Eastchester Rehab & HealthCare v. State

Decision Date24 April 2012
Docket NumberMotion No. M-80914,# 2012-040-024
CourtNew York Court of Claims
PartiesEASTCHESTER REHAB & HEALTH CARE v. STATE OF NEW YORK
Synopsis

Motion to file a claim late pursuant to CCA § 10(6) denied. Lack of appearance of merit as Movant seeking to overturn a determination of the Department of Health.

Case information

UID:                              2012-040-024
                                                  EASTCHESTER REHABILITATION AND
                Claimant(s)
                                                  HEALTH CARE CENTER, LLC
                Claimant short name:              EASTCHESTER REHAB & HEALTH CARE
                Footnote (claimant name) 
                Defendant(s):                     STATE OF NEW YORK
                Footnote (defendant name) 
                Third-party claimant(s)
                Third-party defendant(s)
                Claim number(s):                  NONE
                Motion number(s):                 M-80914
                Cross-motion number(s):
                Judge:                            CHRISTOPHER J. McCARTHY
                                                  HAMBURGER, MAXSON, YAFFE,
                                                  KNAUER & McNALLY, LLP
                Claimant's attorney:
                                                  By: David N. Yaffe, Esq.
                                                  William P. Caffrey, Jr., Esq.
                                                  ERIC T. SCHNEIDERMAN
                Defendant's attorney:             Attorney General of the State of New York
                                                  By: Thomas R. Monjeau, Esq., AAG
                Third-party defendant's attorney:
                Signature date:                   April 24, 2012
                City:                             Albany
                Comments:
                Official citation:
                Appellate results:
                See also (multicaptioned case)
                 
Decision

For the reasons set forth below, the application of Movant, Eastchester Rehabilitation and Health Care Center, LLC (hereinafter "Movant" or "Eastchester"), to serve and file a late Claim pursuant to Court of Claims Act § 10(6) is denied.

Attached to the affidavit of Jerome Weinstock, Movant's Controller, submitted in support of Movant's motion, as Exhibit A is a copy of Movant's proposed Claim. The proposed Claim alleges that Movant owns and operates a New York State licensed Residential Health Care Facility that provides skilled nursing care to a general population of nursing home residents with a variety of care needs (proposed Claim, ¶ 9).

Pursuant to Public Health Law (hereinafter "PHL") § 2807-d(1),1 nursing home facilities such as Eastchester are "charged assessments on their gross receipts received from all patient care services and other operating income, less personal needs allowance and refunds, on a cash basis [in the] percentage amounts and for the periods specified …" (id., ¶ 10).

PHL § 2807-d(7) authorizes the New York State Department of Health ("DOH") to recoup assessments due and owing by withholding amounts from any payments to be made to the facility by the State. In other words, in the event that payments are not submitted by the facility, DOH collects the gross receipts assessments, together with interest and penalties, by withholding amounts from facilities' Medicaid reimbursements. The assessments are calculated based upon monthly cash receipts reports which all facilities are required to submit within 15 days after the end of each month. The actual calculation formula for residential health care facilities is set forth at PHL § 2807-d(2)(b) (id., ¶¶ 11-13).

The proposed Claim also asserts, upon information and belief, that if DOH has not received the reports from a facility, it estimates the assessment based upon the highest-earning month for which a report has been filed, i.e., the estimate imposes the highest possible assessment (id., ¶ 14).

By statement dated June 15, 2006, DOH imposed total assessments against Eastchester, inclusive of interest and penalties, of $415,347.10, for the months November 2003, January 2005 and February 2005. According to the statement, the assessment for all three months was estimated rather than actual. DOH began recouping this amount by recouping $33,055.67 from Movant on September 18, 2006 by withholding that amount from Medicaid payments to Movant, and completed recoupment through further withholdings from weekly Medicaid payments to Eastchester as of January 1, 2007 (id., ¶¶ 15-17).

By statement dated August 1, 2006, DOH imposed total assessments against Eastchester, inclusive of interest and penalties, in the amount of $1,651,751.39, for the months of March 2005 through February 2006. The assessment for all 12 months was estimated rather than actual. DOH began recouping this amount by recouping $36,360.76 from Movant on January 8, 2007 by withholding that amount from weekly Medicaid payments due to Movant, and completed recoupment via further withholdings on a weekly basis as of September 29, 2008 (id., ¶¶ 18-20).

By cover letter dated June 1, 2007 and sent to the DOH Division of Health Care Financing by overnight delivery, Eastchester submitted all monthly cash receipts reports through December 2006 which were purportedly not previously received by DOH. According to Movant, as of June 2, 2007, DOH was in position to calculate Eastchester's actual assessments due for the months in question which had previously only been estimated. Movant's reports reflected significantly lower cash receipts - and hence lower assessments due and correspondingly lower interest and penalties - for all the months in question.

With respect to the June 15, 2006 statement, Movant's monthly reports reflect a total amount due and owing for November 2003, January 2005 and February 2005 of $263,334.60, inclusive of interest and penalties. However, DOH recouped the full amount billed in the statement based upon its estimated assessments of $415,812.50. Eastchester asserts that, with respect to the June 15, 2006 statement, Movant has been overcharged by DOH in the amount of $151,812.50 (id., ¶¶ 21-26).

With respect to the August 1, 2006 statement, Movant's monthly reports reflect a total amount due and owing for March 2005 through February 2006 of $1,140,917.27, inclusive of interest and penalties. Eastchester asserts, upon information and belief, DOH recouped the full amount billed in the statement based upon its estimated assessments of $1,651,751.39. Movant asserts that, with respect to the August 1, 2006 statement, it has been overcharged by DOH in the amount of $510,834.12 (id., ¶¶ 28-31).

Movant asserts that, in addition to the amounts billed per the June 15, 2006 and August 1, 2006 statements, in November 2008, DOH imposed two additional unexplained recoupment amounts against it (id., ¶ 33).

On or about November 17, 2008, DOH imposed a recoupment amount of $26,320.16, purportedly attributable to the period from April 2002 through December 2002. This amount was recouped via withholding on November 24, 2008. Eastchester asserts that, according to DOH records, recoupment for that period had previously been fully completed as of May 16, 2005 (id., ¶ 34).

On or about November 24, 2008, DOH imposed an amount of $68,871.00, purportedly attributable to the period from January 2003 through February 2005. This amount was recouped via three withholdings in the amount of $30,441.74 on December 1, 2008, $30,265.42 on December 8, 2008 and $163.84 on December 15, 2008. Eastchester asserts that, according to DOH records, recoupment for that period had previously been fully completed as of January 1, 2007 (id., ¶ 36).

Eastchester asserts that DOH has failed to refund or credit it for the overpayment of $757,837.38 in total cash receipts assessments represented by the difference between the estimated assessments which the DOH recouped from Eastchester and the actual assessments which were rightfully due and owing based upon Eastchester's monthly cash receipts reports (id., ¶¶ 38-39).

The proposed Claim alleges that the State benefitted from the receipt of these excess monies, has no legal authority to retain these excess monies, has been unjustly enriched by the collection and retention of these excess monies, and, in equity and good conscience, should not be permitted to retain these excess monies, and asserts causes of action against the State for: (1) monies had and received; (2) unjust enrichment; and (3) restitution (id., ¶¶ 40-41).

Pursuant to Court of Claims Act § 10(6), it is within the Court's discretion to allow the filing of a late claim if the applicable statute of limitations set forth in Article 2 of the CPLR has not expired. Thus, the first issue for determination upon any late claim motion is whether the application is timely. The proposed Claim asserts causes of action for money had and received, unjust enrichment and restitution.2 The theory of unjust enrichment is a quasi-contract or implied-in-law contract cause of action (Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 572 [2005]). A cause of action for money had and received is also a contract implied in law (Parsa v State of New York, 64 NY2d 143, 148 [1984]). The statute of limitations on a contract cause of action is six years (CPLR § 213[2]). Movant asserts that the earliest date its causes of action accrued is June 15, 2006. Thus, the statute of limitations for breach of implied contract has not yet expired. Court of Claims Act § 9(2) gives this Court jurisdiction to determine claims for "breach of contract, express or implied" (Parsa v State of New York, supra at 149).

Next, in determining whether to grant a motion to file a late claim, Court of Claims Act § 10(6) sets forth six factors that should be considered, although other factors deemed relevant also may be taken into account (Plate v State of New York, 92 Misc 2d 1033, 1036 [Ct Cl 1978]). Movant need not satisfy every statutory element (see Bay Terrace Coop. Section IV v New York State Employees' Retirement Sys. Policemen's & Firemen's Retirement Sys., 55 NY2d 979, 981 [1982]). However, the burden rests with Movant to persuade the Court to grant his or her late claim motion (see Matter of Flannery v State of New York, 91 Misc 2d 797 [Ct Cl 1977]; Matter of Santana v New York State Thruway Auth., 92 Misc 2d 1 [Ct Cl 1977]).

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