BETH ISRAEL MEDICAL CENTER v. Healthcare Association of New York State, Amicus Curiae. (2005)

Judgment, Supreme Court, New York County (Barbara R. Kapnick, J.), entered on or about May 23, 2003, which denied the petition and dismissed the proceeding brought pursuant to CPLR article 78, challenging the rate at which petitioner hospitals were paid under Medicaid according to the Statewide Case Mix for the 1992 through 1994 rate years, unanimously affirmed, without costs.

 Supreme Court correctly found the petition time-barred, notwithstanding the duration of some of petitioners' administrative appeals.   We note initially that, according to petitioners' pleadings, 59 of petitioner hospitals never filed an administrative appeal, and virtually all of the appeals for the 1992 and 1993 rate years were decided more than four months prior to commencement of this litigation.   In any event, Supreme Court properly found that the purported appeals were not valid pursuant to 10 NYCRR § 86-1.61 because the errors they asserted in the determinations of allowable case mix increase were not mathematical or clerical in nature (see Matter of Evergreen Valley Nursing Home v. De Buono, 277 A.D.2d 569, 715 N.Y.S.2d 523 [2000];  Matter of Sylcox v. Chassin, 227 A.D.2d 834, 836, 642 N.Y.S.2d 411 [1996];  see also 10 NYCRR § 86-1.60).   Respondent Department of Health (DOH) did not create an “ impression of nonfinality” about the challenged determinations and accordingly is not estopped from arguing that petitioners' article 78 challenges are time-barred (see Mundy v. Nassau County Civil Serv. Commn., 44 N.Y.2d 352, 358, 405 N.Y.S.2d 660, 376 N.E.2d 1305 [1978] ).   We note, in any case, that even if article 78 relief had been timely sought, petitioners' claims would not withstand scrutiny on the merits since petitioners have failed to show that the DOH process of setting case mix adjustments “is so fundamentally flawed as to be arbitrary and capricious” (see St. Joseph's Hosp. Health Ctr. v. State Dept. of Health, 247 A.D.2d 136, 153, 677 N.Y.S.2d 194 [1998], lv. denied 93 N.Y.2d 803, 688 N.Y.S.2d 493, 710 N.E.2d 1092 [1999] ), or is inconsistent with a mandate of the Public Health Law and the attendant regulations (see McAllan v. Marcos, 262 A.D.2d 192, 693 N.Y.S.2d 528 [1999], appeal dismissed 94 N.Y.2d 791, 700 N.Y.S.2d 422, 722 N.E.2d 502 [1999], lv. dismissed in part and denied in part 95 N.Y.2d 789, 710 N.Y.S.2d 842, 732 N.E.2d 950 [2000] ).