| Matter of Reconstruction Home & Health Care Ctr., Inc. vDaines |
| 2009 NY Slip Op 06213 [65 AD3d 786] |
| August 13, 2009 |
| Appellate Division, Third Department |
| In the Matter of Reconstruction Home and Health Care Center,Inc., Appellant, v Richard F. Daines, as Commissioner of Health, et al.,Respondents. |
—[*1] Andrew M. Cuomo, Attorney General, Albany (Victor Paladino of counsel), forrespondents.
McCarthy, J. Appeal from a judgment of the Supreme Court (Platkin, J.), entered July 21,2008 in Albany County, which dismissed petitioner's application, in a proceeding pursuant toCPLR article 78, to review a determination of the Department of Health revising petitioner'sMedicaid reimbursement rates.
Petitioner, the owner and operator of a Tompkins County nursing home, commenced thisproceeding to challenge its Medicaid reimbursement rates for the period January 1, 2006 throughAugust 31, 2007. The proceeding stems from the Congressional enactment of Medicare Part D, aprogram which provides for federal subsidization of prescription drug costs for eligibleindividuals (see Medicare Prescription Drug Improvement and Modernization Act of2003, 42 USC § 1395w-101 et seq., as added by Pub L 108-173, 117 US Stat2066, 2071-2176). In response to this enactment, the Legislature directed the Department ofHealth to exclude an amount for prescription drug costs from the Medicaid rates paid to nursinghomes for individuals dually eligible for Medicare and Medicaid (see L 2005, ch 58, partC, § 25).
Thus, in 2005, the Department developed and implemented a methodology for [*2]computing the Medicare Part D offset which was based on eachindividual nursing home's actual cost experience. Following industry concerns, however, theDepartment developed a revised methodology, effective September 2007, which was based onstatewide data. As prospectively applied to petitioner, this revised methodology resulted in amore favorable reimbursement offset rate. To be sure, not all nursing homes benefitted from therevised methodology. In challenging its reimbursement rates for the subject period, petitionerargues that the original methodology was arbitrary, capricious and contrary to law and that therevised methodology should be retroactively applied. Finding that the original offsetmethodology was rational, Supreme Court dismissed the petition. Petitioner appeals.
We affirm. Petitioner has failed to meet its heavy burden of demonstrating that themethodology utilized by the Department in calculating its rates for the period in question wasunreasonable or unsupported by any evidence (see Matter of Nazareth Home of the Franciscan Sisters v Novello, 7NY3d 538, 544 [2006]; Matter of Consolation Nursing Home v Commissioner of N.Y.State Dept. of Health, 85 NY2d 326, 331-332 [1995]; Matter of Medical Socy. of Stateof N.Y. v State of N.Y. Dept. of Health, 83 NY2d 447, 452 [1994]), that is, petitioner failedto make "a compelling showing that the calculations from which [the original Medicare Part Doffsets] derived were unreasonable" (Matter of Society of N.Y. Hosp. v Axelrod, 70NY2d 467, 473 [1987] [internal quotation marks and citation omitted]; see Matter of EllisCtr. for Long Term Care v DeBuono, 261 AD2d 791, 794 [1999], appeal dismissed andlv denied 93 NY2d 1037 [1999]). Indeed, the Department "is entitled to a 'high degree ofjudicial deference, especially when . . . act[ing] in the area of its particularexpertise' " (Matter of Nazareth Home of the Franciscan Sisters v Novello, 7 NY3d at544, quoting Matter of Consolation Nursing Home v Commissioner of N.Y. State Dept. ofHealth, 85 NY2d at 331).
We are particularly unpersuaded by petitioner's contention that the Department is not entitledto "the concept of judicial deference" because the statute at issue is plain and unambiguous. Indirecting the Department to implement the offset, the Legislature was quite general in itsdirective. It stated that Medicaid "rates of payment . . . for services provided on orafter January 1, 2006, shall not include an amount for prescription drugs" for dual-eligiblefacility residents (L 2005, ch 58, part C, § 25). The Legislature did not specify how thiswas to be accomplished. In our view, implicit in the lack of any specific directive is arecognition that the Department would apply its expertise in rate-setting matters. Otherwisestated, while the legislative directive itself may have been relatively plain andsimple—exclude an amount for prescription drugs for certain residents in Medicaid "ratesof payment"—it most assuredly required consideration, interpretation and application ofcomplex rate-setting formulas to actually implement (see Matter of Ellis Ctr. for Long TermCare v DeBuono, 261 AD2d at 792-794). Such interpretation and implementation was mostappropriately left to the Department's sound discretion (see Matter of Medical Socy. of Stateof N.Y. v State of N.Y. Dept. of Health, 83 NY2d at 452; Matter of Home Care Assn. ofN.Y. State v Bane, 218 AD2d 106, 109 [1995], lv denied 87 NY2d 808 [1996]).Moreover, while the Department opted to revisit the issue and ultimately came up with analternative methodology which favored petitioner (but disfavored other facilities), no showinghas been made that the original methodology was irrational or in contravention of the broadstatutory directive (see e.g. Matter of New York Assn. of Homes & Servs. for Aging vCommissioner of N.Y. State Dept. of Health, 87 NY2d 978, 982 [1996], revg ondissenting ops of Crew III and Casey, JJ., 212 AD2d 163, 170-172 [1995]; Matter ofEllis Ctr. for Long Term Care v DeBuono, 261 AD2d at 792; St. Joseph's Hosp. HealthCtr. v Department of Health of State of N.Y., 247 AD2d 136, 153 [1998], lv denied93 NY2d 803 [1999]; Matter of A. Holly Patterson SNF v Chassin, 196 AD2d 155,159-161 [1994], appeal dismissed and lv [*3]denied 83NY2d 962 [1994]) such that petitioner is entitled to a retroactive application of the revisedmethodology.
Petitioner's remaining contentions have been examined and have been found to beunpersuasive.
Peters, J.P., Rose, Lahtinen and Stein, JJ., concur. Ordered that the judgment is affirmed,without costs.