Christ the King Manor v. Commonwealth, Department of Public Welfare

In Christ the King Manor v. Commonwealth, Department of Public Welfare, 911 A.2d 624 (Pa. Cmwlth. 2006) the Court rejected the petitioners' Article II, Section 1 non-delegation claim that the legislature failed to make basic policy choices and to establish adequate standards to guide the Department of Public Welfare (DPW) in the exercise of its delegated administrative function. The Court sustained DPW's demurrer to the petitioners' amended petition for review challenging the validity of DPW's amendments to its cost adjustment regulations related to nursing facility payment rates under the state's medical assistance program. The petitioners sought a declaration that the regulations were invalid due to the alleged unconstitutional delegation of authority. After reviewing the state's Welfare Code and the federal Medicaid Act, the Court held that adequate legislative standards were provided for DPW to perform its delegated administrative function of setting medical assistance nursing facility payment rates even before as well as after Act 42 (Act of July 7, 2005, P.L. 177), which allowed DPW to amend its rate-setting methodology for facilities participating in the program. The Court noted a basic policy of the Medicaid Act: to ensure continued access to facilities for those who need medical assistance by providing reasonable and adequate payments to economically and efficiently operated facilities. It then held that Act 42 was consistent with the federal act and that DPW adopted the challenged amendments pursuant to Act 42. Accordingly, the standards in the Welfare Code and the federal act were adequate to guide and restrain DPW's discretion in establishing the payment methodology.