In the Matter of County of Genesee, Appellant,v.Nirav R. Shah,, et al., Respondents.BriefN.Y.September 7, 2016CA 14-01041 To be argued by: VICTOR PALADINO 10 minutes requested Supreme Court, Genesee County - Index No. 63493 $upreme ~ourt of tbe $tate of ~cw ~ork ~ppellate mOli~ton - jf ourtb 11Bepartment IN THE MATTER OF THE APPLICATION OF COUNTY OF GENESEE, -against- NIRA V R. SHAH, AS COMMISSIONER OF THE NEW YORK STATE DEPARTMENT OF HEALTH AND THE NEWYORKSTATEDEPARTMENTOFHEALTH, BRIEF FOR APPELLANTS ERICT. SCHNEIDERMAN Attorney General of the State of New York Attorney for Appellants The Capitol . Respondent, Appellants. ANDREW D. BING Deputy Solicitor General VICTOR PALADINO Albany, New York 12224-0341 (518) 473-4321 Assistant Solicitor General of Counsel OAG No. 14-170337 Dated: November 10, 2014 Reproduced on Recycled Paper Table of Contents Page Table of Authorities ............................................................................................. iii Preliminary Statement .......................................................................................... 1 Questions Presented ............................................................................................. 4 Statement of the Case .......................................................................................... 5 A. Pre-2006 Statutory and Regulatory Background Regarding Overburden Claims ........................................................ 5 B. The Medicaid Cap Statute ............................................................... 7 C. Prior Litigation Involving the Cap Statute ..................................... 9 . D. The 2012 amendment to the Medicaid Cap Statute ..................... 10 E: Statement of Facts .......................................................................... 12 F. This proceeding ............................................................................... 12 Argument POINT I THE 2012 AMENDMENT ls CONSTITUTIONAL .................................. 14 A. The County has no due process clause claim against the State regarding the 2012 Amendment .................................... 15 B. The 2012 amendment is constitutional under a due process vested rights analysis ............................................ : ........................ 20 1. The 2012 Amendment is not unfair ..................................... 22 2. The County had at most a minimal reliance interest based on prior law ................................................................ 27 ' i Table of Contents (cont'd) Page ARGUMENT, B. (cont'd) 3. The extent of retroactivity is not excessive ......................... 29 4. The 2012 Amendment serves an important public interest .................................................................................. 32 POINT II THE COUNTY LACKS A CLEAR LEGAL RIGHT TO MANDAMUS RELIEF DIRECTING THE DEPARTMENT OF HEALTH TO CALCULATE . AND DETERMINE ALL OUTSTANDING OVERBURDEN LIABILITIES ... 33 POINT III SUPREME COURT ABUSED ITS DISCRETION IN AUTHORIZING DISCOVERY ....................................................................................... 38 POINT IV SUPREME COURT ERRED IN DIRECTING THE DEPARTMENT TO PAY INTEREST ON THE OVERBURDEN CLAIMS AT ISSUE ............... 39 Conclusion ............................................................................................... 43 Addendum .............................................................................................. Al 11 Table of Authorities Cases Page Alliance of American Insurers v. Chu, 77 N.Y.2d 573 (1991) .................................................................................... 21;32 Black Riv. Reg. Dist. v. Adirondack League Club, 307 N.Y. 475 (1954), appeal dismissed, 351 U.S. 922 (1956) .......................... 17 Brothers v. Florence, 95 N.Y.2d 290 (2000) ......................................................................................... 23 Brusco, Matter of v. Brown, 84 N.Y.2d 674 (1994) ................................. : ....................................................... 34 Buffalo Columbus Hos. v. Axelrod, 127 A.D.2d 987 (4th Dep't 1987) ......................... : ............................................. 40 Chrysler Properties, Matter of v. Morris, 23 N.Y.2d 515 (1969) .......... : ............................................................................... 21 City df E. St. Louis v. Cir. Ct. for the Twentieth Jud. Cir., St. Clair Cnty, Ill., 986 F.2d 1142 (7th Cir. 1993) ........................................................................... 17 City of New York v. Richardson, 473 F.2d 923 (2d Cir.), cert. denied, 412 U.S. 950 (1973) ................................ 17 City o{New York v. State of New York, 86 N.Y.2d 286 (1995) .. , ................................................................................. 16,32 Concourse Nursing Home v. State of New York, 1 A.D.3d 675 (3d Dep't 2003), lv. denied, 2 N.Y.3d 704 (2004) ....................... 40 Correa-Ruiz v. Fortuna, 573 F.3d 1 (1st Cir. 2009) ................................................................................. 27 County of Chemung, Matter of v. Shah, App. Div. No. 518222 (pending) .......................................................................... 2 County of Herkimer, Matter of v. Daines, 60 A.D. 3d 1456 (4th Dep't), lv. denied, 13 N.Y.3d 708 (2009) .......................... 9 . County of Jefferson, Matter of v. Shah, App. Div. No. CA 14-01405 (pending) ............................................. '. .................. 2 iii Table of Authorities (cont'd) Cases (cont'd) Page County of Niagara, Matter of v. Daines, 60 A.D.3d 1456 (4th Dep't}, lv. denied, 13 N.Y.3d 707 (2009) ........................... 9 County of Niagara, Matter of v. Daines, 79 A.D.3d 1702 (4th Dep't 2010), lv. denied, 17 N.Y.3d 703 (2011) ............. 9,39 County of Niagara, Matter of u. Daines, 91 A.D.3d 1288 (4th Dep't 2012) ....................................................................... 10 County of Niagara, Matter of v. Daines, 96 A.D.3d 1433 (4th Dep't 2012) ....................................................................... 39 County of Niagara v. Shah, App. Div. No. 13-02010 (argued September 14, 2014).; ..................................... 2 ·County of St. Lawrence, Matter of v. Daines, 81A.D.3d212 (3d Dep't), lv. denied, 17 N.Y.3d 703 (2011) .............................. 9 County of St. Lawrence, Matter of v. Shah, App. Div. No. 518097 (argued October 15, 2014) ............................................... 2 County of St. Lawrence, Matter of v. Shah, 95 A.D.3d 1548 (3d Dep't 2012) .............................................................. 10,21,22 County of St. Lawrence, Matter of v. Shah, 95 A.D.3d 1548 (3d Dep't 2012) ............................................................................ . Dalton v. Pataki, 5 N.Y.3d 243, cert. denied, 546 U.S. 1032 (2005) ............................................... 14 Demisay v. YVhalen, 84 A.D.2d 902 (3d Dep't 1981) ................................ : .................................... 40,41 . E.S., Matter of v. P.D., 8 N.Y.3d 150 (2007) ............................................................................................ 14 Gattis v. Gravett, 806 F.2d 778 (8th Cir. 1986) ............................................................................... 27 iv Table of Authorities (cont'd) Cases (cont'd) Page Gentile v. Garden City Alarm Co., 147 A.D.2d 124 (2d Dep't 1989) ........................................................................ 22 Held v. State of New York Workers' Compensation Board, 85 A.D.3d 35 (3d Dep't), appeal dismissed, lv. denied, 17 N.Y.3d 837 (2011) ........................................................................................... 30 Hernandez v. Robles, 7 N.Y.2d 338 (2006) ........................................................................................... 17 Hodes, Matter of v. Axelrod, 70 N.Y.2d 364 (1987) ......................................................................................... 20 Ideal Mutual Insurance Co., Matter of v. Superintendent of Insurance, 82 A.D.3d 518 (1st Dep't 2011) ......................................................................... 29 ln Re Real Est. Title & Settlement Servs. Antitrust Litig., 869 F.2d 760 (3d Cir. 1989) ................................................................................ 17 Jeter, Matter of v. Ellenville Central School District, 41 N.Y.2d 283 (1977) ......................................................................................... 18 Krauskopf, Matter of v. Perales, 139 A.D.2d 147 (3d Dep't 1988), aff'd, 7 4 N.Y.2d 730 (1989) .......................... 18 Krauskopf, Matter v. Perales, 74 N.Y.2d 730 (1989) ............................................................................................ 6 New York State Association of Counties v. Axelrod, 213 A.D.2d 18 (3d Dep't 1995), lv. dismissed, 87 N.Y.2d 918 (1006) ......... 40,41 New York State Health Facilities Assn., Matter of v. Axelrod, 199 A.D.2d 752 (3d Dep't 1993), rev'd on other grounds, 85 N.Y.2d 326 (1995) ......................................................................................... 40 OnBank & Trust Co., Matter of, 90 N.Y.2d 725 (1997) ......................................................................................... 30 Ostrow, Matter of v. Bane, 213 A.D.2d 651 (2d Dep't 1995) ........................................................................ 40 v Table of Authorities (cont'd) Cases (cont'd) Roman Catholic Diocese of Albany, N. Y. v. New York State Workers' Compensation Board, Page 96 A.D.3d 1288 (3d Dep't 2012) ................................................................... 23~24 Rye Psychiatric Hos. Center, Inc., Matter of v. Surles, 218 A.D.2d 853 (3d Dep't), lv. denied, 83 N.Y.2d 802 (1995), cert. denied, 517 U.S. 1233 (1996) ......................................................................................... 40 South Carolina v. Katzenbach, 383 U.S. 301 (1966) ............................. ; ............................................................. 17 South Dakota v. United States DOI, 665 F.3d 986 (8th Cir. 2012) ............................................................................. 17 Spano, Matter of v. Novello, 13 A.D.3d 1006 (3d Dep't 2004). lv. denied, 4 N.Y.3d 819 (2005) ................... 25 Stolowski, v. 234 E. 178th St. LLC, 104 A.D.3d 569 (1st Dep't 2013) ....................................................................... 21 Trenton v. New Jersey, 262 U.S. 182 (1923) .......................................................................... , ................ 16 Trustees of the Masonic Hall and Asylum Fund, Matter of v. Commissioner of the New York State Department of Health, 193 A.D.2d 249 (3d Dep't 1993). appeal dismissed, 83 N.Y.2d 802 (1994) ..... 40 United States v. Locke, 471 U.S. 84.(1985) ... ~ ......................................................................................... 26 Wendy's Rest., LLC, Matter of v. Assessor, Town of Henrietta, 74 A.D.3d 1916 (4th Dep't 2010) ....................................................................... 38 Williams v. Mayor, 289 U.S. 36 (1933) ............................................................................................. 16 Woodside Manor Nursing Home, Matter of v. Shah, · 113 A.D.3d 142 (4th Dep't 2014) ....................................................................... 34 vi Table of Authorities (cont'd) New York State Constitution Page article I,§ 6 .............................................................................................. 4,13,14 State Statutes C.P.L.R. article 78 ......................................................................................................... 9,12 § 408 ......................................................................................................... 2,13,38 § 5002 ................................................................................................................. 41 § 5003 ................................................................................................................. 41 General Construction Law § 93 .............................................................................................................. 1,13 S.S.L. § 368-a ............. ~ ........................................................................................... passim § 368-a(l)(d) ......................................................................................................... 5 § 368-a(l)(h) ................................................................................................ passim L. 2005, ch. 58, Part C, § 1 .............................................................................................................. 7,11 § l(a) ................................................................................................................... 8 § l(f) ................................................................................................................... _8 L. 2006, ch. 57, Part A, § 60 ................................. : .......... ;., ..................................................................... 7 L. 2010, ch. 109, Part B § 22 ................................................................................................................. 25 § 24 .......................................................................................................... : ...... 10 L. 2011, ch. 59, Part H, § 92 .; ............................................................................................................... 38 L. 2012, ch. 56, Part D § 61 ........................................................................................................ ~ ........ 11 § 6l(h) ................................................................................................................ 11 § 65 ................................................................................................................. 11 vii Table of Authorities (cont'd) State Rules and Regulations Page 18 N.Y.C.R.R. Part 601 ............................................................................................................... 6 § 601.3 ........................................................................................................... 10,37 § 601.3(c) .............................................................................................................. 9 § 601.4 ........................................................................................................... 23,35 Part 635 ......... , ........................................................................................... 6,23,35 United States Constitution 5th Amendment ............ · ............................................................................................... 17 14th Amendment ....... : ............................................................................................ 17, 19 viii PRELIMINARY STATEMENT This appeal is the latest chapter in the ongoing dispute between the counties and the New York State Department of Health regarding overburden reimbursement, a type of Medicaid claim. In 2012, the Legislature enacted an amendment unambiguously providing that as of April 1, 2012, the Department of Health would no longer reimburse counties for pre-2006 overburden claims. The legislative history explains that the purpose of this amendment was to clarify that the State was no longer responsible for pre-2006 overburden costs following the enactment of the 2005 Medicaid Cap S.tatute. The cap statute generally limited the counties' share of Medicaid expenditures each year to a dollar amount, or cap, determined pursuant to the statutory formula. In this proceeding involving petitioner Genesee County, Supreme Court, Genesee County (Noonan, J.) declared that the 2012 amendment was unconstitutional and violated General Construction Law § 93 and annulled the Department's denial of the overburden reimbursement claims that the County submitted after April 1, 2012 (Record ["R."] 18). The court ordered the State to pay the County for these statutorily barred claims, plus interest, and awarded sweeping prospective mandamus relief (R. 18). The court directed · the State to calculate and pay all additional overburden reimbursement owed the County for which the County has yet to submit any claims (and which claims would be barred by the 2012 amendment in any event) (R. 18). In addition, in furtherance of this mandamus relief, Supreme Court sua sponte granted leave for "further discovery on the issue (CPLR § 408)" and stated that, if necessary, it will appoint a referee to supervise the discovery process and determine the final accounting (R. 18). The constitutionality of the 2012 amendment is before this Court in an appeal by the Department in similar proceedings involving Niagara County, Matter of County of Niagara v. Shah (App. Div. No. 13-02010) (argued September 14, 2014), Jefferson County, Matter of County of Jefferson v. Shah (App. Div. No. 14-00926), and Oneida County, Matter of County of Oneida (App. Div. No. CA 14-01405). The constitutional issue is also before the Appellate Division, Third Department, in similar proceedings involving St. Lawrence County, Matter of County of St. Lawrence v. Shah (App. Div. No. 518097) (argued October 15, 2014), and Chemung County, Matter of County of Chemung v. Shah (App. Div. No. 518222). Supreme Court erred in declaring the 2012 amendment unconstitutional. The County failed to meet its heavy burden to demonstrate that the 2012 amendment unconstitutionally impaired its vested rights. Under settled law, the County, as a political subdivision created by the State for the purpose of carrying out the State's governmental powers, has no due 2 process right or vested right regarding the sharing of the costs of governmental programs such as Medicaid. In other words, the Due Process Clause does not limit the Legislature's authority to allocate Medicaid expenses between the State and its political subdivisions as it sees fit, and to change that allocation even after the relevant expenses have been incurred. And even if the County could assert a vested right, the relevant factors in this case support the constitutionality of the 2012 amendment. This Court should therefore declare the 2012 amendment constitutional and dismiss the petitions. Further, the mandamus relief Supreme Court awarded is improper and should be vacated. The injunction directs the Department of Health, in the absence of specific reimbursement claims by the County, to undertake a massive, 30-year review of literally billions of Medicaid claims. The County lacks a clear legal right to such mandamus relief, and the court should not have awarded it. Even if the mandamus relief is upheld, it was error for Supreme Court to authorize discovery. Calculating and paying overburden reimbursement are tasks the Legislature has delegated to the Department. By authorizing discovery while the Department performs a retrospective project, Supreme Court's order impermissibly injects the courts into the day-to-day 3 administration of the Medicaid program. Finally, the award of interest on the overburden claims must be reversed, because settled law holds that there is no statutory authority for such an award of interest on delayed Medicaid reimbursements. QUESTIONS PRESENTED 1. Whether the County failed to demonstrate beyond a reasonable doubt that the 2012 amendment deprives it of property without due process of law in violation of article I, § 6 of the New York Constitution. 2. Whether Supreme Court erred in directing the Department of Health identify, verify and determine the total overburden expenses the County incurred before January 2006, and, without requiring the County to submit any claims, to calculate and pay all outstanding overburden liabilities owed to the County. 3. Whether Supreme Court abused its discretion in sua sponte ordering discovery in aid of the mandamus relief. 4. Whether Supreme Court erred in directing the Department to pay interest on the overburden claims at issue, since there is no authority in Social Services Law § 368-a or its implementing regulations for the payment of interest to Counties on delayed Medicaid reimbursement for overburden claims. 4 STATEMENT OF THE CASE The 2012 amendment at issue in these cases is the culmination of a lengthy dispute between the Department of Health and several counties including petitioner Genesee County. To place the present case in context, the background of the dispute and the prior litigation it engendered are briefly summarized below. A. Pre-2006 Statutory and Regulatory Background Regarding Overburden Claims The Department of Health administers New York's Medicaid program through local social services districts, including petitioner Genesee County. New York's Social Services Law sets forth the financial responsibilities of the State and local governments regarding medical assistance. Before 2006, in general, after deducting any actual or anticipated federal funding, the State and counties each paid roughly 25 percent of total annual Medicaid expenditures. See Social Services Law ("SSL") § 368-a(l)(d). There was no cap on annual dollar increases in the counties' liability for their share of Medicaid expenditures. Certain exceptions to this cost-sharing arrangement applied. From the early 1980s through 2005, counties were not responsible for paying any part of the cost of medical services relating to certain "state charges," including 5 the cost of medical services for certain mentally disabled Medicaid recipients eligible for "overburden reimbursement" under SSL § 368-a(l)(h) (R. 334). The cost of Medicaid services provided to mentally disabled recipients qualified for overburden reimbursement where the recipients met certain criteria. See SSL§ 368-a(l)(h); Matter of Krauskopf v. Perales, 74 N.Y.2d 730 (1989). The counties' claims for overburden reimbursement arose because counties initially paid their full local shares of total Medicaid expenditures for all covered services provided to Medicaid recipients, including services provided to overburden patients for which no local share was owing (R. 336). The Department then identified the recipients who were overburden patients and reimbursed the counties each quarter (R. 336). The Department furnished counties with certain reports from which they could ascertain if the State had failed to reimburse them for any overburden-eligible individuals (R. 336-337). If a county believed that the Department had omitted recipients who met the overburden criteria, it could submit a letter with supporting information to the Department (R. 339, 366, 370), or it could submit claims for any additional overburden reimbursement under 18 N.Y.C.R.R. Parts 601 and 635. 6 The State's overburden reimbursement system largely accomplished its objectives. Over the 22-year period from 1984 through 2005, the Department reimbursed counties for billions of dollars in overburden expenditures. But due to the large number of Medicaid recipients and the complexity of identifying those who were overburden-eligible, the Department's quarterly review process did not capture all overburden reimbursements owed to counties. Although the Department made available a claiming process by which counties could recover any missed overburden payments, many counties, including Genesee County, did not avail themselves of this process until after 2005, when the Legislature radically altered the Medicaid cost- sharing system through the enactment of the Medicaid Cap Statute. B. The Medicaid Cap Statute In 2005, in response to concerns about rapidly increasing Medicaid· costs and local property taxes, the Legislature enacted the Medicaid expenditure cap statute to limit counties' financial responsibility for Medicaid expenditures. See L. 2005, ch. 58, Part C, § 1, as amended by L. 2006, ch. 57, Part A, § 60 ("Cap Statute") (reproduced in addendum to this brief). As of January 1, 2006, the Cap Statute replaced the old cost-sharing system under which counties were generally responsible for 25 percent of New York's Medicaid expenses, without any cap or ceiling limitation. 7 Under the Cap Statute, counties are no longer responsible for a fixed percentage of Medicaid expenses, which had resulted in open-ended and thus unpredictable increases in the counties' financial exposure. Instead, a county's local share of Medicaid expenditures is capped at a dollar amount that is fixed each year pursuant to the formula in the Cap Statute. But the Cap Statute is a two-way street. While a county cannot be required to pay more than its cap amount, it generally must pay its full cap amount. See Cap Statute§ l(f). The cap methodology now governs the Department's reimbursement of counties for Medicaid expenses "notwithstanding the provisions of section 368-a of the social services law," which includes the overburden reimbursement provisions. Cap Statute§ l(a). As a result, after the law went into effect on January 1, 2006, the Department.determined that it was precluded from reimbursing counties for overburden payments formerly authorized by SSL § 368-a(l)(h), even if the county incurred its local share of the Medicaid expenditure before 2006, because that would result in the county paying less than its full cap amount for the year in which it received the payment. 8 C. Prior Litigation Involving the Cap Statute In 2007 and 2008, Niagara and Herkimer counties submitted overburden claims to the Department that accrued before the Medicaid Cap Statute's effective date. The Department denied the claims on the ground that they were barred by the Cap Statute, prompting the. counties to bring · article 78 proceedings to challenge the denials. In 2009, this Court concluded that the Department had impermissibly applied the cap statute retroactively to the counties' pre-2006 overburden claims. Matter of County of Herkimer v. Daines, 60 A.D.3d 1456 (4th Dep't), lv. denied, 13 N.Y.3d 707 (2009); Matter of County of Niagara v. Daines, 60 A.D.3d 1456 (4th Dep't), lv. denied, 13 N.Y.3d 708 (2009). The Third Department subsequently agreed that the Department had impermissibly applied the Medicaid Cap retroactively to pre-2006 overburden claims. Matter of County of St. Lawrence v. Daines, 81 A.D.3d 212, 214-16 (3d Dep't), lv. denied, 17 N.Y.3d 703 (2011). This Court and the Third Department also held that the time limit in 18 N.Y.C.R.R. . . . § 601.3(c) did not bar the county's submission of overburden claims. Id. at 217-18; accord Matter of County of Niagara v. Daines, 79 A.D.3d 1702 (4th Dep't 2010), lv. denied, 17 N.Y.3d 703 (2011). After the Court of Appeals denied the State's motions for leave to appeal in St. Lawrence I and in Niagara II in June 2011, the Department 9 promptly paid the overburden claims at issue in those cases, and in all other pending cases in which the only defenses were the Medicaid Cap and the time limit in§ 601.3. These payments totaled more than $17 million (R. 345, ii 47). In 2010, while this litigation was pending, the Legislature enacted an amendment that the Department interpreted as barring current reimbursement of county overburden expenditures incurred in the past. See L. 2010, ch. 109, Part B, § 24. But both this Court and the Third Department annulled the Department's denials of overburden claims based on the 2010 amendment, concluding that the 2010 amendment did not clearly and unambiguously extinguish the State's obligation to pay pre-2006 overburden claims. Matter of County of Niagara v. Daines, 91 A.D.3d 1288, 1290 (4th Dep't 2012); Matter of County of St. Lawrence v. Shah, 95 A.D.3d 1548, 1552 (3d Dep't 2012); The Department then promptly paid the overburden claims at issue in those proceedings. D. The 2012 amendment to the Medicaid Cap Statute In response to the court rulings that the 2010 amendment did not eliminate state reimbursement for pre-2006 overburden claims, in 2012 the Governor proposed, and the Legislature enacted, another amendment to the Medicaid Cap Statute to clarify that overburden reimbursement was not 10 available under the Medicaid Cap. The Governor included this amendment in the Executive's article VII budget bill, which was submitted to the Legislature on January 17, 2012 (R. 345). The Legislature adopted the Governor's proposed bill as section 61 of Part D of chapter 56 of the laws.of 2012, adding a new subdivision (h) to the Medicaid Cap Statute ("the 2012 amendment"). The 2012 amendment unambiguously ended overburden reimbursement: notwithstanding the provisions of section 368-a of the social services law or any other contrary provision of law, no reimbursement shall be made for social services districts' claims submitted on and after the effective date of this paragraph, for district expenditures incurred prior to January 1, 2006 1 including, but not limited to, expenditures for services provided to individuals who were eligible for medical assistance pursuant to section [366) of the social services law as a result of a mental disability, formally referred to as human services overburden aid to counties. L. 2012, ch. 56, Part D, § 61 (amending L. 2005, ch. 58, Part C, § 1) (reproduced· at R. 136). The 2012 amendment was made effective prospectively on April 1, 2012. See L. 2012, ch. 56, Part D, § 65 (reproduced in addendum to this brief). Unlike the 2010 amendment, which lacked any legislative history, the 2012 amendment's legislative purpose to end the State's financial responsibility for the counties' pre-2006 overburden expenses was clearly stated in the memorandum in support. The amendment's purpose was to 11 "clarify that local governments cannot claim for overburden expenses incurred prior to January 1, 2006 when the 'local cap' statute that limited local contributions to Medicaid expenditures took effect" (R. 373). The 2012 amendment was a response to "adverse court decisions that have resulted in State costs paid to local districts for pre-cap periods, which conflict with the original intent of the local cap statute" (R. 373). E. Statement of Facts Within weeks after the introduction of the bill that became the 2012 amendment, many social services districts (i.e. counties) submitted a flurry of additional claims for overburden reimbursement totaling several million dollars to the Department (R. 346, 1 52). In June 2012, the Department paid all these claims that had been submitted before April 1, 2012 (R. 346 n.23). In December 2013, long after the April 1, 2012 effective date of the 2012 amendment, petitioner submitted overburden claims to the Department totaling $313,134 (R. 447, if1 53-54). The Department denied these claims based on the 2012 amendment (R. 346-347, if 55; R. 375). F. This proceeding· Thereafter, Genesee County commenced this combined article 78 proceeding and declaratory judgment action against the Department and its Commissioner. The County alleges, among other things, that the 2012 12 amendment does not relieve the State of its reimbursement obligation under Social Services Law§ 368-a and that the 2012 amendment deprives it of its vested right to reimbursement for overburden expenses without due process of law in violation of article I, § 6 of the New York Constitution and therefore should be declared null and void (R. 45-60). Respondents answered the petition/complaint. Supreme Court (Noonon, J.) declared the 2012 amendment unconstitutional and violative of General Construction Law§ 93, annulled the Department's determination, and directed it to pay Genesee County's overburden reimbursement claims at issue here, with interest (R. 1 7-18). In addition, the court directed the State to.calculate and pay all additional overburden reimbursement owed the County for which the County has yet to submit any claims (and which claims would be barred by the 2012 amendment in any event) (R. 18). And in furtherance of this mandamus relief, Supreme Court sua sponte granted leave for "further discovery on the issue (CPLR § 408)" and stated that, if necessary, it will appoint a referee to supervise the discovery process and determine the final accounting (R. 18). The court denied the county's remaining claims (R. 17-18). This appeal by the Department ensued (R. 4-6). 13 ARGUMENT POINT I THE 2012 AMENDMENT IS CONSTITUTIONAL Supreme Court erred in declaring the 2012 amendment unconstitutional. As a statute duly enacted by the Legislature and signed by the Governor, the 2012 amendment enjoys a strong presumption of constitutionality, see Dalton v. Pataki, 5 N.Y.3d 243, 255, cert. denied, 546 U.S. 1032 (2005), and may not be annulled except upon a showing that it is unconstitutional "beyond a reasonable doubt." Matter of E.S. v. P.D., 8 N.Y.3d 150, 158 (2007). The County has failed to carry that heavy burden. Supreme Court concluded that the 2012 amendme.nt deprives the County of its vested right to reimbursement for overburden expenses in violation of article I, § 6 of the New York Constitution, which provides in relevant part that "[n]o person shall be deprived of life, liberty or property without due process of law." This conclusion is in error for two reasons. First, under settled law, the County, as a political subdivision of the State deriving its power and authority wholly from the State, is not a "person" who can have a New York constitutional due process clause claim against the State; consequently, the County cannot mount a vested rights challenge to a state law that reallocates, even retroactively, how the State and its political 14 subdivisions share the cost of a governmental program. Second, even if the County could properly claim a due process right based on the statutory allocation of Medicaid costs between the State and its political subdivisions, the 2012 amendment.is constitutional under the balancing test applied by the Court of Appeals in vested rights cases. A. The County has no due process clause claim against the State regarding the 2012 Amendment. The County's due process arguments rest on a simple, but fundamentally flawed, analogy. The County likens itself to a creditor and the State to a debtor. It has repeatedly characterized the overburden litigation as a simple collection action. Based on this false premise, the County contends that the Legislature, through the 2012 amendment, has · unconstitutionally attempted to extinguish a debt owed to the County, thereby depriving it of vested property rights. This analogy is mistaken.· Social Services Law § 368-a, the statute on which the County bases its due process claim, does not create property "rights" in favor of a political subdivision against the State. To the contrary, this statute allocated the financial responsibilities of the State and local social services districts with respect to Medicaid expenditures before January 2006. To be sure, that statute imposed obligations on the Department, as the State's administrator of the Medicaid program. While that statute was in 15 effect, counties could obtain judicial relief if the Department did not comply with its statutory obligations. But the Legislature retains ultimate authority to change the allocation of the State's and the counties' fiscal responsibilities for Medicaid· expenditures. That authority includes extinguishing stale reimbursement obligations like those at issue here, which are as much as 30 years old. When the Legislature does so, as it did in the 2012 amendment, it does not impair any property right belonging to a county. Thus, Supreme Court erred 'in holding the 2012 amendment unconstitutional, because the State's allocation or reallocation of the costs of government between itself and its political subdivisions creates no vested rights that a county may invoke against the State. Counties such as petitioner are political subdivisions created by the state itself "for the convenient carrying out of the State's governmental powers and responsibilities as· its agents." City of New York u. State of New York, 86 N.Y.2d 286, 290 (1995). As a result, a county has "no privileges or immunities under the federal constitution which it may invoke in opposition to the will of its creator." Williams v. Mayor, 289 U.S. 36, 40 (1933) (Cardozo, J.); see also Trenton u. New Jersey, 262 U.S. 182, 186-87 (1923) (federal constitution does not bar a 16 state from taking municipal property without compensation). Just as states. are not persons within the meaning of the Fifth Amendment's Due Process Clause, South Carolina v. Katzenbach, 383 U.S. 301, 323-24 (1966), so too are political subdivisions not persons entitled to federal due process protection from the states that created them. City of New York v. Richardson, 473 F.2d 923, 929 (2d Cir.) ("[p ]olitical subdivisions of a state may not challenge the validity of a state statute under the Fourteenth Amendment"), cert. denied, 412 U.S. 950 (1973); City of E. St. Louis v. Cir. Ct. for the Twentieth Jud. Cir., St. Clair Cnty, fll., 986 F.2d 1142, 1144 (7th Cir. 1993) (municipalities are not persons for due process purposes); see also South Dakota v. United States DOI, 665 F.3d 986, 991 & n.4 (8th Cir. 2012) (expressing doubt whether political subdivisions are persons, but not deciding issue); but see In Re Real Est. Title & Settlement Servs. Antitrust Litig., 869 F.2d 760, 765 n.3 (3d Cir. 1989) (school districts are persons for due process purposes). Although New York courts have.sometimes construed the New York constitution's due process clause more expansively than the Supreme Court has construed the federal clause, Hernandez v. Robles, 7 N.Y.3d 338, 361-62 (2006), New York has followed federal decisions holding that political subdivisions cannot challenge state statutes on due process and similar constitutional grounds. The Court of Appeals has explained that the 17 "alteration, impairment or destruction of {the] powers [of a political subdivision] by the Legislature presents no question of constitutionality" and does not implicate the due process clause. Black Riv. Reg. Dist. v. Adirondack League Club, 307 N.Y. 475, 487 (1954) (emphasis added, citations and paragraph break omitted), appeal dismissed, 351 U.S. 922 (1956). Indeed, "political power conferred by the Legislature confers no vested right as against the government itself* * * The concept of the supreme power of the Legislature over its creatures has been respected and followed in many decisions." Id. at 488. The County's due process/vested rights challenge to the 2012 amendment is barred by these controlling authorities. This bar goes to the merits of petitioner's constitutional claim; it is not simply a question whether petitioner has capacity or standing. That is, even if the County has capacity or standing to challenge the 2012 amendment on other grounds, see Matter of Krauskopf v. Perales, 139 A.D.2d 147, 153 (3d Dep't 1988) (city commissioner has standing to challenge state agency's internal guidance on state statutory grounds), aff'd, 74 N.Y.2d 730 (1989), its due process/vested rights claim fails on the merits because it does "not have the substantive right to raise" a due process challenge to the· 2012 amendment. Matter of Jeter v. Ellenville Central School District, 41 N.Y.2d 283, 287 (1977), In Jeter, a city board of 18 education and a city department of social services alleged that a state law imposing certain educational costs on them violated their rights to due process and equal protection. The Court held that while these municipal entities had standing to challenge the state law, they lacked the "substantive right" to mount state and federal due process and equal protection challenges to the law. Id. In so concluding, the Court followed the federal authorities holding that political subdivisions of a state may not challenge the validity of a state statute under the Fourteenth Amendment. Id. Similarly, here the County has no "substantive right," that is, no due process claim that it was deprived of vested property rights by the Legislature that created it. The New York Constitution's Due Process Clause does not limit the Legislature's authority to allocate the cost of Medicaid expenses between the State and its counties as it sees fit, and to change that allocation even after the relevant expenses have been incurred. Once the Legislature unambiguously extinguished overburden reimbursement, the County, as a political subdivision of the State, could have no due process claim against the State for further overburden payments. Consequently, petitioner's due process/vested rights claim has no merit and Supreme Court erred in declarillg the 2012 amendment unconstitutional. 19 B. The 2012 Amendment is constitutional under a due process vested rights analysis. The conclusion that the County has no due process vested rights claim on the merits against the State suffices to dispose of the County's constitutional claim and require reversal here. However, Supreme Court further erred in adopting the County's constitutional argument, because even if the County had a due process claim against the State, the 2012 amendment would not violate the County's vested rights~ There is no merit to the County's argument that because the County incurred overburden expenses before 2006 at a time when overburden reimbursement was required by statute, the Legislature can never terminate the County's claims for those expenses. As the Court of Appeals has observed, "the vested rights doctrine is conclusory, and indeed a fiction." Matter of Hodes v. Axelrod, 70 N.Y.2d 364, 370 (1987). Although older cases evinced an aversion to retroactive legislation generally, "the modern cases reflect a less rigid view of the Legislature's right to pass such legislation and more candid consideration - on a case-by-case basis - of the various policy considerations upon which the constitutionality of retroactive legislation depends." Id. at 371. Determination of whether legislation impermissibly impairs vested property rights entails a 20 balancing of "a number of factors, including fairness to the parties, reliance on pre-existing law, the extent ofretroactivity, and the nature of the public interest to be served by the law." Alliance of American Insurers v. Chu, 77 N.Y.2d 573, 586 (1991) (internal quotations omitted); see Hodes, 70 N.Y.2d at 370; Matter of Chrysler Properties v. Morris, 23 N.Y.2d 515, 518 (1969). The balance of these factors in this case tips decisively in favor of the 2012 amendment. In Matter of County of St. Lawrence v. Shah, 95 A.D.3d at 1554, the Third Department held that the 2010 amendment to the Cap Statute did not extinguish pre-2006 overburden claims. In dictum, the Court concluded that "the 2010 amendment, even if it was intended by the Legislature to repeal Social Services Law§ 368-a(l)(h), cannot serve to relieve the state of its obligation to refund the counties for these expenditures made prior to January 1, 2006." Id. This conclusion was dictum, because it was expressly hypothetical and not necessary to the court's holding that the 2010 amendment was not intended to extinguish pre-2006 overburden claims.· As dictum, this language is not binding ori either this Court or appellants. See Stolowski v. 234 E. 178th St. LLC, 104 A.D.3d 569, 570 (1st Dep't 2013). Moreover, the constitutionality of the 2010 amendment was neither briefed nor argued in Matter of County of St. Lawrence v. Shah, and the Third 21 Department did not analyze any of the relevant factors in support of the language. As we explain below, analysis of the relevant factors establishes that the 2012 amendment is constitutional, and consequently, the dictum in Matter of County of St. Lawrence v. Shah should not be followed here. See Gentile v. Garden City Alarm Co., 147 A.D.2d 124, 132 (2d Dep't 1989) (Appellate Division is not bound by its prior dicta). · 1. The 2012 Amendment is not unfair. The 2012 amendment is not unfair to the County. The County's claims are stale, in some cases dating back decades. The 2012 amendment terminating these claims is part of a new cost sharing system under the cap statute pursuant to which New York's counties have been relieved of responsibility for billions of dollars of Medicaid expenditures. Thus, there is no merit to the County's claim below that extinguishment ofpre-2006 overburden liabilities is unfair because those monies were due and owing, the failure to pay them is the State's fault, and the State has not undertaken a project to calculate and determine the total overburden reimbursement owed counties dating back to 1984. The Legislature took a different view of the matter, determining that the time has come to close the books on these stale claims. Long before the advent of the new Medicaid cap cost-sharing system, the State made 22 available a process under 18 N.Y.C.R.R. § 601.4 and Part 635 by which counties could have submitted claims for overburden reimbursement. Genesee County and some other counties, however, failed to fully take advantage of that process until after the Medicaid Cap Statute went into effect in 2006. By the time the Legislature passed the 2012 amendment, overburden claims were between seven and twenty-eight years old. Governmental operations, especially fiscal planning, are compromised by such stale reimbursement claims of indeterminate amounts, and it was reasonable for the Legislature to extinguish the claims. Even so, as it considered the 2012 amendment, the Legislature afforded counties a grace period for one last round of claims, allowing payment of pre-2006 overburden claims submitted before April 1, 2012. After the amendment was included in the Governor's article VII bills in mid-January 2012, petitioner and other counties submitted a flurry of overburden claims before April 2012, all of which the Department paid in June 2012 (R. 346, ~ 52 & n.23). The Legislature's judgment in affording this grace period is entitled to deference. See Brothers v. Florence, 95 N.Y.2d 290, 301 (2000) (if the Legislature shortens a statute oflimitations period but sets a reasonable grace period, "its determination of what constitutes a reasonable time is entitled to deference in the absence of some 'palpable error"'); Roman 23 Catholic Diocese of Albany, N. Y. v. New York State Workers' Compensation Board, 96 A.D.3d 1288, 1290 (3d Dep't 2012) ("due process is satisfied when the Legislature expressly sets a 'reasonable grace period"'). There is nothing inequitable in this result. The 2012 amendment is part of the Medicaid Cap statute, which has saved counties billions of dollars since its enactment in 2005. Although counties can no longer obtain reimbursement for old overburden claims, they enjoy substantial savings from the new cap methodology. For the five-year period between the 2005- 2006 fiscal year and the 2009-2010 fiscal year, counties saved approximately $6.4 billion "as a result of the Medicaid cap and an additional $2.5 billion as a result of the State takeover of Family Health Plus," a Medicaid expansion program (R. 933). Genesee County itself has saved more than $5.3 million since the Medicaid Cap's inception (R. 343, if 43). And because the counties' financial obligations are now fixed, the cap provides them with stability and predictability with respect to their future Medicaid obligations. Thus, the financial trade-offs reflected in the Cap Statute as amended in 2012 strongly favor the counties: although the law terminated the state overburden claims, · the counties have saved billions in present and future Medicaid expenditures. Another positive trade-off that counties have received under the new cap regime is protection from pre-2006 Medicaid liabilities. Although the 24 Cap Statute as amended in 2012 does not allow for reimbursement ofpre- 2006 Medicaid claims, the statute shields counties from pre-2006 liabilities they otherwise would owe under the old cost-sharing system, including paying for federal disallowances of old Medicaid expenditures. For example, if this year the federal government finalized an audit and disallowed federal funding for millions of dollars in Medicaid expenditures incurred before 2005, under the cap law the County would not have to contribute to the disallowance, unless the disallowance resulted from the county's failure to properly administer the Medicaid program (R. 343, 'II 42). See L. 2010, ch. 109, Part B, § 22. This is in contrast to the old system, under which counties would have had to pay their percentage share of the disallowance, regardless of fault. See Matter of Spano v. Novello, 13 A.D.3d 1006, 1007"08 (3d Dep't 2004), lv. denied, 4 N.Y.3d 819 (2005). Similarly, if today a court were to grant judgment in favor of health care providers and order the Medicaid program to retroactively pay them increased Medicaid reimbursement for pre-2006 services, the cap would shield the counties from having to contribute to the court-ordered payments. Under the old system, counties would have been required to contribute to such increased retroactive payments resulting from court orders. 25 But here the County seeks the benefits of both cost-sharing systems and the burdens of neither: it now enjoys substantial savings from the Medicaid cap, protection from pre-2006 liabilities (i.e., federal disallowances and judgments directing increased reimbursement for providers), and at the same time it seeks reimbursement for state overburden claims payable only under the old law. The Legislature, in enacting the Cap Statute and the 2012 amendment, made the reasonable policy decision that the substantial financial benefits counties receive from the new cap law, including the protection it affords from old liabilities, warranted extinguishment of pre- 2006 overburden claims. The courts may not overrule the Legislature's policy judgment simply on the basis of a contrary policy judgment. Even if counties are entitled to due process protection, the legislative process itself - in which they lobbied vigorously against the 2012 amendment - afforded them constitutionally adequate process. See United States v. Locke, 471 U.S. 84, 108 (1985) ("In altering substantive rights through enactment of rules of general applicability, a legislature generally provides constitutionally adequate process simply by enacting the statute, publishing it, and, to the extent the statute regulates private conduct, affording those within the statute's reach a reasonable opportunity both to familiarize themselves with the general 26 requirements imposed and to comply with those requirements"). "While the legislative alteration or elimination of a previously conferred property interest may be a 'deprivation,' the legislative process itself provides citizens with all of the 'process' they are 'due."' Gattis v. Gravett, 806 F.2d 778, 781 (8th Cir. 1986); see also Correa-Ruiz v. Fortuna, 573 F.3d 1, 15 (1st Cir. 2009) (same). Thus, under all the relevant circumstances, the 2012 Amendment was fair and reasonable. 2. The County had at most a minimal reliance interest based on prior law. By April 1, 2012, any reliance by the County on pre-2006 law to support its view that reimbursement of its pre-2006 overburden claims would continue indefinitely was unwarranted. Before 2012, the County had ample forewarning that its claims might be extinguished. The County does not deny that the 2005 Cap Statute extinguished the State's responsibility for overburden reimbursement prospectively for periods after 2005 - all the County's claims pertain to periods before 2006. Yet the County waited over seven more years before pursuing the claims at issue here. Although before 2006, the County expected based on then-existing law that it would be reimbursed for overburden expenditures that it incurred, it had no reason to believe that its claims might not be altered by subsequent 27 law, or that it could indefinitely postpone the submission of its claims. Moreover, after 2005, the County did not rely on prior law to incur any new reimbursable expenditures or take other affirmative detrimental actions. The County's only reliance after 2005 was its failure to submit all of its pre- 2006 claims during the more than six years after the Cap Statute went into effect and before the 2012 amendment unambiguously extinguished overburden reimbursement. Although the County might have initially expected that it would continue to be reimbursed for pre-2006 claims despite the Cap Statute, the enactment of that statute, the Department's interpretation of it, and the ensuing litigation at the very least gave petitioner reason to be cautious in relying on its ability to indefinitely postpone its claims. In addition, the Legislature's enactment of the 2010 amendment, and the Department's application of that law, gave petitioner further notice that it would be unwise to further delay submitting its by now stale reimbursement claims. Thus, petitioner reasonably should have been aware well before the enactment of the 2012 amendment that its pre-2006 claims were on borrowed time, and consequently its reliance on pre-2006 law to justify its more than six-year delay in submitting them was unwarranted. 28 This conclusion is bolstered by the more than two-month period between the January introduction of the 2012 amendment and its April effective date. Once the amendment had been introduced by the Governor, petitioner had additional notice that further delay would result in termination of its claims. As we explained above, other counties submitted a flurry of claims during this grace period, and the Department paid them in June 2012 (R. 346, 'li 52 & n.23). Consequently, any reliance interest in overburden reimbursement that petitioner may have had by the time of the enactment of the 2012 amendment was minimal, and the Legislature adequately accommodated it here. 3. The extent of retroactivity is not excessive. There is no merit to the County's claim below that the 2012 amendment is excessively retroactive. On the contrary, the amendment is prospective to the extent that it extinguished only claims that were submitted after its enactment. The Department has paid all claims that were submitted before April 1, 2012. Furthermore, the 2012 amendment is a "remedial statute" that was intended to clarify that reimbursement for pre-2006 overburden claims was no longer available after the Medicaid cap regime went into effect. See Matter of Ideal Mutual Insurance Co. v. Superintendent of Insurance, 82 A.D.3d 518, 519-20 (1st Dep't 2011) (no 29 vested right in the statutory distribution scheme for liquidation of insurance companies, which is "subject to change at the discretion of the Legislature"). Because the Legislature intended the 2012 amendment to be curative, it is appropriately retroactive to the extent that it prospectively ended reimbursement of claims for the County's Medicaid costs that the County paid before 2006 for services provided to overburden-eligible recipients. As reflected in its legislative history, the purpose of the 2012 amendment was to "clarify that local governments cannot claim for overburden expenses incurred prior to January 1, 2006, when the 'local cap' statute that limited local contributions to Medicaid expenditures took effect" (R. 373). Legislative history like this indicating the purpose of clarifying legislation is probative in interpreting the prior law that is the subject of the clarification. See Held v. State of New York Workers' Compensation Board, 85 A.D.3d 35, 41 (3d Dep't) (2008 clarifying amendments to the Workers' Compensation Law confirmed that Board was authorized under pre-existing law to impose assessments with respect to individual and group self-insurers), appeal dismissed, lv. denied, 17 N.Y.3d 837 (2011);.see also Matter of OnBank & Trust Co., 90 N.Y.2d 725, 731 (1997). The County argued below that the 2012 amendment is not a clarifying amendment because both this Court and the Third Department have held 30 that the original Cap Statute did not extinguish pre-2006 overburden liabilities. But as its legislative history makes clear, the 2012 amendment was a remedial response to "adverse court decisions that have resulted in State costs paid to local districts for pre-cap periods, which conflict with the original intent of the local cap statute" (R. 373). In enacting the 2012 amendment, the Legislature made clear that the Medicaid cost-allocation system that the Cap Statute implemented was meant to exclude overburden reimbursement. The Legislature recognized that continued State payment of pre-2006 overburden claims would defeat one of the key requirements of the new cost allocation system: that each County pay its mandated cap amount toward Medicaid expenditures. However,_ the Legislature did not seek to reverse the effect of this Court's decisions regarding claims submitted between 2006 and April 1, 2012. In precluding payment of old overburden cla_ims after April 1, 2012, the Legislature properly clarified, on a prospective basis, the correct allocation of fiscal responsibility between counties and the State under the Cap Statute. The 2012 amendment is thus not excessively retroactive. 31 4. The 2012 Amendment serves an important public interest. By foreclosing payment of stale overburden liabilities now as much as 29 years old, the 2012 amendment provides the State with needed closure and repose, especially during an extreme fiscal crisis. Unlike Alliance of American Insurers v. Chu, 77 N.Y.2d at 586, where the challenged statute affected the rights of private corporations, here the State has amended its statutory reimbursement obligations to its political subdivisions, which it created to assist it in the provision of public services. See City of New York v. State of New York, 86 N.Y.2d at 290. In this regard, the County misses the mark in arguing that the State has converted County funds. The overburden funds that have not been paid to the counties have been used for other governmental purposes, not to enrich private individuals. As far as due process is concerned, the Legislature retains sole discretion regarding how to allocate the costs of governmental programs between the State and the counties, including the County. In sum, in the 2012 amendment to the Cap Statute, the Legislature properly clarified the allocation of fiscal responsibility between the State and its political subdivisions for Medicaid expenditures. The allocation of Medicaid costs set forth in the Cap Statute, as amended in the 2012 32 amendment, reflects trade-offs that, on balance, are very much in the counties' favor. Even if a due process/vested rights analysis were appropriate here, and it is not, the 2012 amendment would be constitutional. POINT II THE COUNTY LACKS A CLEAR LEGAL RIGHT TO MANDAMUS RELIEF DIRECTING THE DEPARTMENT OF HEALTH To CALCULATE AND DETERMINE ALL OUTSTANDING OVERBURDEN LIABILITIES Supreme Court further erred in directing the Department to calculate and pay all outstanding overburden liabilities owed the County (R. 18). This relief is unwarranted, and should be reversed, even if this Court otherwise affirms Supreme Court's judgment. This provision in the Supreme Court's judgment, if permitted to stand, would require the Department to undertake a massive, retrospective project to review Medicaid expenditures spanning a 30-year time period. Other counties bringing overburden claims have requested similar relief, which if granted·would require the :Department to review literally billions of Medicaid transactions. Although the total overburden liability statewide is not known with precision, the Department roughly estimates that liability statewide could exceed $180 million (R. 350, 4) 67 & n.27). 33 Mandamus to compel is an extraordinary remedy, available only if the petitioner establishes both a clear right to relief and that the act to be compelled is purely ministerial. Matter of Brusco v. Braun, 84 N.Y.2d 674, 679 (1994). Where, as here, a clear legal right is lacking, mandamus relief must be denied. Matter of Woodside Manor Nursing Home v. Shah, 113 A.D.3d 1142, 1146 (4th Dep't 2014). The County has no clear legal right to mandamus relief. The County relies on the provision in Social Services Law § 368-a(l)(h) which requires the State to pay social services districts 100% of expenditures on behalf of overburden-eligible individuals. According to the County's reasoning, in enacting the 2012 amendment the Legislature and the Governor intended only to eliminate reimbursement of pre-2006 overburden claims submitted by counties, while still subjecting the State to the much more burdensome obligation of undertaking a retrospective project to identify, calculate and pay all outstanding overburden reimbursements dating as far back as 1984, without any claims for such amounts by the counties. This argument is untenable. The 2012 amendment terminated all responsibility on the State's part to reimburse the counties for pre-2006 overburden, whether the counties sought reimbursement or not. 34 First, the County's argument that the 2012 amendment left the State responsible to pay it for overburden reimbursement that it had not claimed while eliminating the State's liability only for the amounts that the County did claim ignores the historical fact that reimbursement of submitted claims was the manner by whichthe counties obtained unpaid overburden reimbursement for over two decades. Before the enactment of the 2005 Medicaid Cap Statute, the claiming process was the only legally mandated process that was available for counties to obtain overburden reimbursement not captured by the Department in its initial quarterly reviews. When the overburden expenditures were incurred from 1984 through 2005, the Department identified overburden-eligible recipients and reimbursed the counties on a quarterly basis (R. 337-338). Recognizing that this process might not capture all overburden-eligible expenditures, the Department made available a process by which counties could submit claims for overburden reimbursement (R .. 339, 366, 370). See 18 N.Y.C.R.R. § 601.4 & Part 635 (Medical Assistance Reimbursement Claiming). When it enacted the 2012 amendment, the Legislature clarified that overburden reimbursement was no longer available as of April 1, 2012. By terminating the only vehicle for the counties to obtain unpaid pre-2006 35 overburden reimbursement, the Legislature intended to terminate in full the State's responsibility for pre-2006 overburden. Second, the County's interpretation of the 2012 amendment must be rejected because it would render that statute meaningless. The County has not explained why the Legislature would have enacted such a contradictory law, and the County's proposed interpretation cannot be squared with the 2012 amendment's legislative history, which makes clear that the amendment's intent was to eliminate entirely the State's payment to local governments for pre-2006 overburden reimbursement (R. 373 [the amendment addresses adverse court decisions "that have resulted in State costs paid to local districts for pre-cap periods"]). Simply stated, the 2012 amendment ended pre-2006 overburden reimbursement, and with it any legal right on the County's part to overburden payments from the State, whether claimed or unclaimed. Even if this Court concludes for any reason that the 2012 amendment did not extinguish the County's right to overburden reimbursement, nothing in Social S.ervices Law § 368-a(l)(h) gives the County a clear legal right to the massive 30-year retrospective project required by Supreme Court's judgment. To the contrary, while the reimbursement obligation under prior law was clear, the method by which the Department complied with this statutory 36 obligation involved its exercise of discretion. Petitioner and other counties have acknowledged that the claiming process under§ 601.3 was the established and proper remedy for recovering any overburden reimbursements that were not identified and paid in the quarterly review · process. In fact, the judgments granted in prior overburden litigation, drafted by counsel for the counties, specifically directed respondents to "examine and determine all subsequent claims for Overburden reimbursement in accordance with the procedures and time limits set forth in 18 N.Y.C.R.R. § 601.4" (R. 102 [emphasis added]). But now that the . Legislature, in the 2012 amendment, has unambiguously eliminated the State's obligation to pay overburden claims submitted by counties after April 1, 2012, petitioner argues, unconvincingly, that counties are relieved from any obligation to even submit such claims, and that the Department has a nondiscretionary duty to affirmatively undertake a 30-year project to identify and pay all outstanding overburden claims. This claim is meritless. Finally, the sweeping relief at issue, unless vacated, could have unintended negative consequences for Medicaid recipients, providers, and counties. Given the size of the potential liability, payment of all prior overburden liabilities could cause the Medicaid program to exceed the global spending cap on state Medicaid expenditures (R. 350). See L. 2011, ch. 59, 37 part H, § 92. (In the court below, the County confused the global spending cap - which limits State Medicaid expenditures - with the Medicaid Cap statute, which governs the cost-sharing responsibilities of the counties.) If state expenditures exceed the limit, the State must develop and implement a savings allocation plan, which may include reducing reimbursement rates and cutting Medicaid benefits to recipients (R. 350). In sum, Supreme Court's directive that the Department undertake a project to identify and pay all outstanding overburden liabilities should be reversed. POINT III SUPREME COURT ABUSED ITS DISCRETION IN AUTHORIZING DISCOVERY Though the decision to grant discovery under CPLR 408 is discretionary, Matter of Wendy's Rests., LLC v. Assessor, Town of Henrietta, 74 A.D.3d 1916 (4th Dep't 2010), Supreme Court abused its discretion in sua sporite granting leave for discov{,lry in aid of the mandamus relief. If this Court concludes that the 2012 amendment is constitutional, or if it concludes that County lacks a clear legal right to an order directing the Department to undertake a 30-year retrospective project to identify, calculate, and pay all outstanding overburden reimbursement owed the County, then the part of the order granting disc::mvery should be vacated as academic. 38 Even if the mandamus relief is upheld, it was error to authorize discovery. Calculating and paying overburden reimbursement are tasks the Legislature has delegated to the Department. The Department should be permitted to perform the required calculations without being burdened by the County's discovery requests. By authorizing discovery while the Department performs a retrospective project, Supreme Court's order impermissibly injects the courts into the day-to-day administration of the Medicaid program. In prior related cases, this Court has reversed similar overreaching provisions in orders that attempted to dictate. how the Department must administer the Medicaid program in the future. See Matter of County of Niagara v. Daines, 96 A.D.3d 1433, 1436 (4th Dep't 2012); Matter of County of Niagara v. Daines, 79 A.D.3d 1702, 1706 (4th Dep't 2010), lv. denied, 17 N.Y.3d 703 (2011). POINT IV SUPREME COURT ERRED IN DIRECTING THE DEPARTMENT TO PAY INTEREST ON THE OVERBURDEN CLAIMS AT ISSUE Even if the part of the judgment directing payment of the overburden claims at issue is affirmed, the part of the judgment·directing the Department to pay "statutory interest" on the claims (R. 18) should be reversed. Settled law holds that the Legislature, in enacting the Medicaid statutes, did not intend to allow the recovery of interest for wrongfully 39 withheld or delayed reimbursement payments. In Concourse Nursing Home v. State of New Yorh, 1 A.D.3d 675 (3d Dep't 2003), lv. denied, 2 N.Y.3d 704 (2004), a nursing home brought a breach of contract action in the Court of Claims seeking interest for the extensive delay in the payment of $3.3 million in Medicaid reimbursement. The Court reaffirmed that "there is no authority in the Medicaid statutes that allows for such interest and that case law has consistently held pre-decision and post-judgment interest to be nonrecoverable under these and similar circumstances." 1 A.D.3d at 677; see also Matter of Rye Psychiatric Hosp. Center, Inc. v. Surles, 218 A.D.2d 853, 855-856 (3d Dep't), lv. denied, 83 N.Y.2d 802 (1995), cert. denied, 517 U.S. 1233 (1996); Matter of Ostrow v. Bane, 213 A.D.2d 651 (2d Dep't 1995); New Yorh State Association of Counties v. Axelrod, 213 A.D.2d 18, 23-24 (3d Dep't 1995), lv. dismissed, 87 N.Y.2d 918 (1996); Matter of New Yorh State Health Facilities Assn. v. Axelrod, 199 A.,D.2d 752, 754 (3d Dep't 1993), rev'd on other grounds, 85 N.Y.2d 326, 332 (1995); Matter of Trustees of the Masonic Hall and Asylum Fund v. Commissioner of the New Yorh State Department of Health, 193 A.D.2d 249 (3d Dep't 1993), appeal dismissed, 83 N.Y.2d 802 (1994); Buffalo Columbus Hosp. v. Axelrod, 127 A.D.2d 987 (4th Dep't 1987); Demisay v. Whalen, 84 A.D.2d 902 (3d Dep't 1981). Thus, in an action for payment of interest on Medicaid reimbursement wrongfully delayed, the 40 court concluded that "there is no statute authorizing payment of interest in this type of action, nor can any_be inferred. It is for the Legislature to statutorily authorize such payments if, in its wisdom, it so ordains." Demisay, 84 A.D.2d at 903. In directing payment of "statutory interest" (R. 18), Supreme Court presumably meant that the County was entitled to post-judgment interest under CPLR 5002 and 5003. But the courts have already rejected similar claims. In New York Association of Counties, following the invalidation of a Medicaid rate-setting regulation, Supreme Court awarded the county nursin'g homes post-decision and post-judgment interest under CPLR 5002 and 5003 on the Medicaid payments owed as a result of the recalculation of the rates. New York Association of Counties, 213 A.D.2d at 22. The Third Department reversed the award of interest, reiterating that "there is no statutory authority, express or implied, for such an award under these circumstances." 213 A.D.2d at 23 (citations omitted). Though the above-cited cases involved reimbursement claims by Medicaid providers, the same rationale applies to the County's claims here. In both situations, the reimbursement is paid from the state's Medicaid appropriation, a benefit fund limited to the provision of medical assistance for the poor and the disabled. There is no authority in Social Services Law 41 § 368-a or its implementing regulations for the payment of interest to Counties on delayed Medicaid reimbursement for overburden claims. The absence of express statutory authority for the payment of interest is especially critical here because these cases concern the financiai relationship between the State and its political subdivisions. In view of the above case law, the Department and the counties of St. Lawrence, Herkimer, Erie, Niagara, and Chemung have stipulated that no interest is due or will be paid on overburden reimbursement claims at issue in prior litigation. See stipulation in Matter of County of St. Lawrence u. Daines, St. Lawrence County Index No. 133880, at '11 2 (attached hereto as part of addendum, A9- A13). Accordingly, the portion of the judgment directing the State to pay "statutory interest" was mistaken and this Court should reverse it. 42 CONCLUSION · This Court should reverse the judgment, declare that section 61 of Part D of chapter 56 of the laws of 2012 is constitutional, and dismiss the petition/complaint. Alternatively, the Court should reverse the parts of the judgment that (1) direct the Department to calculate and pay all outstanding overburden liabilities owed the County; (2) authorize discovery, and (3) direct the payment of interest on the overburden claims at issue. Dated: Albany, New York November 10, 2014 ANDREW D. BING . Deputy Solicitor General VICTOR PALADINO Assistant Solicitor General of Counsel Respectfully submitted, ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for A~ellants By: ~/{/_,.,,{.- VICTOR PALADINO Assistant Solicitor General Office of the Attorney General The Capitol Albany, New Yorkl2224 Telephone: (518) 473-4321 Reproduced on Recycled Paper 43 r NEW YORK vide reimburse- 1bicle insurance se meeting the rd-party payor Jy unit".; and vered under a 1lanket student 1uranee policy. ea!th law and . to paragr.iph muary l, 2004 1, 2005 may be t to 2807--g of Jtles In which commissioner e potential to for purpose.a w, references nd the sociaJ 1ereto under . ha effect;ive- :ie~tlon 18 of eertifiQation nentlng the n and after 1 December section or tvalid, such confined in ?of directly ; Is hereby ven if such •from the 1haU have t rnay be nentatlon e a lawi . :y rights, lt of this n-opriate effective 'e act or erlllten- tpirat.ion of such subdivisions and o!lhall be deemed to expire therewith; 10. The an1endments to section 2807-j of the publie health law made by sections forty-one, rorty-three, ftfty-th1•ee,.and sixty-two of this aet shall not affect the expiraUon of such section and shall be deemed to expire thet..,with; 11. The amendments to section 2807-s of the public· health Jaw made by sections thirty· one, thirty-two, tbirty-th1·ee, thirty-four, thirty-five, thirty-nine, sixty-three and ninety-nine of this act shall not affect the expiration of such section and shall be deemed to expire therewith; 12. The amendments to section 2807-t of the public health law made by sections forty-five and one hundred of this act shall not affect the expiration of such section and shall be deemed to expire thereunat setting aB purposes of this lrtY~six hundred to such children 1 the element.'! of 1rsing service is ces to medically e economies and 1e satisfaction of ~ervices to such 1ted pursuant to and retention of ces to medieallv 1urpose. FundE> idod by a local ate duty nurses, mer of health, • . the pu111ose of of private duty 1" authorized to required by this )Oses otl1er than te duty nursing on to any other ded by adding • 1d1n11 t. 2006 REGULAR SESSION Ch. 57, Pi. A, § 60 CHAPTER CONTAINS VETOE.'D PROVISIONS (l) u1•e hvafoallv disabled, accorclin to the federal su J len1entnl secnritv incon1e fro ·ani criteria, including ,but not lhnited to a person \\'ho is mult1ph' di.sa >led; or (2) have a developn1ental disabiHtv, as defined in subdivision twf'ntv~t.\\'O of fif•Ctitlll 1.U.~ of the mental hvglene law ancl de1llonstrate <.'01nplex health nml~ as defi1wd in p1u•aro·nph c o}.' subdi\rislon sevf'n of section th1•ee hundred sixty~six of this title; or 3> }tare a inent-ul ill11ess as defined in suhdiviillon twenty of .sec·tion I.OS of th~ mental hvgieue law an enionstrale co1nplex heaUh 01· 1nental health care need:; as dP.fiJlt\.d in paragi•apb d of subdivt.-:;ion nine. of section three hund1·ed sixtr-six of this title; nnd ill) l'e uire t.he level of care rovided bJ• iin intern1ediat.£1 ca1-e facilit · fo1· the dc1\·£tlo Jlll~n t.a.Jly disabled, a nuJ"aing facility, a hospital 01· ;iny ot er institution; and (iv) are ca ble of bein cared for in thP. communit' if l'OYidf!d with cas{' nJnnagt"ment sen;ce~ and or ot ar scn•itte:s provided un< er this tit e; and {v) are capablr. of being cnred fo1· in the co1nmnnitv at. le~s coi.;t tlu.111 in the app1·01wi1tl.i;t institutional spttillgi and - (vi) are not receivinl:\· se1'vice~ unde1· sectio11 th1•ee hundred Hbct; ~1;1even-c of thi}l title and for wbmn services_ provided uu er SElC'tion t rr.P hundred slxt v-SE.'ve11-a tl! this title art• not- available or sufficient. to suppmt the children's ca1-e in the conimunlt.Y • § 59. Paragraph (ili) of subdivision (g) of section I of pai-t C of chaj)ter 58 of the law• of 2005, amending the public- health law and othe1· lawa .relating t.o- implen1ehting the stale fi:::lca/ plan fo.r the 200&.-2006 state fiscal yeal', jg amended to 1•e1td as foilow~; fill) Duling each state fiseal year subject to the provisions- of th!i: Reetion, the eommiA~ioner shall mainta.J.n an accounting, for each social services district, of the net &nonnt.'i that woultl have been expended by, 01• on behalf' of, auC:h diati1ct bad the social services dfa_tricl medical assiatance shares pl'ovi1duns in effect on Janu;u·y l, 2005 been applied to au<'h dh:;trret. For purposes of this paragra1>h, fiftv pe1•cent of.the payments made by New York State to the secretary of the federal d~pcu·tment of health and hL1rnan servit..'e!-J ursu~nt t<1 Rectiotl lf>35(cl of the sociaJ secul'ity act shal be deerued to be paymentR madf: -on behalf of soci1:1l sel'vice~:. disu•icts; such fihr J·ceni aha1•e shall be a> mtioned !A> eii~·h dlsti•lct Jn thP sim1e l'atio w. the numbe1· of "fuU-hvncfif. dua eligibll".! inrlividuaJst" as that term if; defined in section 193 C) ff) of such act, fm· .,vhotn such distric~t; has tlseHl re.s onsibilit v ursuant t.t; 9.ection 365 of 6()cfal senices la:w, l'e ~te.i to the wmr 0 .!1llth indfvi lowc fiscal reaponsibUlt.v. As soon as p1·acticable after the conclu.!ionei· shall reconcile ~UL'h net amounts v.iih sur.h fiscul yeer'a sot:jal services district e:xpenditurt> cap amount. Such reconciliation shall he baued on actu~J e>:penditures inade by ot' 011 behalf of :-loci~d serviceN districts, '1.nd revenueR receh•ed by social aei-vlr.ef: dist.I'ict.'j, during sur.h fil'<'nl year and aha.JI be n1ade \\ithout. reg11rd to expenditureij n)ttde, and rev(lnue: 1·eeeived, out.qide such tiseal .venr 1hat are related to set'\iceE: proviHeatlon ''' t.his .se<·tlon. ;\dditional payn1ents under the medlctil M!lifltance p1'0gr-am p1u·1nmnt to t.ide . t>le\'en of article five of the socia1 services law for non~i>t.a.t.e operated pl1blie 1·e$identia1 h~nlth rn1·e faeifiUe~ including public residential heaJth tal'e fncilltie.'i located in the county ot Na.~sau. the county of Westche1:1tel' and the county of Erle1 but ex.clµding pubUc ref:identlal b1-?alth cal'e t'acilitie~ operated by a town or city within n c1Jtlnty1 in an nggl'egate !\mount of up to one hu1ulred fifty millirJn dollars fn additional payments for !lit.ate fi~eal yt'!ar beginning April fu-st, two t.houaand t"Wo sbc. 'fhe tlmount nUneated to each eligible r1nblie residential health care facility for thls petiod shaU be contpnted in accordance with the pl'ovisions of pa.ragrnph { 0 of thi~ subdM!Mn, provided, however, that patient duys shall be utUi.zed for dUch eomputntion reflecting actual reported data for two thousand three and each representa- tive succeeding year •• appllcable. · § ll.3. lntenUonally omitted. § 64. I ntentlonnlly omitted. § 65. Section 364-j of the aorial services low is amended by adding A new i:iubdivision 23 t.o rend aa follows: 23. (a) AB a means of protecting the health. safety and w&lfare of recipients, in addition to any other sanctions that may be imposed, the eommlasfoner shaU appoint temporary manafie- rnent of R man;r:Od care ~rovider uoon detennlning that the managed cru•e provider as t•e eated fnile to meet t e substantive re ulrements -of seetlons 190,IJ(tn) and 1932 ot' the federal Soeia urity Act an regu ationa. A earlng shun not require prior to the appointment of temporary management. lb) The commissioner nndlor hi• Or her riesl ea• which mav be individuals within the rie ta1·trnent or other ndivl u g or entities a ' rn nate nowled e and ex erien~ ma e nppo nted M tem1>01m mana2ernent. e c.otnmiss1oner may appoint 1e supet'intendent of lnsuran(le andlot•his or her designees as temporary management of an v managed ca.l'e p1•ovider whioh I& oubieet to rehabilitation pUl'Sllant to a1tiele $event.v-fonl' Of the insurance ~ (c) The res nslbilities of tern oru mana ement shal1 Include· oversl ht of the mana d eare >rovider for the u Jose of re1novin t e causes nnd cont itions whtc led to the ·determJnation requiring tempor~ management, e i1nposition of mprovements to remedy viobltionB anri. where necessat'Y,T e ordel'lY reorganization, termination or liquidation of the mnnaged care provider. fd) T•m 01 t 1e. subdivision. (e) The oommissioner, in consultation with the aupe1intendent with l'espeet to uny inana~ed cru•e p1·ovider subfect to rehabilitation pursuant to article seventy .. four of the Insurance f\w, 1nay make avaUab e to temporary management for the bene11t of a managed cro-e provider for 138 Additions are lndloal•d by undo1lln•: d•lellons br -; va10&1 by shading j ZOOO REG ULAF CHAPTER COP the maintenance ed for such put-pc (f) The commi1 fees nnd e:<.:pensei · and entities appoi {g} The comm: determination ttu behavior \Y'ill not : (hJ During any provider being rn requires tempora an l'flc:'iuient enro durjng t.he period (]) The connnil purposes imd pl'D\ § 65-a. Seetio chapter 68 of the I § 367-s, Emel of Jaw to the contr basis to providers to e.xceed four mi ~ pur/iuant to (a) For each e1 assist.a.nee ~ the depa11.ment c processed reimbu· quartet· of th~ illill. (b) ~·or each s obtained pursuant aggregate amouut calculation :;ball 1 payment" :tnd shat (e) Fto•ided ha· 4istRet e1nu1et ·m;e fop ia the 0psnillg: 2. The amount area ot' operation i !lggregatc amount eme1·gency mcdic1d ~ If an necessi federal tinanci:il pa section shull be 1r, thousand si.x and 't set fotth In parng1•, dollat-s or ttu·ee mil :l. 4. Notwithata this title, or of any per centum of th• § 65-.b. Section other Jaws relating Rs follo\vs: § 91. 'This a~>t f subdivision 4 of sec •hall not affect the provided fw·ther ti Addition: ADDENDUM A4 Ch. 56, pt. D, § 59 LAWS OF NEW\' !m!!!!l!• provided that such payor has provided notice of its Intention to so revoke at I - ~ twenty doya prior to the beginning of such ualu•d .. quarBlt· . of this act shall be adjudged by any court of competent jurisdlctlon to be invalid, sn -. judgment shall not affect, Impair or Invalidate the remainder thereof, hut shall be confined Ill_,, Its operation to the c}aoa:e, sentence, paragraph.i subdivision, section or part thereof direcd1'f~. invowed In the controversy In which such judgment shall have been rendered .. lt la herebf·\ declared I<> be the intent of the legislature that this act would have been enacted even it sucll-, invalid provisiono had not been included herein. ·. 432 Addlli1lll• aro lmll<1led by undarll""; doleUo~• by -; vet ... b' ahadlRtl :; ' ' - ....... - .. ~, }?012• •11·· . . ::~;~ ~,. ~~ § 6 ···~·~ .. · and el ,;{~ ·. (a) i ~·1::· e1fecti ~; (b): sh..U (b.-: by ... sball 1 . '(c) made establ chapl.! . (d)-'. ~rvi~ reven (e) by eel, th• e~ (0 l by ... deernf (g)' by ... eeet!Ol (h); by •ei bedei . (i) l (j) I this & Imp lei law;·\ . (k); defeal effecti (!) senic: prior' !ml -trativ1 healtt I<> ad1 counc! (n) the ii couna § l expei OF NEW YORK so revoke at lea.at ublic heslth law ill ieriod• on and after 1ii accordance with ~tlons shall, at a of securing federal llatJonal leaders as 1 ical research sll!lLi; l !Y research teams ?S including but not mt.cs m such infonnation to hoopital-specil!e I for grant proiecta :;ant awards. ting to authorllllng iistrlcts for medical d by adding a n"" !6 law or any other ces districts' claim& Jenditures inCIDTed ervices provided tD iree hundred •bd.Y: /erred to as hu'"" v subdivision 6-a to . prompt fashion, itl/ in connecUon WL. 11Uon, for p1Jl1!0"' ices law, referen~ •l•wand the""""' >ties there«> under ZOIZ REGULAR SESSION Ch. 56, pt. F, § l § 65. This act shall take efl'eet immediately) and shall be deemed to have been in full force and effect on and afte1· April l, 2012, provided, however} that: (a) the commissioner of health may promulgate emergency regulations necessa:ry to effectuate the provisions of sections two, three and four of this act; (b) the amendment.s to section 4400-c of the public health law by section eight of this aot shall not affect the repeal of such section and shall be deemed ro be repealed therewith; (b-1) the amendments made to subdivision 25 of section 1678 of the public authorities law by section twenty-eight-a of thls act shaU not affect the expiration of such subdivision and shall expire therewith; (c) provided, further, that the amendments to section l of chapter I 19 of the laws of 1997 made by section thirty-two of this act, relating to •uthorizing the department of health to establish certain paymenU. w general hospit.als, shall be subject \o the eJioner of health and the superintendent of financial ~ and any ttppropriste council may take any .step.s necessary to implement thJs act Pti•r to it.s effective dato; (~) provided, further, that notwithstanding ally inconsiBtont provision of the state adminls- ·rtive procedure act or any other provision of law, rule or regulation, the commissioner of "~alth and the superintendent of financial services and any appropriate'- council is authomed e.tion, the effectiV!- . "' adopt or a.mend or promulgate on an emergency basis any reguleiion be or she or such !Ction 1 B of chsptP , ··~ ~IJllcll delennines necessa1:y ro implement any provision of this act on its effective date; and frames for not.Jo!, ; ·.· • In) Provided, further, that the provisions of this act shall become effective notwithstanding d without force ~ > ..... :~ f~ure of the commissioner of health or the superintendent of financial aervices or any ; ;·.:.c·. COilncil to adopt or·amend or promulgato regulations lmplementlng this ac~ ~·;,:•f::.ili:. ~ '"'. : . PART E :11:,:.:;::: ;,~~ \_ } . Inten~::~ ~mitted ered. It is h~.: . ·,1 l naoted even ~ ~ · ' ·· . · . Section 1 of part C of chapter 58 of the laws of 2006, authorizing reimbnrsements for ·.~~. ditm-es made by or on behalf of social servi~ districts for medical assistance for needy •hading f': Addlllono are hldloalod by ~: doleflona by -; vetoes by ahadhlJi 433 :tl~' ADDENDUM A6 .... '; ~;;~ .. '·' ... ··:! ... W YORK ds or her >tr.r 645 of ' .ts, nurses, rovided on illnnHS 11nd iption and 1otherapyi i and rou~ lontia but 1ding eye~ th, alcohol "ith the jures and :or use by, :-C of the r supplies ming both ling a new 1 made on otherwise unount by nt for all .e average ijustrnenta onding the wnditures a follow: · failed w !Btion and delinea or 1pose such 11 services snceessor JEartment :lrevious1~ amount L distriet.18 Any ·so£!! missioner F written oveey. ! uniasioner tranSlllit- 1cretion Qf ~lri1 ~ Calculate] ndingtb• .enditu;e!' ·j. 2010 REGULAR SESSION Ch. 109, Pt. B, § 27 made by socia.l seJVi.ces districts for mediea1 assistance, as amended by section 62 of part C of chapter 68 of the laws of 2007, is wnended to read as follows: (f) Subject to paragraph (g) of tru. section, the state fiscal year social services district expenditure cap amount calculated for each social services dlatricl pursuant to paragraph (d) of this section shall be allotted to each district during that fiscal year and paid to the department in equal weekly amounts in a manner to be determlned by the commissioner and -communicat.ed to such districts an .sub·ect to the ovisiona: of subdivision four of section six of this part, sbalJ rep1-esent eaeh district's tnaximum responsibi ity for medi assistance expenditures. governed by this aection. § 24. Subdivision (b) of see~on 1 of part C of chapter 58 of the laws of 2005, amending the public health law and other Jaws relating to authorizing reJrnbursements for expenWtures mqde by social services districts for medical assistance, is amended to read as fol1ows: (b) Commeneing with the period April l, 2005 though March 31, 2006, a social service' district's yearly net share of medical assistance expenditures shall be calculated in relation to a reimbursement base year which, for purposes of this section, is defined aa January l, 2006 t.hrough December Sl, 2006. The final b .. e yenr expenditure calculation for each social services district Bhan be made by the commissioner of health, and approved by the director of the division of the budget, no later than June 30, 2006. Such calculations shwl be based on actual expenditures made by or on behalf of social services districts, and revenues received by BOCial services districts, during the base year and shall be made without regard to expendi· tures made, and revenues received, outside the base year that are related to services provided ~urlng, or prior to, the base year. Such bWie year calculations shall be based on the Racial services district medical assistance shares provisions in effect on January 1, 2005. Sublect to the provisions or aubdivision four of section six of this ~art, the state/local social services dtatrict relative ~entages of the non~federal share o medical assistance expenditures incurred prior to anuary l, 2006 shall not be subject to agjustment on and after July l, 2006. § ~6. Notwithstanding any inoonsistent prcviBlon of section 112 or 163 of the state finance law or any other contrary provision of the state finance law or any other contrary provision of law, the commissioner of health may, without a competitive bid or request for proposal process, enter into contracts with one or more certified public .accounting firms for the purpose of conducting audits of disproportionate share ho•pltal payments made by the state of New York to general hospitals and for the purpose of conducting audit.a of hospital cost reporta as submitted to the state of New York in accordance With article 28 of the public health law. . , . § 26. Subdivision 7-a of section JOI of psrt A of chapter 67 of the laws of2006, amending the social service• law relating to medically fragile children, a.• amended by section 65 of part. .. . C of chapter 58 of the laws of 2008, is amended to read as follows: : .·., 7-a. Sections My-eight, My~ght..a and l'ifty-eight-b shall take effect January l, 2007 ""d shall o>g Ap!'il W.t., two lh•nBaRd tv ... and to lho oo~ of the l'eilo.al seoial 00.,,.;ty •el, modieol : ... IBlanoe eh~ ~· ,••.'&ilaiJle for pa;>mon.I of that !><•>ti•• of ti.a moill...,,e por< II premium Atldnlon• ore indlcaled by underllna; lleloll•n• by ~ vetoes by 1hadlng 691 ADDENDUM A7 'i.t "';,_ ~\~.~· ~-~ -: ,. i ;. .'-·--:·· '!. . .... ·, ,. ·• . LAWS OF NEW YORK ta intention to so revoke at least iuaPteo month. )7-m of the public health law ~ )WS: tbdivision for e1iods on and after •hall be made in accordance wi r. Such regulations shall, at ! h the objective of securing federal ers, recruiting national leaders "i9 ows in biomedical research skillS· interdiseipHnary research teams :ion with entities including but iii 1ealth departmentsj - hall be based on such information not be limited to hospital-specific r staff required for grant project. mder ECRIP grant awards. ' _-,, of 2005, relating to authorizing mcial services districts for medical _ ·- eof, is amended by adding a new (: ie social services law or any other ~ ... for social services districts' claims , tor district expenditures incurred t enditures for services provided to nt to section three hundred sixty- .c· ' ty, formerly referred to ns human !~' in connection Wl . i"~: .~.:~ t;. v, rule or regulation, for purpoeea ,1/:' r the social services law, referencee.:: ~··· · 1e public health law and the sociol any successor titles thereto under . ' r, ntle or .regulation, the effective-: c health Jaw, section 18 of chapter .. relate to time frames for notiCSt · ~~- ,1,· suspended and without force or : '. t. . graph, subdivision, section or Piui - · t jurisdiction to be invalid, sucli.;·. , ir thereof, but shall be confined m .. ,, . n, section or part thereof dil'e-1) the amendments made to subdivision 25 of section 1678 of the public authorities law by section twenty-eight-a of this act •hall not affect the expiration of such subdivision and shall expire therewith; (c) provided, further, that the amendments to section 1 of chapter 119 of the laws of 1997 made by .section thirty-two of this act, relating to authorizing the department of health to establish certain payments to general hospitals, shall be subject to the expiration of such chapter and shall be deemed expired therewith; (d) the amendments to paragraph (a-1) of subdivision 4 of section 365-a of the social services law made by section thirty-nine of this act shall not affect the expiration and reversion of such paragraph and shall be deemed to expire therewith; (e) provlded, fu1tber, that the amendments to section 2807-j of the public health law made by sections forty-three, forty-eight-a, forty-eight-b and fifty-nine of this act shall not affect the expiration of such section and shall be deemed to expire therewith; . (0 provided, further, that the amendments to section 2807-t of the public health law made by section forty-four of this act .shall not affect the expiration of such section and shall be deemed to expire therewith; (g) provided, further, that the amendments to section 4403--f of the public health law, made by sections forty-a, fifty-six-a and fifty-six-h of this act shall not affect the repeal of such section and shall be deemed to repeal therewith; (h) provided, further, that the amendments to section 864-j of the social services law made by sections forty and fifty-five of this act shall not affect the repeal of such section and shall be deemed repealed therewith; (i) provided, further, that section !ifty-five of this act shall take effect January 1, 2013; (j) provided, further, that any rules or regulations necessary to implement the provisions of thia act may be promulgated and any procedures. forms, C>r inatntctiona necessary for such implementation may be adopted and issued on or after the date this act shall have become a law;· · . (k) provided, further, that this act shall not be constroed to alter, change, affect, impair or defeat any. rights, obligations, duties or interests accrued, incurred or conferred prior to the effective date of this act; (I) provided, further, that the commissioner of health and the superintendent of fmancial services and any appropriate council may take any steps necessary to implement this act prior to its effective date; (ml provided, further, that notwithstanding any inconsistent provision of the state adminis- trative procedure act or any other provision of law, rule or regulation, the commissioner of health and t.he superintendent of financial services and any appropriate council is authorized to adopt or amend or promulgate on an emergency basis any regulation he or she or such council determines necessary to implement any provisi(}n of this act on its effective date; and (n) provided, further, that the provisions of this act shall become effective notwithstanding the failure of the commissioner of health or the superintendent of financial aervieea or any council to adopt or amend or promulgate regulations Implementing this act. PARTE Intentionally Omitted PARTF § 1. Section l of part C of chapter 58 of the laws of 2005, authorizing reimbursements for E!Xpenditures m~de by or on behalf of social services districts for medical assistance for needy Addill•n• are Indicated by un!lerllne; delellons by