2 N.Y.3d 583 (2004)
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A state agency’s audit of a nursing home’s Patient Review Instruments (PRIs) for Medicaid reimbursement purposes must be conducted in a timely manner, and unreasonable delays without adequate justification may render the audit untimely and invalid.
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Summary
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Blossom View Nursing Home challenged the New York State Department of Health’s (DOH) attempt to audit its patient review instruments (PRIs) from 1994-1996, arguing the audits were untimely. The DOH had delayed completing a prior audit for the facility from 1993 due to “administrative oversight”. The Court of Appeals held that while DOH regulations do not explicitly require PRI audits to be commenced within six years of filing, the audits must be conducted in a timely manner. The court found the DOH’s unexplained delay unreasonable, barring audits for 1995-1996 and preventing the use of the 1994 audit to determine Medicaid reimbursement rates.
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Facts
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Blossom View Nursing Home is a residential health care facility that receives Medicaid reimbursement. The amount of reimbursement is determined, in part, by the level of care its residents require, as assessed through Patient Review Instruments (PRIs) completed by nurses. The New York State Department of Health (DOH) has a three-stage audit process to ensure the accuracy of PRIs. DOH initiated an audit of Blossom’s July 1993 PRIs. Due to what DOH described as “administrative oversight,” the audit process for the July 1993 PRIs was not completed until 2002. In August 2002, DOH notified Blossom of its intent to audit the facility’s PRIs for January 1994. Blossom challenged DOH’s authority to audit PRIs from 1994-1996, arguing that the audits were untimely.
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Procedural History
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Blossom commenced a proceeding in Supreme Court, seeking to bar DOH from auditing its PRIs for 1994-1996. The Supreme Court granted Blossom’s petition. The Appellate Division reversed the Supreme Court’s decision and dismissed the petition. The Court of Appeals granted Blossom leave to appeal.
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Issue(s)
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Whether the DOH’s attempt to audit Blossom View Nursing Home’s PRIs for the years 1994 through 1996 was untimely, considering the DOH’s delay in completing a prior audit and the lack of a specific deadline for PRI audits in the relevant regulations.
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Holding
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Yes, because while DOH regulations do not impose a specific time limit for PRI audits, the audits must be conducted in a timely manner, and DOH’s unexplained delay in completing the prior audit made the subsequent audits untimely.
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Court’s Reasoning
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The Court of Appeals acknowledged that 10 NYCRR 86-2.30(e)(5) states that DOH may conduct “timely on-site observations and/or interviews of patients [residents] and review of their medical records,” but this rule does not define