Society of the New York Hospital v. Axelrod
This case concerns the Commissioner of Health of New York State's establishment of Medicaid, Blue Cross, workers' compensation, and no-fault insurance reimbursement rates for hospitals. In response to increased labor costs for hospitals affiliated with the League of Voluntary Hospitals, SHIF (Supplemental Hospital Index Factor) benefits were introduced to provide waivers based on actual increased labor costs. Eligibility for SHIF was determined by an "affordability" factor, utilizing a current ratio analysis where a ratio of current assets to liabilities less than 1:1 indicated eligibility. The Society of The New York Hospital and The New York Eye & Ear Infirmary were denied SHIF benefits due to their current ratios, while some other hospital groups with similar financial statuses received benefits. The Supreme Court initially found a rational basis for the rates but questioned the uniform application. The Appellate Division modified the decision, finding the application of eligibility tests to Hospital and Infirmary to be arbitrary, capricious, and discriminatory, thereby violating equal protection clauses. The court granted summary judgment to Hospital and Infirmary, declaring the denial of SHIF benefits arbitrary and capricious, and remanded for an assessment of due benefits.