Appeal from the Order of the Department of Public Welfare, in case of Appeal Of: Carbon County Home for the Aged, File No. 23-82-98; Cedarbrook, File No. 23-82-86; Cedarbrook, Fountain Hill Annex, File No. 23-82-87; Westmoreland Manor, File No. 23-82-135; Beaver Valley Geriatric Center, File No. 23-83-51; Fair Acres Geriatric Center, File No. 23-83-23(a); Pocopson Home, File No. 23-83-239(a), and Philadelphia Nursing Home, File Nos. 23-83-249(a) and 23-83-250(a).
Gerald Gornish, with him, Jeffrey B. Schwartz and Steven E. Bernstein, Of Counsel: Wolf, Block, Schorr and Solis-Cohen, for petitioners.
Jason W. Manne, Assistant Counsel, with him, Bruce G. Baron, Assistant Counsel, and John A. Kane, Chief Counsel, for respondent.
President Judge Crumlish, Jr., Judge Colins, and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge Colins.
[ 112 Pa. Commw. Page 584]
Eight county-operated nursing homes (collectively, petitioners)*fn1 appeal an order of the Department of Public Welfare (Department) reversing a decision of the Office of Hearings and Appeals which, in turn, adopted in its entirety a Hearing Examiner's decision that newly-revised reimbursements be paid to petitioners retroactive to July 1, 1980 rather than to October 1, 1980 as determined by the Department. The sole question for
[ 112 Pa. Commw. Page 585]
our review is whether the Department properly delayed the retroactive payment by three months.
Petitioners, participants in the Pennsylvania Medical Assistance (MA) Program, are skilled nursing and intermediate care facilities (SNFs and ICFs, respectively). Prior to the reimbursement revision here at issue, petitioners were reimbursed by the Department on the basis of actual allowable costs subject to a ceiling on net operating costs calculated on the basis of the Statewide weighted average cost of providing long-term care in county nursing homes. However, Section 201 of the General Appropriation Act of 1980 modified such computation by providing that:
For public nursing homes. . . . Effective January 1, 1981, in accordance with Federal regulations, the [Department] shall replace the current Statewide ceilings for county nursing homes. New ceilings shall be calculated for each standard metropolitan statistical area and nonstandard metropolitan statistical area group within the State and shall be paid retroactively to July 1, 1980. The new ceilings shall provide that no public nursing home shall have a ceiling below its rate that was in effect prior to implementation of the new ceilings. This and any other change in the method of county home reimbursement must be approved in advance by the Federal Department of Health and Human Services. (Emphasis added.)
On July 26, 1980, the Department advised all interested parties*fn2 that current statewide reimbursement ceilings for county-operated SNFs and ICFs were to be replaced, in accordance with the Act, with ceilings based on standard and nonstandard metropolitan statistical
[ 112 Pa. Commw. Page 586]
areas. The Department thereafter submitted to the Department of Health and Human Services (HHS) a proposed amendment to the State MA plan incorporating the newly-revised reimbursement methodology and was advised by HHS that federal regulations might require sixty days public notice of the proposed revision if the anticipated payment varied from previous ...