Nesconset Ctr. for Nursing & Rehabilitation v. Commissioner of Health of the State of N.Y.
Opinion
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Bureau Thomas J.K. Smith, State Reporter
Nesconset Ctr. for Nursing & Rehabilitation v Commissioner of Health of the State of N.Y.
2026 NY Slip Op 04424
July 15, 2026
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This decision is uncorrected and subject to revision before publication in the Official Reports.
Nesconset Center for Nursing and Rehabilitation, etc., appellant,
v
Commissioner of Health of the State of New York, et al., respondents.
Supreme Court of the State of New York, Appellate Division, Second Judicial Department
Decided on July 15, 2026
2021-05097, 2021-08080, (Index No. 617154/19)
Betsy Barros, J.P.
Lara J. Genovesi
Lourdes M. Ventura
Elena Goldberg Velazquez, JJ.
Bond, Schoeneck & King, PLLC, Rochester, NY (John F. Darling and Raul A. Tabora of counsel), for appellant.
Letitia James, Attorney General, New York, NY (Judith N. Vale and Mark S. Grube of counsel), for respondents.
DECISION & ORDER
In an action, inter alia, for a judgment declaring that a final audit report issued by the Office of the Medicaid Inspector General is null and void, the plaintiff appeals from (1) an order of the Supreme Court, Suffolk County (Andrew A. Crecca, J.), dated May 26, 2021, and (2) an order of the same court dated September 28, 2021. The order dated May 26, 2021, insofar as appealed from, granted that branch of the defendants' motion which was pursuant to CPLR 3211(a) to dismiss the complaint for lack of standing. The order dated September 28, 2021, insofar as appealed from, denied that branch of the plaintiff's motion which was for leave to renew its opposition to that branch of the defendants' prior motion which was pursuant to CPLR 3211(a) to dismiss the complaint for lack of standing.
ORDERED that the orders are affirmed insofar as appealed from, with one bill of costs.
The plaintiff owned and operated a residential health care facility located in Nesconset (hereinafter the facility), which was licensed by the New York State Department of Health (hereinafter DOH) and enrolled as a Medicaid provider. The Office of the Medicaid Inspector General (hereinafter OMIG), an independent entity within DOH responsible for assessing providers' compliance with the applicable laws and rules of the Medicaid program, audited the facility's Medicaid reimbursements from February 2008 through December 2014. In 2018, the plaintiff filed Medicaid reimbursement rate appeals with DOH. In February 2019, before OMIG issued a final audit report, the plaintiff sold the facility to its current operator, Nesconset Operating, LLC (hereinafter Nesconset Operating). In April 2019, OMIG issued the final audit report concluding that there had been Medicaid overpayments made to the facility.
Thereafter, the plaintiff commenced this action, inter alia, for a judgment declaring that the final audit report was null and void because it violated Social Services Law § 368-c(3) and a 2016 universal settlement agreement entered into between New York State and various residential health care facilities, including the facility. The defendants moved, among other things, pursuant [*2]to CPLR 3211(a) to dismiss the complaint for lack of standing. In an order dated May 26, 2021, the Supreme Court, inter alia, granted that branch of the defendants' motion. Subsequently, the plaintiff moved, among other things, for leave to renew its opposition to that branch of the defendants' prior motion. In an order dated September 28, 2021, the court, inter alia, denied that branch of the plaintiff's motion. The plaintiff appeals from both orders.
"Standing is a threshold determination, resting in part on policy considerations, that a person should be allowed access to the courts to adjudicate the merits of a particular dispute that satisfies the other justiciability criteria" (Society of Plastics Indus. v County of Suffolk, 77 NY2d 761, 769; see Matter of Association for a Better Long Is., Inc. v New York State Dept. of Envtl. Conservation, 23 NY3d 1, 6). "To establish standing, a party must show that it has suffered an injury in fact, distinct from the general public, and that the injury falls within the zone of interests to be protected by the statute challenged" (Kinsella v Long Is. Power Auth., 236 AD3d 770, 772; see Matter of Green v Town of Ramapo, 227 AD3d 994, 994-995). "Where a defendant seeks dismissal pursuant to CPLR 3211(a)(3) based on lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff's lack of standing" (Kraus v Credit Control Servs., Inc., 237 AD3d 1083, 1084 [internal quotation marks omitted]; see Alsaidi v Alsaede, 227 AD3d 643, 645). "To defeat a defendant's motion to dismiss, the plaintiff has no burden of establishing its standing as a matter of law, but must merely raise a question of fact as to the issue" (Sizova v Union Mut. Fire Ins. Co., 217 AD3d 1007, 1008 [internal quotation marks omitted]; see Wilmington Trust, N.A. v Teo, 204 AD3d 735, 736-737).
Here, the defendants established, prima facie, that the plaintiff lacked standing to commence this action. The injury asserted by the plaintiff, as a former owner and operator of the facility, does not fall within the zone of interests sought to be protected because the governing statute and regulations contemplate the payment of Medicaid reimbursements to and the recovery of overpayments of Medicaid funds from "the current provider of medical services or the current operator of a nursing home facility" (Matter of Park Manor Rehabilitation & Health Care Ctr., LLC v Shah, 129 AD3d 1276, 1277-1278; see Social Services Law § 367-a[1][a]; Public Health Law § 2801[2], [3], [4][b]; 10 NYCRR 86-2.1[a]; 401.2[b]; 401.3[c]; 18 NYCRR 518.1[a]; 518.6). Thus, Nesconset Operating, as the current owner and operator of the facility, is responsible for any Medicaid overpayments made to the facility (see Matter of Park Manor Rehabilitation & Health Care Ctr., LLC v Shah, 129 AD3d at 1278; Matter of Astor Gardens Health Care Ctr. v Novello, 304 AD2d 961, 963). Indeed, in order to obtain its operating certificate, Nesconset Operating was obligated to submit an affidavit to DOH expressly stating that Nesconset Operating would remain liable and responsible for any Medicaid overpayments made to the facility "with respect to the period of time prior to . . . Nesconset Operating, LLC acquiring its interest."
In opposition to the defendants' prima facie showing, the plaintiff failed to raise a question of fact. Accordingly, the Supreme Court properly granted that branch of the defendants' motion which was pursuant to CPLR 3211(a) to dismiss the complaint for lack of standing.
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