Seittelman v. Sabol

• Decision Date: 01 June 1993
• Citation: 158 Misc.2d 498,601 N.Y.S.2d 391
• Parties: , 42 Soc.Sec.Rep.Ser. 99 Estelle SEITTELMAN, as Administratrix for the Estate of Ida Zichlinsky, and Marguerite Holohan, on behalf of themselves and all others similarly situated, Plaintiffs-Petitioners Leah Silverman and Nancy Levanoni as attorney-in-fact for Sadye Bass, on behalf of themselves and all others similarly situated, Proposed Plaintiffs-Intervenors, v. Barbara J. SABOL, as Administrator of the New York City Human Resources Administration, and Mary Jo Bane, as Commissioner of the New York State Department of Social Services, Defendants-Respondents.
• Court: New York Supreme Court

Page 391

601 N.Y.S.2d 391

158 Misc.2d 498, 42 Soc.Sec.Rep.Ser. 99

Estelle SEITTELMAN, as Administratrix for the Estate of Ida Zichlinsky, and Marguerite Holohan, on behalf of themselves and all others similarly situated, Plaintiffs-Petitioners Leah Silverman and Nancy Levanoni as attorney-in-fact for Sadye Bass, on behalf of themselves and all others similarly situated, Proposed Plaintiffs-Intervenors, v. Barbara J. SABOL, as Administrator of the New York City Human Resources Administration, and Mary Jo Bane as Commissioner of the New York State Department of Social Services Defendants-Respondents.

Supreme Court, New York County IAS Part 5.

June 1, 1993.

[158 Misc.2d 499] Martin L. Price, Mark J. Williams, of counsel, The Legal Aid Society, Brooklyn Office for the Aging, Joan Mangones, Lester Helfman, of counsel, The Legal Aid Society, Staten Island Neighborhood Office, New York City, for plaintiff Seittelman and proposed intervenors Silverman and Levanoni.

Yisroel Schulman and Janet Glaser Spitzer, of counsel, New York Legal Assistance Group, Inc., New York City, for plaintiff Holohan.

Atty. Gen. Robert Abrams, Asst. Atty. Gen. Robert F. Baciagalupi, of counsel, for defendant New York State Dept. of Social Services.

Corp. Counsel O. Peter Sherwood, Asst. Corp. Counsel Carole A. Paynter, of counsel, for defendant New York City Human Resources Admin.

BRUCE McM. WRIGHT, Justice.

This action, which is a combined declaratory judgment action and Article 78 proceeding, challenges certain aspects of the Medicaid program administered by the New York State Department of Social Services ("DSS") and the New York City Department of Social Services/Human Resources Administration ("HRA"). The action is brought by plaintiff-petitioner (hereinafter referred to as plaintiff) Estelle Seittelman in her capacity as the Administrator of the Estate of Ida Zichlinsky, on behalf of herself and all others similarly situated. Plaintiff Marguerite Holohan intervened in this action in August, 1992.

Proposed plaintiff-intervenors Leah Silverman and Nancy Levanoni, as attorney-in-fact for Sadye Bass, seek to intervene into this action on behalf of themselves and all others similarly situated.

Plaintiffs seek, inter alia, a declaration that 18 NYCRR 360-7.5(a)(5), which regulates reimbursement to Medicaid recipients of medical expenses incurred prior to the time of application for Medicaid ("three-month preapplication period") is irrational, and violative of federal and state law, as well as the Court of Appeals' decision Krieger v. Krauskopf, 70 N.Y.2d 637, 518 N.Y.S.2d 957, 512 N.E.2d 540, aff'g 121 A.D.2d 448, 503 N.Y.S.2d 418.

Plaintiffs have moved for an order permitting Silverman and Levanoni to intervene in this action, individually and as representative class plaintiffs, and allowing plaintiffs to serve a Proposed Intervenor Class Action Complaint and Petition dated August 26, 1992, in lieu of the previously served amended class action complaint. Plaintiffs also seek an order pursuant to Article 9 of the CPLR, converting this action to a class action and certifying the plaintiff class to be defined as follows:

All New York City recipients of Medical Assistance or their representatives who, on or after December 16, 1988, incurred out of pocket expenses for medical and other health care services of a type generally covered by Medicaid yet received from providers who are non-Medicaid enrollees during the three month period prior to the month of applying for Medical Assistance and whose application for reimbursement of such expenses was, will be or would have been denied on the basis that such care was provided by non-Medicaid enrollees.

Plaintiffs have also moved for partial summary judgment. They seek a declaratory judgment that 18 N.Y.C.R.R. 360-7.5(a)(5) is void to the extent that it limits reimbursement for expenses incurred during the three-month preapplication period, to those services which were provided by Medicaid enrollees. In connection with their request for a judgment declaring that 18 N.Y.C.R.R. 360-7.5(a)(5) is void, plaintiffs seek related relief which would implement such a declaration.

Defendant New York State Department of Social Services has opposed plaintiffs' motion for class certification and partial summary judgment and has cross-moved for an order granting it summary judgment dismissing the complaint. Defendant New York City Human Resources Administration has joined in the State defendant's opposition to class certification, and cross-motion for summary judgment. However, HRA has stated that it takes no position on the rationality or legality of 18 N.Y.C.R.R. 360-7.5(a)(5).

PROCEDURAL ISSUES

Initially, the court notes that by order dated July 29, 1992, plaintiff Holohan was permitted to intervene in this action; the proposed complaint dated June 5, 1992 was deemed to have been served on all parties; and defendants were directed to answer the complaint within 20 days after service of a copy of the order with notice of entry.

Yet, DSS has not based its cross-motion for summary judgment on the most recent June 5, 1992 complaint. Instead, DSS's motion is based on the May 5, 1992 amended complaint (served prior to the time that Holohan intervened) and DSS's answer to the May 5th complaint dated July 15, 1992.

Further, neither defendant DSS's answer nor defendant HRA's answer to the June 5, 1992 complaint have been included in the bulk of papers submitted to the court in support of these motions. If there is any mention of defendant DSS's answer to the June 5, 1992 complaint it has escaped the court, and the only reference to the HRA's answer to that complaint is in plaintiffs' counsel's affirmation in support of the motion for summary judgment, where it is stated that HRA served its answer to the complaint on or around August 3, 1992 (Williams affirmation, paragraph 19).

Thus, plaintiffs move for partial summary judgment based upon the June 5, 1992 complaint and/or the proposed class action intervenor complaint dated August 26, 1992. Defendant DSS cross-moves for summary judgment based upon the complaint dated May 5, 1992, and its answer to that complaint. Despite this procedural morass, the motions shall be entertained to the extent that the issues raised in the various pleadings are the same. Each of plaintiff's pleadings have alleged that 18 N.Y.C.R.R. 360-7.5(a)(5) is void, and that defendants fail to apprise applicants and recipients of their right to apply for reimbursement. Those allegations are addressed by DSS in its July 15, 1992 answer to the May 5, 1992 complaint. Thus, these issues shall be addressed at this juncture.

THE MEDICAID PROGRAM

The Medicaid program is a joint federal-state program which furnishes medical assistance to individuals "... whose income and resources are insufficient to meet the costs of necessary medical expenses ..." (42 U.S.C. § 1396). Federal law requires that a state plan for medical assistance provide for "... the establishment or designation of a single State agency to administer or to supervise the administration of the plan ..." (42 U.S.C. § 1396a(a)(5)). In New York, the Department of Social Services has been designated to act as the single state agency to supervise the administration of the Medicaid plan. (Social Services Law § 363-a(1)). In New York City, HRA administers the Medicaid program subject to supervision by DSS. (Social Services Law §§ 56, 77, 365(1)).

Social Services Law § 363-a(2) provides that DSS "... shall make such regulations, not inconsistent with law, as may be necessary to implement [the Medicaid Plan]". One such regulation promulgated by DSS, specifically, 18 NYCRR § 360-7.5(a)(5), is the subject of a challenge by plaintiffs here. That regulation pertains to reimbursement for medical expenses incurred during the three-month period prior to application for Medicaid and ending with receipt of a Medicaid card.

REIMBURSEMENT FOR MEDICAL EXPENSES INCURRED DURING THE

THREE-MONTH PREAPPLICATION PERIOD

18 NYCRR § 360-7.5, which is entitled "Method of payment for medical care" provides, in pertinent part, as follows:

(a) Payment for medical care provided under the MA [Medical Assistance or Medicaid] program will be made to the person or institution supplying the care. However, payment for services or care may be made, at the MA rate or fee in effect at the time such services or care were provided, to the following

* * * * * *

(5) a recipient or his/her representative for paid medical bills for medical expenses incurred during the period beginning three months prior to the month of application for MA and ending with the recipient's receipt of his/her MA identification card, provided that the recipient was eligible in the month in which the medical care and services were received and that the medical care and services were furnished by a provider enrolled in the MA program (emphasis supplied).

It is the limitation that is set forth in the above italicized language which plaintiffs challenge here. Plaintiffs argue, inter alia, that the intent of Congress with respect to Medicaid coverage is clearly frustrated by 18 NYCRR 360-7.5(a)(5), in that limiting reimbursement for only those services rendered by a Medicaid-enrolled provider arbitrarily penalizes eligible claimants who obtained medical care from a non-Medicaid-enrolled provider before they had any reason to seek out Medicaid providers or had any reason to familiarize themselves with Medicaid regulations. Plaintiffs assert that the regulation promulgated by DSS violates federal statutory law and that the regulation is irrational because one of the purposes of the federal Medicaid law is to provide for reimbursement for out-of-pocket expenses during a retroactive eligibility period.

Plaintiffs also maintain that the regulation, promulgated after the Court of Appeals' decision in Krieger v. Krauskopf, 70 N.Y.2d 637, 518 N.Y.S.2d 957, 512 N.E.2d 540, cert. denied 484 U.S....