USCA1 Opinion
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