Severino v. Ingraham

• Decision Date: 04 August 1977
• Citation: 59 A.D.2d 587,397 N.Y.S.2d 236
• Parties: In the Matter of Lawrence J. SEVERINO et al., doing business as Kent Nursing Home, Respondents, v. Hollis S. INGRAHAM, as Commissioner of the Department of Health of the State of New York, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 236

397 N.Y.S.2d 236

59 A.D.2d 587

In the Matter of Lawrence J. SEVERINO et al., doing business

as Kent Nursing Home, Respondents, v. Hollis S. INGRAHAM, as Commissioner of the Department of

Health of the State of New York, Appellant.

Supreme Court, Appellate Division, Third Department.

Aug. 4, 1977.

Louis J. Lefkowitz, Atty. Gen. (Clifford A. Royael, Albany, of counsel), for appellant.

Gilberg & Gilberg, Mount Vernon (David C. Gilberg, Mount Vernon, of counsel), for respondents.

Before KOREMAN, P. J., and GREENBLOTT, SWEENEY, KANE, and MAIN, JJ.

MEMORANDUM DECISION.

Appeal from a judgment of the Supreme Court at Special Term, entered November 3, 1976 in Albany County, which granted petitioners' application, in a proceeding pursuant to CPLR article 78, to annul a determination of the health department.

This proceeding was previously before this court on a motion to dismiss and we concluded that the petition stated a cause of action (Matter of Severino v. Ingraham, 45 A.D.2d 564, 360 N.Y.S.2d 334). Petitioners challenge the rate at which their nursing home was to be compensated for the care of Medicaid beneficiaries. The rate established by the Commissioner was based upon a patient occupancy rate of 80% rather than the actual figure of 55%, thereby reducing the amount of compensation to the nursing home. The regulation applicable in determining the proper rate at the time required that the per patient day cost of care be determined by dividing the total allowable expenses by the total patient days of care during the previous year (10 NYCRR 770.12 (repealed Jan., 1970)). Since petitioners' nursing home had only been in operation six months prior to the date the figures were to be computed, the Commissioner chose a patient occupancy rate higher than the actual number of patient days of care provided. Special Term concluded that the Commissioner's rate determination was arbitrary and capricious, annulled the determination, and remitted the matter for further proceedings. This appeal ensued. Initially, we conclude that this article 78 proceeding is an improper vehicle to challenge the Commissioner's rate determination and, therefore, convert this proceeding, in the exercise of our discretion, into one for a declaratory judgment (Matter of White Plains Nursing Home v. Whalen, 53 A.D.2d 926, 385 N.Y.S.2d 392, affd. 42 N.Y.2d 838, --- N.Y.S.2d ---, --- N.E.2d ---- (June 2, 1977)).

Regarding the computation of the rate pursuant to regulation, it is a generally established principle that the Legislature may, by statutory authority, confer upon an agency the power to adopt regulations reasonably expected to advance the purposes for which it was created and that reasonable regulations so adopted have the force and effect of law (People ex rel. Jordan v. Martin, 152 N.Y. 311, 46 N.E. 484; Wickham v. Levine, 47 Misc.2d 1, 261 N.Y.S.2d 702, affd. 24 A.D.2d 1035...