Court Opinion

ID: 5819248
Source: CourtListenerOpinion
Date Created: 2022-01-12 21:03:51.361469+00
Date Added: 2024-06-11T08:43:04.741479
License: Public Domain

Lane, J. (dissenting).
Peninsula General Nursing Home was a participant in the New York State Medicare program and, as such, received direct payment from the program for services rendered to eligible individuals. Peninsula provided services to Jacob Stupler from October 15, 1973 to September 30, 1974 and was reimbursed for those services through the program for the period of October 15, 1973 through January 22, 1974.
When Medicare payments were exhausted, application was made for coverage under the Medicaid program, which was denied on the grounds of the ineligibility of the patient, Jacob Stupler. His ineligibility was based upon alleged improper transfer of title by Stupler of residential real property to his children immediately prior to his applying for benefits, in violation of section 366 (subd 1, par [e]) of the Social Services Law. The Stupler family’s request for a fair hearing was *278withdrawn after his death on September 30, 1974. Peninsula requested a fair hearing on the very same issue. This request was denied by the Department of Social Services.
Peninsula instituted this article 78 proceeding in order to annul the determination of the respondents that Stupler was ineligible and to obtain a direction that Peninsula is entitled to and should be afforded a fair hearing.
Peninsula’s position was that it had a right to administrative review of its claim, and denial of that right operates to deprive it of its property without due process of law. The position of the respondents was that there is no basis for the hearing requested and that Peninsula had an adequate remedy at law in the form of a plenary suit against the City of New York.
Special Term, after reviewing the contentions of the parties, granted the petition to the extent of declaring that the Social Services Law and attendant regulations to the extent that they do no afford a fair hearing to providers of services are unconstitutional and directed that Peninsula be afforded a fair hearing. I would reverse.
The statute (Social Services Law, § 363) articulates the objectives of affording aid to the needy by stating: "Medical assistance for needy persons is hereby declared to be a matter of public concern and a necessity in promoting the public health and welfare and for promoting the state’s goal of making available to everyone, regardless of race, age, national origin or economic standing, uniform, high-quality medical care. In furtherance of such goal, a comprehensive program of medical assistance for needy persons is hereby established to operate in a manner which will assure a uniform high standard of medical assistance throughout the state. In carrying out this program every effort shall be made to promote maximum public awareness of the availability of, and procedure for obtaining, such assistance, and to facilitate the application for, and the provision of such medical assistance.”
Neither section 366 of the Social Services Law nor its attendant regulations provide for a fair hearing to a provider of services under circumstances such as those extant in the case at bar. Section 366 of the Social Services Law provides:
"1. Medical assistance shall be given under this title to a person who requires such assistance and who
*279"(a) either (1) is receiving or is eligible for home relief * * * or
"(2) is receiving or is eligible to receive federal supplemental security income payments and/or additional state payments, so long as there is in effect an agreement between the state and the secretary of health, education and welfare, pursuant to section three hundred sixty-three-b of this title, for the federal determination of eligibility of aged, blind and disabled persons for medical assistance, and so long as such secretary requires, as a condition of entering into such agreement, that such person be eligible for medical assistance”
18 NYCRR 358.4 provides that:
"The following persons shall be entitled to a fair hearing:
"(a) Applicants for or recipients of aid to dependent children, aid to the aged, blind or disabled, medical assistance for needy persons, home relief or veterans assistance on the following grounds: * * *
"(4) discontinuance or suspension of assistance, in whole or in part”.
Peninsula as a provider of services does not come within the purview and cannot claim the benefit of the statute or the regulations. The administrative agency involved took the view that there was no necessity to afford a hearing to the petitioner in view of the remedy available to it in the form of a plenary suit. We are bound to give the interpretations of an administrative agency great respect if they are within rational and reasonable bounds (Matter of Howard v Wyman, 28 NY2d 434, 438; Matter of Sigety v Ingraham, 29 NY2d 110, 114).
On this basis alone, I submit that the petition in the case at bar should have been dismissed. I am furthermore of the view that Peninsula, on the merits, is not entitled to an administrative hearing.
I do not quarrel with the position taken by the majority of this court that "the party with the real interest in receiving reimbursement” for expenses of medical care is entitled to a fair hearing when such reimbursement is denied or restricted. I do, however, maintain that the interested party within the intendment of the statute is the "eligible,” as defined in section 366 of the Social Services Law and not the provider of services.
A provider such as the petitioner is entitled to payment only to the extent that it has afforded goods or services to an *280"eligible.” If, as in the case at bar, it develops that services have been provided to one deemed ineligible for benefits, a cause of action may be spelled out against that ineligible or even against the governmental agency designated to declare ineligibility. However, vindication of that claim, available as it is in a plenary suit, need not be afforded through the medium of administrative review.
To the extent that my views, as herein expressed, differ, I respectfully disagree with the conclusion of the Appellate Division, Second Department, in Howe Ave. Nursing Home v Nafus (54 AD2d 686, 687), and the majority of my brethren who rely on that case to support their position.
I must note that those cases in other jurisdictions (some of which are cited in Howe Ave.), which hold that a provider of services is entitled to an administrative hearing, deal with situations far different from the case at bar. Coral Gables Convalescent Home v Richardson (340 F Supp 646) and Wilson Clinic & Hosp. v Blue Cross of South Carolina (494 F2d 50) involve a dispute over the auditing of a nursing home’s cost reports. Ross v State of Wisconsin Dept. of Health & Social Servs. (369 F Supp 570) involves enforcement of statutes against nursing homes failing to meet minimum standards. The common thread in these cases is that direct attack on the nursing homes required provision for direct participation of the homes involved to rebut allegations made directly against them.
Similarly, in the Third Department, in the case of Matter of White Plains Nursing Home v Whalen (53 AD2d 926, 927), a hearing was afforded. However, in that case as well, the hearing involved a dispute over rate reimbursement, a matter directly involving the nursing home. The nursing home in our case, as in the Howe Ave. case (54 AD2d 686, supra), was only indirectly involved in that there was an expectation of payment to it through the provisions made for an alleged "eligible.” They did not have a claim of entitlement grounded in a statute defining eligibility (Goldberg v Kelly, 397 US 254, 262) but, rather, had only a "unilateral expectation” of a benefit, which is not a property interest protected by procedural due process (Board of Regents v Roth, 408 US 564, 577; cf. Matter of Sigety v Ingraham, 29 NY2d 110, 115; Matter of White Plains Nursing Home v Whalen, supra). The unilateral private financial interest of the nursing home in recovering expenditures made for services rendered creates a relationship *281of purchaser and seller. A breach of this relationship would give rise to a plenary suit for breach of contract and would not—and should not—give rise to interpretation of questions of constitutional dimensions (Ross v State of Wisconsin Dept. of Health & Social Servs., supra, p 574, concurring opn per Reynolds, Ch. J.).
Accordingly, the judgment of the Supreme Court, New York County (Hughes, J.), entered September 5, 1975, granting petitioner’s motion to declare section 366 of the Social Services Law unconstitutional and directing that petitioner obtain a hearing, should be reversed on the law and the petition dismissed.
Silverman and Yesawich, JJ., concur with Lupiano, J.; Murphy, P. J., and Lane, J., dissent in an opinion by Lane, J.
Judgment, Supreme Court, New York County entered on September 5, 1975, affirmed, without costs and without disbursements.