Opinion ID: 1364730
Heading Depth: 3
Heading Rank: 3

Heading: The State's Ancillary Arguments

Text: The State further argues that (1) the State's compliance with the procedural requirements cannot reasonably be questioned since the rates were set at the maximum allowable rate under federal law and (2) it was error for the court to invalidate the plan without considering whether the regulation resulted in substantively inadequate rates. The State's first argument is based on a recent decision by a federal magistrate which held that when a state sets rates to comply with the federal upper limit, they comply with the Boren amendment as a matter of law. Connecticut Hosp. Ass'n v. O'Neill , No. N-90-714 (WWE), slip op. at 8 (D.Conn. Oct. 31, 1991). Although a federal district court later overruled this decision, the State nevertheless argues that this reversal did not upset the rule of law. See Connecticut Hosp. Ass'n v. O'Neill, 793 F. Supp. 47, 51-52 (D.Conn. 1992). It is difficult to see how a decision by a federal magistrate in Connecticut on a 12(b)(6) motion, which was later overruled, establishes a rule of law which should persuade this court. Further, the conclusion that the State's compliance with Boren cannot be questioned where rates are set at the upper limits ignores Congress's intent that states make findings regarding the operation of their facilities. An agency regulation establishing limits on reimbursement cannot simply do away with the statutory requirements of Boren. In some situations rates found to be necessary under Boren may be higher than the rates allowed under the federal limits. However, a state in this position may qualify for an exception to the upper limits which would allow it to utilize the necessary, higher rate. [15] While state agencies are entitled to deference with respect to their upper limits determination, this deference does not mean that they can ignore the requirements of Boren. The State is not excused from complying with Boren just because the State is concerned that it may have a problem with the federal upper limits. The State's second argument is that the trial court erred by invalidating the plan without considering its substantive compliance with Boren. This argument is likewise without merit. Although the Wilder decision held that Boren granted both procedural and substantive rights, it did not require a court to consider substantive compliance where procedural compliance was lacking. The Court did hold, however, that procedural compliance alone was insufficient, i.e., that courts must consider substantive compliance if the procedural requirements were met. See Wilder, 496 U.S. at 512-15, 110 S.Ct. at 2518-21. In this case, the superior court concluded that since the plan failed to meet the procedural requirements of Boren, the court need not address the issue of substantive compliance. This conclusion is consistent with the approach of other courts and is a correct interpretation of Boren. See Pinnacle Nursing Home v. Axelrod, 928 F.2d 1306, 1316-17 (2d Cir.1991) (invalidating a state plan on the basis that it violated the procedural requirements without considering substantive compliance); Volk v. Oregon, 799 P.2d 658, 662 (Or. App. 1990) (We conclude that the procedural requirements of the Act are separate from the substantive requirement... .). Accordingly, we affirm the superior court's grant of summary judgment to ASHNHA.