IN THE MATTER OF THE COUNTY OF MONROE, ON BEHALF OF MONROE COMMUNITY HOSPITAL
v. GREGORY KALADJIAN, ACTING COMMISSIONER OF THE DEPARTMENT OF SOCIAL
SERVICES OF THE STATE OF NEW YORK, ET AL.,
83 N.Y.2d 185, 630 N.E.2d 638, 608 N.Y .S.2d 942 (1994).
February 15, 1994
4 No. 3 (1994 NY Int. 011)
Decided February 15, 1994
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This opinion is uncorrected and subject to revision before publication
in the New York Reports.
SMITH, J.:
The issue in this case is whether the Department of Health's (DOH)
decision to deny petitioner Monroe County's request, on behalf of its
County Hospital operation, for additional Medicaid reimbursement due
to the difference between petitioner's estimated electric utility
costs for 1983, a rate base year, and actual usage in 1990, was
arbitrary and capricious. Concluding that DOH's determination was not
arbitrary and capricious, we reverse the order of the Appellate
Division that allowed recovery of such costs.
Petitioner, Monroe Community Hospital (Hospital), is an institution
for extended care and treatment of the chronically ill. Under
provisions of article 28 of the Public Health Law, acute care
hospitals such as petitioner receive reimbursement for services
rendered to Medicaid-eligible patients (see, Public Health Law
2807(3)). Pursuant to 10 NYCRR 86-2.10(b)(1), petitioner was required
to use "statistical data submitted by the facility for the fiscal year
ending December 31, 1983" to determine its reimbursement rate. The
reimbursement rate consists of the following components: (1) direct
costs, (2) indirect costs, (3) noncomparable costs, and (4) capital
costs. The noncomparable component of the rate consists of costs which
are not subject to peer facility comparison due to their nature (see,
10 NYCRR 86-2.10(f)(1)). Electricity costs are part of non-comparable
costs.
When DOH reviewed petitioner's 1983 costs, petitioner was sharing an
electrical meter with three other facilities operated by Monroe
County. In complying with the regulatory scheme petitioner estimated
its share of those costs at 6,929,954 kilowatt hours. In 1990, after
petitioner installed a meter to determine its actual electrical usage,
petitioner assumed that it had underestimated its usage for 1983
SNIPPETS:
IN THE MATTER OF THE COUNTY OF MONROE, ON BEHALF OF MONROE COMMUNITY HOSPITAL
The issue in this case is whether the Department of Health's (DOH) decision to deny
Concluding that DOH's determination was not arbitrary and capricious, we reverse the order of
Under provisions of article 28 of the Public Health Law, acute care hospitals such as
Pursuant to 10 NYCRR 86-2.10, petitioner was required to use "statistical data submitted by
Electricity costs are part of non-comparable costs.
When DOH reviewed petitioner's 1983 costs, petitioner was sharing an electrical meter with
In complying with the regulatory scheme petitioner estimated its share of those costs at
DOH recommended denial of petitioner's request because petitioner had failed to seek prior
That regulation requires that the hearing request be denied unless there are factual issues
Supreme Court annulled DOH's determination as arbitrary and capricious and remitted the
Appellant DOH contends that the prior courts had no authority to direct it to calculate
The appropriate standard of review here is whether DOH's determination was arbitrary and
This settled standard requires the Court to assess whether the action in question was taken
Petitioner claimed no sufficient "factual issue," and sought to assert a new ground to
Additionally, notwithstanding petitioner's contentions to the contrary, the difference
Chief Judge Kaye and Judges Simons, Bellacosa, Levine and Ciparick concur.
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