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CARBONDALE NURSING HOME v. COMMONWEALTH PENNSYLVANIA (09/30/88)

decided: September 30, 1988.

CARBONDALE NURSING HOME, INC., PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF PUBLIC WELFARE, RESPONDENT



Appeal from the Order of the Executive Deputy Secretary, Department of Public Welfare, in the matter of: The Audit Appeals of Carbondale Nursing Home, File Nos. 23-82-053 and 23-82-321.

COUNSEL

C. H. Welles, IV, Welles & McGrath, for petitioner.

William D. Lenahan, Assistant Counsel, for respondent.

Judges MacPhail and Smith, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Smith.

Author: Smith

[ 120 Pa. Commw. Page 187]

Petitioner, Carbondale Nursing Home, Inc. (Carbondale), appeals from the order of the Executive Deputy Secretary, Department of Public Welfare (DPW), which reversed the order of the Director of the Office of Hearings and Appeals allowing reimbursement to Carbondale for owner's compensation for the years 1979 and 1980. The Office of Hearings and Appeals determined that Carbondale failed to meet its burden of proof to substantiate owner's compensation claimed under DPW's medical assistance regulations. The sole issue presented for review is whether Carbondale is entitled to reimbursement for owner's compensation for the years 1979 and 1980. The order of the Department of Public Welfare is affirmed.

Carbondale requested, through the Medicaid program for the years 1979 and 1980, reimbursement of compensation received by its owners for services performed. The amount claimed for 1979 was $86,684, and for 1980, $76,208. DPW performed a desk review for the years in question and made various disallowances, including compensation paid to Carbondale's owners. Carbondale appealed and, after two hearings, the hearing

[ 120 Pa. Commw. Page 188]

    examiner recommended that the cost for owner's compensation be allowed in spite of DPW's position that Carbondale failed to present sufficient documentation to substantiate the compensation claimed under DPW regulations. DPW thereafter appealed to the Director of the Office of Hearings and Appeals who adopted the hearing officer's recommendation. DPW then petitioned for and was granted reconsideration whereupon the order of the Director was reversed by the Executive Deputy Secretary as to the issue of owner's compensation. Hence, this appeal by Carbondale.

This Court's scope of review is limited to determining whether the DPW adjudication is in accordance with the law as well as agency regulations or procedures, whether any constitutional rights were violated, and whether the findings of fact are supported by substantial evidence. Mansion Nursing and Convalescent Home, Inc. v. Department of Public Welfare, 96 Pa. Commonwealth Ct. 143, 506 A.2d 533 (1986), appeal denied, 514 Pa. 644, 523 A.2d 1133 (1987). Moreover, Carbondale bears the burden of proof in challenging an action or finding of DPW's auditors. Harston Hall Nursing and Convalescent Home, Inc. v. Department of Public Welfare, 99 Pa. Commonwealth Ct. 475, 513 A.2d 1097 (1986).

Carbondale initially challenges DPW's interpretation of its regulations as inherently inconsistent and contrary to the regulations in that compensation costs are allowed to the extent of the owner's documented time and involvement as opposed to total disallowance for lack of full documentation. Although an agency's interpretation of its regulations is entitled to substantial weight, deference is inappropriate where the interpretation is contrary to administrative and decisional precedent. Harston Hall Nursing and Convalescent Home, Inc.; Leader Nursing Centers, Inc. v. Department of Public Welfare,

[ 120 Pa. Commw. Page 18982]

Pa. Commonwealth Ct. 53, 475 A.2d 859 (1984). Section IV-C.1 of the Manual for Allowable Cost Reimbursement of Skilled Nursing and Intermediate Care Facilities (Manual), 8 ...


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