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St. Margaret's Center Ex Rel. Center For Disabled Corp. v. Novello

Other Lower Courts

January 10, 2005

In the Matter of St. Margaret's Center, by the CENTER FOR THE DISABLED CORPORATION and ST. MARGARTE'S HOUSE AND HOSPITAL FOR BABIES, Petitioner(s),
v.
Antonia Novello, M.D., as Commissioner of Health of the State of New York; and Director of the Budget of the State of New York, Respondent(s).

Editorial Note:

This case is not published in a printed volume and its disposition appears in a table in the reporter.

COUNSEL

Ruffo, Tabora, Mainello and McKay, P.C. Raul A. Tabora, Jr., Esq. Attorneys for Petitioner.

Eliot Spitzer, Attorney General Office of the Attorney General (Lisa Ullman, Esq., Assistant Attorney General) Attorneys for Respondent.

OPINION

Thomas J. McNamara, J.

Petitioner has moved to reargue a decision of the court awarding judgment to respondent dismissing the petition. The proceeding was brought to challenge the Medicaid reimbursement rate established by the Department of Health (DOH) for the DayLight program for the years 1999 and forward. DayLight is an Adult Day Health Care Program operated by petitioner for individuals over the age of 21.

A "motion for leave to reargue pursuant to CPLR 2221 is addressed to the sound discretion of the court and is properly granted upon a showing that the court overlooked or misapprehended the facts and/or the law or mistakenly arrived at its earlier decision." ( Peak v Northway Travel Trailers Inc., 260 A.D.2d 840).

The determinative issue raised by the petition was whether the DOH acted irrationally in setting the maximum daily reimbursement rate for DayLight program participants by employing a weighted regional average for non-speciality skilled nursing facilities as the proxy rate. Petitioner contends that because the DayLight program provides fundamentally distinct services to a fundamentally distinct patient mix, the proxy rate should be based on a weighted regional average computed by reference to speciality facility rates. The court dismissed the petition based upon petitioner's failure to satisfy its burden of producing some comparative evidence between it and the other peer-group members (non-speciality skilled nursing facilities versus speciality facilities) to demonstrate that its inclusion in that particular group was irrational.

The motion to reargue is based on the assertion that the court resolved the matter by reference to an issue, the absence of comparative evidence, not contested by respondent. According to petitioner, the critical issue raised by the petition was not whether the DayLight program is specialized and distinct from geriatric programs but whether DOH's interpretation of the law is unduly restrictive. The interpretation of law to which petitioner refers is the position taken by DOH that in setting reimbursement rates for adult day health care programs it is guided exclusively by Laws of 1994, chapter 170, section 448 which establishes the maximum daily rates of payment to residential health care facilities for adult day services. That law limits payment to 65 % of the sponsoring facilities residential health care facility per diem rate on January 1, 1990 or for facilities without such a rate, such as petitioner, to a 1990 weighted regional average per diem rate. As noted in the court's original decision, respondent set petitioner's rate using a weighted regional average per diem rate.

Petitioner argues that section 448 must be read in pari materia with the provisions in Public Health Law 2708(3). The latter section requires the DOH to set reimbursement rates for nursing homes at a level that is "reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities." When read together, petitioner argues, the DOH must take into account petitioner's speciality status in setting the ceiling.

In dismissing the petition, the court jumped over the issue of whether the DOH is required to consider Public Health Law 2708(3) in setting maximum daily rates of payment to residential health care facilities for adult day services. Instead, the court dismissed the petition on the basis that even if the DOH was required to consider Public Health Law 2708(3) petitioner had failed to establish that "the population it serves necessitates more complex treatment programs, more expensive equipment, medications, and treatment such that it cannot be placed in the same peer group as other adult day health care facilities because the reimbursement rate would not be reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities"'.

Though the rates for speciality facilities are calculated differently form those of skilled nursing facilities, it does not necessarily follow that in setting a reasonable and adequate reimbursement rate for an adult day care program associated with a speciality facility that rate must be based on a weighted regional average computed by reference only to speciality facility rates. This is particularly true where, as here, the adult day care program is also associated with a 20 bed adult nursing facility as well as a 38 bed speciality pediatric facility. Nonetheless, because respondent did not reach that issue in setting petitioner's reimbursement rate, petitioner was not required to address it in this proceeding. Consequently, it was improper for the court to dismiss the petition on that basis. Accordingly, the court will grant reargument and address the question of whether respondent acted in an arbitrary and capricious manner in setting petitioner's reimbursement rate because it failed to factor into its determination the considerations in Public Health Law 2708(3).

As noted above, petitioner argues that the provisions in Laws of 1994, chapter 170, section 448, which respondent relies on in setting reimbursement rates for adult day care programs and the provisions in Public Health Law 2708(3) are in pari materia and should be read together. Respondent contends ...


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