State of Alaska, Department of Health & Social Services v. North Star Hospital

Summary

The court affirmed the superior court’s reversal of DHSS’s Medicaid rate determination for North Star Hospital. It held that the Office of Rate Review abused its discretion by relying on outdated audited cost data and refusing to set a temporary rate while awaiting a delayed audit that would have reflected North Star’s substantially higher reasonable costs. The court concluded that the prospective-rate system did not justify disregarding the more current audited report when the delay was not North Star’s fault.