Good Samaritan Hosp. Med. Ctr. Inc. v New York State Dept. of Health
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Good Samaritan Hosp. Med. Ctr. Inc. v New York State Dept. of Health 2016 NY Slip Op 30382(U) February 25, 2016 Supreme Court, County of Suffolk Docket Number: 2011-32813 Judge: Jeffrey Arlen Spinner Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] ~upreme J~ QCourt of tbe &tate of ~em !_lork )}art **lf -QI:ountp of ~uffolk PRESENT: HON. JEFFREY ARµ:N SPINNER Justice of the Supreme Court GOOD SAMARITAN HOSPITAL MEDICAL CENTER, INC, as Operator of the GOOD SAMARITAN NURSING HOME, GOOD SAMARITAN NURSING HOME, OUR LADY OF CONSOLATION · GERIATRIC CARE CENTER, ST CATHERINE OF SIENA MEDICAL CENTER, as Operator of ST CATHERINE OF SIENA NURSING HOME and ST. CATHERINE OF SIENA DECISION & ORDER NURSING HOME, Petitioners, For an Order Pursuant to Article 78 of the Civil Practice Law and Rules, INDEX NO: 2011-32813 MTN SEQ NO: 002 - CASEDISP ORIG MTN DATE: 10/ 03/ 14 -against- FINAL MTN DATE: 12/22/15 NEW YORK STATE DEPARTMENT OF HEALTH, NIRAV R SHAH, MD, MPH, as Commissioner of the New York State Department of Health, and ROBERT L. MEGNA, as Director of the Budget of the State of New York, ·-----------~-----------------------~---------~:~~~-~~~:s~-UPON the following papers read on this application: 1. Petitioners' Motion for Renewal and Reargument [002]; it is, ORDERED, that the application of Petitioner is hereby denied in all respects. After a thorough and comprehensive review of the submission herein, all the facts set forth in the original papers and in these instant submissions for renewal and reargument, and after comprehensive review of all the laws cited in all submissions and the prior Order of this Court, this Court has come to the following determination: Petitioner moves this Court for an Order, pursuant to CPLR 2221 (d) and (e), and such other provisions of as may be deemed applicable: 1. Granting leave to re.a rgue that p ortion of the Court's July 23, 2014 Order which allegedly overlooked and failed to address the controlling authority, on principles of stare decisi.s and uniform precedent from the Appellate Division, Second Department and other appellate courts in New Page 1 of 5 [* 2] York, of the Kalcti lvside11,·e Novello holding, as well as other arguments overlooked by the Court; 2. Granting leave to renew that part of the Court's prior Order, d ated July 23, 20 14, as <letermine<l that the Medicaid reim bursement provisions at issue would afford pctitione.rs <lupli<:ativc payment in the event the relief sought in underlying proceeding (and the relief granted by every other court to have considered the issue) were granted to petitioners 3. Upoo such renewal and reargument, vacating this Court's July 23, 2014 Order and granting in all respects sought in the Petition of GOOD $1 \MJ\IUTAN HOSPIT1 \L. As ro that portion of Defendant's application regarding renewal it is well settled that an application to renew must be based on additional material facts which were in existence at the time the prior motion was made, but were not then known to the party moving for leave to renew; and that said party must offer a valid excuse for not supplying sucb additional material facts. Such a request should be rejected where the moving party fails to offer. thercyuisite reasonable excuse. (See, Cuccia v CityofNew York, 306 AD2d2 fl Dpt 2003) titit{gCPLR.2221(3); Elson v D cfren, 283AD2d10911 Dpt2001]; Tishman Const Corp v CityofNew York; 280AD2d 374 l1 Dpt2001l; Linden v M osk owitz,294 r\D2d 114 fl Dpt 2002]; Chelsea Piers M an agement v Forest Electric Corp, 281 AD2d 252 [1 Dpt 20011; Matter of Creole Enterprises v Giuliam; 240 AD2d 279 ll Dpt 19971). Further, in order to succeed, the mov1ng party must demonstrate that new facts not offered on the prior motion would change the previous determination rcndei:cd (See, Greene v NYCHA, 283 AD2d 458 [2 Dpt 2001 I). This court fmds that no new facts were offered, an<l the new arguments offei:e<l as new facts would not have resulted in a different decision in the within matter. Therefore, leave to renew must be denied. As to tbat portion of Defendant's application regarding rcargument, it is well setrJed tbat such a motion is addressed to the discretion of the Court, affording the moving party an opportunity to demonsmuc that the Court overlooked or misapprehended the relevant facts, or misapplied any controlling principle oflaw, and not to afford an opportunity to argue once more the same gucstions pr<:,·iously decided (See, Foley v Riche, 68 AD2d 55811Dpt19791). Defendant failed to demonstrate that the Court ovcrlookc<l or misapprehended relevant facts or misapplied any controlling principal of bw, in reaching its determination (Sec, S<1ccom agno v City ofNew York; 29 AD3d 379, 814 NYS2<l 880 {2 Dept 20061; M cGillvGoldman, 261 J\D2d 593, 691NYS2d75 (2 D ept1999); City ofN ew York v Times' Up Inc; 11 Misc3d 1052, 2006 WL 346491 *3 fSupCt, New York Co, 2006], dtin,~, Sports Channel Am Assocs v Nat'/ H ock ey L eague, 186 AD2d 417 11 Dpt 1992J; Rosa H air Syhst Inc v Jaber Food Corp, 218 AD2d 793 f2Dpt1995]). The Court foun<l nothing to support Defendant's reguest for relief herein, and stands fully by its prior decision. Therefore, leave to reargue must be denied. STATEMENT OF FACTS The Co.urt takes the opportunity to briefly restate the facts, derived from the original Statement of Facts in tbe ptior Order herein. Petitioners, three nursing homes, are all part of Catholic I Iealth Services of 1,ong Island, containing 790 beds, providing nursing home and health services to residents of Suffolk County, New York (NY), and reimbursed by Medicaid for medical care provided to eligible patients unable to afford it, including Page 2 of 5 [* 3] nursing home care. J\ joint federal-state program, pursuant to Title XIX, Social Security Act (SS1\ ) (42 USC § 1396 cl seq), the Federal Government (US) covers 50%, with statt: and local governmems covering the remainder. New York operates its own Medicaid program, setting guidelines for eligibility and services in compliance with US statutes, regulations and rules. New York establishes a rate in Public Health Law (PHI.)§ 2807, expressly to implement a Medicaid reimbursement system in compliance with 42 USC § J396 el seq. ln 1969 the YS Legislature (Legislarure), responding to skyrocketing medical costs, alarmingly consuming taxes, enacted the Hospital Cost Control Law (m L 1969, ch 957).amending Pl TI . § 2807. This altered the criteria for establishing reimbursement rates, from rates "reasonably related to the cosr of providing such service" (PTIL fo1mer § 280713J, as amended by L 1965, ch 795,§ 1), w raLe$ "reasonably related to the cost of efficient production of service" (P.HJ, former§ 2807l3], as amended by L 1969, ch 957, § 4; see: People v Woman's Christian A ssn of Jamestown, 56 AD2d J01, 103 f19771). The Legislature e>rpressly stated "it is essential that an effects cost control program he established will both enabJe and motivate hospitals to control their spiraling costs" (L 1969, ch 957, § 2; see: People v Woman's Christian Assn of Jamestown, 44 NY2d 466, 471 I1978j). The Legislature again amended J>HL § 2807(3) in 1982 QJ 1982, ch 536, § 3), and currently reyuires the Commissioner of Health to establish reimbursement rates that arc "reasonable and adequate to meet the cost which must be incurred by efficiently and economically operated facilities" (Pt II. § 2807r3]). The Health Commissioner developed and implemented the Resource Utilization Group-Il case mix reimbursing mythology, effective 1986 (see: 10 NYCRR subpart 86-2; M atter of Blossom view N ursi11g H ome v N ovello, 4 NY3d 581, [20051), The Court of Appeals, noted this reimbursement methodology represented "a key cost cootairunent device that encourages facilities to economize," replacing prior methodology which, inconsistent with the purpose of PT IL § 2807(3), "saddled taxpayers witl1 ever-increasing expenditures without creating any incentives for efficiency" (see: Matter of N azareth H om e of the Franciscan Sisters v N oveUo, 7 NY3d 538, 544, l2006J). lndeed, PHL § 2807(3) "docs not require rates to cover every !provider':;! actual costs. Rates arc 'reasonable and adequate' so long as they reimburse the necessary cost (i.e., the 'costs which must be incurred') of 'efficiently and econ omically operated facilities'" (id. Quoting PH l . § 2807[3]). lt is unmistakably clc.::ar that the Legislator's express intent in passing PHJ, § 2807(3) was to control the spiraling cost of Medicaid services conswning taxpayer dollars at a burgeoning mind-boggling rate. 1\ New York Stace agency, Respondent DOH, is vested with authority, pursuant to PJJL Article 28, to establish Medicaid reimbursement rates for nursing homes using the Resource Ucifo:arion Group-II ("RUC;- fl") case mix reimbursement methodology (see: 10 NYCRR subpart 86-2; Blossom view v N ovello, Slfpra. Simply put, a nursing home's per diem reimbursement rate, the <la.ily rate at which a facility can bill Medicaid for eligible resident, reflects a facility's allowable costs, divided by the nwnbcr of "patient days". Allowable costs in a base year arc adjusted to reflect patient conditions and care needs, as well as regional differences in wages and fringe benefits, and are then trended forward to account for the effects of inflation allowable costs in a base year. The Health Commissioner adopted this rate-setting methodology in order to encourage nursing homes Page 3 of 5 [* 4] to contain costs, and operate efficiently and economically, in line with their reimbursement rates. Rates arc set in advance of the rate year, and arc subject to maximum (ceiling) and minimum Qnse) amount derived from statewide averages parentheses (see: Matter of Consolf1tion Nursing Home v CommissionerofNYStateDcptofHealth, 85 NY2d 326 [19951). In 2006, the Legislature added a new subdivision, (2-b), to PHL § 2808, providing for updating the base year for operating cost, beginning in 2007 (sec L 2006, ch 109, part C, § 47). This mandated fuU implementation by 2009, preceded by a two-year phase-in period, an<l called for a 2002 base year. f urthcr, PIIL § (2-b)(f) specified updating thereafter no later than the 2012 rate, using a base year no earlier than three years prior w the initial rate year, and for subsequent updating at least every six rears, again using a three-year, or more recent, base year. This amendment, referred to as the Rebasing I ,a\\', constituted a significant change to Medicaid rate setting for nursing homes. 1lcrcin, the source of controversy revolves around Meclicai<l rate-setting practices utilized by DOH to reimburse Petitioners, subsequent to introduction of the Rebas.ing Law, specifically the &>tinction between Medicaid per diem reimbursement rate for 'reserved bed patient days' and 'patient days' has resulted in the filing of the instant Petition. The controlling regulation, 10 NYCRR 86-2.8(d), states simply that 'reserved bed patient days' shall be computed separately from 'patient days'. 'Reserved bed patient <lay' is defined as "the unit of measure denoting an overnight stay away from the residential healthcare facility for which the patient, or patient's third-party payor, provides per diem rcimburscmenr when the patient's absent is due to hospitalization or therapeutic leave" 10 NYCIUl 862.8(d). 'Patient <lay' is defined as "the unit of measure denoting lodging provided and services rendered to one patient between the census-taking hour on two successive days" I0 NYCRR 8G-2.8(a). On June 20, 2011, DOH sent Petitioners a Dear Administrator Letter ("DAL"), with an updated \ determination of ,\ledicaid per diem reimbursement rares Petitioners would receive: beginning 1 pril I, 2009. '!be rate sheets included all 'reserved bed patient days' within the number of 'patient dars' used to calculate per diem reunbursemcnt. "!be update reflected a facility's allowable costs, c.Iivic.led by the number of 'patient clays' and 'reserved patient days', resulting in DOT Teffectively dosing a loophole Petitioners improperly used to increase per diem reimbursement rares Medicaid paid them. While it affords Petitioners continued full compensation for all 'tcsetved bed patient day', it prcclu<lcs them from attifidally increasing the per diem rate DOI I pays by also simultaneously reimbursing them for that bed as a 'patient day', as well. The update DOH sent to Petitioners foreclosed a technicality that Petitioners ha<l exploited so as ro obtain unjust, unreasonable and excessive compensation, at the expense of the United States. New York an<l Suffolk County ( ;overnments and Medicaid, and even more importantly, ulrimarely at the expense of hard-working taxpayers, in cleat violation of established public policy. STANDARD OF REVIEW It is well settled that, in reviewing administrative action, a Court may not substitu!t:: its judgment for rhat of the agency responsible for making the determination, but must ascertain only whether there is a rational basis for the decision or whether the determination is arbitrary and capricious (see: PeU v Bd of Ed ofUnion Free Sch Dist No 1 of Towns ofScarsdale and Mamaroneck, Westchester Cnty, Page 4 of 5 [* 5] 34 NY2d 222, 231, 232 [ l 974J). Deference to the judgment of the agcncy, when supported by the record, is particularly appropriate when the matter under review involves a factual evaluation in the area of rhe agency's expertise (see: Kurcsics v Merch ants M ut Ins Co, 49 NY2d 451, 459 [1980]; Warder v Bd of R egen ts of Univ of State of NY, 53 NY2d 186, 194 [ 1981 I). DOH is entitled to a "high degree of judicial <lcfet~nce, especially when .. . act[ing] in the area of its particular expertise," and thus Petitioners bear the "heavy burden of showing" that DOH's rate-setting methodology "is unreasonable and unsupported by any evidence" (see: Consolation N ursing H om e Inc v Comm't o fNew YorkStatcDep't ofHealtl1, 85 NY2d 326, 331, 332 j1995J). for all rhe reasons stated herein above and in the totality of the papers submitted herein, it is, therefore, ORDE RE D, Lhal the application of Petitioner to renew and rearguc this matter is hereby denied in all respect, as Petitioners faj led to meet the legal standards requisite for the granting of such an application. The foregoing constitutes the Decision an<l Order of the Cou t. D ated: Riverhead, New York February 25, 2016 ./ 1:1N.\L DlSPOSlTION NON rlNAL DlSPOSITIO~ DO NOT SCAN Page 5 of 5
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