The opinion of the court was delivered by: THOMAS J. MCAVOY
The Greenery Rehabilitation Group, Inc. ("the Greenery") specializes in the field of traumatic brain injury treatment and operates facilities in several states. The Greenery entered into an agreement with the New York City Human Resources Administration (HRA) which provided that the Greenery, with the approval of the New York State Department of Social Services (DSS), would admit into its specialized brain injury programs New York City residents who are in need of such services and who are eligible for Medicaid.
The Greenery admitted three New York City residents into its specialized brain injury programs who met the financial eligibility criteria, but for whom HRA has refused to pay. These three patients, Izeta Ugljanin, Yik Kan, and Leon Casimir, are aliens residing in the United States. Izeta Ugljanin, an immigrant from what is now the Republic of Macedonia residing in New York City, was thrown from a car in which she was riding and suffered severe injuries, including brain damage. Yik Kan, then a forty-six-year-old immigrant from Hong Kong legally residing in New York City, was beaten in Manhattan's Central Park in 1990 which resulted in severe injuries, including brain damage. And lastly, Leon Casimir, then a thirty-eight-year-old immigrant from Trinidad residing in New York City, was shot in the head in 1991. He also suffered serious brain damage. All three patients were initially taken to local hospitals in New York but were later transferred to Greenery facilities.
The Greenery alleges that all three patients had Medicaid numbers at the time of their admission.
Because of the high level of specialized care provided by the Greenery, the three named aliens could not be admitted without the prior approval of the New York State Department of Health (DOH). At trial, the issue of whether DOH did, in fact, approve the admission of these three aliens into the Greenery's specialized brain injury programs was litigated. Regardless, the Greenery has provided care to the three aliens, the cost of which, at the rates approved by the State of New York, amounted to $ 152,612.28, $ 213,916.10 and $ 181,604.76 respectively through November 30, 1992. The Greenery continues to provide such care today. Plaintiff Greenery now seeks a declaration which states that the care and services provided to the three aliens have been for the treatment of emergency medical conditions, thus entitling it to Medicaid reimbursement for the care provided.
Title XIX of the Social Security Act ("the Act") establishes a jointly funded, cooperative federal-state program known as Medicaid designed to enable each state to furnish medical assistance to eligible individuals. See Atkins v. Rivera, 477 U.S. 154, 156-57, 106 S. Ct. 2456, 2458, 91 L. Ed. 2d 131 (1986). The program, enacted in 1965, was established "for the purpose of providing federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons." Schweiker v. Hogan, 457 U.S. 569, 571, 102 S. Ct. 2597, 2600, 73 L. Ed. 2d 227 (1982), quoting, Harris v. McRae, 448 U.S. 297, 301, 100 S. Ct. 2671, 2680, 65 L. Ed. 2d 784 (1980). If a state chooses to participate in the program, it must do so in accordance with the broad framework set by the federal government through the Act. If the state satisfies these requirements, it has wide discretion in administering its program "including the responsibility for determining the eligibility of recipients, enlisting medical service providers, and paying those providers for services rendered." DeGregorio v. O'Bannon, 500 F. Supp. 541, 545 (E.D.Pa. 1980).
New York State regulations provide that, in general, aliens lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law who meet Medicaid requirements are eligible to receive the full range of Medicaid benefits. N.Y. COMP. CODES R. & REGS. tit. 18, § 360-3.2(f). However, aliens who meet Medicaid program requirements but who are not lawfully admitted for permanent residence, or otherwise permanently residing in the United States under color of law, or who have not been granted lawful permanent resident status under the Federal Immigration Reform and Control Act of 1986, are not eligible to receive medical assistance unless the care and services are necessary for the treatment of an "emergency medical condition." N.Y. COMP. CODES R. & REGS. tit. 18, § 360-3.2(f)(2). The New York statutory language is substantially the same as the language of the Act. See 42 U.S.C. § 1396b(v).
It is the interpretation of the term "emergency medical condition" which is at the heart of the present litigation. The Greenery contends that the patients in question are receiving treatment for emergency medical conditions within the statutory and regulatory definitions. The State and City defendants contend otherwise and look to HHS for the correct interpretation of the section in question. HHS has argued unsuccessfully that it should not be part of this litigation at all.
III. PROCEDURAL BACKGROUND
The State and City defendants removed the instant case to this Court and filed a third party complaint against defendant Shalala as the Secretary of the United States Department of Health and Human Services (HHS). HHS is the federal agency that administers the Medicaid program. The third party complaint asks that, should the Court determine that the state Medicaid program must pay for the cost of these patients' care (the finding sought in the initial complaint), the Court then determine that HHS must also bear part of that cost pursuant to federal statutes which provide that Medicaid costs are to be divided among the federal, state, and city governments. See 42 U.S.C. §§ 1396a, 1396b. After numerous motions from the parties, the court conducted a bench trial on the remaining issues on April 13, 1995. Only two issues remained at trial:
1. Did the Greenery receive the prior consent required by New York State Medicaid for the three patients in question in regard to their admission to Greenery facilities?
2. Has the Greenery provided emergency medical care to these patients within the meaning of the statute and corresponding regulations?
The court decides these issues in the following discussion.
IV. FINDINGS REGARDING PRIOR APPROVAL
The State and City defendants have asserted that the Greenery did not receive "prior authorization" before admitting Izeta Ugljanin, Yik Kan, and Leon Casimir to its facilities. These defendants have asserted that the proper consent, which must be obtained when admitting a Medicaid patient to a long term care facility includes two steps, one known as "prior approval," and the other known as "prior authorization."
Myrna Ryan, the Director of Case Management for the Greenery, Christine Reilly, who handles admissions for Horizon Health Care, and was the Director of Admissions for the Greenery in Brighton, Massachusetts from 1991 to 1994, and Karen Krichmar, Director of Marketing Support Services for Horizon Health Care (previously the Greenery) each testified as to the process used for admitting patients in general and in the three instances at issue.
Christine Reilly testified that as Director of Admissions at the Greenery in Brighton, she worked with referral sources to initiate the intake of patients and handled all necessary prior approvals. She worked with the New York City HRA from 1991 to 1994 on various admissions and received approval prior to admitting the patients. She discussed the system for prior approval of patients coming to the Greenery facilities from New York and how she followed this procedure for the three individuals in question. She noted that other patients from New York have been admitted to Greenery facilities and that the Greenery is receiving Medicaid payments for their care after following the same prior approval procedure. Reilly stated that no one from HRA, the Department of Social Services, or the Department of Health ever told her that documents were missing or that anything called "prior authorization" was lacking in these three cases, even though she testified that she spoke with a man named Dr. Shankman at the New York State Department of Health hundreds of times.
She testified that in all three cases, she followed the procedure outlined in a letter dated August 20, 1990 from the New York State Department of Social Services, which notably, detailed the process necessary for prior approval but did not discuss anything labelled "prior authorization" or mention that additional steps were necessary for admitting a patient.
Pltf. Exh. 34.
Myrna Ryan testified that she had previously handled Medicaid benefit conversions for individuals coming to the Greenery from New York City and she handled this process in the cases of the three patients at issue. She explained that the "Medicaid hospital number" assigned to each patient when he or she initially enters a hospital for medical treatment must be converted to a "long term care number" when the patient is transferred to a long term care facility such as the Greenery. She noted that the actual Medicaid number remains the same but that the facility must get approval for long term care from the New York City HRA. She also stated that this conversion cannot take place until after the patient has entered the long term care facility. She attempted to conduct this process for the three individuals at issue and she noted that she is unaware of any financial changes these patients have undergone since entering the Greenery.
Each of these patients had a Medicaid number when they entered the Greenery. The "conversion packets," the paperwork required for changing a "Medicaid hospital number" to a "long term care number," for all three individuals were entered into evidence. Ryan testified that she knew that all New York rules must be followed or Medicaid benefits could be denied. Although testimony and exhibits showed that there were difficulties in getting Medicaid coverage for the three patients at issue, Ryan testified that she was never told by the HRA that the Greenery was not being paid because it failed to obtain "prior authorization." In fact, she noted that the issue of "prior authorization" was never raised by the HRA during their discussions of the three cases.
The relevant testimony of these witnesses was essentially reiterated by Karen Krichmar, Director of Marketing Support Services for Horizon Health Care which was previously the Greenery. She also noted that 60 to 70 percent of the approximately 600 New York residents treated by the Greenery were New York City residents, that she did not know of a "prior authorization" process, and that the same approval process was followed in the three cases at issues as in the case of every other New York resident patient.
Defendants submitted a series of letters, all from 1984 through 1986, which show that during this period, the Greenery received placement approval for patients from the New York City HRA prior to their admission.
Plaintiffs submitted documentation which shows that "prior approval" was received from the New York State Department of Health, Office of Health Systems Management for each of the three patients in question. Pltf. Exh. 6-8.
A March 1992 Medicaid provider Manual submitted by the defendants shows that an entity called "prior authorization" exists and this Manual defines "prior authorization." However, the definition, when compared to the definition of "prior approval," does not indicate that the receipt of "prior authorization" requires that additional steps be taken by the health care facility. Notably, the Provider Manual explains how to request "prior approval," but does not indicate a process for obtaining "prior authorization."
Def. Exh. 65. In fact, the definitions appear to show that "prior approval" is the process the health care provider must follow while "prior ...