Case Name: In the Matter of Terrace HealthCare Center, Inc., Appellant, v. Antonia C. Novello, M.D., as Commissioner of Health for the State of New York, et al., Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 2008-09-30
Citations: 54 A.D.3d 643
Docket Number: 
Parties: In the Matter of Terrace HealthCare Center, Inc., Appellant, v Antonia C. Novello, M.D., as Commissioner of Health for the State of New York, et al., Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 54
Pages: 643–649

Head Matter:
(September 30, 2008)
In the Matter of Terrace HealthCare Center, Inc., Appellant, v Antonia C. Novello, M.D., as Commissioner of Health for the State of New York, et al., Respondents.
[865 NYS2d 37]

Opinion:
Judgment, Supreme Court, Bronx County (Mark Friedlander, J.), entered November 30, 2006, dismissing the petition to set aside as untimely the results of all respondent Department of Health's (DOH) audits of petitioner's patient review instruments (PRIs), used to calculate petitioner's Medicaid reimbursement rate, performed within the six years preceding the petition, to direct DOH to use petitioner's PRI unaudited submissions from 1996 to the present to calculate its Medicaid reimbursement rate, to rescind the parties' March 3, 2003 agreement, and to enjoin the review scheduled for March 15, 2006 of petitioner's December 1999 PRIs, affirmed, without costs.
Petitioner's challenges to the reviews of its PRI submissions for December 1996, June 1997, December 1997, June 1998 and December 1998 are barred by the four-month statute of limitations for CPLR article 78 review (CPLR 217 [1]). Petitioner contends that it is entitled to a six-year limitation period because it is challenging the constitutionality of the review process under 10 NYCRR 86-2.30. However, the review of the submissions in question was not conducted pursuant to 10 NYCRR 86-2.30. It was conducted pursuant to the parties' March 3, 2003 "Agreement to Accelerate PRI Processing," which petitioner entered into voluntarily. DOH did not breach the agreement by failing to expedite the process. The agreement did not set forth a schedule to which DOH was required to adhere, and the record shows that, based on the agreement's procedures, DOH became more timely in the reviews and began to reduce the backlog.
Nor were DOH's reviews untimely because they were performed more than six years after the PRIs were submitted. Petitioner's reliance on Matter of Blossom View Nursing Home v Novello (4 NY3d 581, 595-596 [2005]) is misplaced. DOH did not attribute the backlog to mere administrative inadvertence but explained that the delays were the result of having to proceed through all stages of review in 7 of the 10 reviews that preceded the review of the December 1996 submissions, because of petitioner's improper submissions.
DOH's determination was not arbitrary and capricious. DOH is not obligated to accept petitioner's submissions without review on the ground that they were prepared by an independent organization it approved. Moreover, it is uncontested that petitioner did not have proper documentation for at least one such submission. The assertion of the organization's president that the documents must have existed when the submissions were made is not based on personal knowledge, and DOH was not required to accept it in lieu of the documents. Nor was petitioner's counsel's assertion that there had been a fire "some years ago" a substitute for the proper documentation, which, upon execution of the March 2003 agreement, petitioner knew or should have known it was required to preserve. Petitioner has raised no material issues regarding the remaining PRI reviews. Concur—Saxe, J.P., Nardelli and Buckley, JJ.