] [i]t requires a state plan to provide for `payment . .

. of the hospital services, nursing facility services, and

services in an intermediate care facility for the mentally

retarded provided under the plan,'" "[t]here can be little doubt

that health care providers are the intended beneficiaries."

Wilder, 496 U.S. at 510.7 Defendants argue, however, that unlike

the Boren Amendment, section 1396a(a)(30) does not list specific

7Although Medicaid recipients also are intended
beneficiaries under the "equal access" requirement as it affects
the availability of their medical care, it is well settled that
Congress may create more than one class of intended beneficiary.
See Freestone v. Cowan, 68 F.3d 1141, 1150 n.10 (9th Cir. 1995)

(citing Golden State Transit Corp. v. City of Los Angeles, 493

U.S. 103, 110 (1989); Carelli v. Howser, 923 F.2d 1208, 1211 (6th

Cir. 1991)).

15

categories of health care providers (e.g., hospitals, nursing

facilit[ies], and intermediate care facilit[ies]), hence it

cannot be said that Congress focused on providers as section

1396a(a)(30) beneficiaries. We are not persuaded.

The Wilder Court first observed that the statute "is

phrased in terms benefiting health care providers," and leaves

"little doubt that health care providers are the intended benefi-

ciaries," then proceeded to illustrate how the plain language of

the Boren Amendment "establishes a system for reimbursement of

providers" through its listing of specific types of health care

providers. Nowhere did the Court indicate that the more general

term "providers" would not suffice, however, or that a listing of

specific types of providers is a sine qua non without which a

congressional intent to benefit health care providers could not

be inferred. As long as the two statutory provisions evince a

congressional concern for preserving financial incentives to

providers by ensuring adequate reimbursement payment levels

providers are appropriately considered intended beneficiaries.

See Arkansas Med. Soc'y, Inc., 6 F.3d at 526.

(ii) "Preference" or "Binding Obligation"
(ii) "Preference" or "Binding Obligation"

Defendants argue that section 1396a(a)(30) articulates

a more discretionary "access" standard than that in the Boren

Amendment, and that the additional discretion thus conferred

belies a congressional intendment to lay down any "binding

obligations" on the State in section 1396(a)(30). See Wilder,

496 U.S. at 509. As defendants see it, the Boren Amendment (1)

16

requires the State not only to meet the ultimate benchmark of

providing comparable "access" to medical care, but also the

preliminary obligation to make "findings" and "assurances,"

satisfactory to the Secretary, that State reimbursement rates can

ensure reasonable and adequate access, as well as comply with

"State and Federal laws, regulations, and quality and safety

standards," and (2) limits the potential reimbursement methods

and procedures that the State can employ to the institution of

"rates," rather than permitting more innovative or ad hoc

reimbursement systems that might be less rate-dependent. We find

no indication that the Wilder holding turned on these consider-

ations.

First and foremost, the Boren Amendment and section

1396a(a)(30) are prefaced with the same mandatory language

"[a] State plan for medical assistance must . . . [p]rovide," 42

U.S.C. 1396a(a); see Edgar, 765 F. Supp. at 1349 and the

"reasonable" and "equal" access requirements upon which federal

Medicaid funding depends, see 42 U.S.C. 1396c, are conditions

precedent to an approvable State Plan. See Wilder, 496 U.S. at

511 (contrasting with statute in Pennhurst State Sch. & Hosp. v.

Halderman, 451 U.S. 1, 24 (1981), where hortatory language did

not make "compliance with the provision a condition of receipt of

federal funding"); Arkansas Med. Soc'y, Inc., 6 F.3d at 526; see

also supra note 5 (discussing newly enacted 42 U.S.C. 1320a-2).

Thus, the mandatory language in section 1396a(a) defies fair

characterization as a mere "congressional preference."

17

Second, the majority opinion in Wilder mentioned the

Boren Amendment requirement that there be "findings" and

"assurances" merely to rebut a suggestion in the Wilder dissent

that Congress had intended to accord plaintiffs standing to

assert a judicial challenge to a State's default on these two

procedural obligations, but not to challenge a substantive

default (i.e., a State's adoption of rates that do not ensure

"reasonable access," or that are not "adequate" to compensate

"efficient[]" provider costs). See Wilder, 496 U.S. at 514 ("We

reject that argument because it would render the statutory

requirements of findings and assurances, and thus the entire

reimbursement provision, essentially meaningless [since] . . .

[i]t would make little sense for Congress to require a State to

make findings without requiring those findings to be correct.").

The premise that procedural rights normally exist only as aids to

the enforcement of substantive rights is not interchangeable with

the proposition that substantive rights cannot exist absent an

express provision of attendant procedural rights. Thus, the

majority opinion in Wilder in no sense suggests that the Boren

Amendment's substantive "access" requirement would have been

found any less mandatory if, like section 1396(a)(30), it had

contained no explicit procedural requirement of "findings" and

"assurances."

iii) Judicial Enforceability
iii) Judicial Enforceability

Defendants intimate, however, that absent any

requirement of "findings" and "assurances," section 1396a(a)(30)

18

is less amenable to effective judicial enforcement than the Boren

Amendment. As we have explained, however, substantive

requirements are not "impermissibly vague simply because [they]

require[] judicial inquiry into `reasonableness,'" or "adequate

rates," as long as "the action or purpose whose `reasonableness'

[or `adequacy'] is commanded has been clearly delineated and is

susceptible of judicial ascertainment." Albiston, 7 F.3d at 267

(collecting cases).

The Boren Amendment and section 1396a(a)(30) contain

nearly identical substantive requirements that the rates, or

methods and procedures, used to determine reimbursements to

health care providers ultimately ensure reasonable, adequate or

equal "access" to medical care, which the Supreme Court in Wilder

decided did not constitute a standard too vague or amorphous for

judicial enforcement. See Wilder, 496 U.S. at 515 ("[T]he

statute imposes the concomitant obligation to adopt reasonable

and adequate rates."). Indeed, the term "equal access," as

employed in section 1396a(a)(30), arguably provides a more

concrete standard, objectively measurable against the health care

access afforded among the general population, whereas the Boren

Amendment employs the somewhat less objective benchmark:

"reasonable" access.

Nor do we discern a material distinction between the

focus on "methods and procedures" required by section 1396(a)(30)

and the focus on "rates" required by the Boren Amendment. In

either instance, the required determination as to whether the

19

State methods or procedures, or the resultant rates of reimburse-

ment, are adequate to ensure "access" is neither more nor less

daunting a judicial task. See id. at 519 (noting that although

States have great flexibility in choosing among a broad "range of

reasonable rates," "the statute and regulation[s] set out factors

which a State must consider in adopting its rates," so that

"there certainly are some rates outside that range that no State

could ever find to be reasonable and adequate under the Act.").8

For the foregoing reasons, therefore, we conclude that

plaintiffs possess standing to enforce the substantive section

1396a(a)(30) requirement that the State adopt "methods and

procedures" which will afford "equal access" to medical care as

defined in section 1396a(a)(30).

b) Procedural Rights
b) Procedural Rights

Plaintiffs further contend that section 1396a(a)(30),

as interpreted and applied through the HCFA implementing regula-

tions, establishes two coincident procedural requirements

designed to ensure that health care providers may enforce the

8We reject the implicit suggestion by defendants that the
absence of a "findings" and "assurances" requirement under
1396a(a)(30) makes meaningful judicial review wholly
impracticable in that the courts have no factual bases for
ascertaining whether the State's chosen "methods and procedures"
satisfy the substantive "equal access" requirement. Setting
aside the question whether the 1396a(a)(30) implementing
regulations afford any procedural rights that ensure disclosure,
see infra Section II.B.2(a), plaintiffs may adduce evidence

concerning the inadequacy of the State's selected methods and
procedures, or flaws in the State's substantive decisionmaking
processes, in any number of ways; for example, with information
acquired by or from the State during public hearings, in proposed
Plan changes, or in the published State regulations.

20

substantive right of "equal access": the requirements that the

State file a Plan amendment and a public notice "describing" its

proposed new "methods and procedures" in some detail. Since we

conclude that defendants have not violated these procedural

requirements, see infra Section II.B.2(a), we need not reach the

enforceability issue.9

2. Claimed Violations of Enforceable Rights
2. Claimed Violations of Enforceable Rights

a) Procedural Rights
a) Procedural Rights

9We likewise reserve judgment as to whether, and what
extent, procedural rights prescribed only in the implementing
regulations, rather than directly by statute, may be enforced in
a 1983 action. See, e.g., Oklahoma Nursing Home Ass'n, 792 F.

Supp. at 725-26.

21

i) Plan Amendment 003
i) Plan Amendment 003

Prior to the time Amendment 003 was submitted to HCFA

in March 1994, the approved Massachusetts Plan described its

"methods and procedures" for reimbursing providers as "fixed

negotiated fee schedules." Amendment 003 purportedly altered the

"methods and procedures" to be employed under the new class rate

system simply by deleting the word "negotiated," with the result

that the new rates were to be based on "fixed fee schedules."

Plaintiffs argue that the cryptic phrase "fixed fee

schedules" is patently deficient to describe the proposed change

in the Massachusetts reimbursement "methods and procedures," and

that under whatever conceivable definition the phrase might be

given, it utterly failed to notify HCFA or plaintiffs that

defendants planned to change from a cost-based system to a class

rate system, or to explain with any precision the methodology or

formula defendants used to arrive at the bottom-line

reimbursement figures announced in the DMA regulation. See Mass.

Regs. Code tit. 114.3, 3.04(4). We do not agree.

First, HCFA itself implicitly determined that the

phrase "fixed fee schedules" met the section 1396a(a)(30)

mandate, otherwise it could not have approved Amendment 003

retroactive to January 1, 1994. See supra note 4. In order to

be entitled to retroactive effect to January 1, 1994, Plan

amendment 003 had to have been "approvable" as submitted in March

1994, when it contained merely the three-word description

presently challenged by plaintiffs as insufficient to satisfy

22

section 1396a(a)(30).10 We must therefore review the implicit

interpretation given section 1396a(a)(30) by HCFA in this case.

At its initial stage, Chevron review accords no

deference to the interpretation an agency gives to its enabling

statute. See supra Section II.A. If the reviewing court indepen-

dently determines that the intent of the statute is clear, as

disclosed in its plain language and design, the statutory

language is to be given full effect. See Grunbeck v. Dime Sav.

Bank of N.Y., FSB, 74 F.3d 331, 340-41 (1st Cir. 1996);

Strickland v. Commissioner of Me. Dep't of Human Servs., 48 F.3d

12, 16-17 (1st Cir.), cert. denied, 116 S. Ct. 145 (1995).

Section 1396a(a)(30) mandates that a State Plan provide

"methods and procedures relating to . . . the payment for []

[medical] care and services." Plaintiffs argue that "methods"

has a plain or acquired meaning that necessitates disclosure of

the formula the State used to arrive at its proposed bottom-line

reimbursement figures. Thus, plaintiffs suggest that the

solitary statutory term "rates" might permit a Plan amendment to

list only bottom-line figures, cf. 42 U.S.C. 1396a(a)(13), but

that the presence of the term "methods" forecloses such an

approach. Once again, we are unable to agree.

10Thus viewed, the HCFA interpretation comports with 42
C.F.R. 430.16(a)(ii), which empowers HCFA to ask the State for
any "additional information" the agency needs to conduct its
"final [approval] determination." On the other hand, if the
requested "additional information" were a necessary part of the
initial submission by the State, and hence of its Plan, Amendment
003 would only have been retroactive to January 1995. See supra

p. 9.

23

Even if the distinction suggested by plaintiffs were

deemed sound, the question would remain: with what degree of

specificity or detail must a State describe the methodology used

in its Plan amendment? In this case, for example, although non-

exhaustive, the terms "cost-based" and "class rates" assuredly

are to some degree descriptive of the proposed change in

methodology, particularly among the initiated, viz., health care

providers. Yet we are unable to say that section 1396a(a)(30)

defines, in plain language, the term "methods and procedures,"

nor, more importantly, that it prescribes the level of detail

with which a Plan must describe "methods and procedures." Unlike

the Boren Amendment, moreover, section 1396a(a)(30) does not

require the State to make "findings" and "assurances," a require-

ment that arguably might be thought to anticipate a somewhat

greater degree of detail and specificity from a Plan's

description. As we are unable to discern either a "plain

language" meaning or design in section 1396a(a)(30) relating to

"the precise question at issue," Chevron, 467 U.S. at 842

i.e., the degree of specificity required in a Plan amendment

description of proposed new "methods and procedures" we next

turn to defendants' contention that Congress meant to leave this

matter for determination by HCFA, the administering agency.11

The second stage in the Chevron analysis counsels "a

11Plaintiffs do not claim that the available legislative
history provides useful guidance. See Strickland, 48 F.3d at 17

(stating that reviewing court may "examine the legislative
history, albeit skeptically, in search of an unmistakable expres-
sion of congressional intent").

24

high degree of respect for the agency's role" in administering

its enabling statute. See Strickland, 48 F.3d at 17 ("The agency

need not write a rule that serves the statute in the best or most

logical manner; it need only write a rule that flows rationally

from a permissible construction of the statute.") see Lamore v.

Ives, 977 F.2d 713, 718 (1st Cir. 1992); accord Caribbean

Petroleum Corp. v. United States EPA, 28 F.3d 232, 234 (1st Cir.

1994); Cabral v. INS, 15 F.3d 193, 194 (1st Cir. 1994) (agency

interpretation "is entitled to deference unless arbitrary,

capricious, or manifestly contrary to the statute"). As a

general rule, longstanding agency interpretations are entitled to

greater deference than more recent ones. See Bowen v. American

Hosp. Ass'n, 476 U.S. 610, 646 n. 34 (1986); Mayburg v. Secretary

of Health and Human Servs., 740 F.2d 100, 106 (1st Cir. 1984).

Further, the more persuasive the rationale for an agency

interpretation, the more deference it is due, especially if the

statute administered by the agency involves complex questions

peculiarly within the agency's acquired, technical, or

institutional expertise. Bowen, 476 U.S. at 646.

Plaintiffs stress that these HCFA regulations describe

a State Plan as a "comprehensive written statement," 42 C.F.R.

430.10 (emphasis added), which must (i) "contain[] all informa-

tion necessary for HCFA to determine whether the plan [or plan

amendment] can be approved to serve as a basis for Federal

financial participation (FFP) in the State program," id., and

(ii) "describe the policy and the methods to be used in setting

25

payment rates for each type of service included in the State's

Medicaid program," id. 447.201. Although these HCFA

regulations are not facially inconsistent with section

1396a(a)(30), neither do they expressly resolve the ambiguity

inherent in the statute.

Contrary to plaintiffs' assertion, the section 430.10

reference to comprehensiveness accurately describes the State

Plan, even under the minimalist interpretation given the term

"description" by defendants and HCFA, since we think one cannot

rationally contend that a State Plan itself, which must cover no

less than sixty-two different criteria, see 42 U.S.C.

1396a(a)(1)-(62), is not a "comprehensive" document. For this

reason and because HCFA's regulations do not prescribe the level

of specificity and comprehensiveness with which "methods and

procedures" must be described in a Plan, we must consider the

implicit interpretation HCFA has given its own regulations.

Plaintiffs concede that the initial Massachusetts Plan

approved by HCFA had been in existence for years, yet it

contained only a bare-bones, four-word description of its

"methods and procedures." When Massachusetts decided in 1991 to

effect a material change in its rate-setting system, from a cost-

based to a class-rate system, it reasonably understood that HCFA

had interpreted its own implementing regulations to require no

greater degree of specificity in the Amended Plan's description

of reimbursement rates than that provided in the initial

Massachusetts Plan, which had gone unchallenged for many years.

26

See Bowen, 476 U.S. at 646 n. 34; Lynch v. Dawson, 820 F.2d 1014,

1020 (9th Cir. 1987) (agency's interpretation of regulation is

accorded various degrees of deference based on duration and

consistency of agency position).

Plaintiffs correctly contend, of course, that this

longstanding HCFA interpretation does not foreclose a federal

court from determining whether the interpretation an agency has

given its own regulations rationally comports with the statutory

and regulatory language. Nevertheless, their argument seriously

devalues the heightened Chevron judicial deference reaffirmed in

Stinson, which requires the reviewing court to decide whether the

agency's interpretation of its own regulation is "plainly

erroneous or inconsistent with the regulation." Stinson, 508

U.S. at 45 (emphasis added).

Since sections 430.10 and 447.201, like section

1396a(a)(30) itself, do not preclude the interpretation

implicitly given them by HCFA, we may not second-guess its

reasonable policy judgment. See Bowen, 476 U.S. at 646;

Massachusetts Fed'n of Nursing Homes v. Commonwealth of Mass.,

772 F. Supp. 31, 39 (D. Mass. 1991) ("The HCFA certainly has more

expertise in this complicated area of the law than the courts.").

And because plaintiffs have not chosen to join HCFA as a party

defendant, see 42 U.S.C. 1396c, we can only infer the rationale

for HCFA's longstanding practice from its prior approval of

Amendment 003 and its predecessor. Moreover, we find readily

apparent a sound policy reason for the HCFA's action.

27

The Medicaid Act designedly affords States considerable

flexibility in administering their respective Medicaid programs,

allowing each to devise and modify its Plan in response to

prevailing local medical and financial conditions. Once the

sixty-two statutory minima in section 1396a(a) are met, each

participating State has "wide discretion in administering its

local program." See, e.g., Erie County Geriatric Ctr. v.

Sullivan, 952 F.2d 71, 73-74 (3d Cir. 1991); Lewis v. Hegstrom,

767 F.2d 1371, 1373 (9th Cir. 1985). HCFA's regulatory

interpretation permitting terse descriptions of "methods and

procedures," such as "cost-based" or "class rate" arguably

serves this salutary goal as well. Mandating the inclusion of a

detailed formula in the State Plan itself could require a State

to file a new Plan amendment each time it needed to alter any

significant integer in its formula, thereby imposing a cumbersome

administrative burden on the State as well as HCFA. Thus,

whatever one might think of its wisdom, we cannot say that the

implicit policy choice made by HCFA was precluded, either by the

statute or HCFA regulations. See Massachusetts Fed'n of Nursing

Homes, 772 F. Supp. at 39 (noting that HCFA approval of Plan,

unless inconsistent with the statute or regulation, implicitly

establishes definition of comprehensiveness of the term "methods

and procedures" as a matter of law).

Nor do we think the agency decision approving

defendants' description of the new class rate system as one

utilizing "fixed fee schedules" was impermissible, given the

28

original Massachusetts Plan's longstanding description of its

provider-cost-based system as a "negotiated fixed fee schedule."

HCFA fairly and sensibly reasoned that deletion of the term

"negotiated" signified clearly enough that individual providers

no longer would be entitled to reimbursement rates set according

to their idiosyncratic cost experiences, but would be confined

for the most part to across-the-board "fixed" rates established

for services rendered in each of the five covered health service

classifications. Accordingly, as the longstanding interpretation

reflected in the HCFA regulations was not plainly erroneous,

defendants were entitled to place reasonable reliance on HCFA's

interpretation in preparing and submitting their March 1994 Plan

Amendment 003. Cf. Sekula v. FDIC, 39 F.3d 448, 457 (3d Cir.

1994) ("[A] person `proceeding in good faith should not be

subjected to a trap brought about by an interpretation of a

regulation hidden in the bosom of the agency' . . . . [b]ut there

is no `trap' when the agency's interpretation of a regulation is

public and long-standing.") (citation omitted).

ii) Public Notice Under Section 447.205
ii) Public Notice Under Section 447.205

Plaintiffs next contend that the HCFA regulations

mandate that the public notices issued by the State relating to

reimbursement rate changes likewise contain a complete

description of the proposed change in methodology. Section

447.205 provides, in pertinent part:

(a) When notice is required. Except as
specified in paragraph (b) of this section,
the agency must provide public notice of any
significant proposed change in its methods

29

and standards for setting payment rates for
services. . . .

. . . .

(c) Content of notice. The notice must--

(1) Describe the proposed change
in methods and standards;
(2) Give an estimate of any expected
increase or decrease in annual ag-
gregate expenditures;
(3) Explain why the agency is changing
its methods and standards;
(4) Identify a local agency in each
county (such as the social services
agency or health department) where
copies of the proposed changes are
available for public review;
(5) Give an address where written com-
ments may be sent and reviewed by
the public; and
(6) If there are public hearings, give
the location, date and time for
hearings or tell how this informa-
tion may be obtained.

42 C.F.R. 447.205.

Defendants respond that section 447.205 was complied

with because the representative public notice hereinafter quoted

explained "why DMA is changing its methods and standards," i.e.,

"to implement a class rate system by eliminating many of the

idiosyncratic adjustments that existed previously [under the

cost-based rate setting system]":

The proposed amendments do not change
the existing methodology from July 1, 1992 -
December 31, 1992 except for a provision to
allow some eligible providers to request rate
reviews based on their cost report, with
inflation equal to 1.0. Effective January 1,
1992, the proposed amendments change the
structure of the reimbursement methodology to
a class rate system: establishing new

criteria for administrative adjustments;
eliminating, among other things, costs beyond

30

agency control, management initiatives,
program innovation rate adjustments, and
appeals sections of the regulation. It is
estimated that the proposed amendments will
increase program expenditures by the
Department of Public Welfare by approximately
$335,000. (Emphasis added.)

For the reasons discussed in Section II.B.2.(a)(i),

supra, we believe the public notices issued by defendants need

not have "describ[ed]" the proposed changes in greater detail

than that provided in Plan Amendment 003. Absent a reliable

indication to the contrary, we must assume that HCFA construes

the term "describe" in section 447.205(c)(1) as it interprets the

same term in 42 C.F.R. 447.201 (providing that Plan amendment

"must describe the policy and methods to be used in setting

payment rates for each type of service included in the state's

Medicaid program"). Cf. Gustafson v. Alloyd Co., 115 S. Ct.

1061, 1067 (1995) (noting presumption that a word or phrase used

more than once in a statute is intended to have the same

meaning); United States v. Rhode Island Insurers' Insolvency

Fund, 80 F.3d 616, 622 n.4 (1st Cir. 1996).12

Plaintiffs complain that interested parties cannot know

whether proposed changes in methodology threaten their

substantive rights under section 1396a(a)(30) unless the public

12The only case remotely on point, see Methodist Hosps. v.

Indiana Family and Social Servs., 860 F. Supp. 1309, 1326-28

(N.D. Ind. 1994), does not undercut HCFA's interpretation.
Although the notice involved in that case contained greater
detail than these notices, the court found the notice adequate,
not inadequate. Consequently, the case is not particularly
instructive as to how much less detail might have been considered
permissible.

31

notice is sufficiently informative. As their name suggests,

however, "notice" provisions are neither invariably nor primarily

designed to afford exhaustive disclosure, but to alert interested

parties that their substantive rights may be affected in a

forthcoming public proceeding. See Mississippi Hosp. Ass'n v.

Heckler, 701 F.2d 511, 520 (5th Cir. 1983) (noting that notice is

designed to "outline[] the substance of the plan in sufficient

detail to allow interested parties to decide how and whether to

seek more information on the plan's particular aspects"); see

also 42 C.F.R. 447.205(c)(4), (6) (mandating the provision of

information to allow interested parties to initiate follow-up

after 447.205 notice). Accordingly, HCFA might reasonably

anticipate that the State would provide more detailed

information, relating to its methodology, at the public hearings,

especially since it is in the State's interest to respond to

reasonable requests for further information at the public

hearings, if for no other reason than to forfend a future section

1983 action by disgruntled health care providers. See supra note

8 (describing potential discovery burdens facing the State in

1983 action). Thus, HCFA's interpretation cannot be

characterized as either plainly erroneous or inconsistent with

the Medicaid statute.13

13Since the public notices complied with 447.205, we need
not determine whether plaintiffs acquired actual notice during

the two and a half years of public consultative hearings and
meetings, or whether any such actual notice might excuse the
alleged procedural default under 447.205. See North Carolina

Dep't of Human Resources, 999 F.2d at 771 (finding that actual

notice did not cure procedural default).

32

Since defendants violated neither procedural

requirement established in section 1396a(a)(30), we do not reach

defendants' two remaining arguments i.e., whether the district

court erred in refusing to stay its partial summary judgment

while Amendment 003 remained pending before HCFA, and whether the

district court's declaratory judgment constituted retrospective

relief barred by the Eleventh Amendment.14

14Plaintiffs urge us to affirm the district court on another
ground. See Four Corners Serv. Station, Inc., 51 F.3d at 314.

Before implementing the final class rates in January 1994,
defendants failed to consult with the medical care advisory
committee (MCAC), appointed by the Massachusetts Medicaid
director to represent, inter alios, consumer groups, Medicaid

recipients, and health care providers specializing in low-income
medical services. See 42 U.S.C. 1396a(a)(4); 42 C.F.R.

431.12(e). We decline plaintiffs' request.
The alleged MCAC violation was first raised in the amended
complaint filed in September 1994. The State subsequently recon-
vened a MCAC, with which it consulted regarding the final rates.
The 431.12(e) case law suggests that States should undertake
their MCAC consultations as early in the Plan amendment process
as practicable, preferably before any final decision on proposed
changes to their reimbursement methodologies. See Morabito v.

Blum, 528 F. Supp. 252, 264 (S.D.N.Y. 1981) (collecting cases).

Nonetheless, the Medicaid Act contains no express requirement
that a State establish a MCAC, see 42 U.S.C. 1396a(a)(4), an

entity entirely the creature of the HCFA implementing
regulations. See Morabito, 528 F. Supp. at 264. Further, the

HCFA regulations prescribe no time bar for the recommended MCAC
consultation. Thus, HCFA might reasonably conclude that (1) a
State's failure to consult an MCAC, while not the preferred
practice, does not constitute a sufficient ground for
disapproving a Plan amendment in all circumstances, or (2) MCAC
consultation is sufficient as along as it occurs before final
HCFA approval of the Plan amendment. Given that the MCAC is a
purely advisory body, with no veto power over the State's
decisions, see Burgess v. Affleck, 683 F.2d 596, 600 (1st Cir.

1982) (upholding district court's refusal to enjoin
implementation of rates for alleged MCAC violation which was not
"egregious"); cf. Mississippi Hosp. Ass'n, Inc., 701 F.2d at 523

(noting court's reluctance to "read more into [ 431.12(e)] than
is clearly expressed," where "the federal agency whose own
regulation is in question has approved the state's actions"),
this interpretation is neither plainly erroneous nor inconsistent

33

b) Substantive Right to "Equal Access"
b) Substantive Right to "Equal Access"

The district court first dismissed plaintiffs' substan-

tive claims on the mistaken ground that plaintiffs had stipulated

to their dismissal. Upon reconsideration, the court again

dismissed the substantive claims, apparently because its decision

on the procedural claims had rendered their resolution

unnecessary. Insofar as the district court meant to suggest that

defendants' procedural violations from January to October, 1994,

were sufficient in themselves to invalidate the final class rates

during the January-October 1994 period, without regard to whether

the rates violated plaintiffs' substantive "equal access" rights,

its dismissal order cannot stand. See supra Section II.B.2(a).

Since we have concluded that the State was in full procedural

compliance, plaintiffs must now adduce evidence that (1) the

methods and procedures adopted by the State were inadequate to

ensure "equal access," or (2) the bottom-line reimbursement

figures derived under that methodology were too low to retain

health care providers in the Massachusetts Medicaid program. See

supra note 8. Conversely, if the district court meant to

suggest that judicial resolution of plaintiffs' substantive

claims was unnecessary because HCFA has already approved

Amendment 003 retroactive to January 1, 1994, we cannot agree.

HCFA's approval of the State's proposed methods and procedures

(i.e., "class rates"), though arguably entitled to the customary

level of Chevron deference, are not automatically conclusive at

with 1396a(a)(4).

34

the summary judgment stage. Further, the as-yet undeveloped

factual record relating to plaintiffs' substantive claims does

not reveal HCFA's rationale for approving the substantive terms

of defendants' Plan amendment, or whether the final class rates

have the actual effect of creating "unequal access" to medical

services.

35

C. Plaintiffs' Cross-Appeal
C. Plaintiffs' Cross-Appeal

Plaintiffs cross-appeal from the district court rulings

that (1) defendants were in compliance with the section

1396a(a)(30) procedural requirements as of November 1, 1994, and

(2) defendants did not violate the procedural requirements by

instituting their interim and phase-in rates. Although the

district court did not reveal the rationale for the latter

holding, we presume that it found that the transitional rate

methodologies had not effected a "material" or "significant"

change from the pre-1991 methodologies. In light of our previous

holding, see supra Section II.B., we deny plaintiffs' cross-

appeal on both fronts.

First, if defendants complied with the putative proce-

dural requirements in filing Amendment 003 and publishing their

pre-January 1994 notices, it necessarily follows that their

filing of the more detailed Amendment 023 and their post-October

1994 notices likewise would comply with the procedural thresholds

prescribed by the HCFA regulations. Second, since we conclude,

on the specific facts of this case, that deference is due HCFA's

conclusion that a "description" of "methods and procedures" is

adequate as long as it differentiates between a cost-based rate

and a class rate system, we affirm the district court's finding

that the interim and phase-in rates, which retained some aspects

of the pre-1991 "cost-based" or "negotiated" rate systems, did

not represent a cognizable change in the methods and procedures

such as necessitated a Plan amendment or public notice.

36

III
III

CONCLUSION
CONCLUSION

To the extent section 1396a(a)(30) might create the

purported procedural rights advocated by plaintiffs, Chevron

deference is due HCFA's longstanding statutory and regulative

interpretation that a State sufficiently describes its cost-based

system as a "fixed negotiated fee schedule," and its proposed

class rate system as "fixed fee schedules." We therefore reverse

the district court ruling that defendants were in violation of

section 1396a(a)(30)'s procedural requirements from January 1 to

October 31, 1994. We likewise affirm the two district court

rulings challenged in plaintiffs' cross-appeal. Finally, because

summary judgment was improvidently granted on plaintiff's

procedural claims, the district court ruling that no disposition

was necessary on plaintiffs' substantive claims was in error.

Accordingly, the district court judgment for plaintiffs

on their procedural claims is vacated and the case is remanded to

the district court for further proceedings on plaintiffs'

substantive claims, consistent with this opinion.

SO ORDERED. The parties shall bear their own costs.5
SO ORDERED. The parties shall bear their own costs.

37