        SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

479
CA 14-01989
PRESENT: SMITH, J.P., CARNI, LINDLEY, SCONIERS, AND DEJOSEPH, JJ.


CHARLES T. SITRIN HEALTH CARE CENTER, INC.,
PETITIONER-RESPONDENT-APPELLANT,

                    V                             MEMORANDUM AND ORDER

COMMISSIONER OF HEALTH OF STATE OF NEW YORK
AND DIRECTOR OF BUDGET OF STATE OF NEW YORK,
RESPONDENTS-APPELLANTS-RESPONDENTS.


ERIC T. SCHNEIDERMAN, ATTORNEY GENERAL, ALBANY (VICTOR PALADINO OF
COUNSEL), FOR RESPONDENTS-APPELLANTS-RESPONDENTS.

BOND, SCHOENECK & KING, PLLC, ALBANY (RAUL A. TABORA, JR., OF
COUNSEL), FOR PETITIONER-RESPONDENT-APPELLANT.


     Appeal and cross appeal from a judgment (denominated order and
judgment) of the Supreme Court, Oneida County (Samuel D. Hester, J.),
entered March 19, 2014 in a proceeding pursuant to CPLR article 78.
The judgment granted the petition in part.

     It is hereby ORDERED that the judgment so appealed from is
unanimously modified on the law by granting the petition in its
entirety, and as modified the judgment is affirmed without costs.

     Memorandum: Petitioner commenced this CPLR article 78 proceeding
seeking, inter alia, the annulment of a determination of respondents,
made February 25, 2013, that retrospectively revised the capital cost
component of petitioner’s Medicaid reimbursement rate for the period
beginning on September 1, 2009. Respondents appeal and petitioner
cross-appeals from a judgment granting the petition in part and
annulling that part of respondents’ determination that revised the
reimbursement rates for the period from September 1, 2009 through
September 30, 2011. We conclude that Supreme Court also should have
annulled respondents’ determination for the period from October 1,
2011 through March 27, 2013, and we therefore modify the judgment
accordingly.

     Medicaid reimbursement rates for diagnostic and treatment centers
such as petitioner are comprised of an operating cost component and a
capital cost component (see Public Health Law § 2807 [2] [b]). In
2008, the legislature revised the methodology for calculating the
reimbursement rate (see § 2807 [2-a], as amended by L 2008, ch 58, §
1, part C, § 18). Under the new methodology, the operating cost
component of the reimbursement rate would be calculated using “the
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                                                         CA 14-01989

ambulatory patient group (APG) methodology” (§ 2807 [2-a] [e] [i]),
which would be phased-in gradually during an implementation period
running from September 1, 2009 though January 1, 2012 (see § 2807 [2-
a] [b] [i]-[iv]). Section 2807 (2-a) did not impose a new methodology
for calculating the capital cost component of the reimbursement rate
and simply provided that “such rates . . . shall . . . remain subject
to the provisions of paragraph (b) of subdivision two of this section”
(§ 2807 [2-a] [h] [ii]).

     Under Public Health Law § 2807 (2) (b), the capital cost
component of the reimbursement rate is “determined by adjusting the
[capital] cost data of each facility for a base year” (Anthony L.
Jordan Health Corp. v Axelrod, 67 NY2d 935, 936), and “[t]he base year
for the rate period commencing on October [1, 1994] shall be [1992]
and shall be advanced one year thereafter for each subsequent rate
period” (§ 2807 [2] [b]). The legislature adopted legislation,
however, that modified the effect of section 2807 (2) (b) by freezing
the capital cost component of the reimbursement rates such that the
“rates of payment for diagnostic and treatment centers established in
accordance with paragraph[] (b) . . . of subdivision 2 of section 2807
of the public health law for the period ending September 30, 1995
shall continue in effect . . . through September 30, 2011” (L 2009, ch
58, § 1, part B, § 22). Thus, although section 2807 (2) (b) provides
that the capital cost component of the reimbursement rate is
recalculated annually by making an adjustment to the rate applicable
to a base year that is two years prior to the rate year, the rate
freeze legislation provides that the capital cost component would
remain at the 1995 level through September 30, 2011.

     On February 25, 2013, respondents notified petitioner that they
were retrospectively revising the capital cost component of the
reimbursement rate for the period beginning on September 1, 2009 by
using a base year that was two years prior to the rate year. The
court agreed with petitioner, however, that the legislature had frozen
the reimbursement rates for the period from September 1, 2009 through
September 30, 2011 at the 1995 level.

     On appeal, respondents contend that the rate freeze legislation
was not applicable during the period from September 1, 2009 through
September 30, 2011 because it had been rendered inoperable when the
legislature adopted Public Health Law § 2807 (2-a). We reject that
contention. “The primary consideration of courts in interpreting a
statute is to ‘ascertain and give effect to the intention of the
Legislature’ ” (Riley v County of Broome, 95 NY2d 455, 463, quoting
McKinney’s Cons Laws of NY, Book 1, Statutes § 92 [a], at 177). “The
statutory text is the clearest indicator of legislative intent[,] and
courts should construe unambiguous language to give effect to its
plain meaning . . . And where, as here, the question is one of pure
statutory reading and analysis, dependent only on accurate
apprehension of legislative intent, there is little basis to rely on
any special competence or expertise of the administrative agency”
(Matter of DaimlerChrysler Corp. v Spitzer, 7 NY3d 653, 660 [internal
quotation marks omitted]). Here, section 2807 (2-a) (h) (ii) provides
that the capital cost component of the reimbursement rate is to be
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                                                         CA 14-01989

calculated in accordance with section 2807 (2) (b), and the
legislature also enacted a law that unambiguously provides that
reimbursement rates calculated in accordance with section 2807 (2) (b)
shall remain at the 1995 level through September 30, 2011 (see L 2009,
ch 58, § 1, part B, § 22). Nothing in section 2807 (2-a) implies that
the legislation freezing the capital cost component of the
reimbursement rate was not operable after September 1, 2009, and we
therefore conclude that respondents’ determination to the contrary
“runs counter to the clear wording of [the] statutory provision[s and]
should not be accorded any weight” (Kurcsics v Merchants Mut. Ins.
Co., 49 NY2d 451, 459).

     On cross appeal, petitioner contends that it was entitled to 30
days’ notice of any change to the capital cost component of the
reimbursement rate, and we agree. The Public Health Law provides that
“the commissioner shall notify each diagnostic and treatment center of
its approved rates of payment . . . at least thirty days prior to the
beginning of the period for which such rates are to become effective”
(§ 2807 [7-b] [a]). Although the legislature suspended the advance
notice requirements for the purpose of implementing section 2807 (2-a)
(see L 2010, ch 58, § 1, part B, § 49; L 2010, ch 109, § 1, part B, §
29), we conclude that the change to the reimbursement rate for the
period beginning on October 1, 2011 is attributable to the expiration
of the rate freeze legislation by its own terms on that date (see L
2009, ch 58, § 1, part B, § 22), and is not related to the
implementation of section 2807 (2-a). The court therefore should have
extended the annulment of respondents’ determination through March 27,
2013, which is 30 days after the date of respondents’ determination
made February 25, 2013 (see § 2807 [7-b] [a]; see generally Anthony L.
Jordan Health Corp., 67 NY2d at 936).

     In light of our determination, we do not address petitioner’s
remaining contentions on its cross appeal.


                                                Frances E. Cafarell




Entered:   June 19, 2015
                                                Clerk of the Court
