New York State Court of Claims

New York State Court of Claims


Claim for Medicaid benefits that allegedly should have been paid to claimant's Medicaid provider dismissed for lack of subject matter jurisdiction. Primary relief sought is judicial review of whether defendant's actions or omissions were lawful, and any Medicaid funds owed would be incidental relief to a finding that defendant acted improperly. Matter belongs in Supreme Court on an Article 78 petition.

Case information

UID: 2017-038-573
Footnote (claimant name) :
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 129582
Motion number(s): M-90472
Cross-motion number(s):
By: Allan E. Silver, Esq.
Defendant's attorney: ERIC T. SCHNEIDERMAN, Attorney General
of the State of New York
By: Paul F. Cagino, Assistant Attorney General
Third-party defendant's attorney:
Signature date: October 5, 2017
City: Saratoga Springs
Official citation:
Appellate results:
See also (multicaptioned case)


Claimant, a Medicaid rehabilitation and nursing home provider, filed this claim seeking Medicaid reimbursement for nursing care services provided to a Medicaid recipient. Defendant moves in lieu of answer to dismiss the claim on the grounds that this Court lacks jurisdiction and that the claim fails to state a cause of action against defendant. Claimant opposes the motion.

The claim alleges as follows:

"The Office of Temporary Disability Assistance ('OTDA') directed the New York City Human Resources Administration ('HRA') to continue [a Medicaid recipient's], a resident in Claimant's facilities, institutional medical assistance coverage unchanged until a Decision rendered at the Fair Hearing. However, despite multiple requests directed to both HRA and OTDA, to date, HRA has failed to implement aid to continue. Based on the foregoing, OTDA has failed in its obligation to assure that [the Medicaid recipient] receives continued medical assistance and services as required by 18 N.Y.C.R.R. 358-1.1. On August 4, 2016, Claimant's attorneys advised an OTDA representative, of HRA's failure to confer aide [sic] to continue, however to date, aid to continue has not been conferred and [claimant] is unable to receive reimbursement for the services it provides to [the Medicaid recipient]. As a Medicaid provider [claimant] has the right to redress violations of the statutory and regulatory scheme that entitles it to payment for services properly reimbursable under the medical assistance program. See, 42 U.S.C. Sec. 1396a(a); 42 C.F.R. Secs. 447.1-447.371; New York Social Services Law Sec. 367-a."

(Claim number 129582, 2 [emphasis added]). The claim alleges that an "error of law" has caused it "to be deprived of payment for properly reimbursable nursing care services provided to [the Medicaid beneficiary] in the amount of $273,170.00 through February 28, 2017, which sum continues to grow" (id., 5).

Defendant argues that the Court lacks subject matter jurisdiction over the claim because claimant is seeking to review the determination of OTDA regarding the Medicaid recipient's Medicaid benefits. Further, defendant argues that the Court lacks personal jurisdiction as the claim fails to state a cause of action against defendant, the State of New York, because the claim alleges that HRA, a agency of the City of New York, failed to confer "Aid to Continue" and alleges no tortious conduct by defendant (see Cagino Affirmation, 14). Claimant argues in opposition that it has "both a statutory and contractual right to commence a plenary action to be reimbursed for services rendered to a Medicaid eligible individual" (Silver Affirmation, 2; see also Barbieri Affirmation, 8). Claimant further contends that the Court has subject matter jurisdiction over the claim because claimant is seeking monetary damages for the "grossly negligent administration of the Fair Hearing/Aid Continuing System it is responsible to administer for [Medicaid] applicants and recipients . . . on behalf of the New York State Department of Health pursuant to [OTDA regulation]" (Silver Affirmation, 3), that OTDA had a ministerial duty to enforce claimant's "Aid Continuing," and that claimant is a member of the class for whose benefit the OTDA regulations were enacted (id., 17). Claimant argues that the termination of the Medicaid beneficiary's eligibility without notice and a hearing violated the beneficiary's federal due process rights. Claimant argues that the Court has personal jurisdiction over the claim because it has jurisdiction over OTDA.

To determine whether a claim falls within the limited jurisdiction of the Court of Claims, the Court must make two inquiries:

"Initially, the threshold question in determining the subject matter jurisdiction of the Court of Claims is whether the essential nature of the claim is to recover money, or whether the monetary relief is incidental to the primary claim. The second inquiry, regardless of how a claimant categorizes a claim, is whether the claim would require review of an administrative agency's determination - which the Court of Claims has no subject matter jurisdiction to entertain. Notably, an administrative agency's determination may be reviewed only in the context of a CPLR article 78 proceeding commenced in Supreme Court, and not in an action brought in the Court of Claims."

(Buonanotte v New York State Off. of Alcoholism & Substance Abuse Servs., 60 AD3d 1142, 1143-1144 [3d Dept 2009] [internal quotation marks and citations omitted], lv denied 12 NY3d 712 [2009]). As pertinent here, Supreme Court has exclusive subject matter jurisdiction to review whether a state official "failed to perform a duty enjoined upon it by law," and whether the actions of state officials were "in violation of lawful procedure, [were] affected by an error of law or w[ere] arbitrary and capricious or an abuse of discretion" (CPLR 7803 [1], [3]; see CPLR 7804 [b]), while the subject matter jurisdiction of the Court of Claims "is limited to actions seeking money damages against the State in appropriation, contract or tort cases" (Ozanam Hall of Queens Nursing Home v State of New York, 241 AD2d 670, 671 [3d Dept 1997], citing Court of Claims Act 9 [2]; Psaty v Duryea, 306 NY 413, 417 [1954]). The essential nature of the claim is not necessarily defined by a party's characterization of the claim (see Buonanotte, supra at 1143; Madura v State of New York, 12 AD3d 759, 761 [3d Dept 2004], lv denied 4 NY3d 704 [2005]), but rests upon identification of the issues actually presented in the claim (see Sidoti v State of New York, 115 AD2d 202, 203-204 [3d Dept 1985]).

Under OTDA regulations, where there are issues about Medicaid eligibility, beneficiaries in certain circumstances have the right to have their Medicaid continued and unchanged until a Fair Hearing decision is issued. Under this process, where the OTDA Office of Administrative Hearings (OAH) determines that a beneficiary is entitled to aid continuing, it advises the beneficiary and the local social services agency of its determination (18 NYCRR 358-3.6), and upon receipt of OAH's determination, the local social services agency, subject to certain exceptions, must take immediate action to assure that the benefits continue unchanged until the fair hearing decision (18 NYCRR 358-4.2 [a] [1]). The claim asserts that OTDA made an aid continuing determination that HRA did not implement, and that OTDA's failure to enforce its continuing aid determination violated its obligation to ensure that the Medicaid recipient received continuing Medicaid benefits. Certainly claimant's ultimate goal is to recover the money it believes it is entitled to for the Medicaid recipients' care, and the claim alleges a breach of OTDA's duty to ensure the continuing Medicaid benefits of the affected Medicaid beneficiary. However, a finding of liability on this matter necessarily requires review of whether OTDA acted properly in not enforcing its aid continuing determination, and thus, the primary relief sought by claimant is whether OTDA's actions violated lawful procedures or resulted from an error in law, or whether its omissions were a failure to perform a duty enjoined upon it by law (see CPLR 7803 [i] [3]. No monetary recovery could be had without review of OTDA's actions or omissions, and if OTDA is found to have acted improperly, payment of any owed Medicaid funds would be relief incidental to that finding (see CPLR 7806). Accordingly, this matter is properly addressed in a proceeding in Supreme Court on a petition pursuant to article 78 of the CPLR, and Court of Claims is without subject matter jurisdiction.

The Court has considered claimant's remaining arguments in opposition and finds them to be without merit. To the extent that claimant argues that it has a right to bring any action seeking redress of its contractual right to be reimbursed, and the claim does not allege a breach of contract, but rather seeks review of OTDA's failure to enforce the aid continuing determination that was directed to HRA. Claimant's argument that OTDA had a ministerial duty to enforce claimant's right to aid continuing, and that it should have done so, reinforces the Court's conclusions that claimant seeks relief that is available in a CPLR article 78 proceeding in the nature of mandamus to compel under CPLR 7803 (1), and that monetary damages are incidental to the claim. Further, to the extent that claimant argues that a special relationship was formed through the breach of a statutory duty enacted for the benefit of a particular class of persons (see Silver Affirmation, 17; Pelaez v Seide, 2 NY3d 186, 199-200 [2004]), the claim does not allege, nor does claimant argue, that the governing statutes provide an express or implied private right of action (see id., at 200), and the claim is not capable of being construed as such. Finally, to the extent that claimant argues in opposition to the motion that the claim asserts violations of the federal constitution, the Court of Claims lacks jurisdiction over claims of violations of federal constitutional rights (see Carver v State of New York, 79 AD3d 1393, 1395 [3d Dept 2010], lv denied 17 NY3d 707 [2011]), and in any event, the claim fails to allege any constitutional tort.

Thus, this Court lacks subject matter jurisdiction over the claim, and defendant's motion to dismiss the claim will be granted. Given the absence of subject matter jurisdiction over the claim, defendant's remaining arguments in support of its motion for dismissal of the claim need not be addressed.

Accordingly, it is

ORDERED, that defendant's motion number M-90472 is GRANTED, and claim number 129582 is DISMISSED.

October 5, 2017

Saratoga Springs , New York


Judge of the Court of Claims

Papers considered:

(1) Claim number 129582, filed April 17, 2017;

(2) Notice of Motion to Dismiss in Lieu of Answer, dated May 24, 2017;

(3) Affirmation of Paul F. Cagino, AAG, in Support of Motion to Dismiss, dated May 24, 2017,

with Exhibits A-B;

(4) Affirmation of Allan E. Silver, Esq., in Opposition to Motion to Dismiss, dated June 28,

2017, with Exhibits 1-2.