Opinion by President
In Department of Public Welfare v. Temple University,
[I] t would be an abuse of administrative discretion to deny reimbursement to hospitals which have diligently put forth every effort to locate, without success, an appropriate lesser care facility. ... In such circumstances there is still a medical necessity for the hospital services. To hold otherwise would be to read penalty provisions into the regulations where the culpability of the hospital for the particular misutilization involved cannot be established. Clearly this type of penalty would not further the purposes of the utilization review procedure. (Emphasis added.)
Temple I, supra,
After our decision in Temple 1, the Department, by a memorandum dated January 1, 1976, notified hospitals with which it had contracted to provide care under the Medical Assistance Program that Section 9421.45(b) of the Manual—“Noncompensible Hospital Care”—was being “rеvised” so as to expressly prohibit reimbursement in all cases of failure to transfer a patient to a medically suitable lesser care facility regardless of the availability of such a facility,
The Department has filed prеliminary objections raising the defense of failure to exhaust administrative remedies, a demurrer to counts II through IY of the complaints, (due process, equal protection and lack of statutory authority respectively), and challenging the class action nature of these proceedings.
Four days prior to argument on thеse preliminary objections, the Department submitted to this Court a “suggestion of mootness” in the nature of a motion to dismiss. The department avers that by a memorandum dated February 4, 1977, the January 1, 1976 revision to Section 9421.45(b) was “deleted” and that by a second memorandum dated March 4, 1977, (a mere four days prior to argument), the Utilization Review1, Divisiоn of the Department was directed to review and process all claims for reimbursement which a hospital submits or has submitted without regard
Plaintiffs respond by charging the Department with attempting to undermine this Court’s jurisdiction by the subterfuge of rescinding an illegally adopted and unlawful “regulation” which will be reenacted upon dismissal of these proceedings. We need not and do not pass upon the intent of the Department as to these actions but we do agree that such actions suggest we dispose of this case on the merits.
It is the settled law of this Commonwealth that if at any stage of the judicial process a case is rendered moot, it will be dismissed. Glen Alden Coal Co. v. Anthracite Miners of Pennsylvania,
Medical Assistance payments will not be made tо hospitals for any costs incurred on behalf of a patient who was admitted for, or whose length of stay in the hospital was prolonged by the following services or reasons.
2. Patient’s (sic) awaiting transfer from a hospital to another hospital, a skilled nursing or intermediate care facility or other living arrangements, when hospital-type care is no longer medically necessary, regardless of whether such facilities are available. . . . (Emphasis added.)
It is thus obvious not only that recurrence of this dispute is certain, but that the Department did in fact intend and intends to continue the policy that is the subject of these proceedings. We, therefore, dismiss the suggestion of mootness and shall treat the deleted revision of Section 9421.45(b) as if it were a duly enacted regulation still in effect.
The first preliminary objection to which we shall address ourselves is that which is based upon Plaintiffs’ failure to exhaust the available administrative remedy provided by the Administrative Agency Law, Act of June 4, 1945, P.L. 1388, as amended, 71 P.S. §1710.1 et seq.
Equity has jurisdiction notwithstanding a failure to pursue an available statutory remedy if that remedy is inadеquate. Collegeville Borough v. Philadel
The fact that the letter of January 1,1976 has been rescinded is not a bar to the granting of equitable relief as that power survives a voluntary cessation of the offensive conduct so long as the right to the remedy is proved and there is demonstrated a danger of recurrence of such conduct that is greater than a possibility. United States v. W. T. Grant, supra.
The law is, however, different as to declaratory judgments. Section 6 of the Uniform Declaratory Judgments Act, 12 P.S. §836 provides that relief under the Act is a matter of discretion with the Court but that “ [w]here ... a statute provides a special form of remedy for a specific type of case, that statutory
We turn next to the challenge to the class action nature of these proceedings. The principal requirements for the maintenance of a class action have been variously described as numerosity, a commоnality of interest between the representative Plaintiffs and the class members in order to insure adequate representation, and a demand for relief common to all class members. See Metropolitan Hospital v. Department of Public Welfare, supra; Oas v. Commonwealth,
The Department also challenges the standing of Plaintiffs on the ground that if a wrong has been or will be committed by a revised Section 9421.45(b), such wrong will be to the indigent patients of those hospitals denied reimbursement so that only such patients may bring suit. Pa. R.O.P. No. 2002 requires all actions to be brought in the name of the real party in interest. The draftsmen’s note to the rule makes it clear that this includes subrogees. We are of the view that the hospitals which have contracted with the Department to participate in the Medical Assistance Program to provide care to the indigent are subrogated to the claims of those individuals for medical care and that such right takes the form of reimbursement payments. See 42 U.S.C. §1396a et seq.
Defendants’ remaining preliminary objections are in the nature of demurrers to those counts of the complaint based upon due process, equal protection and lack of statutory authority.
Turning first to that count stated in due process, we must sustain the preliminary objection. Plaintiffs argue that the Commonwealth has a duty to provide
In Temple I, in upholding the constitutionality of a sixty day limitation on reimbursement payments, we held:
The fact is that Temple entered into a contract with the Commonwealth and expressly agreed to thе 60-day limitation condition. It is true that Temple may not have been able to bargain over this particular term but it surely assessed the benefits it might reap from entering into this contract, considered the potential liabilities . . . and concluded that on balance participation in the medical assistance program was to its advantage. There is nothing in the law which would prohibit the parties from agreeing upon such an exchange of consideration. (Citations omitted.)
We cannot, however, apply this rationale to the demurrer to the count stated in equal protection as in this instance we are concerned with rights of the patients to which Plaintiffs are subrogated—rights which Plaintiffs cannot be said to have waived by the contract.
What the Department seeks to do is to create a category of рatients which it will treat differently
The United States Supreme Court has established as the test of constitutionality in equal protection challenges to classifications such as this the “rational relationship” test which “calls for a serious and genuine judicial inquiry into correspondence between the classification аnd the legislative goals” sought to be achieved. Dorrough v. Estelle,
The demurrer to count IY of the complaint—challenging the Department’s statutory authority to promulgate this regulation—is directed solely to the standing of Plaintiffs. No effort is made to refute Plaintiffs ’ assertion that this regulation conflicts with the policy underlying the Public Welfare Code, Act of June 13, 1967, P.L. 31, as amended, 62 P.S. §401. Accordingly, this preliminary objection is overruled.
Now, July 1, 1977, it is hereby ordered that our Order of June 17, 1977 is modified and as modified is set forth in its entirety as follows:
1. The complaint in declaratory judgment docketed to No. 1172 C.D. 1976 is hereby dismissed.
2. The suggestion of mootness is hereby dismissed.
3. Count I of the complaint in equity docketed to No. 1171 C.D. 1976 is hereby dismissed as moot.
4. The preliminary objections to count II of the cоmplaint in equity are hereby sustained and said count is dismissed.
5. All other remaining •preliminary objections are overruled.
6. Defendants shall file and serve an answer to the remaining counts of the complaint in equity docketed to No. 1171 C.D. 1976 within thirty (30). days of the date of this modified Order.
Notes
Section 9421.521 of the Manual defined “Misutilization” of hospital facilities as а failure to transfer a patient to a lesser care facility when inpatient hospitalization was no longer required. Section 9421.532 authorized the Director of Utilization of the Bureau of Medical Assistance to deny reimbursement to a hospital guilty of such “misutilization."
The contract entered into between the Department аnd hospitals participating in the Medical Assistance Program requires hospitals to maintain “agreements” for transfers with alternate level care facilities as a precondition to receiving reimbursement for services rendered to indigent patients.
The Department identified this “revision” as minor and as a “mere statement of existing policy” notwithstanding Temple I.
We must, however, dismiss the first count of each complaint which alleged violations of the Commonwealth Documents Daw.
A—Temple I, supra.
B—Appeal of Frankford Hospital,
C—Abington Memorial Hospital v. Department of Public Welfare, No. 2145 C.D. 1976, concluded by settlement agreement dated January 27, 1977.
In Temple I, we held that the sixty day limitation on reimbursement payments did not conflict with federal regulations because those regulations specifically contemplated benefits limited in both duration and amount. 45 C.F.R. 249.10(a) (5) (i). The distinction here, however, centers on type and quality of care and on this point (he federal regulations are less clear. iSee, e.g., the proviso to 45 C.If.R. 249.10(b), which imposes limits upon the power of the Department to transfer patients which must also include a limita