Opinion ID: 744060
Heading Depth: 2
Heading Rank: 1

Heading: Resubmission of SPA 87-7

Text: 20 The Secretary's refusal to reconsider SPA 87-7 is the subject of New York's first appeal. The Secretary interprets our decision in Pinnacle as barring New York from attempting to gain reapproval of 87-7 by submitting supplemental findings and assurances for [87-7]. Her interpretation is based on language in Pinnacle declaring that 87-7 is null and void. Pinnacle, 928 F.2d at 1316. The Secretary takes the position that New York may not retroactively cure the deficiencies found in 87-7, and may not rely on the public notice and 1987 effective date associated with 87-7. 21 Substantial deference is normally accorded to determinations made by the Secretary concerning the approval of SPAs. See State of New York v. Sullivan, 894 F.2d 20, 24 (2d Cir.1990); Pinnacle, 928 F.2d at 1312-13. However, unlike an administrative action that require[s] significant expertise and entail[s] the exercise of judgment grounded in policy concerns, Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 2387, 129 L.Ed.2d 405 (1994) (quotations omitted), an agency has no special competence or role in interpreting a judicial decision. See H.W. Wilson Co. v. United States Postal Serv., 580 F.2d 33, 37 (2d Cir.1978); N.O.W. v. Social Sec. Admin., 736 F.2d 727, 735 n. 78 (D.C.Cir.1984) (concurring opinion). And certainly an agency is no better suited to interpret a judicial decision than the court that rendered it. Thus, the agency's interpretation of Pinnacle is not entitled to any special degree of deference. 22 We disagree with the Secretary and conclude that Pinnacle leaves little doubt that New York could cure the deficiencies of SPA 87-7. The Secretary's reliance on our declaration in Pinnacle that 87-7 is null and void is misplaced. Although Section IV(C) of Pinnacle states we hold that [87-7] is null and void, Pinnacle, 928 F.2d at 1316, an examination of the entire opinion and its resolution of the substantive claims presented by the plaintiffs clearly leaves the door open for New York to revive 87-7. 23 The panel in Pinnacle stated its ultimate null and void holding in terms that were conditional: 24 We hold that [87-7] was enacted without complying with the procedural requirements of the Boren Amendment. Accordingly, it is declared null and void until such time that proper findings are submitted and approved by HCFA. 25 Id. at 1318 (emphasis added). 26 Moreover, the resolution of the substantive claims presented by the Pinnacle plaintiffs confirms that the opinion contemplated further action with respect to 87-7. The plaintiffs in Pinnacle argued that 87-7 was a substantive violation of the Boren Amendment because the state failed to set reimbursement rates that are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities. Id. at 1316. The district court dismissed their substantive challenge in deference to the right of a state to determine its own Medicaid plan. Id. 27 On appeal, we reinstated the substantive claims for further proceedings in the district court even though we affirmed the district court's determination that 87-7 was void on procedural grounds. The Pinnacle panel noted that [a]lthough the court has declared [87-7] void on procedural grounds, that does not prevent the state from making the proper findings and resubmitting the plan to HCFA. Id. at 1317 (emphasis added). The panel was concerned that if New York did resubmit the plan, and the substantive claims were dismissed, the nursing homes [would be] left with no case below ... and would be relegated to commencing a new action. Id. Thus, the panel expressly contemplated the possibility that the state might attempt to cure the deficiencies of 87-7. The panel reinstated the nursing homes' unresolved substantive claims to preserve the claims if, and when, the state submits proper findings as required by the Boren Amendment. Id. at 1318. 28 The Secretary contends that allowing New York to revive 87-7 and seek a 1987 effective date permits a retroactive cure of the state's failure to support properly its original submission of 87-7. We agree with the Secretary that New York may not seek a 1987 effective date for 87-7. Medicaid regulations state that a SPA may take effect no[ ] earlier than the first day of the calendar quarter in which an approvable amendment is submitted.... 42 C.F.R. § 447.256(c) (emphasis added). The amendment was not an approvable submission in 1987 because it was unsupported by any findings whatsoever, and the assurances did little more than duplicate the language of the applicable regulation. Pinnacle, 928 F.2d at 1315. We agree with the Secretary that SPA 87-7, as submitted in 1987 and initially approved in 1989, was not an approvable submission and thus, under the applicable regulations, New York may not receive an effective date prior to the submission of an approvable SPA. 29 This presents us with the question of the appropriate effective date for SPA 87-7. New York maintains that an effective date of January 1, 1990 is consistent with the applicable regulations and the decision in Pinnacle, and grounds its request for the 1990 date on its 1990 submission of additional assurances in support of SPA 87-7. The information submitted by New York in 1990 supported both the state's submission of SPA 87-7 and 90-11. As we discuss below, with respect to SPA 90-11, the Secretary determined that New York's submission was satisfactory, implying that SPA 87-7 would also be approvable in 1990, but delayed the effective date until a new notice was published by New York. 30 Whatever the notice defect applicable to SPA 90-11, it does not apply to SPA 87-7. The Secretary never challenged the adequacy of the 1986 notice in connection with the submission of 87-7 and in fact approved 87-7 in 1989. The state resubmitted the plan in response to Pinnacle, accompanied by additional material supporting the corridor adjustment. Nothing in Pinnacle invalidated the 1986 notice and the decision makes clear that the state had the option of continuing the approval process by submitting the appropriate assurances. Although we ultimately uphold the Secretary's interpretation of the notice regulation as applicable to the submission of SPA 90-11, the adequacy of the 1986 notice was never questioned. Thus, it is possible that SPA 87-7 could receive a 1990 effective date if the additional submissions, which were also submitted and ultimately approved by the Secretary with respect to 90-11, cured the serious defects subsequently found in Pinnacle. 31 Although it may be more efficient in this case for us to declare once and for all an appropriate effective date for SPA 87-7 in order to end this litigation between agencies who should be engaged in cooperative federalism, Connecticut Dep't of Income Maintenance v. Heckler, 471 U.S. 524, 532 n. 22, 105 S.Ct. 2210, 2215 n. 22, 85 L.Ed.2d 577 (1985), we do not review SPAs in the first instance to determine when they become approvable. That is an appropriate role for the agency charged by Congress with exercising policy discretion in the Medicaid area and should be done by the agency here with respect to SPA 87-7. 32 Thus, we vacate the Secretary's refusal to consider when SPA 87-7 became approvable and remand the case for further proceedings in order to determine the effective date of SPA 87-7.