In the Matter of Woodside Manor Nursing Home, et al., Appellants,v.Nirav R. Shah, M.D.,, et al., Respondents.

Brief

N.Y.February 17, 2015

APL-2014-00083 To be argued by: VICTOR PALADINO Time Requested: 20 minutes Supreme Court, Monroe County – Index No. 12-1306 Court of Appeals of the State of New York Matter of WOODSIDE MANOR NURSING HOME, ET AL, Appellants, -against- NIRAV R. SHAH, M.D., AS COMMISSIONER OF HEALTH OF THE STATE OF NEW YORK, AND ROBERT L. MEGNA, AS DIRECTOR OF THE BUDGET OF THE STATE OF NEW YORK, OR THEIR SUCCESSORS, Respondents. BRIEF FOR RESPONDENTS BARBARA D. UNDERWOOD Solicitor General ANDREW D. BING Deputy Solicitor General VICTOR PALADINO Assistant Solicitor General of Counsel ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Respondents The Capitol Albany, New York 12224-0341 Telephone: (518) 473-4321 Facsimile: (518) 473-8963 Dated: July 25, 2014 Reproduced on Recycled Paper TABLE OF CONTENTS PAGE Table of Authorities ............................................................................................ iii Preliminary Statement .........................................................................................1 Questions Presented .............................................................................................3 Statement of the Case ..........................................................................................4 A. Nursing home reimbursement under the Medicaid program ........4 B. New York’s rate appeal process .......................................................5 C. Prior statutory restrictions on rate appeals ....................................6 D. The 2010 Statute – PHL § 2808(17)(b) ...........................................8 E. This proceeding .............................................................................. 10 F. Supreme Court directs the Department to decide appellants’ rate appeals .................................................................................... 11 G. The Appellate Division dismisses the petition ............................. 12 ARGUMENT POINT I - Mandamus Does Not Lie Because Under the Cap and Moratorium Statute, the Nursing Homes Have No Clear Legal Right to an Order Compelling the Department to Decide Their Rate Appeals .................................. 14 A. State law does not provide the nursing homes a clear legal right to an order directing the Department to decide their rate appeals now ............................................. 15 B. Federal law does not provide the nursing homes a clear legal right to an order directing the Department to decide their rate appeals now ......................................... 21 i Table of Contents (cont’d) PAGE ARGUMENT, POINT I, B., (cont’d) 1. 42 CFR § 447.253(e) provides no basis to override the monetary cap and rate appeal moratorium ......... 22 2. 42 CFR § 447.45 does not apply to rate appeals and therefore cannot supply the requisite clear legal right ..................................................................... 29 POINT II - The Nursing Homes’ Vested Rights Challenge to PHL § 2808(17)(b) Is Unpreserved And Without Merit ....................... 31 CONCLUSION ............................................................................................... 36 ii TABLE OF AUTHORITIES PAGE CASES Alexander v. Sandoval, 532 U.S. 275 (2001) .................................................................................. 23 Alliance of American Insurers v. Chu, 77 N.Y.2d 573 (1991) ............................................................................... 32 Bos. Med. Ctr. Corp. v. Sec’y of Exec. Office of Health & Human Servs., 463 Mass. 447, 974 N.E.2d 1114 (Mass. 2012) ....................................... 27 Brusco, Matter of v. Braun, 84 N.Y.2d 674 (1994) .......................................................................... 14-15 Children’s Seashore House v. Waldman, 197 F.3d 654 (3d Cir. 1999) ..................................................................... 24 Chrysler Properties, Matter of v. Morris, 23 N.Y.2d 515 (1969) ............................................................................... 32 Concourse Nursing Home v. Perales, 219 A.D.2d 451 (1st Dep’t 1995), lv. denied, 87 N.Y.2d 812, cert. denied, 519 U.S. 863 (1996) ......................................6 Council of City of N.Y., Matter of v. Bloomberg, 6 N.Y.3d 380 (2006) ................................................................................. 15 Dickinson, Matter of v. Daines, 15 N.Y.3d 571 (2010) ............................................................................... 33 Douglas v. Independent Living Center of Southern California, Inc., 132 S.Ct. 1204 (2012) ............................................................................... 26 Evergreen Presbyterian Ministries Inc. v. Hood, 235 F.3d 908 (5th Cir. 2000).................................................................... 24 Francois v. Dolan, 95 N.Y.2d 33 (2000) ................................................................................. 15 iii Table of Authorities (cont’d) PAGE CASES Hapletah v. Assessor of Fallsburg, 79 N.Y.2d 244 (1992) ............................................................................... 32 Harris v. James, 127 F.3d 993 (11th Cir. 1997).................................................................. 23 Hodes, Matter of v. Axelrod, 70 N.Y.2d 364 (1987) ............................................................................... 32 Hospital Center at Orange v. Guhl, 331 N.J. Super. 322, 751 A.2d 1077 (2000) ...................................... 25, 27 Illinois Council on Long Term Care v. Bradley, 957 F.2d 305 (7th Cir.), cert. denied, 506 U.S. 815 (1992) .................................................................................. 30 Malinckrodt Medical, Inc., Matter of v. Assessor of the Town of Argyle, 292 A.D.2d 721 (3d Dep’t 2002) ............................................................... 33 NYAHSA Litigation, In re, 318 F. Supp. 2d 30 (N.D.N.Y. 2004), aff’d sub nom. New York Ass’n of Homes & Servs. for the Aging, Inc, v. DeBuono, 444 F.3d 147 (2d Cir. 2006) ............................................................... 24, 25 New York State Office of Victim Services, Matter of v. Raucci, 20 N.Y.3d 1049 (2013) ........................................................................ 31-32 North Memorial Medical Center v. Gomez, 59 F.3d 735 (8th Cir. 1995) ................................................................ 23, 28 Pennhurst State School and Hospital v. Halderman, 451 U.S. 1 (1981) ...................................................................................... 26 iv Table of Authorities (cont’d) PAGE CASES Planned Parenthood of Kan. & Mid-Mo. v. Moser, 747 F.3d 814 (10th Cir. 2014).................................................................. 27 Sheffield Towers Rehabilitation and Health Care Center v. Novello, 293 A.D.2d 182 (2d Dep’t 2002) ............................................................... 18 Snyder v. Wetzler, 84 N.Y.2d 941 (1994) ............................................................................... 26 Taylor v. Hous. Auth. of the City of New Haven, 267 F.R.D. 36 (D. Conn. 2010) ................................................................. 23 645 F.3d 152, 153 (2d Cir. 2011) ............................................................. 23 United Cerebral Palsy Associations v. Cuomo, 966 F.2d 743 (2d Cir. 1992) ..................................................................... 30 Wilder v. Virginia Hosp. Ass’n, 496 U.S. 498 (1990) .................................................................................. 23 Woodside Manor Nursing Home, Matter of v. Shah, 110 A.D.3d 1439 (4th Dep’t 2013), vacated and substituted by 113 A.D.3d 1142 (4th Dep’t 2014) ........................................................... 12 STATE STATUTES C.P.L.R. article 78 .................................................................................... 1, 10, 34 Public Health Law § 201(1)(v) ....................................................................................................4 § 2807 ...........................................................................................................5 § 2808 ...........................................................................................................5 § 2808(11) ............................................................................................... 6, 7 § 2808(15) ....................................................................................... 7, 18, 24 § 2808(17)(a) ...................................................................................... passim § 2808(17)(b) ...................................................................................... passim § 2808(17)(c) ......................................................................................... 9, 17 v Table of Authorities (cont’d) PAGE STATE STATUTES (cont’d) Social Services Law §§ 363-369 ......................................................................................................4 § 363-a(1) .....................................................................................................4 L. 1995 ch. 81, § 62 ............................................................................................................ 18 L. 2010, ch. 109, part B, § 30 ................................................................................8 L. 2011, ch. 59, § 1, part H, § 98 .................................................................................... 9, 17 STATE RULES AND REGULATIONS 10 NYCRR part 86-2 ......................................................................................................5 § 86-2.13(a) ..................................................................................................5 § 86-2.14 ......................................................................................................5 § 86-2.14(b) ................................................................................. 2, 6, 15, 21 FEDERAL STATUTES 42 U.S.C § 1396a(a)(5) ................................................................................................4 § 1396a(a)(13)(A) ................................................................................ 23, 24 § 1396b .........................................................................................................5 §§ 1396-1396v ..............................................................................................4 § 1396c ...................................................................................................... 26 § 1983 ...................................................................................................25, 26 Balanced Budget Act of 1997, Pub. L. 105-33, 4711(a)(1), Stat. 251, 507-508 (1997) .............................................................................. 23-24 vi Table of Authorities (cont’d) PAGE FEDERAL RULES AND REGULATIONS 42 C.F.R § 447.253 ................................................................................. 25, 26, 28, 29 § 447.253(a) .............................................................................................. 22 § 447.253(e) ....................................................................................... passim § 447.45 ................................................................................................. 2, 30 § 447.45(b) ................................................................................................ 30 § 447.45(d) ................................................................................................ 14 § 447.45(d)(4) ...................................................................................... 29, 30 MISCELLANEOUS 48 Fed. Reg. 56,046, 56,052 (Dec. 19, 1983) ............................................... 27, 28 McKinney’s Cons. Laws of N.Y., Book 1, Statutes § 124 at 253-254 .............. 19 Senate Memorandum In Support, L. 2010, ch. 109, 2010 N.Y. Sess. Laws 1652, 1653-54 (McKinney) ............................................................................. 9, 19 Webster’s Third New International Dictionary 1816 (4th ed. 1976) .............. 28 vii PRELIMINARY STATEMENT To alleviate the State’s deepening fiscal crisis, in 2010 the Legislature enacted Public Health Law (“PHL”) § 2808(17)(b). The statute, as amended, places a monetary cap on the amount of money that the Department of Health can spend in any fiscal year on Medicaid reimbursement rates revised as a result of nursing homes rate appeals. For rate appeals not decided with- in the monetary cap, the statute places a temporary moratorium through March 31, 2015 on the Department’s obligation to decide them. In considering rate appeals within the monetary cap under the statute, the Commissioner of Health must give priority to facilities facing significant financial hardship. Appellants, twelve nursing homes, brought this CPLR article 78 pro- ceeding seeking an order in the nature of mandamus compelling the Depart- ment to decide their rate appeals. They contend that the monetary cap and moratorium in PHL § 2808(17)(b) do not apply to their rate appeals, which were filed before the statute became effective on April 1, 2010. And they con- tend that state and federal law give them a clear, nondiscretionary right to have the Department decide their rate appeals now despite the cap and mor- atorium statute. Supreme Court, Monroe County (Polito, J.), granted the nursing homes’ petition and directed the Department to decide the rate appeals (Record [“R.”] 10). The Appellate Division, Fourth Department reversed, holding that, by its terms, the moratorium statute applies to rate appeals that were pending when the statute became effective as well as those filed later, and, as a re- sult, the nursing homes have no clear legal right to mandamus relief (R. 271- 277). The Appellate Division’s decision is correct and this Court should af- firm. Although a Department regulation requires that rate appeals be decid- ed within one year, see 10 NYCRR § 86-2.14(b), the Legislature superseded that regulatory time limit when it adopted the statutory rate appeal mone- tary cap and moratorium, PHL § 2808(17)(b). Contrary to the nursing homes’ assertions, the monetary cap and moratorium applies to all rate appeals pending as of April 1, 2010, when PHL § 2808(17)(b) took effect, not just to rate appeals filed on or after the statute’s effective date. Given the tremen- dous backlog of old rate appeals, to construe the statute as applying only to new rate appeals would defeat the Legislature’s purpose in adopting the moratorium and monetary cap. Nor do the federal Medicaid regulations relied on by the nursing homes provide any basis to override the statutory moratorium and monetary cap. One of these regulations, 42 CFR § 447.45, does not apply to administrative rate appeals at all; accordingly, it cannot supply the requisite clear legal right to the mandamus relief appellants seek here. The other regulation, 42 CFR 2 § 447.253(e), requires a State, as a condition for approval of a state plan, to make available an administrative appeals procedure by which Medicaid pro- viders may receive prompt administrative review of payment rates on issues the State deems appropriate. But this regulation is not privately enforceable by Medicaid providers. It is enforceable only by the federal Medicaid agency through the disallowance of federal Medicaid funds. Thus, the nursing homes may not rely upon 42 CFR § 447.253(e) to nullify PHL § 2808(17)(b) and di- rect the Department to decide their rate appeals. Finally, the nursing homes failed to preserve for this Court’s review their assertion that the application of PHL § 2808(17)(b) to their rate appeals that were pending when the statute went into effect is unconstitutionally ret- roactive. In addition, the claim has no merit. Accordingly, the Appellate Divi- sion’s order should be affirmed. QUESTIONS PRESENTED 1. Did the Appellate Division correctly hold that the appellant nurs- ing homes have no clear legal right to mandamus to compel the Department to decide their administrative rate appeals filed before April 1, 2010, the ef- fective date of the rate appeal moratorium and monetary cap imposed by PHL § 2808(17)(b), because the statute applies to rate appeals that were pending when it became effective? 3 2(a). Have the nursing homes failed to preserve their claim – raised for the first time in the Appellate Division – that retroactive application of PHL § 2808(17)(b) deprives them of their vested property rights? (b). Is the challenge to PHL § 2808(17)(b) in any event meritless be- cause the delay in resolving the nursing homes’ pending rate appeals does not deprive them of their vested rights? STATEMENT OF THE CASE A. Nursing home reimbursement under the Medicaid program This case involves the Legislature’s enactment of a fiscal year monetary cap and moratorium on the adjustment of Medicaid reimbursement rates re- sulting from administrative rate appeals filed by nursing homes. Medicaid is a joint state and federal program that provides funding for medical care for needy persons. See 42 U.S.C. §§ 1396-1396v; N.Y. Social Services Law (“SSL”) §§ 363-369. The Department is the “single State agency” (42 U.S.C. § 1396a[a][5]) designated to supervise the administration of the Medicaid program in this State. See SSL § 363-a(1); PHL § 201(1)(v). The United States Department of Health and Human Services’ Centers for Medicare and Medicaid Services (“CMS”) administers the program at the federal level. Up- on CMS approval of a state plan, federal funds are available to pay a per- 4 centage of the total amounts spent by states for medical assistance. See 42 U.S.C. § 1396b. In New York, responsibility for the remaining expenditures is divided between the state and local governments. Nursing homes are reimbursed for services rendered to Medicaid pa- tients based on per diem rates set by the Department. See PHL §§ 2807, 2808; 10 NYCRR part 86-2. Rates are based on actual, allowable costs and statistics in a prior period, known as the base period or base year, detailed in a cost report submitted by the facility. The Department adjusts the base year costs and applies trend factors to account for inflation, producing rates for one or more rate periods. B. New York’s rate appeal process A federal regulation requires States, as a condition for approval of a state plan, to provide Medicaid providers with an appeals procedure to obtain prompt administrative review of “such issues as the agency determines ap- propriate, of payment rates.” 42 CFR § 447.253(e). Accordingly, Department regulations permit nursing homes to administratively appeal their Medicaid rates on certain enumerated grounds within prescribed time periods. See 10 NYCRR § 86-2.14. Under 10 NYCRR § 86-2.13(a), appeals to correct errors resulting from the rate computation process must be brought within 120 days of the receipt of the rate computation sheet advising the facility of its rates 5 for a given rate period. Under well-established Department policy, however, nursing homes cannot use a rate appeal to challenge rate-setting methodolo- gies (R. 63-64). See PHL § 2808(11); Concourse Nursing Home v. Perales, 219 A.D.2d 451, 452 (1st Dep’t 1995), lv. denied, 87 N.Y.2d 812, cert. denied, 519 U.S. 863 (1996). A Department regulation requires the Commissioner of Health to act upon properly documented rate appeals within one year of the end of the 120- day period for filing rate appeals or the receipt of the rate appeal, whichever date is later. 10 NYCRR § 86-2.14(b). This one-year regulatory deadline is ex- tended if the Department requests additional documentation. Id. C. Prior statutory restrictions on rate appeals The Legislature has from time to time previously enacted restrictions on rate appeals to protect the State’s fiscal stability. In addition to limiting the allowable grounds for rate appeals, the Legislature has imposed morato- ria on the disposition of rate appeals and monetary caps on the amount of state Medicaid funds that can be expended in any fiscal year on reimburse- ment rates revised as a result of rate appeals. Thus, as of April 1, 2009, the Department may only consider rate appeals for correction of computational errors, capital costs, and such other reasons as the Commissioner determines are appropriate. See PHL § 2808(11). The Department may not consider revi- 6 sions to a facility’s cost report for purposes of adjusting the operating compo- nent of the rates after the due date established by the Commissioner. Id. The due date is the date for the original submission of the cost report (R. 65). Further, in 1995, the Legislature imposed a moratorium until April 1, 1996 on the consideration of rate appeals filed by nursing homes “for services provided” by them from April 1, 1995 through March 31, 1996. See PHL § 2808(15). Exceptions were provided for facilities facing significant financial hardship. Id. Beginning April 1, 1996, the Legislature directed the Commis- sioner to consider such rate appeals “within a reasonable period,” id., which the Commissioner determined to be one year (R. 65). From April 1, 1996 through March 31, 1997, the Legislature imposed a monetary cap of $47 mil- lion in state share Medicaid funds on the revision of Medicaid rates from rate appeals. Id. (state share refers to the portion of the payments funded by state as opposed to federal or local funds). The Legislature again imposed a moratorium on the processing of all nursing home rate appeals for the time period April 1, 1997 through March 31, 1998. PHL § 2808(17)(a). For the period April 1, 1998 through March 31, 1999, the Legislature imposed a monetary cap of $20 million in state share Medicaid funds on the revision of Medicaid rates from rate appeals. Id. Once again, exceptions were provided for facilities facing significant financial 7 hardship. Id. This moratorium was extended through March 31, 1999 (R. 64). Id. Beginning April 1, 1999, the law specified that the Department review rate appeals “within a reasonable period,” id., which the Department deter- mined would be one year (R. 65). D. The 2010 Statute – PHL § 2808(17)(b) At issue here is the most recent cap and moratorium, enacted in 2010 and amended in 2011. As adopted in 2010, the statute provided in relevant part that, “[n]otwithstanding any inconsistent provision of law or regulation to the contrary, for the state fiscal year beginning April [1, 2010] and ending March [31, 2011], the [C]ommissioner [of Health] shall not be required to re- vise certified rates of payment established pursuant to [PHL article 28] for rate periods prior to April [1, 2011], based on consideration of rate appeals filed by residential health care facilities,” in excess of the statutory cap. See L. 2010, ch. 109, part B, § 30. The statute also provided that the Commis- sioner should prioritize rate appeals within the cap based on “which facilities the [C]ommissioner determines are facing significant financial hardship” as well as other considerations that the Commissioner deems appropriate. Id. When the Legislature adopted the statute in 2010, it imposed an $80 million monetary cap on the amount of money the State could expend in re- vising reimbursement rates in the coming fiscal year (R. 65). See Id.; PHL 8 § 2808(17)(b). Once the cap was reached, the Legislature put into place a moratorium on the consideration of all rate appeals during the 2010-2011 state fiscal year (April 1, 2010 through March 31, 2011). Id. The monetary cap and rate appeal moratorium were part of legislation intended to “[i]mplement cost savings proposals for Medicaid” and “ensure the fiscal sta- bility of the State.” Senate Memorandum in Support, L. 2010, ch. 109, 2010 N.Y. Sess. Laws 1652, 1653-54 (McKinney). In 2011, the monetary cap for the 2011-2012 fiscal year was reduced to $50 million, and the moratorium was extended through March 31, 2015 (R. 65). See L. 2011, ch. 59, § 1, part H, § 98. The Legislature effected the ex- tension by replacing the 2011 dates in the language quoted above with the same dates in 2015. The quoted language was not otherwise amended. In addition, the 2011 amendment added a new section 2808(17)(c), which provides that “for periods on and after April [1, 2011] the commis- sioner shall promulgate regulations . . . establishing priorities and time frames for processing rate appeals, including rate appeals filed prior to April [1, 2011] . . . ; provided, however, that such regulations shall not be incon- sistent with the provisions of [subdivision (17)] (b).” See L. 2011, ch. 59, § 1, part H, § 98. The Legislature also authorized the Commissioner to enter into agree- 9 ments with nursing homes to resolve multiple pending rate appeals. PHL § 2808(17)(b). These negotiated amounts may be used to offset any debts the facility owes the Department or the State (R. 66-67). E. This proceeding Appellants, twelve nursing homes in the Rochester area, commenced this article 78 proceeding in February 2012 in Supreme Court, Monroe Coun- ty, seeking to compel the Department to decide 95 administrative rate ap- peals that they had filed in the years 2000 through 2009 (R. 14-15). They al- leged that respondents’ failure to decide these rate appeals within one year violated Department regulations and federal law (R. 28). In addition, the nursing homes demanded a judgment ordering respondents to pay them all Medicaid reimbursements withheld as a result of their failure to resolve the outstanding rate appeals within one year, and an injunction enjoining re- spondents from recouping any Medicaid overpayments until the rate appeals have been resolved (R. 28 [wherefore clause]). In lieu of an answer, respondents moved to dismiss the petition for fail- ure to exhaust administrative remedies and as untimely (R. 59). In support of the motion to dismiss, respondent submitted an affidavit from the director of the Department’s bureau of long-term-care reimbursement, Robert Loftus, who explained that appellants’ rate appeals were subject to the rate appeal 10 moratorium and monetary cap imposed by PHL § 2808(17)(b) (R. 65-66). This statute, Mr. Loftus explained, superseded the one-year time period set forth in Department regulations (R. 66). Mr. Loftus also explained that the purpose of the statute was to limit the Department’s expenditures in nursing home rate appeals to help contain overall Medicaid costs and manage spending within the Medicaid global cap. He stated that “[t]he impact on state fiscal year expenditures is the same whether the rate appeal is old or new” (R. 66). Under the statute, the Commissioner must prioritize the processing of rate appeals by facilities facing significant financial hardship and based on other considerations the Commissioner deems appropriate. Thus, Mr. Loftus explained, petitioners’ rate appeals will be processed and resolved in accord- ance with PHL § 2808(17)(b) and the other statutory restrictions discussed above (R. 67-68). The Department will consider appellants’ rate appeals “within the aggregate monetary limits from year to year; however, the De- partment must first process higher priority rate appeals as directed by PHL § 2808(17)(b)” (R. 68). F. Supreme Court directs the Department to decide appellants’ rate appeals Supreme Court granted the petition to the extent of ordering respond- ents to review and decide appellants’ rate appeals from 2000-2009 (R. 10). According to the court, the rate appeal moratorium and monetary cap in PHL 11 § 2808(17)(b) does not apply to rate appeals filed before April 1, 2010, and did not change respondents’ duty under Department regulations to decide the rate appeals within one year (R. 10). G. The Appellate Division dismisses the petition In a corrected decision and order, the Appellate Division dismissed the petition in its entirety (R. 259-262 [initial decision], 264-270 [corrected deci- sion on reargument]). See Matter of Woodside Manor Nursing Home v. Shah, 110 A.D.3d 1439 (4th Dep’t 2013), vacated and substituted by 113 A.D.3d 1142 (4th Dep’t 2014). The Appellate Division held that the monetary cap and rate appeal moratorium in PHL § 2808(17)(b) applies retroactively to the nursing homes’ rate appeals filed before April 1, 2010 (R. 266-268). The court explained that the language of the statute required such ret- roactive application: “While there is no explicit statement that the moratori- um and cap shall apply to rate appeals filed before April 1, 2010, the statute specifically states that no revisions are required for any period before April 1, 2015 where the revision would emanate from a rate appeal filed by a residen- tial health care facility” (R. 267). According to the court, “the necessary impli- cation of that language is that the statute applies to any rate appeal seeking a revision for any period before April 1, 2015, including any revisions result- ing from rate appeals filed before the statute took effect” (R. 267). 12 Moreover, the court explained that the 2011 amendment “specifically states that the Commissioner is required to promulgate regulations establish- ing priorities and time frames” for processing rate appeals, including those filed prior to April 1, 2011, necessarily implying that “the moratorium and cap apply to all pending rate appeals, inasmuch as there would be no need to prioritize the handling of those appeals unless they were encompassed by the moratorium and cap” (R. 267). The court also explained that the intent of the 2010 and 2011 legislation was to decrease state costs in order to maintain the State’s fiscal stability, and that this goal would not have been accomplished if the moratorium and cap applied only to rate appeals filed after it was im- posed (R. 268). Because the moratorium applied to the nursing homes’ pre-April 1, 2010 rate appeals, the Appellate Division held that the nursing homes lacked a clear legal right to mandamus relief (R. 268). The Appellate Division fur- ther held that neither the provision in PHL § 2808(17)(a) requiring that rate appeals be decided “within a reasonable period,” nor the provision in 42 CFR § 447.253(e) requiring a State to make available an appeals procedure that provides “prompt” review of rate appeals, was sufficient to override the mora- torium statute (R. 268). In the court’s view, the determination whether some- thing has occurred within a reasonable period or promptly involves a discre- 13 tionary determination. Consequently, the nursing homes had failed to estab- lish a clear legal right to relief and a corresponding nondiscretionary duty – the required elements for mandamus relief (R. 268). Finally, the Appellate Division held that the nursing homes’ reliance on 42 CFR § 447.45(d) was misplaced. That regulation, the court held, applied only to the payment of provider “claims” and did not apply to the revision of reimbursement rates established for those claims (R. 268-269). This Court granted the nursing homes’ motion for leave to appeal (R. 243-244). ARGUMENT POINT I Mandamus Does Not Lie Because Under the Cap and Mor- atorium Statute, the Nursing Homes Have No Clear Legal Right to an Order Compelling the Department To Decide Their Rate Appeals The nursing homes are not entitled to relief in the nature of mandamus directing the Department to decide their rate appeals now. Mandamus to compel is an extraordinary remedy, available only when the petitioner estab- lishes both a clear legal right to the relief requested and that the duty to be performed is purely ministerial. Matter of Brusco v. Braun, 84 N.Y.2d 674, 679 (1994). Where a clear legal right is lacking, mandamus relief must be denied. Matter of Council of City of N.Y. v. Bloomberg, 6 N.Y.3d 380, 388 14 (2006); Francois v. Dolan, 95 N.Y.2d 33, 37 (2000). Because the monetary cap and moratorium in PHL § 2808(17)(b) supersedes any state law that would give the nursing homes a clear legal right to have the Department decide their rate appeals now, and because the federal regulations they cite do not require the Department to act, the Appellate Division correctly dismissed the petition. A. State law does not provide the nursing homes a clear legal right to an order directing the Department to decide their rate appeals now. The monetary cap and moratorium in PHL § 2808(17)(b) supersedes the time limit contained in a Department regulation, 10 NYCRR § 86-2.14(b), specifying a one-year time limit for deciding rate appeals. The Appellate Di- vision correctly held that PHL § 2808(17)(b) applies to all rate appeals, in- cluding those that were pending as of the statute’s April 1, 2010 effective date, not just to rate appeals filed on or after April 1, 2010. This conclusion results from the plain language of PHL § 2808(17)(b). That statute now provides in relevant part that “notwithstanding any incon- sistent provision of law or regulation to the contrary,” for period beginning April 1, 2010, and ending March 31, 2015, “the [C]ommissioner shall not be required to revise certified rates of payment established pursuant to this ar- ticle for rate periods prior to April first, two thousand fifteen, based on consid- 15 eration of rate appeals filed by residential health care facilities,” in excess of the cap amount. PHL § 2808(17)(b) (emphasis added). The statute directs that, in revising rates within the monetary cap, “the commissioner shall, in prioritizing such rate appeals, include consideration of which facilities the commissioner determines are facing significant financial hardship as well as such other considerations as the commissioner deems appropriate.” Id. The statute’s reference to April 1, 2010 defines the starting date of the moratorium; it does not qualify or limit the rate appeals subject to the mora- torium. The statute provides that from April 1, 2010 (the starting date of the moratorium) through March 31, 2015 (the end date of the moratorium), the Commissioner of Health shall not be required to revise Medicaid reimburse- ment rates for rate periods before April 1, 2015 “based on consideration of rate appeals filed by residential health care facilities” in excess of certain ag- gregate annual monetary limits. Nothing in the language of the statute limits its application to rate appeals filed on or after April 1, 2010. PHL § 2808(17)(b). To the contrary, by its terms the moratorium and monetary cap apply to the revision of Medicaid rates for rate periods prior to April 1, 2015 “based on consideration of rate appeals filed by” nursing homes – without re- gard to when the rate appeals were filed. Id. As the Appellate Division cor- rectly observed, “the necessary implication of that language is that the stat- 16 ute applies to any rate appeal seeking a revision for any period before April 1, 2015, including any revisions resulting from rate appeals filed before the statute took effect” (R. 267). As the Appellate Division also explained (R. 267), the moratorium’s ap- plicability to all rate appeals, including those filed before April 1, 2010, is confirmed by PHL § 2808(17)(c), which was added in 2011. See L. 2011, ch. 59, § 1, part H, § 98. Subdivision (17)(c) states that the Commissioner is re- quired to promulgate regulations establishing priorities and time frames “for processing rate appeals, including rate appeals filed prior to April [1, 2011] . . . ; provided, however, that such regulations shall not be inconsistent with the provisions of [subdivision (17)] (b)” (emphasis added). Once again, the necessary implication of this provision is that the moratorium and cap apply to all pending rate appeals “inasmuch as there would be no need to prioritize the handling of those appeals unless they were encompassed by the morato- rium and cap” (R. 267). That the Legislature intended to apply PHL § 2808(17)(b) to pending rate appeals is further demonstrated by the fact that it used different lan- guage in a prior statute when it intended to limit a rate appeal moratorium to rate appeals filed on or after the effective date of the moratorium. The lan- guage of PHL § 2808(17)(b) stands in contrast to that in the moratorium in 17 PHL § 2808(15), enacted in 1995. See L. 1995 ch. 81, § 62. The 1995-96 mora- torium provided that, “for services provided by residential health care facili- ties for the period [April 1, 1995 through March 31, 1996], the [C]ommissioner shall not be required to revise a certified rate of payment es- tablished pursuant to this article based on consideration of rate appeals filed by a residential health care facility” (emphasis added). Thus, the rate appeal moratorium in PHL § 2808(15) applied only to reimbursement rates for a specified rate period – rates in effect “for services provided” from April 1, 1995 through March 31, 1996. In contrast, during the period between April 1, 2010 and April 1, 2015, the moratorium in PHL § 2808(17)(b) bars DOH from considering all rate ap- peals for rate periods before April 1, 2015, without regard to when the services were provided or when the rate appeals were filed. The moratorium therefore applies to all rate appeals pending as of April 1, 2010. See Sheffield Towers Rehabilitation and Health Care Center v. Novello, 293 A.D.2d 182, 186 (2d Dep’t 2002) (moratorium on construction of new nursing homes applied to construction and certificate of need applications that were pending and not finally approved as of effective date of moratorium). As the Appellate Division also recognized, this interpretation of PHL § 2808(17)(b) best serves the statute’s avowed purpose – to limit the State’s 18 aggregate Medicaid expenditures in the area of nursing home rate appeal payments in order to contain overall Medicaid costs (R. 66). The legislative history of PHL § 2808(17)(b), enacted as part of a package of revisions to the State’s public health programs, makes clear that the Legislature intended for the statute to “provide enhanced fiscal management and generate fiscal sav- ings” for the State. Senate Memorandum in Support, L. 2010, ch. 109, 2010 N.Y. Sess. Laws 1652 (McKinney). Because the impact on State fiscal year expenditures is the same regardless of whether the rate appeal is old or new (R. 66), the nursing homes’ contention that § 2808(17)(b) applies only to new rate appeals but not to those pending on April 1, 2010, is directly at odds with the purpose of the Legislature in adopting the cap and moratorium statute. This is particularly so given the tremendous backlog of old rate appeals (approximately 7500) that had been pending in the Department (R. 72, 105- 240). In ascertaining the applicability of a statute, it is proper to consider the circumstances surrounding the statute’s passage and the evil intended to be cured. McKinney’s Cons. Laws of N.Y., Book 1, Statutes § 124 at 253-54. The Legislature is presumed to have been aware of the backlog of rate appeals in enacting the rate appeal moratorium and monetary cap. Requiring the De- partment to decide this backlog of rate appeals, without regard to whether the rate appeals were filed by facilities facing significant financial hardship, 19 would render meaningless the annual monetary limit on expenditures on rate appeals and frustrate the statute’s overall savings goal. The nursing homes argued below that the backlog of rate appeals is a “self-created hardship” that should not excuse the Department from comply- ing with the one-year regulatory time limit for deciding rate appeals (R. 95). This argument misses the point. The issue here is not who is at fault for the backlog, but rather the Legislature’s intent as to the proper scope of the mon- etary cap and rate appeal moratorium in light of that backlog. In 2010, the Legislature confronted an extreme fiscal crisis and, faced with of the backlog of rate appeals, it temporarily suspended the regulatory time limit and im- posed a monetary cap on expenditures for nursing home rate appeals, with priority to be given to financially distressed facilities. Likewise without merit is the nursing homes’ argument that PHL § 2808(17)(a) gives them a clear, nondiscretionary right requiring the De- partment to decide their rate appeals now. Subdivision 17(a) imposed a mora- torium and monetary cap on rate appeals from April 1, 1997 through March 31, 1999. It also provided that, beginning April 1, 1999, the Department is required to review rate appeals “within a reasonable period.” The Appellate Division concluded that this provision was insufficient to warrant mandamus relief because whether something has occurred “within a reasonable period” 20 is a discretionary determination (R. 268). Even if this reasoning is questioned (e.g., on the ground that the Department determined that “a reasonable peri- od” would be one year (R. 65, citing 10 NYCRR § 86-2.14 [b]), and so has exercised its discretion), the outcome is still correct. Mandamus relief is unavailable here because the rate appeal moratorium and monetary cap in PHL § 2808(17)(b), which governs, “[n]otwithstanding any inconsistent provi- sion of law or regulation to the contrary,” supersedes the “within a reasonable period” requirement in section 2808(17)(a) until April 1, 2015. For all these reasons, the Appellate Division correctly held that there is no basis in state law for the clear legal right to mandamus that the nursing homes claim. B. Federal law does not provide the nursing homes a clear legal right to an order directing the Department to decide their rate appeals now. Nor do the two federal regulations cited by the nursing homes provide a basis to override the rate appeal moratorium and monetary cap in PHL § 2808(17)(b). Federal law imposes no specific deadline for the disposition of rate appeals, and confers no privately enforceable rights on nursing homes, that could form the basis for mandamus relief. 21 1. 42 CFR § 447.253(e) provides no basis to override the monetary cap and rate appeal moratorium The nursing homes invoke 42 CFR § 447.253(e), but this regulation provides no authority for the nursing homes to invalidate the monetary cap and moratorium in PHL §2808(17)(b). This regulation requires that as a con- dition for approval of a State plan (which makes the State eligible for federal funding), a State must provide Medicaid providers with an appeals proce- dure. Specifically, a State Medicaid agency “must provide an appeals or ex- ception procedure that allows individual providers an opportunity to submit additional evidence and receive prompt administrative review, with respect to such issues as the agency determines appropriate, of payment rates.” 42 CFR § 447.253(e). The State must also periodically provide the federal Med- icaid agency with assurances and related information that this requirement is being met. 42 CFR § 447.253(a). This regulation does not furnish the requisite clear legal right for two reasons. First, the federal regulation is not privately enforceable by health care providers, and second, the regulation does not mandate a time period for deciding rate appeals. As to the first reason, a federal regulation, standing alone, cannot confer enforceable rights on private parties. A regulation may be privately enforced only if it “invoke[s] a private right of action that Congress through 22 statutory text created.” Alexander v. Sandoval, 532 U.S. 275, 291 (2001). But “a right of action ‘can extend no further than’ the personal right conferred by the plain language of the statute.” Taylor v. Hous. Auth. of the City of New Haven, 645 F.3d 152, 153 (2d Cir. 2011)(quoting Taylor v. Hous. Auth. of New Haven, 267 F.R.D. 36, 75-76 (D. Conn. 2010)). When a regulation “defines the content of a statutory provision that creates no federal right” or “goes beyond explicating the specific content of the statutory provision and imposes distinct obligations in order to further the broad objectives underlying the statutory provision,” then the regulation “is too far removed from Congres- sional intent to constitute a ‘federal right’ enforceable under [42 U.S.C.] § 1983.” Harris v. James, 127 F.3d 993, 1009 (11th Cir. 1997). 42 CFR § 447.253(e) is not privately enforceable because Congress did not intend for the statute it implements to be enforced by health care provid- ers. This regulation implements 42 U.S.C. §1396a(a)(13)(A), a provision of the federal Medicaid Act that governs reimbursement rates for hospitals and nursing homes. See North Memorial Medical Center v. Gomez, 59 F.3d 735, 739 (8th Cir. 1995). Although a prior version of § 1396a(a)(13)(A), known as the “Boren Amendment,” conferred enforceable rights on health care provid- ers, see Wilder v. Virginia Hosp. Ass’n, 496 U.S. 498, 506 (1990), Congress repealed the Boren Amendment in 1997. See Balanced Budget Act of 1997, 23 Pub. L. 105–33, 4711(a)(1), 111 Stat. 251, 507-508 (1997). In place of the Boren Amendment, Congress enacted a provision requiring states to provide a public process for the determination of reimbursement rates – a provision that does not confer enforceable rights on health care providers. In re NYAHSA Litigation, 318 F. Supp. 2d 30, 38-39 (N.D.N.Y. 2004), aff’d sub nom. New York Ass'n of Homes & Servs. for the Aging, Inc. v. DeBuono, 444 F.3d 147 (2d Cir. 2006). Through the repeal of the Boren amendment, Congress intended to eliminate causes of action by health care providers to challenge reimbursement rates. See Evergreen Presbyterian Ministries Inc. v. Hood, 235 F.3d 908, 919 n.12 (5th Cir. 2000); Children’s Seashore House v. Waldman, 197 F.3d 654, 659 (3d Cir. 1999). For these reasons, the United States Court of Appeals for the Second Circuit held that nursing homes had no right to enforce 42 CFR § 447.253(e). New York Ass'n of Homes & Servs. for the Aging, Inc. v. DeBuono, 444 F.3d 147, 148 (2d Cir. 2006). There an association of nursing homes challenged, among other things, the 1995-96 rate appeal moratorium and monetary cap in PHL § 2808(15), claiming that it violated 42 CFR § 447.253(e). In re NYAHSA Litigation, 318 F. Supp. 2d at 32, 34. The district court held that because 42 U.S.C. §1396a(a)(13)(A), in its current form, does not confer privately enforceable rights on nursing homes, its implementing federal 24 regulations, including 42 CFR § 447.253(e), are not privately enforceable either. Id. at 40. The Second Circuit affirmed the district court’s judgment in In re NYAHSA Litigation “for the reasons set forth in the district court’s well- reasoned” decision, and thereby adopted its cogent reasoning. 444 F.3d at 148. Likewise, in Hospital Center at Orange v. Guhl, 331 N.J. Super. 322, 751 A.2d 1077 (2000), New Jersey’s Appellate Division rejected a claim that the state’s Medicaid agency violated 42 C.F.R. § 447.253(e)’s promptness re- quirement upon holding that § 447.253(e) did not create a privately enforcea- ble right. Id. at 342. Noting that the federal Medicaid agency deliberately chose not to require states to decide rate appeals within a set period, the court held that the right lacked the mandatory character necessary to be pri- vately enforceable. Id. at 342-43. The court further held that even if the plaintiffs were entitled to a presumption of a private right of action, that pre- sumption was rebutted by language and regulatory history demonstrating that § 447.253(e) was not “intend[ed] to authorize an action under 42 U.S.C. § 1983 whenever a Medicaid agency failed to issue a timely decision on a rate appeal.” Id. at 343-44. The requirements in 42 CFR § 447.253 are enforced not by private parties, but by the federal Medicaid agency through the disallowance of 25 federal funding. The federal Medicaid Act was enacted pursuant to Congress’ authority under the Spending Clause. “In legislation enacted pursuant to the spending power, the typical remedy for State noncompliance with federally imposed conditions is not a private cause of action for noncompliance but rather action by the Federal Government to terminate funds to the State.” Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 28 (1981). If CMS, the federal Medicaid agency, believes that New York is not providing nursing homes with prompt administrative review, it may seek to disallow federal funds in order to compel compliance with 42 CFR § 447.253(e). See 42 U.S.C. § 1396c. Federal administrative action by CMS, not a mandamus proceeding in state court, is the proper forum for enforcing 42 CFR § 447.253. It has been suggested in other cases that even when Congress did not intend for litigants to enforce Spending Clause legislation like the Medicaid Act under 42 U.S.C. § 1983, private parties may enforce the legislation under the Supremacy Clause. See Douglas v. Independent Living Center of Southern California, Inc., 132 S. Ct. 1204 (2012) (avoiding Supremacy Clause claim). But the nursing homes in this case have never raised that claim in any court, and accordingly it is not preserved for this Court’s review. See Snyder v. Wetzler, 84 N.Y.2d 941, 942 (1994) (refusing to review unpreserved Suprema- cy Clause claim). In any event, any such argument would be meritless. See 26 Planned Parenthood of Kan. & Mid-Mo. v. Moser, 747 F.3d 814 (10th Cir. 2014) (Spending Clause legislation may not be enforced under the Supremacy Clause when the legislation does not confer a private right of action); Bos. Med. Ctr. Corp. v. Sec’y of Exec. Office of Health & Humans Servs., 463 Mass. 447, 974 N.E.2d 1114, 1127-28 (Mass. 2012) (same). Moreover, even if § 447.253(e) were privately enforceable (which it is not), the regulation would not provide the nursing homes a clear legal right to mandamus, because the regulation does not mandate that rate appeals be de- cided within any specific time period. See Hospital Center at Orange v. Guhl, 331 N.J. Super. at 335-336; 751 A.2d at 1084. Indeed, the federal Medicaid agency expressly considered and rejected a proposal to include an express time period: With regard to the comment on establishing time pe- riods, we believe that a greater degree of specificity in the appeals provision would not be in the interests of State flexibility nor would it necessarily result in any substantial benefit to the Medicaid program. We do agree that State appeal procedures should be con- sistent with the intent of the Federal provision re- garding prompt administrative review as currently reflected in the regulation. Therefore, we are not re- vising the regulations to specify a given time period, for the State to act on appeal requests. 48 Fed. Reg. 56,046, 56,052 (Dec. 19, 1983). The agency also observed that “the States, not the Federal government, are in the best position to determine 27 the administrative process that would best meet their needs and be most compatible with their reimbursement system.” Id. Nor can the nursing homes find precision in the ordinary meaning of the word, see Br. at 19, because “prompt” means many things, including “ready and quick to act as occasion demands.” Webster’s Third New Interna- tional Dictionary 1816 (4th ed. 1976) (emphasis added). In view of the State’s worst fiscal crisis since the Great Depression, and the flexibility the Medicaid Act affords states to tailor their Medicaid programs to local conditions, the federal Medicaid agency may well consider New York administrative appeals process to be in compliance with 42 CFR § 447.253. To date, the federal Medicaid agency has not taken any action against New York in relation to PHL § 2808(17)(b), nor did it take any adverse action regarding the monetary caps and moratoria the Legislature has imposed to address prior fiscal crises. At least one federal court has interpreted § 447.253(e) to provide only that facilities receive notice of a determination and an opportunity to appeal. North Mem’l Med. Ctr., 59 F.3d at 739-40. Finally, nothing in PHL § 2808(17)(b) is inconsistent with the text or purpose of the federal regulation. The administrative appeal process remains open to all nursing homes that are dissatisfied with their rates. The cap and moratorium imposed under PHL § 2808(17)(b) simply reordered the priority 28 in which those appeals would be decided in light of severely diminished resources. Until the $80 million statutory cap is fully exhausted during a given year, PHL § 2808(17)(b) permits the Department to process rate appeals according to the reordered priority. PHL § 2808(17)(b) allows any facility’s rate appeal to be resolved in a given year; the only variable is the number of higher priority appeals that can be resolved before the Department reaches the statutory cap. Thus, PHL § 2808(17)(b) is consistent with the provisions of 42 CFR § 447.253. For this reason also, nursing homes do not have a clear legal right to compel the Department to decide their rate ap- peals. 2. 42 CFR § 447.45 does not apply to rate appeals and therefore cannot supply the requisite clear legal right Nor does 42 CFR § 447.45 furnish a basis for compelling the Depart- ment to decide their rate appeals now. It is not necessary for the Court to de- termine if this regulation is privately enforceable because its substantive con- tent does help the nursing homes here. The Appellate Division correctly rea- soned that this regulation governs the timely processing and payment of Medicaid claims, not rate appeals. With respect to hospitals and nursing homes, section 447.45 generally requires a Medicaid agency to pay all claims within twelve months of the date of receipt. See 42 CFR § 447.45(d)(4); 29 United Cerebral Palsy Associations v. Cuomo, 966 F.2d 743, 745-46 (2d Cir. 1992) (administrative lag program in which reimbursement of Medicaid funds was changed from 14 to 28 days from receipt of the claims invoice did not violate 42 CFR § 447.45(d)(4)); Illinois Council on Long Term Care v. Bradley, 957 F.2d 305 (7th Cir.) (rejecting claim that State’s payment of Med- icaid claims to nursing homes in 94 to 105 days violated the Medicaid statute and its implementing regulations), cert. denied, 506 U.S. 815 (1992). This regulation does not apply here. By its terms, § 447.45 applies to the payment of Medicaid “claims,” not rate appeals. “Claims” are defined to mean a bill for services, a line item of service, or all services for one benefi- ciary within a bill. See 42 CFR § 447.45(b). For example, if a nursing home submitted claims on January 1, 2009 to the Department for nursing facility services provided to Medicaid residents in November 2008, the regulation requires the Department to pay the claims by January 1, 2010, that is, within one year of receipt of the claims. Here, the nursing homes do not allege that the Department failed to pay them the promulgated Medicaid reimbursement rates within one year of receipt of the claims. To the contrary, they have filed rate appeals asserting errors in the promulgated Medicaid reimbursement rates. Nothing in 42 CFR § 447.45 applies to the processing and disposition of administrative rate 30 appeals. Accordingly, neither state nor federal law affords petitioners a clear legal right to a writ of mandamus compelling the Department to decide their rate appeals, and the Appellate Division properly dismissed this proceeding. POINT II The Nursing Homes’ Vested Rights Challenge To PHL § 2808(17)(b) Is Unpreserved And Without Merit The nursing homes contend that, if PHL § 2808(17)(b) applies to rate appeals filed before the moratorium’s April 1, 2010 effective date, then the statute unconstitutionally deprives them of their vested property rights. But the nursing homes did not raise this constitutional claim in the petition (R. 28-29 [petition]). They raised this claim for the first time in their Appellate Division brief (see appellants’ Br. at 4 [jurisdictional statement, citing Pets’ App. Div. Br. at 17]), but that court did not address it. Recognizing the preservation problem, the nursing homes argue here (Br. at 3), that the fact that the State argued below that PHL § 2808(17)(b) applies to all pending rate appeals “necessarily” raises the issue whether the statute would be constitutional. They are mistaken — a litigant may contend that a law was not intended to apply retroactively without also contending that the law would be unconstitutional if it were retroactive. The nursing homes did not raise their vested rights argument in Supreme Court, and consequently, their constitutional challenge to PHL § 2808(17)(b) is unpreserved. See Matter of 31 New York State Office of Victim Services v. Raucci, 20 N.Y.3d 1049 (2013) (argument not raised in Supreme Court was not preserved for this Court’s review although the Appellate Division ruled on it); Hapletah v. Assessor of Fallsburg, 79 N.Y.2d 244, 252 (1992) (constitutional claim raised for the first time in the Court of Appeals is unpreserved). In any event, this constitutional claim is not only unpreserved but also meritless. As this Court 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 balancing of “a number of factors, including fairness to the parties, reliance on pre- existing law, the extent of retroactivity, 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 PHL § 2808(17)(b). 32 The nursing homes’ vested rights argument fails at the threshold. They argue that the statute “destroys” and “strips” them their right to reimburse- ment for services provided (Br. at 25-27) and that their rate appeals will be “delayed indefinitely” (Br. at 26). These arguments are mistaken. The cap and moratorium does not extinguish any right to reimbursement, but only delays the time limit for deciding rate appeals, and then only if the rate appeals do not come within the cap set aside for financial hardship cases. Thus, the only right affected by the cap and moratorium statute is the state regulatory proviso that rate appeals be decided within one year. But under settled law, such regulatory time periods for administrative decisions are not mandatory. See Matter of Dickinson v. Daines, 15 N.Y.3d 571, 575-76 (2010). And prior law put the nursing homes on notice that the processing of their rate appeals was subject to statutory limitations. The Legislature has the authority to suspend this regulatory time limit, especially in response to an extreme fiscal crisis, as it did here. Indeed, the Legislature has done so several times since 1995. Further, the moratorium and monetary cap does not suspend complete- ly the disposition of rate appeals. See Matter of Malinckrodt Medical, Inc. v. Assessor of the Town of Argyle, 292 A.D.2d 721, 723-724 (3d Dep’t 2002) (up- holding three-year moratorium on litigating an adjudicated tax assessment, 33 noting that it was not absolute). Rather, it makes available a substantial fund ($80 million for 2010-11, $50 million for 2011-12, and $80 million each fiscal year thereafter through March 31, 2015) to pay for rate adjustments resulting from rate appeals filed by financially distressed facilities, as determined by the Department. Moreover, in arguing that the retroactive reach of the statute is too great (Br. at 27), the nursing homes ignore their failure to utilize their available judicial remedy during the years before the statute became effec- tive. Appellants bear some share of the responsibility for the delay in the dis- position of the 95 rate appeals at issue here. As they candidly acknowledged (Br. at 10), before the moratorium went into effect in 2010, other nursing homes routinely brought article 78 proceedings to compel the Department to adjudicate rate appeals pending for more than one year, and courts would routinely grant mandamus relief (R. 72, ¶ 10; R. 94, ¶ 31). Appellants fail to explain why they did not avail themselves of this remedy any time in the decade between 2000 and April 2010. They sat on their rights. The statute also serves important public interests. It was enacted when the State was in the midst of its worst fiscal crisis since the Great Depression. And the Legislature’s judgments as to the need for the monetary cap and moratorium and its assessment of the amount to be made available 34 to provide for rate adjustments for distressed facilities are entitled to deference. The Court should decline the nursing homes’ invitation to second- guess the Legislature’s and the Department’s judgment as to who should be at the front of the line. Finally, in enacting the moratorium and monetary cap, the State has not simply kicked the can down the road. PHL § 2808(17)(b) authorizes the Commissioner to enter into agreements with nursing homes to resolve multiple pending rate appeals, a process that has helped mitigate the back- log. For all these reasons, if this Court reaches the nursing homes’ vested rights argument, it should reject it. 35 CONCLUSION The Court should affirm the Appellate Division’s order. Dated: Albany, New York July 25, 2014 BARBARA D. UNDERWOOD Solicitor General 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 Respondents By: _____________________________ VICTOR PALADINO Assistant Solicitor General Office of the Attorney General The Capitol Albany, New York 12224 Telephone (518) 473-4321 Reproduced on Recycled Paper 36