The plaintiffs (hospitals) in these two cases challenge the Rate Setting Commission’s (commission’s) assessment of the Medicaid reimbursement to which they are entitled for fiscal years 1983 through 1985.
4
Specifically, they attack the commission’s use of a $70 per day rate for one component of the reimbursement formula in the now-superseded State statute, St. 1982, c. 372, controlling Medicaid payments in fiscal years 1983 through 1985. The State regulation setting the $70 per day rate was invalidated for 1982 when it was reviewed by this court under the standards of a different Federal Medicaid scheme in place before, and inapplicable to, c. 372’s enactment.
New England Memorial Hosp.
v.
Rate Setting Comm’n,
*433 In October, 1985, and April, 1986, the hospitals filed these separate actions for declaratory and injunctive relief under G. L. c. 30A, § 7, and c. 231A in the Supreme Judicial Court for Suffolk County. They seek a declaration that St. 1985, c. 200, § 3 (amending G. L. c. 6A, § 68, the codification of St. 1982, c. 372) is invalid, and request an order that the “routine care” rate, rather than seventy dollars, be used to compute the relevant portion of their final Medicaid reimbursement rates for 1983 through 1985. The single justice granted joint motions to consolidate, and to reserve and report these cases here, on a stipulation of facts by the parties. Because of the view we take of these cases, we do not construe St. 1985, c. 200, § 3, and declare that the hospitals are not entitled to the relief they seek.
A review of the long and complicated history of this Medicaid reimbursement rate controversy is necessary to understand the ultimate conclusion we reach on the hospitals’ claims. We draw the following summary from the parties’ stipulations and their record appendices, prior court decisions, and legislative history. Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq. (1983), offers States the option of participating in the cooperative Federal-State program commonly called “Medicaid,” aimed at providing, “as far as practicable under the conditions in such State,” payment for “necessary medical services” to the poor. 42 U.S.C. § 1396. If a State chooses to participate, it must submit to the Secretary of Health and Human Services (secretary) a “State plan” for medical assistance that comports with Federal statutory and regulatory requirements. Id. See 42 U.S.C. § 1396a(a), and 42 C.F.R. §§ 430, 10-430.16, and 447.252-256 (1988). Before August, 1981, the reimbursement rates in a State plan could not be implemented without the prior approval of the secretary. Since the overhaul of Title XIX’s Medicaid provisions by the Omnibus Budget Reconciliation Acts of 1980, Pub. L. No. 96-499, § 902, 94 Stat. 2599, 2613 (1980), and 1981, Pub. L. No. 97-35, § 2173(a)(1), 95 Stat. 357, 808 (1981) (commonly referred to as the Boren Amendment), however, the Federal oversight *434 requirement has been reduced. As a result, a State need only “find and make assurances satisfactory to the secretary” that the plan’s rates reasonably reimburse costs of efficiently run providers to allow them to satisfy Federal Medicaid standards of care. 42 U.S.C. § 1396a(a)(13)(A).
Massachusetts participates in the Medicaid program through a two-pronged regulatory apparatus. The commission is responsible for setting the reimbursement rates for Medicaid providers, such as the plaintiff hospitals, under G. L. c. 6A, § 32 (1988 ed.). The Department of Public Welfare (department) is charged with administering the program itself, under G. L. c. 118E, §§ 3, 4, & 6 (1988 ed.), and making sure the Commonwealth continues to comply with the relevant Federal Medicaid rules, as they are routinely revised by Congress and the United States Department of Health and Human Services (HHS).
In February, 1981, the commission put into effect a regulation setting seventy dollars as the daily reimbursement rate for care administered by Commonwealth hospitals to Medicaid patients during “administratively necessary days” (AND). 5 The $70 per AND rate represented the mean daily costs to a skilled nursing facility in a hospital, incurred in caring for patients of equivalent needs to those in acute-care hospitals on AND status. A companion regulation permitted hospitals to apply for an administrative adjustment to raise their AND reimbursement rate from seventy dollars to their “routine rate” if they could demonstrate “extreme difficulty” *435 in placing AND patients in nursing homes. 6 Prior to the February, 1981, regulation, hospitals were reimbursed for AND at their “routine rate,” meaning the average costs of providing all patients the “routine” portion of their hospital care (i.e., bed, board, and nursing services), as determined by the commission. The average “routine rate” among the plaintiff hospitals was $150 per day for fiscal year 1982.
The pre-Boren Amendment Federal statutory requirements for State Medicaid plans in effect at the time required that “inpatient hospital service” rates had to reimburse providers for their “reasonable costs” of rendering such services, according to a methodology that received the approval of the secretary before being implemented. 42 U.S.C. § 1396a(a)(13)(D) (repealed, effective August, 1981). While reserving its right to contest the HHS’s position that the department’s regulation on AND required prior Federal approval, the department submitted the regulation, as a proposed amendment to the Commonwealth’s Medicaid plan, to the HSS’s regional Medicaid director. In April, 1981, the Federal official denied approval of the department’s $70 per AND rate on the ground that it did not reimburse providers for “reasonable costs” of hospital services. The department went ahead and implemented the $70 per AND rate regulation. In a declaratory judgment action brought by some twenty-five hospitals throughout the Commonwealth, this court decided that the department should have obtained prior . Federal approval in order to implement an AND rate change, and thus the department’s regulation was invalid for the period February 1, 1981, through August 13, 1981, when the Boren Amendment’s major changes to the Federal Medi
*436
caid rules took effect.
Addison Gilbert Hosp.
v.
Rate Setting Comm’n,
A second declaratory judgment action attacking the department’s AND rate resulted in our invalidation of the AND regulation for the remainder of fiscal year 1982 as well. In
New England Memorial Hosp.
v.
Rate Setting Comm’n,
In 1982, before this court decided either Addison Gilbert or New England Memorial Hosp., St. 1982, c. 372, was enacted. This statute, “the culmination of a long and difficult negotiation process between the State Administration and the hospital industry, the medical profession, Blue Cross, the private insurance industry, and the business commmunity,” revamped the entire hospital reimbursement system in the Commonwealth, and represented “a mutual concern about the unacceptably high level of hospital costs in Massachusetts,” in the words of the department, a characterization echoed by the hospitals. 7 With these words, the department *437 opened its August, 1982, application to the secretary seeking approval of the new Massachusetts Medicaid reimbursement plan as an experimental project to enhance “incentives for economy while maintaining or improving quality in provision of health services.” 42 U.S.C. § 1395b-l (1983). Such experimental reimbursement projects could be granted a waiver from meeting Title XIX requirements “relat[ing] to reimbursement on the basis of reasonable cost.” Id. at § 1395b-1(b). In September, 1982, the St. 1982, c. 372, reimbursement scheme received both the secretary’s approval, and a § 1395b-1 (b) waiver for fiscal years 1983, 1984, .and 1985. 8
The HHS’s approval letter informed the Commonwealth that the waiver was for the “hospital reimbursement system according to your request and attachments . . . and revised ‘project narrative’ . . . .” The formula in c. 372, as explained in those attachments and narratives, preserved the traditional discount for Medicaid service payments in the calculation of a “Medicaid payment ratio.” The Medicaid payment ratio was derived from a formula dependent on 1982 Medicaid rates. In both the waiver request and the narrative, the department consistently used a $70 per day reimbursement rate for the AND component of the Medicaid payment ratio. Statute 1982, c. 372, § IB, added the following refinement on the Medicaid payment ratio’s derivation:
The medicaid payment ratio as calculated “shall be adjusted to reflect changes in fiscal year nineteen hundred *438 and eighty-two medicaid per diem rates or outpatient rates which result from final disposition of administrative adjustments, audit adjustments, or appeals of rates to the division of hearing officers or the courts . . . ” (emphasis supplied).
For the 1982 reimbursement year, of the 110 hospitals providing services to Medicaid patients on AND status, fifty sought administrative adjustments, and twenty — but none of the hospitals in these cases — received them. In 1984, five of the plaintiff hospitals 9 individually appealed to the Division of Administrative Law Appeals (division), 10 under G. L. c. 6A, § 36, the application to the rate calculation, in their particular circumstances, of the $70 per AND reimbursement rate. In 1985, the division ordered in each case that the department use “routine rates” for the AND component, and not seventy dollars, in computing these hospitals’ Medicaid payment ratio. The department has appealed all five decisions to the Superior Court; those proceedings have been stayed pending our decision in this case. None of the other plaintiffs in these cases invoked the G. L. c. 6A, § 36, appeal process in regard to the calculation of their appropriate Medicaid reimbursements for fiscal years 1983 through 1985.
In July, 1985, after this court decided Addison Gilbert and New England Memorial Hosp., the General Court enacted St. 1985, c. 200, § 3, amending G. L. c. 6A, § 68, as inserted by St. 1982, c. 372, to require the commission to use a seventy-dollar figure for the AND portion of a hospital’s Medicaid payment ratio. 11 It is that amendment that is the focus of the plaintiff hospitals’ declaratory judgment actions.
*439
1.
Declaratory judgment act requirements.
For reasons explained below, we view St. 1985, c. 200, § 3, as having no effect on the parties’ respective rights. Declaratory judgment is a vehicle for resolving actual, not hypothetical, controversies, with the declaration issued intending to have an immediate impact on the rights of the parties.
Massachusetts Ass’n of Indep. Ins. Agents & Brokers
v.
Commissioner of Ins.,
However, the declaratory judgment statute is to be construed and applied liberally to afford relief from uncertainty with respect to rights in issue.
Jacobson
v.
Parks & Recreation Comm’n,
2.
The meaning of St. 1982, c. 372.
The hospitals assume, in attacking St. 1985, c. 200, § 3, that St. 1982, c. 372, entitled them to a recalculation of their fiscal years 1983, 1984, and 1985 Medicaid reimbursement rates, as a result of our decision in
New England Memorial Hosp.
v.
Rate Setting Comm’n,
The crux of the parties’ divergent interpretations of St. 1982, c. 372, is the language pertaining to the adjustment of the Medicaid payment ratio for changes in 1982 Medicaid per day rates “which result from final disposition of administrative adjustments, audit adjustments, or appeals of rates to the division of hearing officers or the courts” (emphasis supplied). The hospitals contend that this language unambiguously includes changes wrought by class action declaratory judgment challenges on general grounds, to a 1982 rate regu: lotion of general application, such as the New England Memorial Hosp. decision. Because it is unambiguous, they assert, we are foreclosed from engaging any of the tools of statutory construction that might challenge this interpretation. While a superficial reading of the statute might lead to that conclusion, the preexisting legal distinction between individual provider appeals of the commission’s rates, through the c. 6A appeal process, and broad-based challenges to those rates, which may not be brought through the appeal process, creates a question of statutory interpretation.
This court has long viewed as separate and very different actions (1) an individual hospital’s appeal, based on application to its own situation, of reimbursement rates, and (2) a
*441
challenge to the propriety, in general, of a commission regulation of general application. See
Palm Manor Nursing Home, Inc.
v.
Rate Setting Comm’n,
This distinction in the law governing parties aggrieved by the commission’s actions in setting rates raises an ambiguity on the face of the statute as to the meaning of the word “appeal” in c. 372. While the line between commission decisions that may be appealed and actions that may not, may have become clearer in the years since St. 1982, c. 372, was adopted, as the hospitals suggest, see Rate Setting Comm’n v. Division of Hearings Officers, supra; Medi-Cab of Mass. Bay, Inc. v. Rate Setting Comm’n, supra, the distinction existed for at least ten years prior to the statute’s enactment. Nor do we think the use of the disjunctive “or” between “appeals of rates to the division ... or the court,” instead of “and,” eliminates the ambiguity. A division decision on a plaintiffs rate can be appealed under G. L. c. 6A, § 36, to the courts, and adjudicators at both forums would be empowered to adjust a rate in accordance with their decisions. Thus, it is possible to emerge with an adjustment to a Medicaid rate after an “appeal ... to the courts” different from that which resulted from an appeal to the division.
In order to construe c. 372’s provision for circumstances requiring adjustment of the 1982 Medicaid rates serving as the numerator in the 1983, 1984, and 1985 formula for Medicaid payment ratios, we look first to other language of the statutory plan within which this provision appears, and the legislative purpose behind that plan.
Pentucket Manor Chronic Hosp., Inc.
v.
Rate Setting Comm’n,
*443
Statute 1982, c. 372, § 9, defined the remedy of any hospital seeking review of the commission’s actions in connection with c. 372 to be an “appeal” under G. L. c. 6A, § 36. Furthermore, as we have noted above, c. 372 was a comprehensive revision of the method used for computing Medicaid reimbursement rates. It made substantial changes to G. L. c. 6A which regulates appeals from such rate determinations. Because a general term in a statute takes its meaning from the setting in which it is employed, we are led to the conclusion that the word “appeal” was used in St. 1982, c. 372, § 1B, in the same sense as in G. L. c. 6A, § 36. See
Commissioner of Corps. & Taxation
v.
Chilton Club,
Such a meaning must be adopted if matters which might come within the letter of the enactment do not fairly come within its spirit and intent.
Hogerney
v.
Baker,
Chapter 372 was enacted as emergency legislation which would “immediately provide for the establishment of hospital rates.” As the parties acknowledge, it was the product of a long negotiation process, bringing together the Commonwealth and the hospital service and insurance providing industries. In general, Federal Medicaid law, before and after the Boren Amendment changes, gives the States broad discretion in cost-finding and rate-setting, policy-making decisions that shape their particular plans.
Addison Gilbert, supra
at 24.
Haven Home, Inc.
v.
Department of Pub. Wel
*444
fare,
In permitting the approach adopted by c. 372, that discretion was broadened by the Federal authorities. Both the hospitals and the department submitted the c. 372 plan to the appropriate HHS office for review, in the hope that the Federal authorities would approve it as an experimental program qualified for a waiver from requirements relating to reimbursement on the basis of reasonable cost. The Federal statute governing such special projects is set up expressly to encourage States to develop and experiment with reimbursement schemes aimed at containing Medicaid costs. See 42 U.S.C. § 1395b-l.
Georgia Hosp. Assn
v.
Department of Medical Assistance,
In the opening paragraph of its application to HHS for Federal approval and waiver, the department stated: “We believe that participation in the proposed system would reduce the level of future Medicaid hospital expenditures in Massachusetts relative to their expected level in the absence of such a waiver.” In a section entitled “Impact on Medicaid Expenditures,” the department stated to the Federal authorities: “We expect that, under the proposed system, Medicaid expenditures will be lower than they would have been if we continued to reimburse hospitals using our current methodology. Under the proposed system, Medicaid recognizes no new costs, because the Medicaid payment ratio calculation essentially freezes the Medicaid discount, relative to the basis of payment for the proposed system, at its 1982 level.” In conclusion, the department asserted: “We feel strongly that the proposed system is superior to the current system of hospital reimbursement in Massachusetts, not only because of the large expected savings to the Medicaid program, but because of the rationalization of systemwide hospital reimbursement which would result.”
HHS approved the c. 372 plan as a cost-containment reimbursement experiment under 42 U.S.C. § 1395b-l, and granted the department and the hospitals the waivers they
*445
sought on the terms of the application and attachments submitted to them. Therefore, we believe it is clear from the history of c. 372’s development, the intent of its framers, and the relevant Federal statute under which the State plan received the approval necessary for implementation,
Murphy
v.
Bohn,
The $70 per AND rate was built into the blueprint which the Federal authorities approved for the experimental c. 372 program. In considering a project submitted to it under 42 U.S.C. § 1395b-l, HHS has broad authority to grant waivers to programs, limited only by the requirement that it “must judge the project to be ‘likely to assist in promoting the objectives’ of the designated parts of the Social Security Act.”
Georgia Hosp. Ass’n
v.
Department of Medical Assistance, supra
at 1355, quoting
Aguayo
v.
Richardson,
The plaintiff hospitals assume that the procedural defects that undermined the $70 per AND rate, as discussed in
Addison Gilbert
and
New England Memorial Hosp.,
render it a nullity, and beyond the right of the commission to revive, no matter what the circumstances. However, these cases specifically invalidated the $70 per AND rate regulation for a particular period: February, 1981, until October, 1982. Implicit in that cut off date is the court’s recognition that the department’s Medicaid reimbursement scheme was about to be replaced by an entirely different set of rules, for which their reasoning regarding the $70 per AND rate might not apply. See
Amisub (PSL), Inc.
v.
Colorado Dep’t of Social Servs.,
*446
For, indeed, this court found the $70 per AND rate infirm for a procedural defect totally inapplicable to the new c. 372 scheme in which it now appeared. The department had failed to receive prior Federal approval, under the 42 U.S.C. § 1396a(a)(13)(A), that existed until the Boren Amendment of 1981 (see
Addison Gilbert
v.
Rate Setting Comm’n,
Finally, we cannot help but note, as an additional aid to statutory construction, the “history of the times,”
Murphy
v.
Bohn, supra
at 548, in which c. 372 was framed, approved and implemented. In enacting the Boren Amendment to the Social Security Act in 1981, “Congress essentially abandoned the ‘reasonable cost’ reimbursement principles of the old Medicaid Act as inflationary and, in its place, adopted a new anti-inflationary reimbursement standard with the stated
*448
purpose of ‘promoting] the efficient and economical delivery of [medical] services.’ ”
Pinnacle Nursing Home
v.
Axelrod,
Since St. 1982, c. 372, was drafted and enacted at the very time this major shift in Federal Medicaid policy was occurring, we do not believe the Legislature was unmindful of it. In addition, c. 372 had an express waiver, for Federally-approved, cost-cutting experiments, from meeting the even' looser requirements wrought by the Boren Amendment. With this backdrop in mind, we believe the Legislature could not have intended the broad range of circumstances the hospitals’ view of “appeal” entails, in which a base component of the Medicaid formula for three years hence would be subject to great jeopardy of upward revision.
3.
Conclusion.
In summary, we declare that the word “appeal” is a “general or descriptive term which may have varying meanings according to the circumstances in which it is used.”
Oxford
v.
Oxford Water Co.,
So ordered.
Notes
The fiscal years here began October 1 and ran through September 30.
’’Administratively necessary days” (AND) is the term given to the extra days during which Medicaid patients continue to occupy acute-care hospital beds after an administrative determination that their condition has so improved as more appropriately to require care in facilities such as nursing homes. Because of frequent unavailability of beds at these facilities, however, acute-care hospitals continue to treat these Medicaid patients until transfer to a nursing home is possible.
The regulation setting the rate for AND was codified at 114.1 Code Mass. Regs. § 3.06 (1981). The entire regulatory scheme of which § 3.06 was a part has been superseded. Currently, 114.1 Code Mass. Regs. §§ 25.08 et seq. (1986) covers Medicaid reimbursement rates.
Section 3.14(1) of 114.1 Code Mass. Regs. (1981) authorized the administrative adjustment mechanism. The department would actually determine whether a hospital met the “extreme difficulty” standard under 106 Code Mass. Regs. 452.007(E) (1981). To qualify, a hospital had to show (a) it had an AND occupancy rate of five per cent or higher and an overall medical/surgical bed occupancy rate (minus AND) of eighty per cent or higher (eighty-five per cent for teaching hospitals) or (b) it was located on an island. In addition, the hospital had to prove it had taken sufficient steps to better plan patient discharge.
The other main purpose of St. 1982, c. 372, was to rationalize and unite, under one universal reimbursement methodology, the previous diverse and often discordant bases for payment of hospital services in the *437 Commonwealth. The discussion of c. 372 here will be limited to its role in radically redesigning the calculation of Medicaid reimbursement rates.
The department’s application was coordinated with, and drew on the description contained in the Massachusetts Hospital Association’s (MHA’s) application to qualify c. 372 as an experimental reimbursement project for Medicare, and to ask for a waiver from Federal Medicare requirements to allow the hospitals to participate. The MHA, a nonprofit corporation including some 160 hospitals as members, serves as a clearinghouse for information for its member hospitals, and among other things conducts litigation on behalf of its member hospitals. The Medicare waiver was granted at the same time and on the same terms as the department’s waiver for c. 372 from Medicaid rules.
Noble Hospital, Providence Hospital, Salem Hospital, Somerville Hospital, and Worcester Memorial Hospital.
The Division of Administrative Law Appeals replaced the Division of Hearing Officers in 1983. See G. L. c. 7, § 4H, as amended by St. 1983, c. 683.
In relevant part, St. 1985, c. 200, § 3, stated: “[T]he medicaid payment ratio for each year subsequent to fiscal year nineteen hundred eighty-two shall be calculated using an administratively necessary day rate of *439 seventy dollars per administratively necessary day patient per day, unless such rate for fiscal year nineteen hundred and eighty-two is adjusted based on a specific finding that in fiscal year nineteen hundred and eighty-two an individual hospital met the criteria for an administrative adjustment set forth by [114.1 Code Mass. Regs. § 3.14(b)].”
General Laws c. 6A, § 36 (1988 ed.), provides, in pertinent part: “Any person, corporation or other party aggrieved by an interim rate or a final rate established by the commission, or by failure of the commission to set a rate or to take other action required by law and desiring a review thereof shall, within thirty days after said rate is filed with the state secretary . . . file an appeal with [division] ... On appeal, the rate determined for any provider of services shall be adequate, fair and reasonable for such provider, based, among other things, on the costs of such provider . . .
“Any party aggrieved by a decision of the commission may, within thirty days of the receipt of such decision, file a petition for review in superior court . . .
“A provider may appeal as an aggrieved party in accordance with the provisions of the preceding sentence in the event that a remand by the commission to a hearing officer does not result in a final decision by the commission within twenty-one days of the remand.”
The plaintiff hospitals have criticized the $70 per AND rate as having been primarily motivated by the department’s desire to control Medicaid costs. It is not our role to weigh or evaluate the political and financial concerns behind the Commonwealth’s policy choices.
Mississippi Hosp. Ass’n
v.
Heckler,
The hospitals argue that sl waiver under 42 U.S.C. § 1395b-1(b) is very limited in scope, and does not extend to a waiver of such a “procedural” requirement as the “adequate assurances” demanded by § 1396a(a)(13)(A), and 42 C.F.R. § 447.253. However, as the “adequate assurance” requirements are expressly adequate assurances of reasonable cost reimbursement, they are encompassed by § 1395b-l(b)’s waiver from meeting “requirements related to reimbursement or payment on the basis of reasonable cost.”
Furthermore, as already noted, the secretary has “extensive authority in granting waivers to experimental State Medicaid plans.” See
Georgia Hosp. Ass'n
v.
Department of Medical Assistance,