Opinion ID: 1425590
Heading Depth: 1
Heading Rank: 4

Heading: validity of wac 388-87-070

Text: We next address the Hospitals' challenge to the validity of WAC 388-87-070. The trial court concluded that the purchase of MI-GAU hospital care pursuant to the variable ratable reduction methodology contained in WAC 388-87-070(6) was beyond DSHS's statutory authority under RCW 74.09.120 and invalidated WAC 388-87-070 to the extent that it or any part thereof authorized variable ratable reductions. [9] To determine the validity of a challenged regulation, [26] we begin with the presumption that administrative rules and regulations adopted and enacted by an agency pursuant to statutory authority are valid if they are reasonably consistent with the statute being implemented. [27] State v. Ford, 110 Wn.2d 827, 831, 755 P.2d 806 (1988). [28] The burden of overcoming this presumption of validity rests upon the party challenging the rule. Federated Am. Ins. Co. v. Marquardt, 108 Wn.2d 651, 654, 741 P.2d 18 (1987); Ravsten v. Department of Labor & Indus., 108 Wn.2d 143, 154, 736 P.2d 265 (1987). The party challenging the rule must demonstrate, with compelling evidence, that the rule conflicts with the intent and purpose of the legislation which it implements. American Network, Inc. v. Utilities & Transp. Comm'n, 113 Wn.2d 59, 69, 776 P.2d 950 (1989); Ravsten, at 154; Hi-Starr, Inc. v. Liquor Control Bd., 106 Wn.2d 455, 459, 722 P.2d 808 (1986); Converse v. Lottery Comm'n, 56 Wn. App. 431, 435, 783 P.2d 1116 (1989). Consequently, in the present case, the Hospitals must demonstrate, with compelling evidence, that WAC 388-87-070 conflicts with the intent and purpose of RCW 74.09.120. We conclude that the Hospitals have failed to satisfy this burden. [10, 11] First, it appears that WAC 388-87-070 is facially consistent with RCW 74.09.120. RCW 74.09.120 does not define the type of reimbursement or provide a standard by which to measure the appropriateness of the reimbursement terms when DSHS elects to purchase hospital care pursuant to the contract method. Accordingly, the statutory language does not exclude variable ratable reductions. Furthermore, the variable ratable reductions are consistent with the statutory mandate to maintain expenditures within the scope of available funds. [29] See RCW 74.09.700(1) and RCW 74.09.035(1). We also note that deference to the agency interpretation of the statute is appropriate when the agency is charged with the responsibility for administering the statute. Green River Comm'ty College Dist. 10 v. Higher Educ. Personnel Bd., 107 Wn.2d 427, 438, 730 P.2d 653 (1986); Moses v. Department of Social & Health Servs., 90 Wn.2d 271, 274, 581 P.2d 152 (1978). Here, we do not find DSHS's regulation to be inconsistent with RCW 74.09.120. Finally, additional support can be inferred from the absence of action to correct any conflict between the statute and the regulation. The Legislature was well aware of WAC 388-87-070 and took no action to prohibit the variable ratable reductions. In the operating budget for the 1985-87 biennium, the Legislature instructed DSHS to continue ratable reductions on MI-GAU payments. Laws of 1985, 1st Ex. Sess., ch. 6, § 210(4). Similarly, in the operating budget for the 1989-91 biennium, the Legislature instructed that: The appropriations in this section are subject to the following conditions and limitations: .... (3) The department [DSHS] shall continue variable ratable reductions for the medically indigent and general assistance  unemployable programs in effect November 1, 1988. Laws of 1989, 1st Ex. Sess., ch. 19, § 213(3). In sum, the Hospitals have not established, with compelling evidence, that WAC 388-87-070(6) conflicts with the intent and purpose of RCW 74.09.120. Accordingly, we reverse that part of the trial court's decision which invalidated WAC 388-87-070.