State Ex Rel. Pilot Development Northwest, Inc. v. State

701 P.2d 390, 102 N.M. 791
CourtNew Mexico Court of Appeals
DecidedMay 9, 1985
Docket7914, 7933
StatusPublished
Cited by6 cases

This text of 701 P.2d 390 (State Ex Rel. Pilot Development Northwest, Inc. v. State) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Pilot Development Northwest, Inc. v. State, 701 P.2d 390, 102 N.M. 791 (N.M. Ct. App. 1985).

Opinion

OPINION

WOOD, Judge.

Section 1122 of the Social Security Act, 42 U.S.C.S. Section 1320a-l (Law.Coop.1973 & Supp.1984), provides a limitation on federal reimbursement of capital expenditures for health care facilities. The purpose of the statute is to assure that funding for specified programs under the Social Security Act is “not used to support unnecessary capital expenditures made by or on behalf of health care facilities which are reimbursed” by the federal government. 42 U.S.C.S. § 1320a-l(a).

These consolidated appeals involve the competing applications of Americare Southwest, Inc. (Americare) and Pilot Development Northwest, Inc. (Pilot) for Section 1122 approval of proposed health care facilities. Pilot’s application was approved; Americare’s was denied. Americare appealed both the approval of Pilot’s application and the denial of its application. The appeal was to be heard by a hearing officer. Americare and the State Health Planning and Development Bureau (SHPDB) “settled” Americare’s appeals, and the appeals were dismissed.

Pilot sought, and the district court granted, a peremptory writ of mandamus which was made permanent. Cause No. 7914 is Americare’s appeal of the mandamus decision.

Americare then moved that the hearing officer vacate the orders dismissing its administrative appeals. The hearing officer refused to vacate the order dismissing Americare’s appeal of SHPDB’s approval of Pilot’s application. Americare moved for reconsideration of the refusal to vacate. The motion to reconsider was denied. Cause No. 7933 is Americare’s appeal from the denial of the motion to reconsider. The hearing officer has taken no action on that part of Americare’s motion which sought vacation of the order dismissing its appeal from the denial of Americare’s application.

We (a) state the background, (b) dispose of the appeal in No. 7933 on a jurisdictional ground, and (c) consider the propriety of the district court’s mandamus decision.

BACKGROUND

The limitation on federal reimbursement for capital expenditures for health care facilities is accomplished through a cooperative program of state and federal review. Under this program, a state agency meeting certain criteria makes recommendations to the Secretary of Health, Education and Welfare (Secretary) with respect to proposed capital expenditures. The state agency acts pursuant to an agreement between the state and federal governments. 42 U.S.C.S. § 1320a-l(b). 42 U.S.C.S. Section 1320a-l(b)(3) requires that a participating state provide for the administrative appeal of a party which received an adverse recommendation to its capital expenditure proposal. The Secretary can reduce payments to health care facilities which did not comply with the review program. 42 U.S. C.S. § 1320a-l(d).

New Mexico participates in the Section 1122 cooperative program on the basis of written agreements. The agreements provide that SHPDB is the agency charged with reviewing Section 1122 applications.

SHPDB received the applications of Americare and Pilot for Section 1122 approval of health care facilities in Health Planning District I, which is not defined but appears to cover San Juan and McKinley Counties. Americare applied for approval of 84 intermediate care nursing home beds (ICF) and 36 skilled nursing home beds (SNF) to be located in Farmington, San Juan County. Pilot applied for approval of 90 ICF to be located in Bloomfield, San Juan County.

SHPDB referred the applications to the Health Systems Agency (HSA). The application of Pilot was reviewed by a Subarea Council (SAC) for District I. The SAC approved Pilot’s application. The SAC did not review Americare’s application.

A court order required SHPDB to “batch” Americare’s application with Pilot’s application. The governing body of HSA reviewed the two applications. The governing body recommended approval of Pilot’s application and recommended disapproval of Americare’s application. After receiving the HSA recommendation, SHPDB considered the criteria for Section 1122 applications and, on the basis of a comparative review of the applications, accepted the HSA recommendations. SHPDB’s letter decision was June 6, 1983.

On June 30, 1983, Americare wrote to SHPDB demanding a “fair hearing of the SHPDB findings and recommendations” which denied Americare’s application and approved Pilot’s application. No one contends the letter was insufficient to invoke an appeal before a hearing officer. See 42 U.S.C.S. § 1320a-l(b)(3) and 42 C.F.R. § 100.106(c) (1984). A hearing officer was appointed.

In August 1983 (the administrative record does not consistently show filing dates), Pilot moved to dismiss Americare’s administrative appeal insofar as the appeal involved SHPDB’s approval of Pilot’s application. The motion alleged that Section 1122 did not afford Americare the right to appeal the decision on Pilot’s application. The hearing officer set the motion to dismiss for hearing on October 13, 1983.

The motion to dismiss was not heard on October 13, 1983. Instead, two orders of dismissal were entered.

The hearing officer entered an order dismissing Americare’s appeal of SHPDB’s denial of Americare’s application. The order recites that Americare and SHPDB “have settled and compromised their dispute * * Two exhibits were incorporated as a part of the order of dismissal. These exhibits reveal “discussions” between SHPDB and Americare, Americare’s “modifications in Americare’s original proposal,” a “new total capital expenditure” of $3,500,000 of which $3,000,000 would be allocated to 72 ICF and 24 SNF. Thus, settlement was reached by amending Americare’s original proposal by decreasing ICF beds by 12 and SNF beds by 12. “The above figures do not work a change in the daily cost and charges * * *.” Pilot was not a participant in the “discussions” between Americare and SHPDB and was not a party to the settlement.

The hearing officer entered a separate order dismissing Americare’s appeal of SHPDB’s approval of Pilot’s application. This order recites that the matter before the hearing officer was Pilot’s motion to dismiss Americare’s appeal of SHPDB’s approval of Pilot’s application, “[t]hat Americare no longer opposes Pilot’s motion” and consents to the dismissal of its appeal against Pilot. The order recites “that the disposition of Americare’s appeal as against Pilot in no way affects Pilot’s right to appear or speak as an interested person with respect to Americare’s application for 1122 approval.”

On November 1, 1983, Pilot moved for reconsideration of the hearing officer’s order of October 13,1983, approving the “settlement” between SHPDB and Americare. The motion alleges “that the settlement and its approval are beyond the authority of SHPDB and the hearing officer and that the procedural irregularities involved in the settlement require that it be disapproved.” Pilot’s memorandum supporting its motion identified three items allegedly disregarded by SHPDB in settling with Americare.

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Bluebook (online)
701 P.2d 390, 102 N.M. 791, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-pilot-development-northwest-inc-v-state-nmctapp-1985.