This is an appeal from an order of the Office of Hearings and Appeals (OHA) of the Department of Public Welfare (DPW) which sustained the recommendation of the Attorney Examiner and denied Lemington Home for the Aged's (Lemington Home) appeal.
Prior to January 5, 1993, Lemington Home owned and operated a 34 bed nursing home in Pittsburgh. On January 5,
Due to an audit by DPW, a depreciation expense of $87,291 was disallowed because Appellant failed to create a separate funded depreciation account as required. This requirement was subsequently dropped and DPW found it necessary to determine how much of the depreciation expense Lemington Home was entitled to receive. In determining these costs, DPW applied 55 Pa.Code § 1181.233,
The issue we are requested to address is whether DPW correctly applied the 90% minimum bed occupancy provision of 55 Pa.Code § 1181.233(a)-(d) to compute Appellant's allowable depreciation costs.
Our scope of review of an administrative regulation is limited to a determination of whether there has been a clear abuse of discretion or a clearly arbitrary action. Savko v. Department of Public Welfare, 47 Pa.Commw. 168, 407 A.2d 152 (1979).
Lemington Home argues that the 180 bed facility should be regarded as a new facility because it is substantially larger than the old facility and thus possesses all of the attendant complexities of a newly opened facility. Lemington Home asserts that the requirement should thus be waived as it would for a new facility under 55 Pa.Code § 1181.233(f). Lemington Home concedes that the new home does not meet the definition of a "new facility", but argues that the Legislature never contemplated a situation such as theirs. DPW argues that its interpretation of its own regulation is controlling unless the interpretation is erroneous or inconsistent with the underlying statute. Department of Public Welfare v. Forbes Health System, 492 Pa. 77, 422 A.2d 480 (1980).
Upon examination of the Attorney Examiner's Adjudication, we find it accurate and persuasive. Lemington Home's interpretation of 55 Pa.Code § 1181.233 is inconsistent with the underlying statute and would render the last line of paragraph
Accordingly, we shall affirm.
AND NOW, to wit, this 14th day of April, 1994, the order of the Office of Hearings and Appeals of the Department of Public Welfare at Nos. 23-85-246, 24-85-222 and 40-85-036 and dated July 22, 1993 is affirmed.