In the Matter of County of Jefferson, Appellant,v.Nirav R. Shah,, et al., Respondents.BriefN.Y.September 7, 2016CA 14-00926 To be argued by: VICTOR PALADINO 10 minutes requested Supreme Court, Jefferson County- Index No. 2013-1956 $upreme (:ourt of tbe ~tate of ~ew ~ork ~ppellate t!libi~ton - jf ourtb t!lepartment IN THE MATTER OF THE APPLICATION OF COUNTY OF JEFFERSON, -against- . NIRA V R. SHAH, AS COMMISSIONER OF THE NEW YORK STATE DEPARTMENT OF HEALTH AND THE NEW YORK STATE DEPARTMENT OF HEALTH, ANDREWD. BING BRI.EF FOR APPELLANTS ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Appellants The Capitol Respondent, Appellants. Deputy Solicitor General VICTOR PALADINO Albany, New York 12224-0341 (518) 473-4321 Assistant Solicitor General of Counsel OAG No. 13-162252 Dated: August 6, 2014 Reproduced on Recycled Paper Table of Contents Page Table of Authorities ....................................................................... ~ .................... iii Preliminary Statement .............. ; ....................................................... , ................... l Questions Presented ............................................................................................. 3 Statement of the Case .......................................................................................... 4 A. Pre-2006 Statutory and Regulatory Background · Regarding Overburden Claims ....................................................... .4 B. The Medicaid Cap Statute ......... ; ..................................................... 6 C. Prior Litigationlnvolving the Cap Statute ..................................... 8 D. The 2012 amendment to the Medicaid Cap Statute ....................... 9 E. Statement of Facts ........................... ;,; .... ; ....................................... 11 F. · This proceeding .................. ; ................... ~ ........................................ 11 Argument POINT r THE 2012 AMENDMENT Is CONSTITUTIONAL .................................. 13 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 ..................................................................... 19 I. The 2012 Amendment is not unfair ..................................... 22 2 .. · The County had at most a minimal reliance interest based on prior law ............................................. : .................. 27 Table of Contents (cont'd) Page ARGUMENT, POINT!, B. (cont'd) 3. The extent of retroactivity is not excessive ......................... 29 4. The 2012 Amendment serves an important public interest .................................................................................. 31 POINT II PETITIONER LACKS A CLEAR LEGAL RIGHT TO MANDAMUS RELIEF DIRECTiNG THE DEPARTMENT OF HEALTH TO CALCULATE AND DETERMINE ALL OUTSTANDING OVERBURDEN LIABILITIES ........... 33 Condusion ............................................................................................... 39. Addendum .............................................................................................. Al ii Table of Authorities Cases Page Alliance of American Insurers v. Chu, 77 N.Y.2d573 (1991) .................................................................................... 20,31 Black Riv. Reg. Dist. v. Adirondack League Club, 307 N.Y. 475 (1954), appeal dismissed, 351U.S.922 (1956) ..................... 17,18 Brothers v. Florence, 95 N.Y.2d 290 (2000) .............. , ............................................................. , ............ 23 Brusco, Matter of v. Braun, 84 N.Y.2d 674 (1994) .......................... , ......................... : .................................... 34 Chrysler Properties, Matter of v. Morris, 23 N.Y.2d 515 (1969) .......................................................................................... 20 City of E. St. Louis v. Cir. Ct. for the Twentieth Jud. Cir., St. Clair c,;,iy, 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) ........................... 16-17 City of New York v. State ofNew York, 86 N.Y.2d 286 (1995) .................................................................................... 16,32 Correa-Ruiz v. Fortuna, 573 F.3d 1 (1st Cir. 2009) ................................................................................. 27 County of Herkimer, Matter of v. Daines, 60 A.D. 3d 1456 (4th Dep't), lv. denied, 13 N.Y.3d 708 (2009) .......................... 8 County of Niagara, Matter of v. Daines, 60 A.D.3d 1456 (4th Dep't), lv. denied, 13 N.Y.3d 707 (2009) ........................... 8 County of Niagara, Matter of v. Daines, 79 A.D.3d 1702 (4th Dep't 2010), lv. denied, 17 N.Y.3d 703 (2011) ............. 8,33 County of Niagara, Matter of v. Daines, 91A.D.3d1288 (4th Dep't 2012) .......................................................... ; .............. 9 iii Table of Authorities (cont'd) Cases (cont'd) Page County of Niagara, Matter of v. Daines, 96 A.D.2d 1433 (4th Dep't 2012) ........................................ ,. ............................. 33 County of St. Lawrence, Matter of v. Daines, 81 A.D.3d 212 (3d Dep't), lv. denied, 17 N.Y.Sd 703 (2011) ............................... 8 County of St. Lawrence, Matter of v. Shah, 95 A.D.3d 1548 (3d Dep't 2012) ...................................................................... 9,21 Dalton v. Pataki, 5 N.Y,3d 243, cert. denied, 546 U.S. 1032 (2005) ............................................... 13 . . E.S., Matter of v. P.D., .8 N.Y.3d 150 (2007) .................................... , .......... ; ............................................ 13 Gattis v. Gravett, . . . 806 F.2d 778 (8th Cir. 1986) .......................................................................... 26-27 Gentile v. Garden City Alarm Co., ·. 147A.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 . In 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) .................................................................................... 18,19 iv Table of Authorities (cont'd) Cases (cont'd) Page Krauskopf, Matter of v. Perales, 139 A.D.2d 147 (3d Dep't 1988), aff'd, 74 N.Y.2d 730 (1989) .......................... 18 Krauskopf, Matter v. Perales, 74 N.Y.2d 730 (1989) ........................................................................................... 5. OnBank & Trust Co., Matter of, 90 N.Y.2d 725 (1997) ......................................................................................... 30 Roman Catholic Diocese of Albany, N. Y. v. New York State Workers' Compensation Board, 96 A.D.3d 1288 (3d Dep't 2012) ........................................................................ 23 South Carolina v. Katzenbach, 383 U.S. 301 (1966) ............. ; ................................................................. , ........... 16 South Dakota v. United States DOI, . 665 F.3d 986 (8th Cir. 2012) ............................................................................. 17 Spano, Matter ofv. 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.(lst Dep't 2013) ....... , ............................................................... 21 Trenton v. New Jersey, 262 U.S. 182 (1923) ................................ , ......... , ................................................ 16 United States v. Locke, 471 U.S. 84 (1985) ............................................................................................. 26 Williams v. Mayor, 289 U.S. 36 (1933) ............................................................................................. 16 Woodside Manor Nursing Home, Matter of v. Shah, . 113 A.D.3d 1142 (4th DE!p't 2014) ....................................... : ........ ~ .................... 34 v Table of Authorities (cont'd) Page New York State Constitution article I, § 6 .............................................................................................. 3, 12, 13 article IX, § 2(b )(1) ............................................................... ; ...........................• 12 State Statutes C.P.L.R. article 78 .......................................................................................................... 8,11 S.S.L. § 368-a ..................................... ; ..................................................................... 12, 15 § 368-a(l)(d) ......................... , ....................... ~· ...... , .......... , ..................................... 4 § 368,a(l)(h) ............................................................. , .................................. passim Statute of Local G-0vernments . § 2 ............................................................................. ; ........... · .... : .............. , ........ 12 L. 2005, ch. 58, Part C, , . § 1 ................................................................................................................ 6,10 § l(a) , ................................................ ,: .................... : ........................................... 7 § l(f) : ................................................................................................................... 7 L. 2006, ch. 57, Part A, § 60 .................................................................................................................... 6 . L. 2010, ch. 109, Part B § 22 ........................................ : ........................................................................ 25 § 24 .................................................................................................................... 9 L. 2011, ch. 59, part H .§92 ...................... : .................................................... ; ................................ 37-38 L. 2012, ch. 56, Part D § 61 ....................................... : ......................................... : ...................... : ...... 10,39 § 65 ................................................ : ................ , ........................................... ; .... 10 vi Table of Authorities (cont'd) Page State Rules and Regulations 18 N.Y.C.R.R. Part 601 ............................................................................................................... 5 § 601.3 ............................................................................................................. 9,37 § 601.3(c) : ........................................................................................... : ................. 8 § 601.4 ...... , ..................................................................................................... 22,35 Part 635 ..................................................................................................... 5,22,35 United States Constitution 5th Amendment ........... : ............................................................................................... 16 14th Amendment ........ , ...................................................................... , ............................. . 19 vii ·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 Statute. The cap statute generally limited the counties' · share of Medicaid expenditures each yearto a dollar amount, or cap, determined pursuant to the statutory formula. In this proceeding involving petitioner Jefferson County, Supreme Court, Jefferson County (Gilbert, J.) declared the 2012 amendment unconstitutional and annulled the Department's denial of the overburden . reimbursement claims that the County sqbmitted.after April 1, 2012 (Record ["R."J 14). The court ordered the State to pay the County for these statutorily barred claims, and awarded sweeping prospective mandamus relief. 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. 14). Challenges to the 2012 amendment are before this Court in appeals by the Department in a proceeding involving Niagara County, Matter of County of Niagara v. Shah (App. Div. No. 13-02010), and one involving Chautauqua County, Matter of County of Chautauqua v. Shah (App. Div. No. 14-00923), and before the Appellate Division, Third Department, in a similar proceeding involving St. Lawrence County, Matter of County of St. Lawrence v. Shah (App. Div. No. 518097). Supreme Court erred in declaring the 2012 amendment unconstitutiom'll. 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 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 2 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. QUESTIONS PRESENTED 1. . Whether petitioner 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 to provide the County with all information necessary to 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 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 Jefferson 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 Jefferson 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 4 the cost of medical services for certain mentally disabled Medicaid recipients eligible for "overburden reimbursement" under SSL§ 368-a(l)(h) (R. 413- 414). 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, includirig services provided to overburden patients for which no local share was owing (R. 415). The Department then identified the recipients who were overburden patients and reimbursed the counties each quarter (R. 415). The Department furnished counties with certain reports from which they could ascertain if the State had failed to reimburse them for any overburden-eligible individu:ils (R. 415-416). 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. 416~417, 444, 448), or it could submit claims for any additional overburden reimbursement under 18 N.Y.C.R.R. Parts 601 and 635. 5 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 overburdenreimbursements owed to counties. Although the Department made available a claiming process by / which counties could recover any missed overburden payments, many counties, including Jefferson 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 a.nd 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, § l, 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. 6 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 ofthe social services law," which includes the overburden reimbursement provisions. Cap Statute § i(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 ifthe 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. 7 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 Herhimer v. Daines, 60 A.D.3d 14156 (4th Dep't), Iv. 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 8 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. 424, ii 48). Petitioner received more than $750,000 as a result of these court decisions (R. 424, ii 49). 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 o{County of St. Lawrence u, 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 a:niendment to the Medicaid Cap Statute In response to the court rulings that the 2010amendment did not eliminate state reimbursement for pre-2006 overburden claims, in 2012 the Governor proposed, and the Legislature enacted, another amendme.nt to the 9 Medicaid Cap Statute to clarify that overburden rei.mbursement was not 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. 424-425). 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, 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. 358). 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 . 10 stated in the memorandum in support. The amendment's purpose 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. 451). 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. 451) .. E. Statement of Facts Within weeks after the introduction of the bill that became the 2012 amendment, Jefferson County submitted a flurry of additional claims for overburden reimbursement totaling more than $500,000 to the Department (R. 425, 11· 54). The Department paid all the claims that the County submitted before April 1, 2012 (R. 425 n.23). After the April 1, 2012 effective date of the 2012 amendment, petitioner continued to submit overburden claims totaling $114,502 (R. 425, ii 55). The Department denied these claims based on the 2012 amendment (R. 425, ~ 56; R. 453-454). F. This proceeding . Thereafter, Jefferson County commenced this combined article 78 proceeding and declaratory judgment action against the Department and its 11 Commissioner. The County alleges that the 2012 amendment does not relieve the State of its reimbursement obligation under Social Services Law § 368-a (R. 108). The County also alleges that the 2012 amendment deprives it·ofits vested right to reimbursement for overburden expenses without due process of law in violation of article I, § 6 of the New York Constitution and therefore should be declared null and void (R. 110-113). And the County alleges that the 2012 amendment is void under article IX, § 2(b )(1) of the New York Constitution and§ 2 of the Statute of Local Governments (R. 11·1-115). In addition, the County alleges that respondents are guilty of intentional and/or negligent conduct with respect to overburden reimbursement, including intentionally altering or miscoding overburden eligible individuals in the State-operated computer sy$tem used to track Medicaid payments, dilatory conduct, and bad faith. On this basis, the County alleges that respondents should be precluded from invoking the 2012 amendment to deny petitioner's overburden claims. Further, the County alleges that the State has been unjustly enriched at the County's expense and that the court should impose a constructive trust over the overburden reimbursement to which it is entitled (R. 116•119). Respondents answered the petitions/complaints, and the parties cross-moved for summary judgment. Supreme Court (Gilbert, J.) declared 12 the 2012 amendment unconstitutional, annulled the Department's determination, and directed it to pay Jefferson County's overburden reimbursement claims at issue here (R. 14). In addition, Supreme Court directed the Department forthwith to determine the total overburden expenses the County incurred before 2006 and to pay the County the total pre-2006 overburden reimbursements to which it is entitled (R. 14). 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 rea.sonable doubt." Matter of E.S. v. P.D .. 8 N.Y.3d 150, 158 (2007). The County hasfailedto carry that heavy burden . . Supreme Court concluded (R. 33) that the 2012 amendment 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 13 relevant part that "[n]o person shall be deprived of life, liberty or property without due process of law." Preliminarily, in so ruling, Supreme Court correctly interpreted the 2012 amendment as terminating the State's responsibility for pre-2006 overburden reimbursement, although it erred in holding the statute unconstitutional. Accordingly, as we explain in Point II of this brief, petitioner's argument in Supreme Court that the statute did not fully terminate the State's responsibility for overburden reimbursement is wrong. Supreme Court's holding that the 2012 amendment is unconstitutional . conclusion is wrong 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 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. 14 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 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. 15 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 v. 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 inv()ke in opposition to the will of its creator." Williams v. Mayor, 289 U.S. 36, 40 (1933) (Cardozo, J.); see also Trenton v. New Jersey, 262 U.S. 182, 186-87 (1923) (federal constitution does not bar a 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 16 923, 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 ,Jttd. Cir., St. Clair Cnty, Ill., 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 procoss purposes). Although New York courts have sometimes construed the New York . constitution's due process clause mo),'.e expansively than the Supreme Court has construed the federal clause, Hernandez v. Robles, 7 N.Y.3d 338, :J61-62 (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 "alteration, impairment or destruction of [the] powers [of a political subdivision] by the Legislature presents no question of constitutionality" and does ~ot implicate the due process clauso. 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). 17 Indeed, "political power conferred by the Legislature confers no vested right as against t):ie 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 Distri:ct, 41 N.Y.2d 283, 287 (1977). In Jeter, a city board of 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 18 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 declaring the 2012 amendment unconstitutional. 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 19 . if the Qounty 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 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 20 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 l, 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 on 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 · 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 di_ctum in Matter of County of St. Lawrence v. Shah should not be followed here. See 21 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 of pre-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 bboks on these stale claims. Long before the - . advent of the new Medicaid cap cost-sharing system, the State made 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. Petitioner and some other counties, however, failed to fully take advantage of . . that process until after the Medicaid Cap Statute went into effect in 2006. 22 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 countieE! .submitted a flurry. of overburden claims . . . before April 2012, all of which the Department paid (R. 425, ii 54 & n. 23). The Legislature's judgment in affording this grace period is entitled to. deference. See Brothers ti. Florence, 95 N.Y.2d 290, 301 (2000) (if the Legislature shortens a statute of limitations period l:>ut 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 Catholic Diocese of Albany, N.Y. v. New York State Workers' C9mpensation Board, 96 A.D.3d 1288, 1290 (3d Dep't 2012) ("due process is satisfied when the Legislature expressly sets a 'reasonable grace period"'). 23 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 substa:qtial 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. 756). Petitioner itself has saved more than $12 million since the Medicaid Cap's inception (R. 422, ~ 43). And because the coiinties' 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 Cap Statute as amended in 2012 does not allow for reimbursement of pre-· 2006 Medicaid claims, the statute shields counties from pre-2006 liabilities they otherwise would owe under the old cost-sharing system, including 24 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. 422, 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 Medfoaid 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. But here the County se~ks the benefits of both cost,sharing eystems ' ' and the burdens of neither: It now enjoys substantial savings from the · Medicaid cap, protection from pre-2006 liabilities (i.e., federal disallowances andjudgments directing increased reimbursement for providers), and at the 25 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 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 26 (8th Cir. 1986); see also Correa-Ruizµ. Fortuna, 573 F.3d. 1, .15 (1st Cir. 2009) (same). Thus, under all the relevant circumstances, the 2012 Amendment was not 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 continu!;l 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 o.ver six 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 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- 27 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. 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, petitioner submitted a 28 flurry of claims during this grace period, and the Department paid them (R. 425, 1! 54). 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 supmitted 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 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 29 paid before 2006 for services provided to overburden-eligible recipients. As · reflected in its legislative history, the pu:rpose 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. 451). Legislative history like this indicating the purpose of clarifying legislation is probative in inte:rpreting 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 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. 451). In enacting the 2012 30 amendment, the Legislature made clear that the Medicaid cost-allocation system that the Cap Statute implemented was meant to exclude oyerburden 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 claims 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. . . . 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 ne~ded 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 t.he rights ofprivate corporations, here the State has amended its statutory reimbursement obligations to its political subdivisions, which it 31 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 Col.lnty 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 ·.clarified the allocation of fiscal responsibility between the State a.nd its .. political subdivisions for Medicaid expenditures.· The allocation of Medicaid costs set forth in the Cap Statute, as amended in the 2012 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. . . 32 POINT II PETITIONER 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 petitioner (R. 14). This relief is unwarranted, and should be reversed, even if this Court otherwise affirms Supreme Court's orders. 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. 427-428, 'If 64 & J;J..26). 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.Sd 1702, 1706 (4th Dep't 2010), lv. denied, 17 N.Y.3d 703 (2011). 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 amendµient the Legislature and the Governor intended only to eliminate reimbursement ofpre-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 argume11t 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 which the 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. 415-417). 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. 416-417, 444, 448). See 18 N.Y.C.R.R. § 601.4 & Part 635 (Medical Assistance Reimbursemi;int Claiming). Districts were also allowed to submit correspondence and documentation to DSS (R. 416-417, 444, 448). When it enacted the 2012 amendment, the Legislattire clarified that overburden reimbursement was no longer available · as of April 1, 2012. By terminating the only vehicle for the counties to obtain 35 unpaid pre-2006 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. 451 [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 overb'urden 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 Services 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 mr;;thod 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 identi:6.ed 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. 158 [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. 428). 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. 428). In sum, Supreme Court's directive that the Department undertake a project to identify and pay all outstanding overburden liabilities should be reversed. 38 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 petitions/complaints. Even if this Court holds that section 61 is unconstitutional, it should nevertheless vacate the part of the judgment that directs the Department of Health to calculate and pay all outstanding overburden liabilities owed petitioner. Dated: Albany, New York August 6, 2014 Respectfully submitted, ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney. for~. p~p·: ants By:~~ ANDREW D. BING Deputy Solicitor General VICTOR PALADINO Assistant Solicitor General of Counsel VICTOR PALADINO Assistant Solicitor General Office of the Attorney General The Capitol Albany, New York 12224 Telephone: (518) 473-4321 Reproduced on Recycled Paper 39 tK .... ice he '01' ~ a mt 12! nd ph 04 be of .ch er to , .. :es !al !er , .. of on he er or or ch in tly by ch he •e he :m w; '8 1b .te re or •· le l I I I I I I I I 2005 REGULAR SESSION Ch. 58, Pt. C, § 1 on an emergency basis any regulation he or she or aueh council dOtemunea nece.ssar,y to implement any provla\on of lhla act on It.a effectlve date; . 8. The ·provlalons of this act shall become effective notwithstanding the failure of the commlaaloner of health or the superintendent of insuranoo or any council to adopt or amend or promulgate regulations bnµlementlng this act; 9. The amendmenta to aubdlvlaion 4 or ... tion 2511 or the public health law made by section seventy of this act shall not atrect the expll'aUon or such subdlviaions and shall be deemed to expire therewilh; · 10. ·The amendmente to section 2801-j of the publto health law made by sections forty-one, forty-three, llfty..ill.tee, and llixty·t:wo of lhia wit shall not affect the expll'atlon of such section and shall be deemed to expll'e therewith; 11. The amendments to section 2807-s of the public health law made by sections thirty· one, thhty4wo, thhty-three, thhty-four, thirty-five, thirty-nine, afxty-thr!!e and ninety.nine of this act shall not aftect the expiration of such secllon and shall be deemed to expire therewith; 12. The amendment& to SBctlon 2807-t or the publk health law made by aectlona forty.five and one hundred of this act shall not aft'ect the expiration of sud> section and shall be deemed to expire thereWith; · ·13. The amendments to paragraph (l-1) or aubdiv!alon 1 of section 2807-v ot the public health law· made by section three of this wit ahall not a!tect the repeal of such pilnlgt&ph and shall be deemed to be repealed therewith; and . . 14. The amendments to sectlon 4408-r of the.publlo health laW made by BBcilon• eighty. three and eighty.four of this act shall not aftect the l'!lpeal of 81lCil section and ahllll be deemed to be repealed therewith. · EM of Parl B PARTC f· 1. (a) Notwithstanding the provls!ons of section 868-~ In a~rdanoo with the provle!ollll of this SBctlon; provided, however, that tJrl8 .oectlon •hall not apply to 111110unte expended for health"""" servlees under •e•1lon 361Hie of the social aervices law, whld> amoun!JI shall be reimbursed In accordance with paragraph (t) of aubdlvllllon I of section 36lHI of such law and Bhalt be excluded from all calculatlona made pursuant to this section. (b) Commencing with the period April I, 2005 though Man:h 31, 2006, a social aervlces district's yearly net share or medical aaalstance expenditureo shall be calculated in relation to a reimbUl'SBment bsSB year which, for.plll'pOOea ofthla SBOtlon, la defined as January I, 2005 through . December SI, 2005. The final base year expenditure OJ!lcul.atlon for each soolal · servl""" diatrict shall be made by the g, or prioJ' to, the base year. Sud> base y..,. calculaUona aha!! be based on the soclal services district medical assistance ahares provllllontl In effect on January 11 2005. (c) Commencing with the calendar ye&l" beginnlng Janllll!'¥ 1, 2006, calendar year soclal services district med!OJ!l asalatance expenditure amounts for eMh aoclal aervlcee district shall be calculated by multiplying the results of the calculations performed purauant to paragraph (b) or this se; (Ii) 2007 (January I, 2007 through December 31, 2007): 6.751'1> (3.25.,_ plus the prior year's . 8.5%); . . Additions 111 lndlcottd bY l!!!ll!!!!!!; delotlons bY ~ v1toe1 lly •lladlnt . 315 ADD EN.DU M Al . :.:~ '1,;'1· . I :. .. i I ' r f \. r I J . . \ ,. .. , .. .:- ; ... .·t. ... !·' Ch. 58, Pt. C, § 1 LAWS OF NEW YORK (IU) 2008 (January 1, 2008 through December 31, 2008); 9.75% (8% plus the prior year's 6.75%): (iv) 2009 (January l, 2009 through December 31, 2009), and each succeeding calendar year: prior year's trend factor peroentage plua 3%. (d) The base year expenditure amounta oalculated pursuant to paragraph (bl of thla section and the calendar year social .. rv1cea diatriet expenditure amounts calculated pm'Suant to paragraph (c) of thla •ectlon shall be ecnverted Into state fiacal year social services dlatrlct expenditure eap amounts for eaeh social services district such that each such state tiacal year amount la proportional to the portlona of the two calendar years within each fiscal year, !IS tollowa: (l) llacal year 2006-2006 (April !, ZOOfi through March SI, 2006): 75'h ot tho base year amoant plus 25% of the 2006 calendar year amount; · (ill rracal year 20IM>-2007 (April l, 2006 through March 31, 2007): 75% of the 2006 year calendar amount plus 25% of the 2007 calendar yeu amount: (iii) each succeeding ftscal year: 75% or the first calendar year within that fiscal year's amount pl1111 25% of the aecond calendllt year within that flllCal year's amount. (el No later th1111 April !, 2007; the commlaaloner of health shall certify the 2006-2007 fiscal year soolal aervieea district expendlturs cap amounts for each .Oclal services district calculat- ed pW'lluant to subpaniaraph ugh June 30, 2006, the commhlsloner la authorized to allot agalnat each dlatrlct an amount baaed on the oommlauloner'a beat eaUmate o!the ftnal bsae year expenditure calculation requlred by paragraph (bl ofthia section. Upon eo111pletlon· of such calculatlon, the commlouloner shall, no later tliat1 n..,.mber 81, 2006; reconcile BUch estlmated allotmenta with the llacal ye>r social aorvlces dlatrlct expenditure cap IUllounta calculated puniuant to aubparagraphs (I) and (ii) of fl81'D111'11Ph (d) of thla 11eet1cm. UU> During eaeh etate fiacal year subJeet to the provisions of this IM>Ctlon,. the commloaioner shall maintain an accounting, for eacil social servlcea dlatrlct. or the .net •mounts that would have been expended by, or on behalf of, such diatrlct l1ad the aoclal aerv!cea district medical uS11mtance share• provisions In effect on January !, 2006 been app,lied to such district. As soon !IS practicable after the conclusion ot each such fiscal year, but in no event later than •ix mon\ha after the conclusion or each such l!scal year, the commissioner shall reconcile such net amounto with such fiscal year's social services district expenditure cap amount. Such reconciliation shall be based on actual expenditures made by or on. behalf of social services districts, and revenues received by ooclal services district.a, during such fiscal year and shall be .made without ~eganl t.o expendlturea made, and revenue• received, outoide such tlscal year · that are related to aervices p1'0Vlded during, or prior to, such J!scal year. The oommlaaioner shall psy to each aoolal services dlatrict. the amount, If any, by which such dlattict's expenditure cap amount exceeds auch net amount. · . § 2. (al Commencing January 1, 2008, at the optlon of a social services district, such . option to be exercised aa deacribed In PlltBgTBpb (b) ot this section, and notwithlitanding any other provtalon ot law, the deplirtinent of health shall provide relmburse.ment for. th~ full amount of expenditures made by such district for medical iw!stance for needy peroons, and the administration thereof, in accordance with the provlalona of this aeetlon. 316 MdltiOM 111 llldlCatd by 1111dtl11M; dtlalll!ns by~ wlatl by lfllditlg A2 2006 REG (b) Notv eontrary:. (I) ABO< adoption 01 of .this pat paragraph •UbdivWor. (b) of secti local leglal: be ettectiv• later than commlsaio1 latar than social ..... services di secUon. (Ii) Fon Be It eni § one. 1 reimburse! chapter (fl § 2. Tl § 3. Tl calendar y not. taken the baaey shall Ollam hllltorlcal . m!nea that medical 11 act.lono. § 4. _N dMsion of . dllltrlct OX! or a tax" of the tax percentagt f 6. N health ill pu,,.,..,•.• care aervi1 such proJ!I tlon by U. social sen and the dl t 6. L eioner ofl of the ats diligence supervlalo 2. sue local dlstr utilization arid ab\lll1! (a)· lf.J district bl i I: ! • ! > ' NEW YORK . ; pB(Jl'ISIONS · ~• empluved ~v ,, In er,blia • M1&1· e eost Reiflca Iv r•t llln~ For Iii at risk or , are technoiogi· ltfo re · ne11 or poo · (J on:a.in~ !!t!!!! .or m "' eallllblu Of bein5 i'.buE not llffiite 44 of pal't J of . :m pl'ogram. J.. o of th!s.·acctlon liatance rates of .~twothousand· -ec1ui~ent and .. 1nereaae rate• en to ensu1'E': the nent under th!• •• rel11fud to the lonat aettlJ!ir .. pumosea of iliis irty:aJlt Jliiilar@d to such chlldren 1 the elementa ot tl'Bfug .servicP. fs ces to mediciilla e ec:onomies ·an te -satisfaction of !81'11icea to sueli 1ted pursuant tAl ind retention or ces to medicallv 1Ul'p<)se. Fund• lded by a local ate duty nurs~s. ,. ... or health, a the plli'Jto&e or ·of private duty is &UthorizOd to reqllired by this 1osea other than le duty nursing on to any other ded by adding a :·: I i A3 Ch. 57, P~ A, § 60 AddllloJI• tit lltdlceled by .,.dorihw; dlloUaM _, rllllteo!d; maes by •hading ' ;; ... . ... ._,, Ch. 57, Pt, A, § 60 LAWS or NEW YORK CHAPTER CONTAINS VETOED PR0'/18/0NS 14 ot part A and. lleea tempora au l't 1 aubd1vtaio1H of se< •hall not arr .. t the Ptnvided ful'ther ti Add!Unn A5 Ch. 56, pt. D, § 59 LAWS OF.NEW y § 62. NotwltbJtandlllg any lncol!ldetent prl)Yislon of law, nde or rogulatlon, for : ot implementing the provla!ona of the public healtli law and the aaclal Mlrricet law, rel to t!tl.,. XIX and XXl' of the !edend POclal security act In the public health law and the services law ahall be deemed to lnclude and ahlo to mean any aucceeeor titles thereto ~~ the federal aoc!al aeaurit,y act. § 68, Notwlthltandlng any lnconalstent provlalon of la'}', rule or regulatlon, the etr. net111 of the provision• of sections 280'1 and 3814 of the public health law, seetlon l8 of c ,, 2 or the lawa of 1988, and 18 NYCRR ll06.14(hl. at they relate to Ume frame• ror n~ approval or certltlcatlon of ratoa of pa,yment, are hereby sW1pended and without fo"" .. olfect for purpoeea of !mplementlnr the prl)Yislona of thla. act. · '"' I 64. SeverabUity clause. It any clallle, sentenee, paragraph, l!ubdlvls!on, section or of tblll aet shall be aiijudged by any court of competent jurlsdlctiun to be Invalid, ludgment shall not affect, lmpa]r or Invalidate the remainder ~ but ahalJ be coollned In,. ta operation to the clause, sentence, pangraph, subdivision, section or part thereof dlreatlf~: Involved In the controversy In which ouch judgment shall have been rendered. . It la h declared to be the Intent of tho leglnlatu1'8 that thla act would have been enacted even it 8U : Invalid provialont had not been included herein. ; 432 Addi!IOM Ill iWMod fir llOdtrtln; "41tiloat llf alRl!eGlll; V- llf l~dlog , ... (c)-. mad• eita!>l 'CJiaptl ·:· (d}'. Belvlii ·r..v • ..i (•) byth ·""! • g the department of health to eetabllah OO'ta!n payments to general hoaplbda, shall be su!Ueet to the expiration of such chapt.er and shall be deemed expired therewith; · (d) the amendmenta to J1BlilBl'llPh (a-1) of subdivlaion 4 of section 360-a of the aoc!al aervkeil law made by section lhlrty-nlne of this act shall not atreet the expiration and re\'Ol'U!on of such paragraph and shall be deemed to expire therewith; . (el provided, further, ·that the amendments to aeetlon $17-j of the pubUc health law made by eecUone forty-three, forty-eight'•• torty-elght-b and lifty·nlne of this act ahall not afteet the oxplratlon of such 88ction and shall be deemed to explr& therewith; (t) provided,.further, that the amendments to oectlon 2807-t of the public health law made by eecUon forty.four .of thfa act ahaU not affect the expiration of sucb section and shall be · deemed to expire therewith; · ~- i) · (gl provided, torther, that the amelidmente to sect!on «os-t of the public health law, made · •.i;; by sectlona forty-a, ftAy·slx·a and lilty·aix·b of thla act shall not affect the repeal of such , 'i, sectlon and ahall be deemed to repeal therewith; · ,. Jaw or J!\Y~ '(b) provided, further, that the emendmenbl to eectlon 364-J of the aoctal services law made ces dlstrllM~ by aectlona forty and t!Jty.ftve of thfa act shall not afl'ect the repeal of auch section and aball iendltunlll ......._ " , be deemed repealed therewith; · m proVid8d Is ' ' ' (I) provided, further, that •ectlon fttty.ftve ot this act shall toke e!fect January l, 2018; iree:!f ndi'ed 8lli · implement thfa act Prior to Its e!fact!ve date; . (In) provided, further, that notwithstanding any lnconalatent provision of the state adminis· .. hlraU\te procedure act or any other provlalon of law, rule or regulation, the commissioner of ·• ealth and the superintendent of rmsnclal services and any appropriate council la authorized at!on, the etrectll'tl' to adopt or amend 01· promul&ate on an emergency baolll any regulation he or she or such ~n 18 of ebJp!A!I· :~'. \.'\")IUldl detennines necessary to hnplement any pravlBl011 of this act on It.a eft'ectlve date; and l'nunes for noQot. . ·: ·:".: '( In! provided, further, that the promiuna of this act shall become eft'ective notwlthstendlng d without fotce :~ . ,_:-.'.'·.)lie failure of the commlll8ioner of health or the superintendent of financial aervlces or any .; ;·::. C\lllhdl to adopt or .amend or promulgat.e regulstlona implementlng tllle act. · ~~~b~~ :;z~i:~ lnt.eni;; ~~ eted, It is h ... nai:ted even Jf ~ · 1. S..Uon 1 of part C of chapter 68 of the laws Of 2005, authorizing relmbunemente tor tures made by or on behalf of social servieea districta for medical 8l!Olstenee for needy Addlllolll 111 lndlclllld bi lllldrlflne; dllle!len1 II)' ~: moea 11y 11!1dliig 433 A6 " ..... " ' ·,. - ~'·· . :1 '~~i:.;. '. , ~. --~:; ' 1_.? -~.'- . '( .. =:~\,.:?:;.~~ ,, . ·~ > ~i>. wYORK !!:!. or her w 645.of. .ts,' nurses, roYided' on illness and lptlon Bild 1otherapy; l arid l'OU· lontia but id!ilg eye. th, alcohol with the lures arid br use bi. :-C of the r supplJee ming both Unga new i .,. : 2010 REGULAR S1!;$SION Ch. 109, Pt. 8, • 27 inado by llOcial aerv!eea dlstrieta for medical aaalst.ance, aa amended by seotlon 62 of part C Of chapter Ml Of the lawa of 2007, ls amended to read aa folloWSI ((J Subject to paragraph (g) of this aectlon, the atata llscal year ooolal aetVices district expenditure cap 11111ount ealaulated for each social aervlco!I district pul"Suant to paragraph (d) of this ... tfon shall be allotted to each dilltrict during that llscal year and pald to. the department In eqllal weekly amounts in a manner to be determined by the aon'!ml8810ller and commwileated to such dlstrlctt BDd, au~ to the ~ons of aubdMsion tour of eeotion •Ix Of thia part. aball represent each dlilirict a iiiaillnum reaponaillillty tor medical Lltlistance expenditures governed by tlds teetion. f 24. ·Subdivision lb) of llOOtion l of part C of chapter 68 otthe laws of 2006, amending the public health law ll!ld othel' laws relating to authorizing relmb-nte for expenditures made by socl1il services districts for medical ass!atanco, ls amended to read aa follows: (b) Commencing wiUI the period April I, 2005 though March 81, 2006, a social lllln'lces d!Jtrict'e yearly net ahare of medical aaaiatance expenditure& shall be calculated In relation to a ?elmbuniement base year which, tor Plll'P"l"B of this aectlon, ls defined aa Januar,Y l, 2005 lh:ouKb December St, 2005. The ftllal bue year expenditure calculation for ellCb social. amlces district shall be made by the comm!asloner or health, and approved by the_dltector of the dMsion of the budge~ .no later than June SO, 2006. Such calculatlons shall be bued oil aetual expenditures mado by or on ·behalf of tlllclal aerri""9 districts, and revenues reeelved by llOClal services districl:&, durlnir the base year and ohall be made without reprd to expendl· lUreJ made, Bild revenues reOO!ved, outside the baae year that are related tO services provlded llUdng, or prior to, the base year. Such base yev calculat10ll8 shall be based on the oOcllll 1 made on services dfatlict medical 8118fataru:e &hares pl'Ov!sions In ettect on January 1; 2006, Su~.!!! otbeiWlllii tbe!Ln>vislons of subdivfalon foyr of section six of this J!srl.$!>• ataWJocal aocl81 liiMiieS t l1l' i118tna rellilve nt.a e of tll8 non-re&@ share of mefgh4 fifty-eight-a and .My'eightrb shall take eJrect January l, 2001 ~"'!:'~ ._. '· "'1d ehU °"'""" orul be .i-ed ••P•l>led Jan•arr 11 aoll. · · . . ·:.· .-}:. I ZI. Paragraph Cd) of subdlvlslon 8 ot section l!M-8 of the l!llowe: . ~ : ,, .il' (d)(I) Beginning April lira~ two thoueand two. am! to the extent that federal llnanciul ;a Wrl'*"!\ · ... 'Jl\?tltipstion la available at a one hundred ~nt federal Medical •••Mance percentage and 2!!!!I " . ::, r· subject to sections l!l8S Bild 1902(aXl()l(EX!v) of the ledel'lll soclal sellllrit)' aet; medical ii'lilssiITTwt · . · _r. . , llll!atance shall be available for lldl payment of medloue part B premiums for Individuals tnns~ · ~: _;1, ._. lref'en-ed to u qualllled lndlvidush! ll wbo are entitled to hospital Insurance benetlts under 1cretion 0? . .),: --~A of title XVIII of the federlll ooclal security act and whose Income excseds the Income 1se ta!!!:£ ·:,:;·:·, ~-:,, ~llshed by the state and·le at le&st ol\e hundred twenty percen~ but leaa than one ":1~ i :: '/¥,1' · '!J1o are n~~~u;J;~~~~::i:i .:::r~":Jf.orth! ~::Pf!t~• s1t4 htVolved and 1 ilhali iiO · _.;iii \j" · (2) llesinnl"i Ap>il llNt, ~we U.e"'""'ti i\oo anti ta th• went M l•aoral llRllnolol C81CUlat@ .. :.·::~1:: ~.;·_-Pl'tiofpaU9A ill M1nUab1e at a BM )H1RU84 perouaC federal Mediell aeeietaaee penentap and "'"" ,...; :r!~ i;i~ · !';!t•• le seeli9118 111a3 ono lflOll(al!lO)(li:)(M et Ille t'