New York State Psychiatric Assn. v New York State Dept. of Health

[*1] New York State Psychiatric Assn. v New York State Dept. of Health 2009 NY Slip Op 50607(U) [23 Misc 3d 1106(A)] Decided on March 23, 2009 Supreme Court, Nassau County Feinman, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 23, 2009
Supreme Court, Nassau County

New York State Psychiatric Association, INC., THOMAS ARONSON, M.D., GUY GLASS, M.D., RONALD M. PODELL, M.D., BRUCE ROSEN, M.D., and JOHN DOE, M.D., Plaintiffs,

against

New York State Department of Health, Defendant.



22256/07



The attorneys in this decision are:

Morritt Hock Hamroff & Horowitz, LLP - Attorneys for Plaintiffs

New York State Attorney General's Office - Attorneys for Defendant

Thomas Feinman, J.

Relief Requested

The plaintiffs move for an order pursuant to CPLR §3212 declaring (a) that the defendant, the New York State Department of Health, (hereinafter referred to as the "DOH"), must pay the full Medicare Coinsurance Amount to psychiatrists for services rendered to Medicaid recipients who are Dual Eligibles between April 1, 2007 and April 11, 2008 and/or for claims processed between April 11, 2007 through April 11, 2008, (b) to direct and mandate that the DOH reimburse psychiatrists, ( c ) to enjoin the DOH from continuing to refuse to so reimburse psychiatrists from that period, and (d) to annul Sections 53 and 54 of the 2008 Amendment to the extend that they retrospectively impair plaintiffs' vested rights in violation of the Due Process Clause of the United State and New York State constitutions, and for attorneys fees. The plaintiffs submit a Memorandum of Law in Support of Plaintiffs' Motion for Summary Judgment.

The Defendant, DOH, cross-moves for an order (a) denying plaintiffs' motion for summary judgment and (b) granting defendant's cross-motion for summary judgment dismissing the Amended Complaint. The defendant submits a Memorandum of Law in opposition to [*2]plaintiffs' motion for summary judgment and in support of defendant's cross-motion for summary judgment. The plaintiffs submit a reply affirmation and a reply Memorandum of Law. The defendant submits an affidavit in reply and further support of defendant's cross-motion, and a Memorandum of Law in reply and in further support of defendant's cross-motion for summary judgment.

The plaintiffs initiated this action on December 12, 2007 by filing and serving a summons and complaint. The plaintiffs amended their complaint on or about April 30, 2008. The defendants interposed an answer to the amended complaint on or about May 9, 2008. Plaintiffs allege, in their amended complaint, that this is a declaratory judgment action brought pursuant to CPLR §3001 seeking relief declaring that pursuant to an amendment to Social Services Law §367-a(1)(d)(iii), enacted by the New York State Legislature in 2006, the New York State Medicaid Program, (hereinafter referred to as "Medicaid"), must pay the full Medicare Part B coinsurance amount for Dual Eligibles and Qualified Medicare Beneficiaries for services rendered by psychiatrists after March 31, 2007 and/or claims processed by the Medicaid program after March 31, 2007. Plaintiffs, by way of Amended Complaint, also seek injunctive relief seeking to enjoin the defendant from continuing to refuse to pay the full Medicare Part B coinsurance amount for Dual Eligibles and Qualified Medicare Beneficiaries, (hereinafter collectively referred to as "Dual Eligibles"), for the services rendered by psychiatrists between April 1, 2007 and April 11, 2008, and/or for claims processed between April 1, 2007 and April 11, 2008.

Plaintiffs also seek, by way of the instant action, to annul a law enacted on April 11, 2008, which plaintiffs submit was enacted in response to the commencement of the instant action, to the extent that plaintiffs claim that said law retroactively rescinds the plaintiffs' vested right to reimbursement under the above-mentioned amendment to the Social Services Law enacted in 2006 for services rendered and/or claims processed between April 1, 2007 and April 11, 2008.

The plaintiff, New York State Psychiatric Association, (hereinafter referred to as "NYSPA"), is a statewide professional medical association providing that it represents over 4,800 psychiatrists practicing in New York. The individually named plaintiffs are physicians licensed to practice medicine in the State of New York, specializing in the practice of psychiatry. The plaintiffs claim that they have submitted Medicaid claims for the treatment of Medicaid recipients who are Dual Eligibles for services rendered between April 1, 2007 and April 11, 2008, and/or for claims processed by Medicaid between April 1, 2007 and April 11, 2008. The plaintiffs allege that the defendant has wrongfully interpreted the 2006 amendments to Social Services Law §367-a(1)(d)(iii) by reimbursing plaintiffs at the rate of 20% instead of 100%, and has denied, and is continuing to deny, psychiatrists 100% Medicaid reimbursement for the treatment of Medicaid recipients who are Dual Eligibles, thereby causing injury to the plaintiffs.

Background[*3]

Individuals referred to as "Dual Eligibles" are certain low income and/or disabled individuals who are eligible for Medicaid benefits who are also enrolled by New York State in the Federal Medicare program. Claims for medical care rendered to individuals who are Dual Eligibles are first submitted to the Medicare Part B program, whereby Medicare pays a portion of the applicable Medicare fees for the services rendered. The balance of the Medicare fee, the Medicare deductible and coinsurance amount, (referred to as the "Medicare Coinsurance Amount"), is the patient's responsibility. The plaintiffs submit that prior to 2003, Medicaid paid 100% of the Medicare Coinsurance Amount for services rendered to Dual Eligibles. Plaintiffs provide that in their trade, claims submitted to Medicare for Dual Eligibles are commonly referred to as "crossover claims" since such claims are first submitted to Medicare, and then "crossover" to Medicaid for the payment of the Medicare patient deductible and coinsurance amounts.

In 2003, New York State Social Services Law §367-a(1)(d)(iii), (referred to herein as the "2003 Amendment"), provided as follows:

(iii) When payment under part B of title XVIII of the federal social security act for items and services provided to eligible persons who are also beneficiaries under part B of title XVIII of the federal social security act and for items and services provided to qualified medicare beneficiaries under part B of title XVIII of the federal social security act would exceed the amount that otherwise would be made under this title if provided to an eligible person other than a person who is also a beneficiary under part B or is a qualified medicare beneficiary, the amount payable under this title shall be twenty percent of the amount of any coinsurance liability of such eligible persons pursuant to federal law were they not eligible for medical assistance or were they not qualified medicare beneficiaries with respect to such benefits under such part B; provided, however, amounts payable under this title for items and services provided to eligible persons who are also beneficiaries under part B or to qualified medicare beneficiaries by an ambulance service under the authority of an operating certificate issued pursuant to article thirty of the public health law, a psychologist licensed under article one hundred fifty-three of the education law, or a facility under the authority of an operating certificate issued pursuant to article sixteen, thirty-one or thirty-two of the mental hygiene law and with respect to outpatient hospital and clinic items and services provided by a facility under the authority of an operating certificate issued pursuant tot article twenty-eight of the public health law, shall not be less than the amount of any co-insurance liability of such eligible persons or such qualified medicare beneficiaries, or for which such eligible persons or such qualified medicare beneficiaries would be liable under federal law were they not eligible for medical assistance or were they not qualified medicare beneficiaries with respect to such benefits under part B. (Emphasis added.) [Psychiatrists are not listed.]

The plaintiffs submit that the "2003 Amendment" provided that Medicaid would pay on 20% of the Medicare Part B coinsurance for Medicaid recipients who are Dual Eligibles. However, plaintiffs claim, that Medicaid continued to pay the full (100%) Medicare Part B coinsurance for Dual Eligibles provided by certain providers including a "psychologist", yet not a "psychiatrist" as in 2003, "psychiatrists" were not listed under New York State Services Law [*4]§367-a(1)(d)(iii) as a provider.

In 2006, New York State Social Services Law §367-a(1)(d)(iii), (referred to herein as the "2006 Amendment"), provided as follows:

(iii) When payment under part B of title XVIII of the federal social security act for items and services provided to eligible persons who are also beneficiaries under part B of title XVIII of the federal social security act and for items and services provided to qualified medicare beneficiaries under part B of title XVIII of the federal social security act would exceed the amount that otherwise would be made under this title if provided to an eligible person other than a person who is also a beneficiary under part B or is a qualified medicare beneficiary, the amount payable under this title shall be twenty percent of the amount of any co-insurance liability of such eligible persons pursuant to federal law were they not eligible for medical assistance or were they not qualified medicare beneficiaries with respect to such benefits under such part B; provided, however, amounts payable under this title for items and services provided to eligible persons who are also beneficiaries under part B or to qualified medicare beneficiaries by an ambulance service under the authority of an operating certificate issued pursuant to article thirty of the public health law, a psychologist licensed under article one hundred fifty-three of the education law and a psychiatrist licensed under article one hundred thirty-one of the education law, or a facility under the authority of an operating certificate issued pursuant to article sixteen, thirty-one or thirty-two of the mental hygiene law and with respect to outpatient hospital and clinic items and services provided by a facility under the authority of an operating certificate issued pursuant tot article twenty-eight of the public health law, shall not be less than the amount of any co-insurance liability of such eligible persons or such qualified medicare beneficiaries, or for which such eligible persons or such qualified medicare beneficiaries would be liable under federal law were they not eligible for medical assistance or were they not qualified medicare beneficiaries with respect to such benefits under part B. (Emphasis added.)

The plaintiffs submit that the 2006 Amendment, which included "psychiatrists", increased the amount of Medicaid reimbursement for Medicare coinsurance amounts for services provided by psychiatrists to Dual Eligibles, as it added "psychiatrist licensed under article one hundred thirty-one of the education law" to the list of exempted services for which Medicaid would pay the full Medicare part coinsurance amount. Plaintiffs submit this statute became effective on April 1, 2006. Plaintiffs also submit that this new law placed psychiatrists on an equal footing with ambulance, psychologist and other exempted services and mandated that Medicaid pay these providers 100% of the Medicare Coinsurance Amounts for services rendered by psychiatrists to Dual Eligibles.

The plaintiffs acknowledge that the 2006 Amendment placed a cap on the amount of such [*5]additional payments, "but only for the 2006-2007 state fiscal year from April 1, 2006 through March 31, 2007." The plaintiffs provide that Section 2 of the legislation provided a "2006 coinsurance enhancement" in the amount of $2 million for claims processed by Medicaid during the April 1, 2006 through March 31, 2007 period for services provided by psychiatrists to Dual Eligibles. Therefore, plaintiffs submit the "2006 coinsurance enhancement" established a fund of $2 million to provide additional reimbursement to psychiatrists over and above the 20% Medicaid payment of the Medicare Coinsurance Amount provided for under the 2003 Amendment. However, the plaintiffs argue that the "2006 coinsurance enhancement", which now included "psychiatrists" in the list of exempted services, in the amended Social Services Law §367-a(1)(d)(iii), mandated that

the plaintiffs be paid for crossover claims at the rate of 100% for services rendered after March 31, 2007 and/or claims processed after March 31, 2007 instead of the rate of only 20%. Therefore, plaintiffs initiated the action herein.

Thereafter, on or about April 11, 2008, Governor David Paterson signed into law the budget bill for the 2008-2009 fiscal year, (referred to as "2008 budget bill"). As per Section 53 of the 2008 budget bill, "psychiatrists" were stricken from the list of exempted services for which Medicaid would pay the full Medicare B coinsurance amount for services rendered after March 31, 2007 and/or processed by the Medicaid program after March 31, 2007.

In 2008, Section 53 of the budget bill provided that New York State Social Services Law §367-a(1)(d)(iii), (referred to as the "2008 Amendment") was amended as follows:

(iii) When payment under part B of title XVIII of the federal social security act for items and services provided to eligible persons who are also beneficiaries under part B of title XVIII of the federal social security act and for items and services provided to qualified medicare beneficiaries under part B of title XVIII of the federal social security act would exceed the amount that otherwise would be made under this title if provide3d to an eligible person other than a person who is also a beneficiary under part B or is a qualified medicare beneficiary, the amount payable under this title shall be twenty percent of the amount of any co-insurance liability of such eligible persons pursuant to federal law were they not eligible for medical assistance or were they not qualified medicare beneficiaries with respect to such benefits under such part B; provided, however, amounts payable under this title for items and services provided to eligible persons who are also beneficiaries under part B or to qualified medicare beneficiaries by an ambulance service under the authority of an operating certificate issued pursuant to article thirty of the public health law, a psychologist licensed under article one hundred fifty-three of the education law, and a psychiatrist licensed under article one hundred thirty-one of the education law,or a facility under the authority of an operating certificate issued pursuant to article sixteen, thirty-one or thirty-two of the mental hygiene law and with respect to outpatient hospital and clinic items and services provided by a facility under the authority of an operating certificate issued pursuant to article twenty-eight of the public health law, shall not be less than the amount of any co-insurance liability of such eligible persons or such qualified medicare beneficiaries, or for which such eligible persons or such qualified medicare beneficiaries would be liable under federal law were [*6]they not eligible for medical assistance or were they not qualified medicare beneficiaries with respect to such benefits under part B. (Emphasis added.)

In 2008, Section 54 of the budget bill provided as follows:

(e) 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.

The plaintiffs maintain that one portion of the 2006 Amendment provided an enhanced formula for the 2006-2007 fiscal year that increased the amount reimbursed to plaintiffs in the amount of roughly 58%. Plaintiffs also maintain that another portion of the 2006 Amendment required the defendant to pay the full Medicare, (100%), part B coinsurance amount for services rendered by psychiatrists after March 31, 2007 and/or for claims processed after March 31, 2007. Plaintiffs claim that they performed services during that time period in expectation of being fully reimbursed. Plaintiffs state that the 2008 Amendment eliminated plaintiffs' right to be fully reimbursed retrospectively and prospectively.

The defendant, in opposition to the plaintiffs' motion, and in support of the defendant's cross-motion, submits the affidavit of Gregor MacMillan, Director of the Bureau of Health Insurance Programs, Division of Legal Affairs, New York State Department of Health. Mr. MacMillan was a participant in the 2006 budget negotiations that occurred between the legislative branch of New York State government and the executive branch of New York State government. Mr. MacMillan's responsibilities included reviewing and drafting legislation for inclusion in the Governor's annual budget submission to the Legislature. Mr. MacMillan avers that during the budget negotiations for the upcoming State fiscal year, (SFY), for 2006-2007, the Senate wanted to provide psychiatrists with a one-time only enhancement to their Medicare Part B payment for patients who are Dual Eligibles. Mr. MacMillan provides that the Senate representatives at the budget negotiations proposed a two-part change to the reimbursement methodology for Part B payments: (1) an amendment to Social Securities Law §367-(a)(1)(d)(iii), explicitly including psychiatrists in the group of providers receiving an enhanced Part B payment, accompanied by (2) the addition of a new section in the Unconsolidated Law, which would include language in the nature of a "sunset provision", specifically limiting the applicability of that enhanced payment for psychiatrists during the SFY 2006-07 period.

Accordingly, Mr. MacMillan provides, the "2006 Amendment" required the defendant to read Social Securities Law §367-a(1)(d)(iii), as amended, in conjunction with the amended Unconsolidated Law (§2 of Part C of Chapter 106 of the Laws of 2006), provided herein as follows:

Section 1. Subparagraph (iii) of paragraph (d) of subdivision 1 of section 367-a of the social services law, as amended by section 1 of part J1 of chapter 63 of the laws of 2003, (the [*7]2006 Amendment), is amended to read as follows:

(iii) When payment under part B of title XVIII of the federal social security act for items and services provided to eligible persons who are also beneficiaries under part B of title XVIII of the federal social security act and for items and services provided to qualified medicare beneficiaries under Part B of title XVIII of the federal social security act would exceed the amount that otherwise would be made under this title if provided to an eligible person other than a person who is also a beneficiary under part B or is a qualified medicare beneficiary, the amount payable under this title shall be twenty percent of the amount of any co-insurance liability of such eligible persons pursuant to federal law were they not eligible for medical assistance or were they not qualified medicare beneficiaries with respect to such benefits under such part B; provided, however, amounts payable under this title for items and services provided to eligible persons who are also beneficiaries under part B or to qualified medicare beneficiaries by an ambulance service under the authority of an operating certificate issued pursuant to article thirty of the public health law, a psychologist licensed under article one hundred fifty-three of the education law and a psychiatrist licensed under article one hundred thirty-one of the education law, or a facility under the authority of an operating certificate issued pursuant to article sixteen, thirty-one or thirty-two of the mental hygiene law and with respect to outpatient hospital and clinic items and services provided by a facility under the authority of an operating certificate issued pursuant to article twenty-eight of the public health law, shall not be less than the amount of any co-insurance liability of such eligible persons or such qualified medicare beneficiaries, or for which such eligible persons or such qualified medicare beneficiaries would be liable under federal law were they not eligible for medical assistance or were they not qualified medicare beneficiaries with respect to such benefits under part B. (Emphasis added.)

Social Securities Law §367-a(1)(d)(iii), as amended, (the 2006 Amendment), must be read in conjunction with Unconsolidated Law §2 which provides as follows:

§2. (a) Notwithstanding any provision of law to the contrary, medical assistance payments made in compliance with the amendments made by section one of this act shall be calculated in accordance with the methodology set forth in this section. Any medical assistance payments made to psychiatrists during the period April 1, 2006 through March 31, 2007 for items and services provided under part B of title XVIII of the federal social security act to eligible persons who are also beneficiaries under such part and for such items and services provided to qualified Medicare beneficiaries under such part and which are made subject to the twenty percent of coinsurance liability provisions of subparagraph (iii) of paragraph (d) of subdivision 1 of section 367-a of the social services law that were in effect immediately preceding the effective date of this act shall be increased in an aggregate amount not to exceed two million dollars pursuant to the following methodology:

(I) For each psychiatrist that received such payments during such period, the department of health shall determine the ratio of such psychiatrist's payments to the total such payments made during such period, expressed as a percentage;

(ii) For each such psychiatrist the department of health shall multiply the percentage obtained [*8]pursuant to paragraph (I) of this subdivision by two million dollars. The result of such calculations shall represent the "2006-2007 coinsurance enhancement" and shall be paid expeditiously to such psychiatrist.

(b) If all necessary approvals under federal law and regulation are not obtained to receive federal financial participation in the payments authorized by this section, payments under this section shall be made in an aggregate amount not to exceed one million dollars. In such case, the multiplier set forth in paragraph (ii) of subdivision (a) of this section shall be deemed to read "one million dollars".

( c ) The state share of any payments under this act shall be made from the general fund aid to localities, local assistance - 001.

(d) Notwithstanding any inconsistent provisions of section 368-a of the social services law, or of any other law, to the contrary, the department of health shall pay one hundred per cent of the nonfederal share of any payments made pursuant to this section.

Mr. MacMillan avers that in 2006 he voiced his objection to the amendment of Social Securities Law §367-a(1)(d)(iii) as he told staff members that the change to the Unconsolidated Law (which included the "sunset provision"), standing alone, was sufficient to provide the one-year enhanced Part B payment to psychiatrists, and therefore, there was no need to amend the Social Services law to accomplish this. Nevertheless, the statutes were signed into law on April 12, 2006 and were effective April 1, 2006.

Mr. MacMillan submits that the "2008 Amendment" was drafted to correct the "2006 Amendment" by repealing it, retroactively to April 1, 2007, (the day after the sunset date that was included in the Unconsolidated Law in 2006), to reinforce the original intent of the Senate, (and ultimately the Legislature and Governor), in 2006 and make it unmistakably clear that the legislative and executive branches of New York Government did not intend to extend this one-year benefit for psychiatrists beyond March 31, 2007. Mr. MacMillan provides that the Legislature was briefed on the Governor's proposed budget for the SFY 2008-09, including the repealer provision, and there was no objection, discussion or debate to the inclusion of the repealing language. Accordingly, the repeal of Social Security Law §367a-(1)(d)(iii), retroactive to April 1, 2007, was adopted, and the legislation became law on April 11, 2008.

Discussion

Article 78 of the CPLR, §7801, provides that relief obtained by writs of certiorari to review, mandamus or prohibition, shall be obtained in a proceeding under this article. A mandamus to compel is a judicial command to an officer or body to perform a specific ministerial act that is required by law to be performed. (Hamptons Hospital & Medical Center, Inc. v. Moore., 52 NY2d 88). The legal duty to act may be imposed by statute or by common law. However, the validity of a "legislative" act is not subject to review in an Article 78 proceeding. (New York City Health and Hospitals Corp. v. McBarnette, 195 AD2d 391). The appropriate remedy for a facial attack on the substance or content of legislation is an action for a declaratory judgment pursuant to CPLR §3001. (Bryant Avenue Tenn v. Koch, 71 NY2d 856; [*9]Matter of Kovarsky v. Housing & Development Adm. of NY, 31 NY2d 184).

CPLR §103( c ) provides that if a court has obtained jurisdiction over the parties, a civil proceeding shall not be dismissed solely because it is not brought in the proper form, but the court shall make whatever order is required for its proper prosecution. If the court findsit appropriate, in the interests of justice, the court may convert a motion into a special proceeding, or vice-versa, upon such terms as may be just, including the payment of fees and costs.

The Court of Appeals in Solnick v. Whalen, 49 NY2d 224, held that in order to determinewhether there is a period of limitation prescribed by law for the commencement of a particular declaratory judgment action, it is necessary to examine the substance of that action to identify the relationship out of which the claim arises and the relief sought. The court reasoned that if factors revealed that the parties' rights were open to a forum or proceeding for which a specific limitation period is statutorily provided, then that period limits the time for the commencement of the declaratory judgment action.

In Solnick, supra, the plaintiffs challenged the retroactive adjustment of certain Medicaid reimbursement rates seeking to an order declaring the retroactive adjustment as null and void, and an order adjoining the defendants from attempting to withhold any current Medicaid payments. The Court held that while the plaintiffs brought a "declaratory judgment" action challenging the determination of the Commissioner of Health adjusting Medicaid reimbursement rates for lack of due process, the action was in fact time-barred as it was brought less than four months after notification of the adjusted reimbursement rates. The Court reasoned that the challenge would have been barred by the four-month limitation period of a CPLR article 78 proceeding, (CPLR 217), which was an alternate form of judicial proceeding available to the plaintiffs, and the mere fact that plaintiff's challenge to the defendant's determination was stated in terms of a "constitutional objection", to wit, "violation of due process", did not serve to make an article 78 proceeding, the customary vehicle for review of administrative determinations, unavailable. (Id.) The Court in Hebrew Hospital Home, Inc. v. Novello, M.D.. 303 AD2d 255, found that while plaintiff might have sought to recover funds allegedly wrongfully recouped from the defendants by means of a proceeding pursuant to CPLR article 78, such a proceeding was already time-barred when plaintiff's declaratory judgment action was commenced.

In the action sub judice, plaintiffs challenge how the defendant, the DOH, interpreted the 2006 Amendments, and allege that the DOH has wrongfully denied plaintiffs 100% reimbursement. The plaintiffs claim that the DOH's "reading of the law is clearly erroneous", and that the DOH failed to follow the provisions of the Social Securities Law. The plaintiffs request this Court to "issue a declaration" that the "DOH must pay the full Medicaid Coinsurance Amounts to psychiatrists" for services rendered to Medicaid recipients who are Dual Eligibles , and "to direct and mandate DOH to so reimburse psychiatrists for that period". Clearly, plaintiffs seek writs in the nature of mandamus and prohibition, two forms of relief provided by Article 78 [*10]of the CPLR. Accordingly, an Article 78 proceeding is the appropriate vehicle in which to review plaintiffs' claims herein. When plaintiffs seek to test the action or inaction of a public officer, their sole remedy lies in a CPLR Article 78 proceeding seeking mandamus to compel. (New York Civil Liberties Union v. State of New York, 4 NY3d 175).

While the plaintiffs provide that "[t]his is a declaratory judgment action brought pursuant to CPLR §3001 seeking relief declaring that pursuant to an amendment to Social Services Law §367a(1)(d)(iii) enacted by the New York State Legislature in 2006", in examining which statute of limitations period should be applied to this "declaratory judgment action", this Court must look behind the form of the pleading and examine the nature of the claims. (Solnick, supra, New York City HHC v. McBarnette, 84 NY2d 194). Here, as already provided, the nature of plaintiffs' action as it seeks "injunctive relief", an order "enjoining" the defendant from continuing to refuse to pay full Medicaid reimbursement, and an order "to direct and mandate DOH to reimburse", are writs in the nature of mandamus and prohibition, and fall within two forms of relief provided by Article 78 of the CPLR.

This Court will now examine the plaintiffs' additional claim. The plaintiffs claim that the DOH has wrongfully interpreted the 2006 Amendment and challenge the DOH's interpretation of the rate-setting methodology embodied in the statutes. Therefore, plaintiffs' challenge amounts to a challenge of a "quasi-legislative" act of an administrative agency which requires CPLR Article 78 review which has a four-month limitations period. (Via Health Home Care, Inc. v. New York State Department of Health, 33 AD3d 1100).However, plaintiffs initiated this "declaratory judgment" action on or about December 12, 2007, and not within four months of the enactment of the offending legislation. (Kent Acres Dev. Co., Ltd. v. City of New York, 41 AD3d 549). Therefore, the plaintiffs' instant proceeding was already time-barred when the instant action was commenced. (Id.; Hebrew Hosp. Home, Inc. v. Novello, 303 AD2d 255).

Plaintiffs also challenge the 2008 Amendment on the theory that the 2008 Amendment was unconstitutional and violated the Due Process clause of the Federal and State Constitution as it "remove[d] plaintiffs' vested right to be reimbursed pursuant to the 2006 Amendment between ... April 1, 2007 and ... April 11, 2008" and therefore, "retrospectively impair[s] plaintiffs' vested rights". While a declaratory judgment is the proper vehicle in which to challenge the validity of a "legislative act" not subject to review in an Article 78 proceeding, plaintiffs' claims herein do not stem from the enactment or validity of the earlier legislation, but rather, DOH's interpretation and implementation of the legislation. As plaintiffs failed to pursue their claims in a timely Article 78 proceeding, it is beyond cavil that they are time-barred from challenging the retrospective application of the legislation enacted in 2008. Inasmuch as plaintiffs' Article 78 proceeding challenging DOH's interpretation of the underlying 2006 Amendments is time-barred, plaintiffs are time-barred from moving to challenge the 2008 amendment as plaintiffs claim the 2008 amendment deprived plaintiffs of a property right vested by virtue of the 2006 Amendment. [*11]

In any event, the 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. "A cognizable property interest is more than just a unilateral expectation'; it is a legitimate claim of entitlement." (Board of Regents v. Roth, 408 US 564). The plaintiffs' willingness to provide services to Dual Eligibles, in the expectation of receiving enhanced reimbursement rates from DOH, voluntarily participates in a price regulated program or activity, and therefore, as there is no legal compulsion to provide service, there can be no "taking". (Garelick v. Shalala, 510 US 821). Here, plaintiffs have not met their burden of establishing that the statute is unconstitutional.

Conclusion

In light of the foregoing, the plaintiffs' motion is denied and the defendant's motion is granted. Therefore, plaintiffs' instant action is hereby dismissed.

All other relief sought by way of the instant applications are hereby denied.

E N T E R :

________________________________

J.S.C.

Dated: March 23, 2009

cc: Moritt Hock Hamroff & Horowitz, LLP

New York State Attorney General's Office