Opinion ID: 764672
Heading Depth: 3
Heading Rank: 1

Heading: Requirement of Change

Text: 37 As a preliminary matter, common sense, precedent, and the text of the regulations dictate that there must be some change in a State's Medicaid plan before the amendment provisions of §§ 430.12(c) and 447.253(b) will be activated. See United Cerebral Palsy Ass'ns v. Cuomo, 966 F.2d 743, 746 (2d Cir.1992) (finding these provisions inapplicable where there had been no change). In the present case, Concourse does not argue that the Department has changed the terms of the State Medicaid plan itself. Hence, its point that the Department has changed the State Medicaid plan must be understood to encompass two inquiries: first, as a question of fact, whether the State has changed its interpretation or application of the plan; and, second, as a question of law, whether a particular interpretation or application of the plan constitutes a change in the terms of the plan itself. 38 Addressing the first question, the district court found the Department has not changed the Audit Tool since its adoption ten years ago. See Concourse, slip op. at 10-11. Further, the court also made a finding that it was a change in Concourse's practices in 1994--a new emphasis on providing patients with restorative therapy--that made the critical difference between the favorable audits in 1991 and 1993 and the unfavorable audit of the 1995 Patient Reviews. See id. Concourse has presented nothing suggesting that these findings were clearly erroneous; accordingly, we leave them untouched. 39 Addressing the second question, the district court ruled that the Audit Tool's use of the term significantly did not constitute a change in the qualifier for restorative therapy. See id., slip op. at 8-10. It reasoned that inasmuch as the qualifier for maintenance therapy requires the absence of a potential for further or any significant improvement, it is consistent that the qualifier for restorative therapy, by way of contrast, should insist on the presence of a potential for significant improvement. Any other interpretation might eliminate the distinction between the two categories and render much of the qualifier language superfluous. Applying a de novo standard of review to this conclusion of law, we think the trial court's reasoning sound. 40 The remaining issue--one apparently not addressed by the district court--is whether the Department's requirement of actual improvement constitutes a change in the qualifier for restorative therapy. At first blush, the restorative therapy qualifier appears to embody a prospective viewpoint, in the sense that classification of a restorative therapy patient requires potential for improvement at some point in the future. Read in this manner, the qualifier is arguably inconsistent with the Department's adoption of a retrospective view requiring that, on audit, the patient show actual improvement after treatment to justify reimbursement for restorative therapy. The Department believes the two standards reconcilable. It points out that the phrase patient has potential/is improving is read to mean that newly admitted patients must show potential for improvement while patients admitted to the health care facility for some time should show signs that they are actually improving.