Anthony L. Jordan Health Corp. v. Axelrod
The Anthony L. Jordan Health Center, a not-for-profit corporation, challenged the New York State Department of Health's recalculation of its Medicaid reimbursement rates for the 1983-1984 and 1984-1985 periods. Following an appeal, the parties entered into a stipulation agreement. However, the Department, while recalculating the rates in accordance with the stipulation, unilaterally changed the group composition, resulting in a significant negative adjustment and recoupment from Jordan. The court determined that this regrouping constituted an 'error of judgment,' not a permissible correction for mathematical error or an audit finding. Consequently, the court found that the Department did not have the right to retroactively adjust the rates based on this discretionary change. The petition was granted.