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FRANKFORD HOSPITAL v. COMMONWEALTH PENNSYLVANIA (10/12/83)

decided: October 12, 1983.

FRANKFORD HOSPITAL, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF PUBLIC WELFARE, RESPONDENT



Appeal from the Order of the Department of Public Welfare in case of Appeal of Frankford Hospital, dated February 23, 1982.

COUNSEL

Joanne E. Kleiner, with her John P. Quinn, Steinberg, Greenstein, Gorelick & Price, for petitioner.

Jeffrey Gonick, Counsel, with him John A. Kane, Deputy Chief Counsel, for respondent.

Judges Rogers, Williams, Jr. and Craig, sitting as a panel of three. Opinion by Judge Craig.

Author: Craig

[ 77 Pa. Commw. Page 449]

Frankford Hospital (Frankford) appeals from an order and adjudication of February 23, 1982, by the Department of Public Welfare's Office of Hearings and Appeals (OHA), which granted DPW's motion to dismiss Frankford's agency appeal from DPW's refusal to reimburse the hospital for non-acute care. OHA granted DPW's motion on the basis of our decision in Temple University v. Department of Public Welfare, 47 Pa. Commonwealth Ct. 22, 407 A.2d 92 (1979), aff'd 490 Pa. 207, 415 A.2d 413, appeal dismissed, 449 U.S. 1005 (1980) (Temple III). In Temple III, on motion for summary judgment, we dismissed a class action suit brought by Temple University and

[ 77 Pa. Commw. Page 450]

    the Hospital Association of Pennsylvania (Association) challenging the legality of section 9421.74(q) of the Medical Assistance Manual, which provides that DPW may reimburse hospitals for skilled nursing or intermediate care only when provided in "a certified and approved hospital based skilled nursing or intermediate care unit."*fn1 Frankford Hospital was and is a member of the Association.

Frankford admits that the seventeen patients, for whose care it seeks reimbursement, no longer require acute care and that the facility does not maintain a unit certified to provide necessary skilled nursing or intermediate care. In its petition for review here, the hospital now contends that our decision in Temple III does not have res judicata effect or otherwise control the present claim for Medicaid reimbursement for two reasons.

First, although a member of the Association, Frankford alleges that it was not truly a party to the class action, claiming that it was not given notice or an opportunity to participate in, or opt out of, the Association's suit. Secondly, focusing upon that part of Temple III where we discussed the "unwillingness" of hospitals to maintain lesser care facilities, 47 Pa.

[ 77 Pa. Commw. Page 451]

Commonwealth Ct. at 26, 407 A.2d at 94, Frankford submits (1) that it would now demonstrate not unwillingness but financial inability to meet section 9421.74(q)'s requirements, and (2) in response to our observation that "there is no real coercion or duress here, for the plaintiffs need not participate in the Medical Assistance Program at all," 47 Pa. Commonwealth Ct. at 26, 407 A.2d at 95, that the medical assistance provider ...


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