Aurelia Osborn Fox Memorial Hospital v. Axelrod

OPINION OF THE COURT

Weiss, J.

Petitioner, a not-for-profit hospital corporation, annually files a Medicaid reimbursement rate schedule which is used by respondents to establish the rate allowed for reimbursement of patient care. Depreciation is one of the items *510of cost included in the reimbursement rate computation (10 NYCRR 86-1.23). This controversy arose when the Department of Health (hereafter department) disallowed certain inclusions in petitioner’s 1979 Medicaid funded depreciation schedule, to wit: an entry of “Due to/from Other Funds — $263,858”, and the addition of a line “Overfunding…