Court Opinion

ID: 5859484
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:14:21.069642+00
Date Added: 2024-06-11T08:44:23.184370
License: Public Domain

— Appeal from a judgment of the Supreme Court at Special Term (Klein, J.), entered November 12, 1981 in Albany County, which dismissed petitioner’s application, in a proceeding pursuant to CPLR article 78, to enjoin respondents from retroactively revising petitioner’s Medicaid reimbursement rates. By letter dated June 22,1981, petitioner was advised that its Medicaid reimbursement rates for the period 1980-1981 had been retroactively revised downward and that the overpayments would be recouped. The revision resulted from the discovery some seven months earlier that “electronic data processing problems” and other errors in calculation had resulted in higher rates than authorized by the relevant rules and regulations. Petitioner sought to prohibit respondent from making the retroactive revisions and recouping the overpayment. Special Term dismissed the petition, holding that the State could not be precluded from revision or recoupment of unauthorized payments caused by errors of State employees since equitable estoppel does not lie against the State when acting in its governmental capacity. There must be an affirmance. *1162Where overpayments are the result of errors in computing the rate, respondent may recoup the unauthorized payments (Matter of University of Rochester — Strong Mem. Hosp. v Whalen, 61 AD2d 867, mot for lv to app den 44 NY2d 646). To be contrasted are the cases where the reimbursement rate is properly calculated pursuant to the applicable statute or rules and regulations, but the facility’s actual costs are less than those anticipated in the prospectively calculated rates (see Matter of Beekman-Downtown Hosp. v Whalen, 44 NY2d 124,128; Matter of Sigety v Axelrod, 91 AD2d 1091). Thus, where the overpayment results from a mere error in judgment, rather than an erroneous calculation, the commissioner’s common-law right of recoupment has been questioned (see Hurlbut v Whalen, 58 AD2d 311, 318, mot for lv to app den 43 NY2d 643). Here, it is undisputed that the overpayments were due to data processing problems and other errors in calculation, and thus, were not caused by errors in judgment. Accordingly, the overpayments are subject to recoupment {Matter of University of Rochester—Strong Mem. Hosp. v Whalen, supra). Petitioner points out that respondent continued to make reimbursement at the mistaken rates during the seven-month period following discovery of the mistake. The underlying cause of the overpayments, however, continued to be the original errors in calculation. There is nothing in the record to suggest that the delay was occasioned by some conscious, judgmental decision on respondent’s part to continue paying petitioner at the higher rate. The decision to recoup was in furtherance of respondent’s duty as a public official to protect public funds and ensure that they are expended in accordance with applicable statutes, rules and regulations. Respondent’s determination was within his authority and had a rational basis. The judgment dismissing petitioner’s application must, therefore, be affirmed. Judgment affirmed, without costs. Sweeney, J. P., Main, Casey and Weiss, JJ., concur.