Palm Manor Nursing Home, Inc. v. Rate Setting Commission

270 N.E.2d 823, 359 Mass. 652, 1971 Mass. LEXIS 870
CourtMassachusetts Supreme Judicial Court
DecidedJune 14, 1971
StatusPublished
Cited by13 cases

This text of 270 N.E.2d 823 (Palm Manor Nursing Home, Inc. v. Rate Setting Commission) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Palm Manor Nursing Home, Inc. v. Rate Setting Commission, 270 N.E.2d 823, 359 Mass. 652, 1971 Mass. LEXIS 870 (Mass. 1971).

Opinion

Braucher, J.

The Rate Setting Commission (the commission) allowed the plaintiff nursing home a per diem rate of $10.46 for 1967 to be paid by various agencies of the Commonwealth. The plaintiff sought judicial review of the commission’s decision under G. L. c. 30A, § 14. The judge made rulings and an order for decree, and the final decree affirmed the decision of the commission. The plaintiff appeals under G. L. c. 30A, § 15.

Early in 1967, before opening, the plaintiff applied to the Board of Rate Setting for Convalescent or Nursing Homes and Rest Homes (the board) for the establishment of a per diem rate for publicly aided patients, and a temporary rate of $8.82 was set in March, 1967. The plaintiff promptly appealed and requested a hearing pursuant to G. L. c. 7, § 30L. On April 17, 1967, the board notified the plaintiff that it and other nursing homes listed were entitled to a rate of $9.43. The plaintiff opened late in April and was licensed by the Department of Public Health to accept a total of three public and private patients. The licensed number of patients was increased five times, reaching a total of seventy-nine patients late in November, 1967. The capacity of the home is 115 or 120 patients.

New rules and regulations effective July 1, 1967, provided a $10 rate for new homes. Nevertheless, the board on December 29, 1967, notified the plaintiff that it would be allowed a rate of $10.46, retroactive to the date of opening. The plaintiff again requested a hearing, and after a hearing in May, 1968, a hearing officer of the board submitted his finding in August, 1968, sustaining the $10.46 rate for 1967. Effective September 12, 1968, the board was abolished and the commission established. St. 1968, c. 492. On Novem[654]*654ber 18, 1968, the commission approved the $10.46 rate over the written objections of the plaintiff, and the bill' for judicial review followed.

1. The governing statute was G. L. c. 7, § 30L, as amended through St. 1963, c. 809, § 1: "... [The] board shall, after hearing, determine at least as often as annually the per diem rate or rates to be paid to . . . nursing homes . . . by the various departments, boards or commissions of the commonw'ealth . . . and may establish fair and reasonable classification or classifications of such rate or rates. Such rates shall be adequate and reasonable. The determination of the per diem rate or rates as provided in this section shall be deemed a 'regulation' as defined in paragraph (5) of section one of chapter thirty A. ... If a person conducting a . . . nursing home . . . believes that the rate established under this section is inadequate or unreasonable as to such home, he may, within sixty days after the date such rate was established, file an appeal with the board for a determination of a rate for such . . . nursing home . .

By St. 1968, c. 492, § 3, these provisions and others were struck out and six new sections, G. L. c. 7, §§ 30K-30P, were inserted. Pending proceedings before the board were to be turned over to the newly created commission. St. 1968, c. 492, § 25. Subsequent proceedings before the commission and judicial review in the Superior Court were conducted under the law as it stood before the 1968 revision, and we therefore do not consider the effect of the new G. L. c. 7, § 300, providing for an "exclusive method of review of all rates.” See Massachusetts Gen. Hosp. v. Rate Setting Commn. ante, 157, 164-166.

As the judge ruled, the provisions of § 30L quoted above describe two types of administrative action. First, the board is to determine annual per diem rates, using fair and reasonable classifications and setting adequate and reasonable rates. The determination is to be treated as a “regulation” under G. L. c. 30A, § 1 (5), and may thus be reviewed under G. L. c. 30A, § 7, through a petition for declaratory relief under G. L. c. 231A. Compare Massachusetts Gen. [655]*655Hosp. v. Cambridge, 347 Mass. 519, 522; Springfield Hosp. v. Commissioner of Pub. Welfare, 350 Mass. 704, 710; Massachusetts Gen. Hosp. v. Commissioner of Admn. 353 Mass. 369, 374. Second, an individual nursing home may appeal for a determination of an individual rate for that home, claiming that the rate established generally is inadequate or unreasonable “as to such home.” Such a determination is an adjudication rather than a regulation, and is reviewable under G. L. c. 30A, § 14.

2. We agree with the judge that the adjudicatory proceeding here under review was not held for the purpose of determining the validity of the board’s regulations or the adequacy or reasonableness of the rates applicable to nursing homes generally. We therefore do not consider the plaintiff’s general assault on the board’s classification system, based largely on a study by the United States General Accounting Office. The plaintiff also asserts that various regulations of the board were invalid because not properly filed with the Secretary of State under G. L. c. 30, § 37, and c. 30A, § 5, or because there was no notice or hearing under G. L. c. 30A, § 2 or § 3. The fact that a regulation was not effective because not properly promulgated would prevent its use as a basis for the rate determination here under review. Massachusetts Gen. Hosp. v. Cambridge, 347 Mass. 519, 522-523. Massachusetts Gen. Hosp. v. Commissioner of Admn. 353 Mass. 369, 375. But the “Rules and Regulations Governing the Determination of Individual Rates of Payments to Convalescent and Nursing Homes Under General Laws, Chapter 7, Section 3QL” (the 1967 Rules), effective as of July 1, 1967, approved by the board August 8, 1967, and filed with the Secretary of State on October 11, 1967, were the basis for that determination. They are before us in a form constituting “prima facie evidence of compliance with all regulation making requirements imposed by law.” G. L. c. 30A, § 5, inserted by St. 1954, c. 681, § 1.

3. “The regulation stands on the same footing as would a: statute .... All rational presumptions are made in favor [656]*656of the validity of every legislative enactment.” Druzik v. Board of Health of Haverhill, 324 Mass. 129, 138-139. The plaintiff has the burden of showing that the rate in question is inadequate or unreasonable “as to such home.” The applicable provision of the 1967 Rules, paragraph 11, states, “New homes constructed during 1966-1967-1968 shall be given a temporary rate of $10.00 per day until such time as sufficient data, statistics, records, and books can be made available to the Rate Setting Board and a 90% occupancy of the total beds for a reasonable amount of time.” The commission’s reason for allowing the $10.46 rate was that “because a rate of $10.46 per day was set according to the resurvey under the old classification system, the Rate Setting Commission will not reduce the rate which had been previously set.”

4. The plaintiff sought to carry its burden in three ways. First, through evidence of its costs in 1967 it showed that a rate of approximately $22 would be required to avoid a loss. Second, it showed that its charge to private patients was about $14 (it claims an average charge of $15.24 to private patients in 1967). Third, it attacks the hearing officer’s computations which produced a rate of $8.12 on a basis of 90% occupancy. Neither the commission nor the judge accepted any of these three attempts at proof, and we think they were properly rejected.

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Bluebook (online)
270 N.E.2d 823, 359 Mass. 652, 1971 Mass. LEXIS 870, Counsel Stack Legal Research, https://law.counselstack.com/opinion/palm-manor-nursing-home-inc-v-rate-setting-commission-mass-1971.