In the Matter of Viola Dickinson v. Richard F. Daines, M.D., Commissioner, New York State Department of Health
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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
----------------------------------------------------------------No. 195
In the Matter of Viola Dickinson,
Appellant,
v.
Richard F. Daines, M.D.,
Commissioner, New York State
Department of Health, et al.
Respondents.
Rene H. Reixach, for appellant.
Victor Paladino, for respondents.
SMITH, J.:
We hold that violation of a regulatory deadline for
rendering a decision after a fair hearing does not require the
State to pay Medicaid benefits to a person not otherwise entitled
to them.
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No. 195
I
Petitioner, an elderly woman living in a skilled
nursing facility, applied to the Onondaga County Department of
Social Services (DSS) for Medicaid benefits.
DSS rejected her
application, concluding that she had resources and income
available to her exceeding the amounts permitted for Medicaid
recipients.
On June 14, 2007, petitioner exercised her right
under Social Services Law § 22 (1) to appeal to the Department of
Health (DOH), and demanded the "fair hearing" to which she was
entitled by that statute.
An applicable DOH regulation, 18 NYCRR 358-6.4 (a),
says that "definitive and final administrative action must be
taken promptly, but in no event more than 90 days from the date
of the request for a fair hearing."
complied with in this case.
That regulation was not
The fair hearing was not held until
September 13, 2007, 91 days after the fair hearing demand, and
DOH's "Decision After Fair Hearing" was not issued until the
190th day, December 21, 2007.
When the decision came, it was favorable to petitioner.
A representative of the Commissioner of Health decided that
assets subject to a trust agreement entered into by petitioner
should not count against her for Medicaid eligibility purposes,
and that she was entitled to receive benefits.
DSS asked the
Commissioner to review that decision, as DOH regulations permit
(18 NYCRR 358-6.6 [a] [1]).
On April 4, 2008, the 295th day
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after the request for a fair hearing, a designee of the
Commissioner issued an "Amended Decision After Fair Hearing"
upholding DSS's position and denying petitioner benefits.
Petitioner brought this CPLR article 78 proceeding to
annul the Commissioner's amended decision and reinstate the
original one.
Petitioner does not claim that the original
decision was correct, or the amended one wrong.
Her argument is
that the Commissioner's violation of the time limit imposed by
the DOH regulation renders the amended decision invalid.
Supreme Court granted the petition.
The Appellate
Division, with two Justices dissenting, reversed (Matter of
Dickinson v Daines, 68 AD3d 1646 [4th Dept 2009]).
Petitioner
appeals to us as of right, pursuant to CPLR 5601 (a), and we now
affirm.
II
The opinions in the courts below, and the parties'
briefs, debate whether the 90-day limit contained in 18 NYCRR
368-6.4 (a) is "mandatory" or only "directory" -- words that have
often been used, by our Court and others, in characterizing time
limits and other provisions of law relating to the conduct of
government business.
In this case, the simple choice between
"mandatory" and "directory" does not adequately describe all
possible ways of applying the regulation.
We agree with the
Appellate Division majority, however, that the DOH regulation at
issue was not "mandatory" as we have used the term, and that its
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No. 195
violation does not warrant nullifying the Commissioner's amended
decision.
In Matter of Grossman v Rankin (43 NY2d 493 [1977]), we
considered a statute requiring the Civil Service Commission to
decide within four months of the occurrence of a vacancy whether
the vacant position had been properly classified as exempt.
We
held the time limit to be "merely directory" (id. at 501).
While
we said that the Commission "should seek to comply in a timely
fashion" with the statute's "guidelines," we also said:
"The courts have repeatedly held that unless
the language used by the Legislature shows
that the designation of time was intended as
a limitation on the power of the body or
officer, the provision is directory rather
than mandatory"
(id.).
In Matter of King v Carey (57 NY2d 505, 512-13 [1982]),
by contrast, we rejected an argument that a 90-day time limit was
"merely directory."
We recognized the rule that
"prescriptions in regard to the time, form
and mode of proceeding by public
functionaries are generally directory, as
they are not of the essence of the thing to
be done, but are given simply with a view to
secure system, uniformity and dispatch in the
conduct of public business"
(id.; internal quotation omitted).
We concluded, however, that
the Legislature that enacted the time limit at issue in King
"considered time of the essence" (id. at 514).
There can be no
doubt that King involved an exception to the general rule.
As we
said in Matter of Syquia v Board of Educ. of Harpursville Cent.
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No. 195
School Dist. (80 NY2d 531, 535 [1992]):
"A rule that rendered every administrative
decision void unless it was determined in
strict literal compliance with statutory
procedure would not only be impractical but
would also fail to recognize the degree to
which broader public concerns, not merely the
interests of the parties, are affected by
administrative proceedings."
Grossman, King and Syquia are all different from the
present case in an important way: the requirements at issue in
those cases were imposed by statutes, but here petitioner is
relying on a DOH regulation.
When the regulation was first
adopted, it may have been necessary to comply with federal law;
before 2002, federal Medicaid regulations imposed an unqualified
time limit on decisions made after fair hearings (see the former
version of 42 CFR 431.244 [f], 44 Fed Reg 17925, 17933 [March 23,
1979]).
The federal regulation, however, was relaxed in 2002,
and now says that a state agency "must take final administrative
action . . . [o]rdinarily, within 90 days" (42 CFR § 431.244 [f]
[1] [emphasis added]).
"ordinarily."
The State regulation does not say
Its unqualified 90-day limit is one that DOH
imposes on itself.
The parties have cited no case, and we know of none, in
which a time limit or other procedural requirement imposed on an
administrative agency by its own regulation was held to be
mandatory.
It would certainly be unusual, if not impossible, for
an administrative agency so to deprive itself of power that the
Legislature conferred upon it.
Indeed, petitioner here is not
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really arguing that the time limit is "mandatory" in the sense
that, to use our words in Syquia, it renders "every
administrative decision void" that is not made within 90 days.
If that were true, petitioner would lose the case, because the
Commissioner's original decision after the fair hearing -- the
decision in petitioner's favor -- was rendered after 90 days had
expired.
In any event, to take the time limit as a
jurisdictional barrier to action would make no sense.
It would
allow the Commissioner, merely by delaying his decision more than
90 days, to nullify the right of applicants for Medicaid to fair
hearings.
The real question here is not whether the regulation is
"mandatory" in the sense of depriving the agency of power to act
when it is violated, but what the consequences of a violation
are.
Petitioner, perhaps wary of seeking too broad a holding,
has not suggested a rule that would answer this question.
A
theoretically possible rule is that, when a decision after a fair
hearing is not timely issued, the party requesting the fair
hearing (i.e., the party seeking benefits) wins automatically
(cf. Persico v Maher, 191 Conn 384, 407, 465 A2d 308, 320
[1983]).
But that rule would be draconian, potentially very
expensive for the State and unfair to agencies, like DSS here,
that would suffer the consequences of delays that were not their
fault.
It seems unlikely that the Legislature has even empowered
the Commissioner to impose such severe consequences as the result
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No. 195
of bureaucratic delays; but assuming that he has that power, we
see no sign that the Commissioner intended, by adopting the
regulatory 90-day time limit, to exercise it.
Another theoretically possible rule would be that,
where the 90-day time limit is violated, reconsideration of a
decision favorable to the applicant is barred.
But this rule,
though less drastic than the applicant-always-wins rule, has
little to recommend it.
DOH regulations provide that the
Commissioner "may review an issued fair hearing decision for
purposes of correcting any error found in such decision" (18
NYCRR 358-6.6 [a] [1]), and impose no time limit on the review.
To prohibit review where the original decision was late would be
an arbitrary restriction, without support in any statutory or
regulatory text, that would needlessly prevent the Commissioner
from correcting errors by his subordinates.
We thus reject any view of the 90-day time limit that
would render invalid the action taken by the Commissioner here.
In doing so, we do not necessarily hold that the time limit is
"merely directory" in the sense described by Grossman v Rankin -a
guideline with which DOH "should seek to comply" (43 NY2d at
501).
DOH does not argue that violations of the time limit have
no consequences at all.
On the contrary, it acknowledges that
the time limit may be enforced by a lawsuit to compel the
issuance of a decision (see Matter of Cisco v Lavine, 72 Misc 2d
1087 [Sup Ct, Nassau County 1973]).
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The Commissioner also points
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No. 195
out that the federal government may cut off the State's Medicaid
funds if the state program is not administered in accordance with
federal requirements (42 USC § 1396c).
And finally, the
Commissioner acknowledges that, as we said in Syquia, a
petitioner may obtain relief even under a merely directory
procedural requirement if she shows "that substantial prejudice
resulted from the noncompliance" (80 NY2d at 535).
petitioner has shown no such prejudice.
This
On the contrary, as the
case reaches us, she has effectively conceded that she is not,
and never was, entitled to receive Medicaid benefits.
Accordingly, the order of the Appellate Division should
be affirmed, without costs.
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Order affirmed, without costs. Opinion by Judge Smith. Chief
Judge Lippman and Judges Ciparick, Graffeo, Read, Pigott and
Jones concur.
Decided November 23, 2010
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