IN RE: Application of the CITY OF NEW YORK

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Supreme Court, Appellate Division, First Department, New York.

IN RE: Application of the CITY OF NEW YORK, Petitioner-Respondent, For a Judgment, etc., v. Brian J. WING, etc., et al., Respondents-Appellants.

Decided: May 19, 1998

Before MILONAS, J.P., and ROSENBERGER, NARDELLI, WALLACH and RUBIN, JJ. Mordecai Newman, for petitioner-respondent. Lyssa M. Sampson, for respondents-appellants.

Order, Supreme Court, New York County (Sherry Heitler, J.), entered April 16, 1997, which, inter alia, upon reargument, adhered to so much of a prior judgment of the same court and Justice, entered October 16, 1996, as enjoined respondents from withholding from petitioner's Human Resources Administration monies deemed by respondents to represent overpayments by respondent Department to providers of home care for Medicaid recipients, unanimously affirmed, without costs.

 We agree with Supreme Court that respondents cannot on the basis of “unpromulgated, internal audit standards” (see, Flowers v. Perales, 170 A.D.2d 217, 218, 565 N.Y.S.2d 504, lv. denied 78 N.Y.2d 857, 574 N.Y.S.2d 938, 580 N.E.2d 410) hold petitioner responsible for collecting an arbitrarily and unilaterally determined amount of money allegedly overpaid to home care providers.   There is no statutory or regulatory authority for the recovery the State seeks.   Nor can the State respondents recover the amounts they have determined to have been overpaid from petitioner pursuant to their common-law right to recoup overpayments (see, e.g., Matter of Schwartfigure v. Hartnett, 83 N.Y.2d 296, 300, 610 N.Y.S.2d 125, 632 N.E.2d 434), since that right of recoupment entitles the State respondents to do no more than recoup actual overpayments from the actual parties to whom such overpayments were made.   As Supreme Court made clear on reargument, however, respondents may, of course, collect from petitioner those actual overpayments made by the State that petitioner has in fact recouped from home care providers.   We have considered respondents' remaining arguments and find them to be without merit.