The opinion of the court was delivered by: Ciparick, J.:
This opinion is uncorrected and subject to revision before publication in the New York Reports.
In this appeal, we are asked to consider whether the 2006 amendment to the Social Services Law found in a budget bill implementing a coinsurance enhancement for the benefit of psychiatrists who treat patients eligible for both Medicare and Medicaid was intended to be permanent or whether the amendment was intended only to provide a limited one-year enhancement. We conclude that the Legislature only intended to provide for a one-time coinsurance enhancement, limited to the 2006-2007 fiscal year.
Plaintiff New York State Psychiatric Association, Inc. represents psychiatrists who treated patients eligible for both Medicare and Medicaid, referred to herein as dual eligibles, from April 2007 to April 2008. Defendant New York Department of Health (DOH) is responsible for administering Medicaid in New York and for implementing and enforcing Medicaid reimbursement rates. In New York State, claims for medical care for dual eligibles are first submitted to the Medicare Part B program and the balance, i.e. the deductible and the coinsurance amount is paid by Medicaid. Prior to 2003, Medicaid paid 100% of this balance amount to providers. In 2003, the New York State Legislature amended Social Services Law § 367-a (1) (d), curtailing the deductible and coinsurance payments for the majority of providers to 20%. A limited number of providers continued to be covered at 100%.*fn1 Psychiatrists, however, were not among them (see L 2003, ch 63, part J1, § 1 [amending Social Services Law § 367-a (1) (d) (ii); adding id. § 367-a (1) (d) (iii)], 2003 McKinney's Session Laws of NY at 566-577).
In 2005, the Legislature amended section 367-a (1) (d) (iii) to include "a physician" on the list of itemized providers that would receive 100% reimbursement. Simultaneously, the Legislature enacted Unconsolidated Law § 9, which set forth the methodology for the provision of the "2005 coinsurance enhancement." For the period between April 1, 2005 and June 30, 2005, the Legislature, "[n]otwithstanding any provision to the contrary," capped the coinsurance enhancement distribution to physicians at "an amount not to exceed five million dollars" (L 2005, ch 12, §§ 8 and 9, 2005 McKinney's Session Laws of NY at 113-114).
In 2006, the Legislature again amended section 367-a (1) (d) (iii) to include "a psychiatrist licensed under article one hundred thirty-one of the education law" on the list of itemized providers that would receive 100% reimbursement. As in 2005, the Legislature, in the same bill, enacted Unconsolidated Law § 2, which set forth the methodology for the provision of the "2006-2007 coinsurance enhancement." For the period between April 1, 2006 and March 31, 2007, the Legislature, "[n]otwithstanding any provision to the contrary," capped the coinsurance enhancement distribution to psychiatrists at "an amount not to exceed two million dollars" (L 2006, ch 109, part C, §§ 1 and 2, 2006 McKinney's Session Laws of NY at 477-478).
From April 1, 2006 to March 31, 2007, DOH distributed the prescribed $2 million in available funds to all the eligible psychiatrists pursuant to the mechanisms set forth in Unconsolidated Law § 2.*fn2 After April 1, 2007, DOH resumed applying the 20% default rule.
In December 2007, plaintiffs New York State Psychiatric Association, Inc. and four individual psychiatrists who provided services for dual eligibles after March 31, 2007, commenced this hybrid declaratory judgment action/CPLR article 78 proceeding seeking a declaration that licensed psychiatrists were entitled to the full Medicaid reimbursement and seeking full payment of coinsurance amounts for services rendered after April 1, 2007, plus attorney's fees. Plaintiffs argued that the amendment of section 367-a (1) (d) (iii) provided for 100% reimbursement for psychiatrists beginning on April 1, 2007 and had set no termination date. While the lawsuit was pending, in April 2008, the Legislature once again amended section 367-a (1) (d) (iii), this time by removing the reference to psychiatrists all together. It included the following language:
"Medical assistance payments shall not be made pursuant to the amendments made by section one of this act for services provided on and after April 1, 2007 by psychiatrists licensed under article 131 of the education law, or as co-insurance enhancements to payments made to such psychiatrists on and after April 1, 2007." (see L 2008, ch 58, Part C, § 53 [amending Social Services Law § 367-a (1) (d) (iii) and § 54 [amending L 2006, ch 109, part C, § 2] 2008 McKinney's Session Laws of NY at 539-540).*fn3
Plaintiffs amended their complaint to challenge the 2008 legislation as improperly retroactive in violation of their due process rights. Plaintiffs then moved in Supreme Court for summary judgment and defendant cross-moved for summary judgment. Supreme Court granted the cross-motion and dismissed the complaint, finding that the claim was time barred (see New York State Psychiatric Assn., Inc. v New York State Dept. of Health, 23 Misc 3d 1106[A] [Sup Ct, Nassau County 2009]) and that "plaintiffs lack a cognizable property interest in an enhanced coinsurance payment based on services provided by psychiatrists to Dual Eligibles, beginning on April 1, 2007" (id. at *10). The Appellate Division modified finding some claims time barred and holding that the amendment to the Social Services Law imposed a continuing duty on DOH to reimburse psychiatrists who performed services for dual eligibles at 100% after March 31, 2007 (see New York State Psychiatric Assn., Inc. v New York State Dept. of Health, 71 AD3d 852, 855-856 [2d Dept 2010]). The court further opined that the 2008 legislation was impermissibly retroactive and impaired the vested rights of plaintiffs to reimbursement (see id. at 855). The matter was remitted to Supreme Court to determine attorney's fees and to enter judgment declaring the 2008 legislation unconstitutional. Defendant DOH appeals as of right on constitutional question grounds from the final Supreme Court judgment to bring up for review the non-final Appellate Division order. We now reverse and grant judgment declaring that the 2006 amendment to the Social Services Law provided for a one-time coinsurance enhancement, limited to the 2006-2007 fiscal year.
To begin, we must determine the legislative intent surrounding the 2006 amendment to Social Services Law § 367-a (1) (d) (iii) and other provisions contained in the same act of a budget bill by looking at the actual words of the act. It is well settled that, "[a] statute or legislative act is to be construed as a whole, and all parts of an act are to be read and construed together to determine the legislative intent" (McKinney's Cons Laws of NY, Book 1, Statutes § 97; see also Frank v Meadowlakes Dev. Corp. 6 NY3d 687, 691 ). Furthermore, "[e]ach section of a legislative act must be considered and applied in connection with every other section of the act, so that all will have their due, and conjoint effect" (McKinney's Cons Laws of NY, Book 1, Statutes § 98 n 23; see also Matter of Kaplan v Peyser, 273 NY 147 ). To determine the intent of a statute, "inquiry must be made of the spirit and purpose of the legislation, which requires examination of the statutory context of the provision" (Matter of Sutka v Conners,
73 NY2d 395, 403 ).
With this framework in place, plaintiffs argue that the 2006 amendment to section 367-a (1) (d) (iii) is clear and unambiguous on its face and that interpreting the amendment by its plain language requires reimbursement payments to psychiatrists at the rate of 100% after March 31, 2007. Defendant argues that the 2006 amendment created only a one-year coinsurance enhancement program for psychiatrists and that the legislative intent is clearly demonstrated by the plain language of the act as a whole. Plaintiffs further argue that, had the Legislature intended only for a one-year reimbursement enhancement for psychiatrists, there would have been no need to amend section 367-a (1) (d) (iii). Plaintiffs contend that the provision delineating how psychiatrists would receive the $2 million dollar disbursement pursuant to Unconsolidated Law § 2 would have ...