In the Matter of County of Monroe, Appellant,v.Nirav R. Shah,, et al., Respondents.BriefN.Y.September 7, 2016CA 14-01888 To be argued by: VICTOR PALADINO 10 minutes requested Supreme Court, Monroe County- Index No. 14-3162 ~upreme twlthatamllng the failure of the eomml .. ionel' or health or the supaintellden~ of in1uronce er any council to adopt or amend or promulgate regulatlon• implementing this Mt; 9. The amendmenut to •ubdivlsion 4 of ,..tion 26!1 ol the public health law made by llOOtion eeventy of thiB act •hall not affect the expiration or such subd!vioione and •hall be d80llled to expire therewith; . lQ. 'l'ho 1111endments to etJ1JUon 2807-j of the publlc health law 11\ade by sectlons forty.<)ne, fotty-three, lllty-tlme, and illxty-two of this act shall not affect the ""-plrat!on of such a..Uon and shall be deemed to ·explre therewith; . 11. The amendments to sect.Ion 280'!-s of the public health law made by eecUoM thirty· one, thlrty·two, thirty-th,..,., thlrty·lour, thlrty·ii•e, thirty-nine, s!l!ty·tlire• snd ninety-nine or thl• set. shall no\ affect the elcplratlon of ouch section and shall be deemed to expire therewith; 12. The amendments to &action 2807-t or the p~bllc heolth law lllad• by sect!••• forty•five and one hundred of !.bis act shall not affect. the elcplration of suoll eecdon and shall be doomed to expln! therewith; •JS, '!'he amendments to pa,..graph (I-!) of subdivllllon 1 of aecUon 2807-v of the public health law made by ...Uon three ot thla act shall rn>I all'eot the repeal of auch paragraph ond shall be deemed to be repealed therewith; and . . · 14. The amendments to sect.Ion 4403-f of the public health law made by sectiono eighty· three and elghty·fow- or this sot shall not affect the repeal of such section Md shall be deemed to be repealed therewith, Efl-2006 (,\prU l, 2006 through March 31, 2000): 75% of the bue year amount plus 26% of the 2006 calendar year amoun~ (il) r!Scal year 2006-2007 (April l, 2006 through Morch 31, 2007): 75% of the 2006 year calendar smount plus 25% of \he 2007 : soda! services district e•pen:agnlph (g) of this se1pons!blllty for medklal ... i.tanoe expenditures guvemed ~Y thla aectlon. Commencing January !, 2008, all snch amount. shall be deposited into the general fund of tho state treBBury to the credit of the at.ate purposes account therein. (g) (!) No allotment pureuant to p.,..grapb (() of thla aection shall be appl!ed against .• soolal services di&trict during the period April !, 2000 through December 31, 2005 •. Social servic .. district medical ....U.tonce •hare• uhall be determine~ tor auch· period pursuant to shares provfslona In effecl'0Ph '. subdivialot I .. (h) or ... u ! local legtal 1 • be ell'ecdv• law. tlum '] commfs8l01 ' later than ! : social ...., ;i seniices di i ... uon. (ll) Fon Be it em t one, 1 relmburset chapter (ft § 2. '!'I § s. Tl calendar y . not taken the b ... y shall exam historical • mJnea ttiat modical .. actJone. § 4, N division o! . district ""I oratu:n of tho ta< percentall! § 6. N health la purposen • Clll'O sel'vi< such progl Uon by th• social'"" and ttie rlt f 6. L olonerofl of the •ts diligence aupe.v!aio 2. sue local dletr uWJzallon and abua• . (a) lf, I dlotner of health, a the purpose of of private duty 16 •uthoi'Fed to required by this ,, .... oilier than le duty nursing on to any otlie1· \. ' 1· ( Ch. 57, Pi.. A, § 60 ' ,, . •,' ,1 .. . ;. ADDENDUM A3 Ch. 51, Pt. A, § 60 LAWS or NEW \'ORK Cllitl'T8ll CON'l'/JNS Vln'08D PROVISIONS 14 or part A and. BellUon& 13 and 14 of part ll of 'but&ble to •hem Mj-11 tor ~xpendllurei made hi ca~r .)'9lll' ll006 •hall be Included In· the baH ynr calculnllon requited by $\lb of uubdlv!illuo 12 or ...UO.. 2808 or the p<>blle health law, 1111 ndllod hy """Uon ll9 or pot~ C. ot oh~plar /i8 ol the lawa of 2006, l• amunti.d to rel1d .. foll Div•: (°".!) Nolwlthlta!llUng •ny lnconoll!r.tnl provMon ol low or i•olion, th• con111U..loner ahnll provld~, In addlt!on lo )lRymenta eslllbllshed~ pu111111U11 to UU. 01tlcle prior to opplle ...w ..... ,~. law for ····•!.&«< operoted p1bli• ltiidentlol ht11lth ••ro r..IUU... lncltul!na pub& nialdenllal health •111'<1 1 .. utt1~ loe county of N"""ao. the county or Westcn..ter and' the county or Erl•, but excludlni pnb!lo re~itlentl~l heolth care !acll!tle.< opern"'d by a Uiwn or city within u councy, In llll llill""Snle runoum ol gp to one hundred My million dollan in oddltlonal payments l'ur stale flill?ol year beatnnlng April fll'sl, ;wo thousand ""° >Ill!. The nmoilll~ .nncllleil to .aoh olfglbla p11hllc reofdentlal health care ractuiq tor thl>! ponod Nh.U be coo1p11tod In """"""'""" with the pl'<>Vl!llono of pmlll'Oph (I) or thi. aubdll'lllllln, provided, however, that pollent d>Q'• •hall be ullll:od tor . •uch oomputatlon reftectlng ae I § 3ij7-a. Eme1 ollaw to th• contr bula to providers to e.weed four mi !!l!to P"""'anl to (a) For each •• willt.ance paymo. the department c PrOcy!!sed rtlmb>x quarter ol the !\I!!! (b) F'or each s -Obtained pursuant . auregate amount oalcuiatlon $hall ' paymen1•·w •h•I {o) -•11od· ho· distriat lh\RntUi ex1 ._ fer i11 \ha ept1m,tg: 2. The amount !!!Yf! of omtfuli i ;>Gre~~nt iifu&l' jCCljl !!. It all neooalll . federnl financial pa sectlon ahuU be ,. thoWIBlld six and t ..i toiili in pa:~gr: dollm" or three mil :l., 4. ·Notwiihsta thla tTtte, -or of any per centum oC I.ho I 61>-b. Section other law. relating "'•Uows: § 97. Thia act' subdivision: 4 of sec •hall not affect the Provided tuitber ti Mdltlo# A4 Ch. 56, pt. D, § 59 ADDENDUM A5 Of NEW YORK so revoke at leaat ublic health law i. I for grant prnlecll :rant award!t. ting to authorlldng liatrlcla for med!~ d by adding a nw v subdivision 6-a to prompt !ashlo~ oll In connection~ atlon, for pUl'JXI"' icea low, ref~f.: 1 law and the - atles thereto under " ,. 21112 REGULAR SESSION Ch. 56, pt. F, § l I 65. Thfs set shall take effect lmmedlately, and shall be deemed to have been In full for repeal therewith; . '(b) provided, nlrther, thot the amendments to sectlon 364-J of the eoclal aerv!cee law mode by ...UODB forty and My-t!ve of thfa act shall not all'ect the repeal of such ...Uon and •hall ha doemed repealed tlierBwlth; · (!) provided, further, that sectlon ftf\y·ftve at this act shall tl\ke el'C..t January l, 2018; · (j) J>l'O'lded, further, that any rules or regulatiomi necenl>lll')' to Implement the provlslona of this act may he promulgated ond any procedurta, forma, or lnatriictions n.....,.,., for such lmJ')ementsUon may be adopted and Issued on or 111\er the date th!a act shall ·have become a .law; . (kJ provided, further, that. this act shall"°' be oonatrued to alw, change, .Uec~ Impair or · .detoot any rights, obllgaUons, duties or Interests acorued, incun'ed or conferred prior to the eA'ec!ive dsw or this act; . (I) provided, further, that the commi.ilioner of health and the superlnU!ndent of financial . :ed atlon, tho (!ffecliVO: , · ·\c adopt or amend or promulgate on an emergonoy basla any regulailon he or •he or auch !C\lon 18 of chaJ!!· ::, .':.·~ell detenn!neo necessu,y to Implement any prov!s!on of this act on Its elfecti•e date; and l'nl!llDB for no.... : .: · ... : 'Y (nJ pl'\lYlded, further, that tho provlaluns o!thluct shall beoome efl'e<.:·.'::!lie fa!lure of the commlB!loner or health or the superintendent ot financial Services or any .: ;·;;, """'cll C. adopt or.amend or promulgaU! roguloliOJ18 lmpleinentlng thJa act. Jon, section or~ · .. ~~;~· .'.:'.~ · lo be invalld, .T' , 1..:•v:: (~., PART 1'l 1ball be confinoull · ,; :>;;.-:: · lnten!Jonelly Omitted art thereof ~ :.<, PART F ered, It is h~: I . nacted even ii iili!: .,, , !· Section I of part C of chapter 68 of the laws of 2006, authorizln8' reimbursements for tures made by or on behalf or soclal services diatricta for med!Clll ...mt.once for needy 1hodlnt Md!Uons are 1•111•0\Jll by unnrilne; doJo!l,.. by -; vetm by 1hldliig 433 ADDENDUM " •''I. ' . .,;.: .. A6 W YORK ~or her i(et 645 of .w.' nurses, rov!deif on Ulnr~• and ipUon and iotherapr. I and TOU· iontla hui idlilg eye- th, alcohol •1th the Jure> an~ ~or use by, :.C ot the r &uppllee mlng both " .,, ' 0010 REGULAR SESSION Ch. 109, Pt. B, ~ 27 ·ADDENDUM f..i' .-;~--;~:. r ·, ·' ": , . • '•t; . '· ). '' I ,, . / A7 SUPREME COURT OF THE STATE OF NEW YORK . COUNTY OF MONROE In the Matter of the Application of COUNTY OF MONROE Petitioner-Plaintiff, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules and a Declaratory Judgment Pursuant to Section 300 J of the Civil Practice Law and Rules -against· NIRA V R. SHAH, M.D., M.P.H., as Commissioner of the New York State Department of Health and THE NEW YORK STATEDEPARTMENT OF HEALTH, Respondents-Defendants. Index No. 14-31662 MEMORANDUM OF LAW IN SUPPORT OF RESPONDENTS' MOTION FOR SUMMARY JUDGMENT ON THE DE;CLARA TORY JUDGMENT CLAIMS AND RESPONDENTS' ANSWER TO THE ARTICLE 78 CLAIMS J. Richard Benitez Assistant Attorney General, of Counsel ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Respondents ADDENDUM AS the Cap Statute, as previously enacted, in light of adverse court decisions which "conflict with the original intent of the local cap statute". LoCicero Aff. Ex. F. In light of the clear clarifying nature of the Section 61 it may be applied retroactively, and no vested rights analysis must be undertaken. Upon concluding that Section 61 is in actuality a clarifying amendment, the Court must apply a rational basis test in analyzing the legislation for constitutionality. Nebbia v. New York, 291 U.S. 502, 525 (1934) .. Under this standard petitioner bears the heavy burden of negating "every conceivable basis which might support [the law] whether or not the basis has a foundation in the record." Affronti v. Crosson, 95 N.Y.2d 713, 719 (2001). As demonstrated, supra, the Legislature had a sound and rational basis for enacting Section 61. In sum, the basis was to clarity ambiguity in the Cap Statute which has resulted in adverse decisions misinterpreting the · Cap as permitting reimbursement of tens of millions of dollars in overburden claims that were meant to be walled off by the Cap. LoCicero Aff. Ex; F, LoCicero Aff. ilil 52-58. Section 61 provides the State with critical economic certainty in its administration of the Medicaid program, promoting the State's important interest in closing its books on undisclosed old liabilities, some dating as far back as thirty (30) years. Id. ~ 63, Without question the Legislature had a rational basis for passing Section 61. Section 61 is not an imperrnissibly retroactive law but rather a clarifying amendment to the Medicaid Cap statute, which may be applied ·retroactively. In light of its clear clarificatory nature. of the law it is' wholly constitutional as rationally related to many important State interests. fn light thereof, respondents are entitled to summary dismissal of petitioner's declaratory judgment claims seeking to invalidate. Section 61 as unconstitutional. C. Even if Viewed as a Retroactive Infringement of Vested Rights, Section 61 is 29 ADDENDUM A9 Constitutional Und.er the Balancing Test Applied by the Court of Appeals Alternatively, even if this Court disregards the clarifying nature of Section 61 and considers it to be a retroactive 'amendment, the legislation must be deemed constitutional under · well trodden Court of Appeals precedent. As an initial consideration, while petitioner wields the term 'retroactive' as if it were a dirty word, and claims inarguable entitlement under the vested rights doctrine, such is simply not the current state of the law. To the absolute contrary, the Court of Appeals has recognized "that the vested rights doctrine is conclusory, and indeed a fiction that hides many unmentioned considerations" Hodes v. Axelrod, 70 NY2d 364, 370-371 ( 1987), citing Matter of Chrysler Props. v Morris, 23 NY2d 515 ( 1969). While the law does continue to recognize a "persisting aversion to retroactive legislation· generally", the Court of Appeals maintains that the modem view of retroactivity reflects "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. In sum, far from the inflexible application advocated by petitfoner, the Court of Appeals maintains that this "is an area where broad conclusions are to be studiously avoided for it is impossible to predict in advance how in each concrete case the various factors will line up", Id. To this end, where legislation is determined to have a retroactive effect, the court must balance a number of factors in deciding "whether the rights affected are subject to alteration by the Legislature". Alliance Insurers, 77 NY2d 573, 678 (1991 ); see also Hodes, supra at 369-370. Specifically, the factors to be balanced by the court include "fairness to the parties, reliance on pre-existing law, the extent of retroactivity and the nature· of public interest to be served by the law". Id.; see also Hodes supra at 369-370. Analysis of these factors to Section 61 tips 30 ADDENDUM AlO decidedly in favor ofa finding of constitutionality. i. "Fairness to the Parties" The first element of the balancing test announced under Hodes and Alliance lnSurers is "fairness to the parties". Id. As set forth in detail throughout the Locicero Affidavit, the county social service districts enjoy incredible advantages and protections under the Medicaid Cap statute that they did not enjoy prior to the Cap under the. cost sharing methodology. LoCiciero Aff. ~~ 7, 8, 33-44. The list of these benefits is lengthy, and includes, inter alia: (I) The reconciliation process which gives the county social service district the benefit of paying the lesser amount of what they owe under the Cap calculation or what they would have owed under the old calculation - if the county would have owed more under the old system the State holds the county harmless for the overage; (2) The fact that overburden expenditures were already reduced from each county's 2005 base year, which results in a reduction to the county's Medicaid , Cap amount (its local share) for each fiscal year going forward; in fact, Monroe County's 2005 base year expenditures were reduced by $86.6 million on account of overburden claims, 'Id.; (3) Protection to the counties from overpayment in the event that additional Federal monies become ·available to the State (LoCicero ~ 42); ( 4) Fiscal certainty from year to year of knowing the most they would have to pay in Medicaid expenditures, rather than tlie uncertainty of the old methodology (LoCicero Aff. ~~ 38-40), and; (5) Indemnification by the State in the event the ·Federal government were to disallow federal financial participation for Medicaid -- the State, not the counties would absorb the.increase (Id.). Indicative of all of these advantages is the fact that petitioner alone has saved more than $86.6 million and an additional 87.8 million due to the 31 ADDENDUM All advent of the Cap between State fiscal years from 2005-2006 through 2011-2012. ld. i! 43-44. Section 61 is undeniably fair to the parties, as it re-levels the playing field by applying the original intent of the Cap Statute. Namely, it prohibits the counties from double dipping into Medicaid ti.Inds, and relieves the State taxpayer from paying the couniies twice for overburden claims, i.e. once as a credit for the 2005 base year and a second time on the reimbursements in question. LoCicero Aff. 11 43-44 & 68-71. In actuality it is petitioner's reading of the Cap Statute and rejection of Section 61 that is patently unfair to the State and its taxpayers. In petitioner's world the counties enjoy all of the benefits of the Cap set forth above, while also being free to submit unknown amounts of antiquated overburden claims. Petitioner's speculation does not belie the fact that it had ample opportunity at the time to ascertain whether it was owed more reimbursement and to Claim such reimbursement prior to April I, 2012. ii. "Reliance on Pre-Existing Law" Analysis of this aspect of the balancing test is straight forward. This prong looks at the parties' reliance on the law as it existed prior to the amendatory, retroactive codification. Hodes, supra at 371. As in Hodes, any claim by petitioner that it relied upon the pre·existing law to its detriment must be discounted by the fact that its reliance was based upon a misinterpretation of the law, under which it eajoyed a windfall. Id. As set forth in detail both supra and in the LoCicero· Affidavit, the Cap Statute's intent was to wall off post-Cap reimbursement for pre-Cap overburden claims. LoCicero Aff. Ex. F. The fact that this was not accomplished due to either ambiguity of the statute itself or misinterpretation of the appropriate statutory language by the reviewing couf\s has resulted in petitioner's receipt of a windfall -· enjoying more than $86 million in benefits from the Cap, plus an additional $87 million federal funds and forgiveness of the petitioner county's obligation to repay an approximately $9,500,000 million to the State. 32 ADDENDUM Al2 LoCicero All 11 43-44 & 71. Such receipt of a windfall based upon the unintended interpretation of the law does not move the balancing test in petitioner's favor. See Hodes supra at 371 ("Any reliance by petitioners on the judgment thus would have been the product of a legislatively unintended windfall which was, immediately upon identification. eliminated"). iii. "Extent of Retroactivity" This element of the Hodes balancing test is also straight forward. The retroactivity of Section 61 is undercut by the facts that: (!) Petitioner has been on notice of the respondents' interpretation of the Cap Statute as prohibiting overburden reimbursements since approximately 2009; (2) Petitioner could have and should have submitted its claims for reimbursement long ago using the reports and data that DOH made .available to petitioner and other districts regarding overburden reimbursement (LoCicero Aff. 1~ 3, 22-24, 45-57), (3) Any retroactive effect of Section 61 is meant to cut off petitioner's windfall, and; (4) Section 61 provided ample notice to the petitioner t.o submit. its pre-Cap overburden claims by April 2012 or forfeit reimbursement. See Section 61; LoCicero Aff. 'll 75. Consequently, before the effective date of Section 61 petitioner had years (up to April 1, 2012) to submit claims for reimbursement for the period prior to 2006 its inordinate delay has created potential fiscal nightmare for the State. k!. ~ 54. Thus, petitioner's assertion of the crippling affect of the. retroactivity of Section 61 is grossly over-stated. Petitioner has been on notice of the respondents' interpretation of the Cap Statute for years and had the means to seek reimbursement of its claims for potentially d~cades, but chose not to do so in a timely manner. All of these factors mitigate against a finding of extreme retroactivity and tip the balance further in respondents' favor. iv. "Public Interest to be Served by the Law" On balance the public interest to be served by Section 61 tips decidedly in favor of 33 ADDENDUM Al3 respondents and the State taxpayer. As set forth above the county social service districts enjoy a myriad of benefits under the Cap Statute. LoCicero Aff. ii~ 34-75. Petitioner's construction of the Cap Statute results in an enormous windfall for the counties to the detriment or the State's orderly administration of the Medicaid program. Id. Should Section 61 be stricken as unconstitutionally retroactive, or under any other of petitioner's many claims, the resulting affect could be devastating to the State's administration of the Medicaid program, as a whole. LoCicero Aff. iiii 72-75. Additionally, the State has an undeniable interest in·closing its books on antiquated, and unknown liabilities. Under petitioner's reasoning county social service districts would be free submit their old reimbursement claims ad iiifinitum. Of particular concern is that the oldest claims among them might conceivably seek reimbursement for district.expenditures incurred as long ago as January l. 1984. Id. ii 46. Even the "newest" of these potential claims might seek reimbursement for expenditures incurred in 2005; already nine (9) years ago. IQ. Operating the Medicaid program with this large .and unknowable potential liability lurking in the shadows creates a difficult, almost untenable situation which inures to the detriment of all New Yorkers. The marked public interest rests with implementation of Section 6 I. This amendatory provision clarifies the Cap Statute, providing the State with the benefits of the Cap Statute already realized by the counties, like fiscal certainty and avoidance of inequity. v. Other Considerations to the Hodes Balancing Test While only the four ( 4) elements discussed above were expressly contemplated by the Court of Appeals in !lodes there are other considerations, at least worth note here. Initially, 34 ADDENDUM A14 petitioners' characterization of the various Appellate Divisions' precedent regarding the Cap Statute is silent with respect to perhaps the most salient aspect of those prior decisions. While petitioner uses the Third and Fourth Department decisions to decry the validity of Section 61, in reality those courts both actually contemplated the viability of Section 61, going so far as to issue a legislative roadmap for the implementation of the law, in dicta. See County of Niagara v. Daines, 91AD3d1288 (41h Dept. 2012). Jn reviewing and ultimately denying the legitimacy of the 2010 Amendment, the Fourth Department clearly contemplated the possibility that reimbursement of overburden claims could ultimately be stopped by legislation. To this end, the Fourth Department stated that: Thus, that duty [to reimburse social service districts for overburden expenditures] continues unless it was extinguished by the 2010 Amendment ... The plain language of the 20 IO Amendment does not address overburden expenditures or respondents' dut;y to pay them ... Consequently, inasmuch as the plain.language of the 2010 Amendment does not mention overburden expenditures or respondents preexisting duty to reimburse petitioner for such expenses incurred prior to 2006, that duty is not extinguished by the amendment ... There is nothing jn the legislative history indicating that the Legislature acted in response to . the prior judicial decisions concerning · the Medicaid Cap Statute". Id. (emphasis added) Following suit, the Third Department utilized similar language in its rejection of the 2010 Amendment, finding that the 2010 Amendment's "legislative history - make[s] no reference to · the state's obligation to reimburse counties for overburden expenditures ... or the court decisions declaring that this obligation was not altered or affected by the Medicaid Cap Statute". s;ounty of St. Lawrence v. Shah, 95 AD3d at 1551. These pieces of dicta are critically important here, as they expressly demonstrate .bot!\ Appellate Courts' belief that legislation extinguishing the State's perceived responsibility to 35 ADDENDUM Al5 reimburse overburden claims under the Cap Statute is possible, although not properly attained through the 2010 Amendment. In essence, these courts held that while the 2010 Amendment was not itself properly constructed, legislation that achieves its stated goal could be viable if crafted properly. Then the courts go on to detail some of the components that would be necessary to achieve proper statutory construction, i.e. a roadmap of sorts. This time, with respect to Section 61, the Legislature applied the teachings of the Appellate Courts, followed the roadmap, and codified Section 61. Specifically, Section 61 by its plain language addresses overburden expenditures and the State's obligation to pay them, as discussed by both the Third and Fourth Departments. See Section 61. The Section states, with pertinent part to this discussion emphasized: 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 I, 2006, including, but not limited to, expenditures for services provided to individuals who were eligible for medical assistance pursuant to section three hundred sixty-six of the social services law as a result of a mental disability, formerly referred to as human services overburden aid to counties. Id. · Similarly, tlie legislative history of Section 61 clearly indicates that the Legislature "acted in response to the prior judicial decisions concerning the Medicaid Cap Statute", as .noted by both appellate courts. fumm Niagara County 91 AD3d 1288 and St. Lawrence County 95 AD3d at 1551. Section 6 I ... is necessary to address 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. See LoCicero Aff. Ex F., Memorandum in Support, 2012- 13 New York State Executive Budget, Health and Mental Hygiene Artie le VII Legislation, at p. 18 (emphasis added). 36 ADDENDUM A16 Legislative history thus conditions the legislation's adherence to the guidance provided by the Appellate Divisions. In its memorandum of law petitioner relies heavily on the Court of Appeals decision in Alliance Insurers (77 NY 2d 573 (1991)) to purportedly establish the impermissible retroactivity of Section 61. Pet's MOL at 28·30. However, the facts in Alliance Insurers are readily distinguishable from those presented here. Jn Alliance the Court looked at various amendments of State Insurance Law which affected funds set aside in the statutorily created Property and Liability lnsurance Security Fund (t~e "Fund"). Id. at 573. In essence, the amendments took income from the Fund and diverted income producing assets away from the Fund. !Q. at 584. Prior to the amendments in question, the em:nings of the Fund were payable to plaintiff insurance companies. Id. There are three primary distinctions between Alliance Insurance and the instant matter which render the decision inapposite here. First, and foremost, in Alliance Insurance, the State was unable to articulate a justification for the amendments in question and as such could not show a public interest in its actions. ld. at 588-589. Here, however, respondents have set forth a comprehensive list of justifications and public policy concerns that support the clarifying steps of Section 61. See supra Point Il(C)(iv). Second, a major sticking point for the court in Alliance Insurance was the fact that the plaintiff insurance companies would be forced to make further contributions to the Fund upon its depletion due to the amendments. Id. at 589. Such is simply not the case here, where the petitioner's 2005 base year already reflects a $4 million reduction for overburden expenditures. LoCicero Aff. ~~ 33-34. 37 ADDENDUM A17 Finally. the legislation ut issue iri'Alliance Insurance disturbed a distinct and definable pot of money readily available within the Fund, so that plaintiffs claims to the money were easily identifiable as based on an income analysis and would result in no windfall to them. Id. at· 587-588, As set forth throughout this memorandum and the Affidavit of Robert Locicero, all of these factors differ here. See generally LoCicero Aff. Even if the Court holds Section 61 to be a retroactive enactment, application of the Hodes balancing test factors demonstrates that Section 61 is a constitutionally permissible retroactive enactment. As such, respondents are entitled to summary judgment on petitioner's declaratory judgment claims. D. Section 61 Does Not Violate Petitioner's Due Process Rights As an alternative to its retroactivity argument, petitioner also claims that Section 61 violates its due process rights to be heard. Pet's MOL at 32. Petitioner's argument on this score is somewhat ambiguous by its own terms. The due process challenge necessarily fails. Petitioner's Due Process claim fares no better than their State constitutional claim. As explained, supra, it was the Legislature that enacted an enabling statute based on compelling public policy for the stability and predictability to the State Medicaid program. The Court in RAM, supra at 282, stated in pertinent part, The due process argument is equally without merit. Plaintiffs ask this court to strike down the exercise of legislative discretion specifically vested in the . Legislature by the Constitution. The presumption in favor of constitutionality is strong, particularly where the challenge is addressed to remedial legislation dealing with the economy and social benefits and burdens, peculiarly legislative functions (Dandridge v Williams, 397 U.S. 471, 484-485). There is no violation of the State Constitution. Nor is there a violation of the due process clause of the Federal or State Constitution, · Here, the public's "notice" or awareness of the proposed changes was accomplished in the 38 ADDENDUM A18 politital process accompanied· by the bl!l's passage through the state legislature." Himes v. Sullivan, S06 F. Supp . .J l 3 (W.D.N.Y. 1992). As set forth above, Section 61 is, by its own terms and its clear legislative history, a clarifying amendment to the Cap Statute. See supra Point rI(B); see also Section 61; LoCicero Aff Ex. F. Pursuant to U.S. Supreme Court precedent, a retroactive statute that is ch\rifying in ·nature· satisfies constitutional due process concerns "simply by showing that the retroactive application of the legislation is itself justified by a rational legislative purpose". U.S. v. Carlton, 512 U.S. 26, 30-31 (1994), quoting Pension Benefit Guaranty Com. v. R.A: Gray and Co., 467 U.S. 717, 733 (1984). As such, clarifying statutes "are less likely to fall victim to due process challenges". As set forth in detail above {supra Poi_nt II(B) at pg. 28-29), Section 61 easily satisfies the rational basis test, as the Legislature had ample basis to clarify ambiguity in the Cap Statute, including, inter alia, the tens of millions of dollars in improper overburden reimbursements already paid and the. $180 million in claims potentially putstanding. Petitioner's due process claim fails for another reason, as well. Petitioner claims that it was not provided with a reasonable opportunity to submit its claims prior to enforcement of Section 61. Pet's MOL at 27-28. As the record evidence demonstrates, this contention is plainly false. Far from lacking notice and opportunity, petitioner has actually had since the,J990s, at least, a full opportunity to submit its antiquated overburden reimbursement claims. LoCicero Aff. ~~ 28-75. Petitioner was provided with ample information regarding overburden claims by DOH in the 1990s and 2000s. Id. It could have reviewed this data upon receipt, determined if it inadvertently omitted any recipients and submitted its claims prior to the April 1, 2012 effective date for Section 61. Id. Inexplicably, petitioner chose not to do so and now wishes to foist its own unreasonable 39 ADDENDUM A19