| New York State Psychiatric Assn., Inc. v New York State Dept. ofHealth |
| 2010 NY Slip Op 02113 [71 AD3d 852] |
| March 16, 2010 |
| Appellate Division, Second Department |
| New York State Psychiatric Association, Inc., et al.,Appellants, v New York State Department of Health,Respondent. |
—[*1] Andrew M. Cuomo, Attorney General, New York, N.Y. (Peter Karanjia and Cecelia C.Chang of counsel), for respondent.
In a hybrid action, inter alia, for a judgment declaring that those portions of sections 53 and54 of part C of the New York State 2008 budget bill (L 2008, ch 58, part C, §§ 53,54, adding L 2006, ch 109, part C, § 2 [e]) which provide that licensed psychiatrists arenot entitled to be paid the full Medicare Part B coinsurance amount for services renderedbetween April 1, 2007, and April 11, 2008, to certain individuals who are eligible for bothMedicaid and Medicare benefits and/or for claims processed between April 1, 2007, and April11, 2008, are unconstitutional, and, in effect, proceeding pursuant to CPLR article 78 in thenature of mandamus to compel the New York State Department of Health to pay to licensedpsychiatrists the full Medicare Part B coinsurance amount for those individuals pursuant to the2006 amendment to Social Services Law § 367-a (1) (d) (iii) for services rendered and/orfor claims processed between April 1, 2007, and April 11, 2008, the plaintiffs/petitioners appealfrom an amended order of the Supreme Court, Nassau County (Feinman, J.), dated March 23,2009, which denied their motion for summary judgment on the causes of action for declaratoryrelief, and granted the cross motion of the defendant/respondent for summary judgment on thosecauses of action, and, in effect, denied the amended petition.
Ordered that on the Court's own motion, the notice of appeal from so much of the amendedorder as, in effect, denied the amended petition, is treated as an application for leave to appealfrom that portion of the amended order, and leave to appeal is granted (see CPLR 5701[c]); and it is further,
Ordered that the amended order is modified, on the law, (1) by deleting the provision thereofdenying the motion for summary judgment on the causes of action for declaratory relief andsubstituting therefor a provision granting the motion to the extent of declaring that those portionsof sections 53 and 54 of part C of the New York State 2008 budget bill which provide thatlicensed psychiatrists are not entitled to be paid the full Medicare Part B coinsurance amount forservices rendered to certain individuals who are eligible for both Medicaid and Medicarebenefits and/or for claims processed between August 12, 2007, and April 11, 2008, areunconstitutional and declaring that the New York State Department of [*2]Health must pay to licensed psychiatrists the full Medicare Part Bcoinsurance amount for those individuals for services rendered or claims processed betweenAugust 12, 2007, and April 11, 2008, and otherwise denying the motion, and (2) by deleting theprovision thereof granting the cross motion for summary judgment and substituting therefor aprovision granting the cross motion only to the extent that the services or claims at issue wererendered or processed prior to August 12, 2007, and otherwise denying the cross motion, and (3)by deleting the provision thereof, in effect, denying the amended petition and substitutingtherefor a provision granting the amended petition to the extent of directing thedefendant/respondent to pay to licensed psychiatrists the full Medicare Part B coinsuranceamount for those individuals pursuant to the 2006 amendment to Social Services Law §367-a (1) (d) (iii) for services rendered or claims processed between August 12, 2007, and April11, 2008, and otherwise denying the amended petition; as so modified, the amended order isaffirmed, and the matter is remitted to the Supreme Court, Nassau County, for the entry of ajudgment, inter alia, declaring that those portions of sections 53 and 54 of part C of the NewYork State 2008 budget bill which provide that licensed psychiatrists are not entitled to be paidthe full Medicare Part B coinsurance amount for services rendered to certain individuals who areeligible for both Medicaid and Medicare benefits and/or for claims processed between August12, 2007, and April 11, 2008, are unconstitutional; and it is further,
Ordered that one bill of costs is awarded to the plaintiffs/petitioners.
In 2006 Social Services Law § 367-a (1) (d) (iii) was amended by the StateLegislature, effective April 1, 2006, to add licensed psychiatrists as medical professionalsentitled to receive full Medicaid reimbursement of Medicare coinsurance amounts for servicesrendered to certain individuals who are eligible for both Medicaid and Medicare benefits. Thisamendment placed a cap on the amount of such additional payments during the period of timefrom April 1, 2006, through March 31, 2007, limiting those payments to "an aggregate amountnot to exceed two million dollars" (L 2006, ch 109, part C, § 2, amending Social ServicesLaw § 367-a [1] [d]).
Thereafter, the 2008 budget bill removed licensed psychiatrists from the list of serviceproviders who are entitled to receive 100% reimbursement of the Medicare deductible andcoinsurance fees pursuant to section 53 of part C of the 2008 budget bill. Section 54 of part Cadded subdivision (e) to section 2 of part C of chapter 109 of the Laws of 2006, specificallyproviding for retroactive effect, stating "[m]edical assistance payments shall not be madepursuant to the amendments made by section one of this act for services provided on and afterApril 1, 2007, by psychiatrists licensed under article 131 of the education law, or as coinsuranceenhancements to payments made to such psychiatrists on and after April 1, 2007."
Here, the plaintiffs/petitioners proffered prima facie evidence that the Legislature includedlicensed psychiatrists among the list of service providers who were entitled to receive 100%reimbursement of the Medicare deductible and coinsurance fees for dual eligible individuals insection 1 of Social Services Law § 367-a. If the intent of Social Services Law §367-a (1) (d) (iii) was to provide a one-time-only enhancement to licensed psychiatrists, as thedefendant/respondent contends, there would have been no need to amend section 1 to includelicensed psychiatrists as persons entitled to receive full Medicaid reimbursement of Medicarecoinsurance amounts for services rendered to dual eligible individuals. The acceptance of thatconstruction would not harmonize the 2006 change with the other amendment (L 2006, ch 109)limiting the aggregate reimbursement of licensed psychiatrists for a defined period enacted thatyear (see generally Matter ofWestchester County Dept. of Social Servs. v Robert W.R., 25 AD3d 62 [2005]). Suchresult would not be in conformity with the rules of statutory construction (seeMcKinney's Cons Laws of NY, Book 1, Statutes § 98).
Where, as here, the language of the 2006 statutory amendments are unambiguous, we shouldnot avoid their plain meaning because of the legislative attempt to alter that statuteretrospectively by the enactment of the 2008 amendment in the budget bill. As the Court ofAppeals stated in Matter of Roosevelt Raceway v Monaghan (9 NY2d 293, 304 [1961],quoting City of New York v Village of Lawrence, 250 NY 429, 447 [1929]): "Thisprinciple is, of course, no less compelling because 'the other means of interpretation' urged is alater so-called clarifying statute. The [*3]Legislature has nopower to declare, retroactively, that an existing statute shall receive a given construction whensuch a construction is contrary to that which the statute would ordinarily have received." Thus,the attempt of the legislature to subsequently modify the plain meaning of the 2006 amendmentwas unconstitutional as applied to the vested right of the plaintiffs/petitioners to reimbursement,although the prospective change implemented in 2008 was permissible (see US Const,14th Amend, § 1).
Since the plaintiffs/petitioners demand in their amended complaint/petition 100%reimbursement based on their legal right, this action/proceeding, in effect, seeks mandamus tocompel (see Matter of Eidt v City ofLong Beach, 62 AD3d 793 [2009]). Hence, this action/proceeding had to becommenced within four months of a demand for compliance and subsequent refusal (seeCPLR 217 [1]; Matter of Zupa vZoning Bd. of Appeals of Town of Southold, 64 AD3d 723 [2009]; EMP of Cadillac, LLC v Assessor of Vil.of Spring Val., 15 AD3d 336 [2005]). The timeliness of the demand is measured by thefour-month limitation period in CPLR 217 (1) so that the demand for payment should have beenmade no more than four months after the right to make the demand arose (see CPLR 217[1]; Matter of Zupa v Zoning Bd. ofAppeals of Town of Southold, 64 AD3d 723 [2009]). The right of theplaintiffs/petitioners to 100% reimbursement, and hence their right to demand same, first aroseon April 1, 2007, thereby requiring them to have made a demand by August 1, 2007. Here, thecommencement of the action/proceeding on December 12, 2007, constituted the first demand(see Matter of Mutschler v Board of Educ. of William Floyd Union Free School Dist.,177 AD2d 629 [1991]; Community Bd. No. 3 v State of N.Y., Off. of Mental Retardation &Dev. Disabilities, 76 AD2d 851 [1980]).
However, Social Services Law § 367-a (1) (d) (iii) imposed a continuing duty on thedefendant/respondent to provide 100% reimbursement of the Medicare deductible andcoinsurance fees for services rendered to and claims processed for dual eligible individuals afterMarch 31, 2007. The statute of limitations is not a defense to claims based on breaches of acontinuing duty which occurred within the limitations period (see Matter of DeCintio v Cohalan, 18AD3d 872 [2005]). Furthermore, the defense of laches should not be applied to any of therepeated violations occurring within the limitations period since each new violation gave rise toa corresponding new right to demand compliance with the statute (see State of New York vCSRI Ltd. Partnership, 289 AD2d 394 [2001]; Selkirk v State of New York, 249AD2d 818 [1998]). Thus, the amended complaint/petition should have been dismissed onlyinsofar as it concerned acts or omissions occurring more than four months before the action wascommenced (see State of New York v CSRI Ltd. Partnership, 289 AD2d 394 [2001]).
The evidence of the defendant/respondent confirms that, despite the strongly-voicedobjections of the defendant/respondent, the Legislature amended section 1 of the statute to addlicensed psychiatrists to the list of providers entitled to receive 100% reimbursement of theMedicare deductible and coinsurance fees.
Accordingly, the plaintiffs/petitioners timely challenged the 2008 legislation (seeCPLR 213 [1]; American Ind.Paper Mills Supply Co., Inc. v County of Westchester, 16 AD3d 443 [2005]), haveproperty rights in reimbursement at a 100% rate after March 31, 2007 (cf. Senape vConstantino, 936 F2d 687, 690 [1991]), and shall be entitled to reimbursement for claimsarising between August 12, 2007, and April 11, 2008. Covello, J.P., Angiolillo, Balkin andSgroi, JJ., concur.