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NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by E-mail at the following address: reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________ Merrimack No. 2005-522 BEL AIR ASSOCIATES v. NEW HAMPSHIRE DEPARTMENT OF HEALTH AND HUMAN SERVICES Argued: March 17, 2006 Opinion Issued: September 28, 2006 Devine, Millimet & Branch, P.A., of Manchester (Thomas Quarles on the brief and orally), for the petitioner. Kelly A. Ayotte, attorney general (Suzan M. Lehmann, senior assistant attorney general, and Laura Lombardi, assistant attorney general, on the brief, and Ms. Lehmann orally), for the respondent. DUGGAN, J. The petitioner, Bel Air Associates, appeals two orders of the Superior Court (McGuire, J.), the first granting the motion to dismiss filed by the respondent, the New Hampshire Department of Health and Human Services (DHHS), and the second denying the petitioner leave to further amend its complaint after the dismissal. We affirm in part and reverse in part. The petitioner's amended complaint alleges the following facts. The petitioner is a New Hampshire partnership that operates a State-licensed nursing home in Goffstown. In the mid-1990s, the State ordered the petitioner to close one of its two buildings. In order to replace the capacity lost due to

this closure, the petitioner sought and received approval from the State for the construction of an addition. DHHS is responsible for administering the Medicaid program in New Hampshire. The Medicaid program, which provides joint federal and state funding of medical care for individuals who cannot afford to pay their own medical costs, began in 1965 with the enactment of Title XIX of the Social Security Act. See Pub. L. No. 89-97,

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New Hampshire Law