Court Opinion

ID: 9481632
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:26:51.611393+00
Date Added: 2024-06-11T17:48:28.783586
License: Public Domain

OAKES, Chief Judge, concurring:
I concur in the result.
I do believe it should be noted, in connection with the lack of findings in the earlier injunctive order of November 8, 1990, as amended on November 14, 1990, that this was only the latest in a series of cases before the same judge brought by providers of Medicaid services involving the same defendant, the same underlying set of facts and the same issue — whether payment of claims approved subject to audit may be withheld for up to six months pursuant to the state agency’s authority to review and verify payments, without prior hearing or notification to the provider. See, e.g., Medecorp Labs., Inc. v. Perales, 89 Civ. 7320, 1990 WL 55703 (S.D.N.Y. Dec. 11, 1989); Quantum Lab., Inc. v. Perales, 88 Civ. 8487 (S.D.N.Y. Dec. 15, 1988); Eastwick Medical Labs. v. Perales, 88 Civ. 7685 (S.D. N.Y. Nov. 29, 1988); Franklin Medical Lab., Inc. v. Perales, 88 Civ. 7520 (S.D.N.Y. Nov. 7, 1988); Continental Lab., Inc. v. Perales, 88 Civ. 6649 (S.D.N.Y. Nov. 7, 1988); Modern Medical Lab., Inc. v. Perales, 88 Civ. 6648 (S.D.N.Y. Nov. 7, 1988); Plaza Health Labs., Inc. v. Perales, 88 Civ. 6647 (S.D.N.Y. Nov. 7, 1988); ADL, Inc. v. Perales, 88 Civ. 4749, 1989 WL 83390 (S.D. N.Y. Aug. 2, 1988). I note also that the state thought that the courts’ prior cases were distinguishable only on the basis that this case involved “substantiated evidence of threats to Medicaid recipients’ health.” Affidavit of Robert J. Schack, Assistant Attorney General (Nov. 23, 1990). I am confident that the district court had these other cases in mind, particularly since a lengthy opinion in the ADL case is included in the record before us. Nevertheless, facts such as the amounts of payments due and withheld as well as the evidence relating to threats to Medicaid recipients’ health could have bearing on any review.
I also do not think the majority opinion’s discussion of the likelihood of success on the merits gives sufficient weight to our observation in Oberlander v. Perales, 740 F.2d 116 (2d Cir.1984), that “[i]n contrast to the refusal to recognize a property interest in future Medicaid reimbursement, New *1100York acknowledges a property interest m money paid for services already performed in reliance on a duly promulgated reimbursement rate.” Id. at 120. While it is true that Oberlander did not involve the state’s withholding of payments pending investigation, it nevertheless held — as seems perfectly reasonable — that a provider has a constitutionally protected property interest in reimbursement for Medicaid services already performed, just as the district court held. While it is true that the district court order did not discuss whether a post-withholding hearing, as in FDIC v. Mallen, 486 U.S. 230, 240-47, 108 S.Ct. 1780, 1787-91, 100 L.Ed.2d 265 (1988), would adequately protect Tekkno’s right to payment, the court considered this question very extensively in the ADL case, incorporated in our record, and found that the new DSS regulations under the Mallen test would probably not satisfy due process. I agree with the district court on this point.
Nevertheless, I concur in the result because I cannot find a distinction for Eleventh Amendment purposes between a damage action for a past state wrong and a due process action for money in which plaintiff holds a property interest. In other words, what seems to me to be the ultimate question in the case is whether Eleventh Amendment analysis is complete once it is determined that the relief sought would tap the state treasury and that the state has not waived its immunity. Under the Eleventh Amendment cases to date decided by the Supreme Court, I am forced to conclude that the answer to this ultimate question is in the affirmative.