Court Opinion

ID: 9535564
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:50:52.396686+00
Date Added: 2024-06-11T13:33:16.983801
License: Public Domain

*315Schreiber, J.,
dissenting. New Jersey’s receipt of federal funds to assist it in providing medical services and care for eligible persons in hospitals and nursing home facilities depends upon the existence of a state plan which must satisfy the federal requirements and be approved by the Secretary of Health, Education and Welfare (HEW). New Jersey’s plan does satisfy those requirements and has been approved by the Secretary.
The federal Medicaid statute states that federal funds will be available to assist states in furnishing medical assistance for certain eligible persons. The act provides that
[f]or the purpose of enabling each State, as fa»- as practicable under the conditions in such State, to furnish (1) medical assistance * * * and (2) rehabilitation and other services * * *, there is hereby authorized to be appropriated for each fiscal year a sum sufficient to carry out the purposes of this subchapter. The sums made available under this section shall be used for making payments to States which have submitted, and had approved by the Secretary of Health, Education, and Welfare, State plans for medical assistance. [42 U. S. G. A. § 1396; emphasis supplied]
It is important to recognize that in the first instance funding for services may be fixed by the state to the extent it deems practicable. This has been construed to mean, inter alia, financially feasible. As one commentator recently stated:
Thus, while section 1396 establishes that one of Medicaid’s objectives is to provide necessary medical services, it also reflects a congressional intent that each state have the freedom to tailor programs that are responsive to the fiscal conditions prevalent in that state. [Note, “State Restrictions on Medicaid Coverage of Medically Necessary Services,” 78 Oolum. L. Rev. 1491, 1499 (1978)]
The New Jersey Medical Assistance and Health Services Act, N. J. 8. A. 30:4D-1 et seq., was enacted to enable the State to obtain the benefits provided by the federal law. The Division of Medical Assistance and Health Services in the Department 'of Institutions and Agencies has been charged with implementing and administering a program of medical *316assistance to do whatever is “necessary to secure for the State of New Jersey the maximum Federal participation that is available with respect to a program of medical assistance, consistent with fiscal responsibility and within the limits of funds available for any fiscal year * * N. J. 8. A. 30:4D-7 (emphasis supplied). Authorization was granted to promulgate rules and regulations to carry out that intent, N. J. 8. A. 30:4D-7, as well as to provide the Secretary of HEW with the State’s plan, N. J. 8. A. 30: 4D-7(a).
There is nothing in the federal law, including HEW regulations, which requires the State to pay a hospital for inpatient hospital care when those services are no longer needed. The federal act specifies the required content of a state medical assistance plan, including the “payment of the reasonable cost of inpatient services, provided under the plan * * 42 Ü. 8. C. A. § 1396a(a) (13) (D). The Secretary’s regulations in turn require that the amount and duration of each medical and remedial service provided be sufficient “to reasonably achieve its purpose.” 42 C. F. B. § 440.230(b) (1978). This regulation does not require that the plan must include payment for inpatient hospital care when it is no longer needed.
Superimposed upon the care requirements are the fiscal restraints which a state may observe. Thus, a state plan which limited inpatient hospital care to a 21-day maximum period because of fiscal considerations has been upheld. Virginia Hospital Ass’n v. Kenley, 427 F. Supp. 781 (E. D. Va. 1977). The State is not required to pay for all reasonably necessary inpatient hospital services, but may limit coverage because of financial conditions. See District of Columbia Podiatry Soc’y v. District of Columbia, 407 F. Supp. 1259, 1263-1264 (D. D. C. 1975) (recognizing that fiscal considerations play a legitimate role in a state’s determination of what medical services to provide).
Here, the State’s reason for not reimbursing hospitals for inpatient care for those who no longer need that care is a *317financial one. In an affidavit filed in these proceedings the Commissioner estimated that compliance with the majority’s decision would increase the yearly expenditures by more than $37,000,000. The State might expect a reimbursement from the federal government of approximately 50% of that amount, provided that the Secretary of HEW finds the Court’s modification of the current program acceptable.1
Although the State has proposed to amend its plan so that hospitals which may be forced to keep patients because of the unavailablity of nursing home facilities may be reimbursed at the lower rate paid to nursing homes, this amendment has not been approved by the Secretary of HEW. Such approval would appear to be necessary since the proposed scheme will result in a change in the "method and standards” for reimbursement of hospitals for inpatient services. See 43 G. F. B. § 447.361(a) (1978). See Hospital Ass’n of New York State, Inc. v. Toia, 73 F. R. D. 565, 567 (S. D. N. Y. 1976), vacated on other grounds 435 F. Supp. 819 (S. D. N. Y. 1977), aff’d 577 F. 2d 790 (2d Cir. 1978).
Authority to decide whether any modification of the State’s plan is appropriate, particularly when the change may have a substantial fiscal impact, has been delegated by 'Congress and the State Legislature to others. The plan as approved by the Secretary of HEW and implemented by the Commissioner of the Department of Institutions and Agencies was within their respective delegated authority. See Note, supra, 78 Colum. L. Rev. at 1506, criticizing the Appellate Division decision in this ease. As stated by the United States Supreme Court:
*318[W]e must be mindful that “the construction of a statute by those charged with its execution should be followed unless there are compelling indications that it is wrong * * [New York Dept. of Soc. Services v. Duildno, 413 U. S. 405, 421, 93 S. Ct. 2507, 2516, 37 L. Ed. 2d 688, 699 (1973), quoting Red Lion Broadcasting Co. v. F. C. C., 395 U. S. 367, 381, 89 S. Ct. 1794, 1801, 23 L. Ed. 2d 371, 384 (1969)]
I would reverse and enter judgment for the State.
For affirmance — Chief Justice Hughes and Justices Mountain, Sullivan, Pashman, Clieeoed and Handles —6.
For reversal — Justice Schbeibee — 1.

At the oral argument the Deputy Attorney General stated that the regional office of HEAY, not the Secretary, had indicated that if payment were ordered in this proceeding the federal government would share in this cost. The Secretary was not a party in these proceedings.