GMR Living Centers, Inc. v. McBarnette

—Judgment unanimously affirmed without costs. Memorandum: Supreme Court properly determined that the receiver appointed to operate the Pinnacle Nursing Home was not bound by the determination in Pinnacle Nursing Home v Axelrod (928 F2d 1306), which nullified and voided the State’s 1987 Adjustment to the methodology for calculating Medicaid reimbursement rates for nursing homes and other residential care facilities. Supreme Court held that the State was obligated to apply the 1987 Adjustment in calculating the receiver’s reimbursement rate. The Receivership Agreement expressly provided that the State would calculate the receiver’s reimbursement rate differently from the methodology applicable to the facilities that were plaintiffs in the Pinnacle case, and that the receiver’s reimbursement rate would be determined by the actual costs of wages and fringe benefits during the first six months of operation under receivership (see, 10 NYCRR 86-2.10 [k]). The State has applied the 1987 Adjustment in the calculation of the reimbursement rate for GMR Living Centers, Inc., the new owner and operator of Pinnacle. Because similar rate-setting methodologies apply to GMR and the receiver, the State has failed to demonstrate a rational basis for changing its initial determination, which applied the 1987 Adjustment. The new determination eliminated that adjustment.

*868Petitioners are not entitled to prejudgment interest because they are not "contractors” within the meaning of State Finance Law § 179-e (2) and because Supreme Court did not find that petitioners’ civil rights were violated (see, 42 USC § 1983). Further, petitioners are not entitled to an attorney’s fee pursuant to 42 USC § 1988. (Appeals from Judgment of Supreme Court, Monroe County, Calvaruso, J. — Article 78.) Present — Denman, P. J., Balio, Fallon, Doerr and Davis, JJ.