Opinion ID: 764672
Heading Depth: 3
Heading Rank: 2

Heading: Change: Interpretation versus Amendment

Text: 41 On a more fundamental level, determining whether the Department's interpretation constitutes a change to the State Medicaid plan implicates the analytical difficulty of distinguishing between an interpretation and an amendment generally. To some degree, every construction of a State Medicaid plan necessarily effects a change to the plan, since a construction that added nothing to the plan's terms would be redundant. On the other hand, insisting that an interpretive change be significant as a predicate to triggering the plan amendment regulations would be wholly inconsistent with the history of those provisions. See Medicaid Program, Revisions to Medicaid Payments for Hospital and Long-Term Care Facility Services, 52 Fed.Reg. 28,141, 28,142-43, 28,147 (July 28, 1987) (eliminating the requirement that changes be significant under 42 C.F.R. § 447.253(b)). 42 One approach to resolving this difficulty might be to analogize to federal administrative rulemaking and its longstanding distinction between interpretive rules (which are exempt from notice and comment requirements) and legislative rules (which are not) under the Administrative Procedure Act, 5 U.S.C. § 553 (1994). See, e.g., White v. Shalala, 7 F.3d 296, 303 (2d Cir.1993) (The central question is essentially whether an agency is exercising its rule-making power to clarify an existing statute or regulation, or to create new law, rights, or duties in what amounts to a legislative act.). But even this distinction, which has enjoyed several decades of judicial elucidation, has been described by courts and commentators as 'fuzzy,' 'tenuous,' 'blurred,' 'baffling,' and 'enshrouded in considerable smog.'  Elizabeth Williams, Annotation, What Constitutes Interpretative Rule of Agency so as to Exempt Such Action from Notice Requirements of Administrative Procedure Act (5 USCS § 553(b)(3)(A)), 126 A.L.R. Fed. 347, 375 (1995) (collecting cases). Given the inherent vagueness of this distinction, and given the additional problems that would arise were we to transplant this distinction to State law, we decline to infer--absent a clear expression to the contrary--that Congress meant to place the federal courts in such a tangle, and to ask us--as Alexander the Great was asked--to untie such a Gordian knot. 43 Indeed, 42 C.F.R. § 430.12(c) simply requires that a plan must provide that it will be amended whenever necessary to reflect certain [m]aterial changes (emphasis added). By its terms, this regulation is satisfied once a State plan includes the appropriate provision, and the failure of a State to adhere to that provision cannot give rise to a federal claim, for the reasons discussed earlier. Further, although § 447.253(b) appears to apply to any change in [the State's] methods and standards of payment, subsection (a) clarifies that subsection (b) applies only to a State plan change, suggesting in that way that the federal approval requirements are brought into play not simply by a change in the State's administration of the plan, but only by an alteration of the plan itself, i.e., its actual written terms. Compare Oregon Ass'n of Homes for the Aging, Inc. v. Oregon, 5 F.3d 1239, 1243-44 (9th Cir.1993) (holding that § 447.253(b) applied where a change to the State plan would have reclassified services under the plan), with United Cerebral Palsy Ass'ns, 966 F.2d at 746 (holding that a delay in the State's payment of Medicaid reimbursements was not a change in methods and standards of payment to which § 447.253(b) applied), and Illinois Council on Long Term Care v. Bradley, 957 F.2d 305, 309 (7th Cir.1992) (same). 44