The Court therefore declines to issue an injunction based upon the foregoing "taking" arguments.
Plaintiff argues that the delay, targeting only nongovernmental providers, thereby violates its rights to Equal Protection under the federal and state Constitutions. In response, defendant, through an affidavit of Ben Mastrototaro, Associate Commissioner for Medicaid Centralized Operations in the New York State Department of Social Services, states that the delay applies to all Medicaid providers, both governmental and nongovernmental, which are paid through the Medicaid Management Information System ("MMIS"). See Mastrototaro Aff. par. 20. In reply, plaintiff asserts that, unlike the ICFs it operates, which are paid through the MMIS, the state-operated ICFs are not paid through the MMIS. Therefore, argues plaintiff, "defendants have in fact singled out providers such as UCPA for the permanent withholding." Parker Reply Aff. par. 16.
Plaintiff has not demonstrated to this Court, as it must for the issuance of a preliminary injunction, that it is likely to succeed on the merits of its Equal Protection Claim. Plaintiff has not shown that the delay, which targets a particular payment system, not a particular type of provider, lacks a rational basis or fails to further a legitimate government interest. This argument is unavailing.
Finally, to the extent the UCPA and St. Lukes claim state law grounds to support the issuance, by this Federal Court, of an injunction, such relief is barred by the Eleventh Amendment. See Pennhurst State School and Hospital v. Halderman, 465 U.S. 89, 106, 79 L. Ed. 2d 67, 104 S. Ct. 900 (1984) ("It is difficult to think of a greater intrusion on state sovereignty than when a federal court instructs state officials on how to conform their conduct to state. law. Such a result conflicts directly with the principles of federalism that underlie the Eleventh Amendment.").
The Court therefore makes the following findings of fact:
(1) Plaintiff United Cerebral Palsy Associations of New York State, Inc. ("UCPA") is a not-for-profit provider that operates Intermediate Care Facilities ("ICFs") and community residences for the mentally retarded and developmentally disabled, under licenses of the New York State Office of Mental Retardation and Developmental Disabilities ("OMRDD"). UCPA also operates Diagnostic Treatment Centers under licenses of the New York Department of Health ("DOH"), and provides transportation services to its clients.
(2) Proposed Intervenor St. Lukes-Roosevelt Hospital ("St. Lukes") is a not-for-profit hospital corporation located in Manhattan, with 1,300 patient beds, 6,500 employees St. Lukes and is one of the largest non-governmental provider of care to Medicaid patients in the State.
(3) By letter dated August 13, 1991, the New York State Department of Social Services ("DSS") informed plaintiff of the initiation of a delay in payment of Medicaid checks by one week, to be gradually phased in by delaying the payment one day per week. Under the original delay as described in that letter, no check would be received by plaintiff during the week of December 30, 1991 to January 3, 1992. Such check would be received one week later.
(4) By subsequent letter, providers were informed that the week during which no check would be received had been changed to the week of February 3-7, 1992.
(5) By letter dated January 6, 1992, DSS informed providers that a second week-long delay would be instituted, as a result of which not check would be received during the week of March 16-20, 1992. This second delay would be phased in by delaying checks one day per week during the months of February and March.
(6) One week's Medicaid payments to plaintiff UCPA and its 25 New York state affiliates and divisions is approximately $ 3 million.
(7) On week's Medicaid payments to intervenor St. Luke's-Roosevelt Hospital is approximately $ 3.4 million.
(8) The delay has in fact been implemented, with the first week-long delay planned for week of February 3-7, 1992.
The Court makes the following conclusions of law:
FIRST : UCPA and St. Lukes have not demonstrated a likelihood of success on the merits of their claim that the Medicaid payment lag is a change in the methods and standards of payment implicating the "findings" and "assurances" requirements of 42 U.S.C. § 1396a(a)(13)(A) and 42 C.F.R. § 447.253(a) & (b).
SECOND : UCPA and St. Lukes have not demonstrated a likelihood of success on the merits of their claims that the Medicaid payment lag is a taking of their property without just compensation and/or due process of law.
THIRD : Plaintiff has not demonstrated a likelihood of success on the merits of its claims that the Medicaid payment lag denies it equal protection of the law under the federal Constitution.
FOURTH : To the extent UCPA and St. Lukes rely upon alleged violations of state law by the defendants in support of the motion for an injunction, such relief is barred by the Eleventh Amendment.
FIFTH : The Court, having declined to issue a preliminary injunction on the ground that movants have failed to demonstrate a likelihood of success on the merits of their claims, does not reach the issue of irreparable harm.
SIXTH : The Court grants St. Lukes-Roosevelt Hospital's motion to intervene in this action.
IT IS SO ORDERED:
CON. G. CHOLAKIS, JUDGE
UNITED STATES DISTRICT COURT
DATED: February 3, 1992
Albany, New York