Okoli v. New York State Department of Social Services

141 Misc. 2d 63, 532 N.Y.S.2d 701, 1988 N.Y. Misc. LEXIS 597
CourtNew York Supreme Court
DecidedSeptember 14, 1988
StatusPublished
Cited by2 cases

This text of 141 Misc. 2d 63 (Okoli v. New York State Department of Social Services) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Okoli v. New York State Department of Social Services, 141 Misc. 2d 63, 532 N.Y.S.2d 701, 1988 N.Y. Misc. LEXIS 597 (N.Y. Super. Ct. 1988).

Opinion

OPINION OF THE COURT

Harold J. Hughes, J.

Petitioner brings this proceeding to annul respondent’s decision to terminate his enrollment in the Medicaid program.

Petitioner is a physician with a practice located at 703 East 187th Street, Bronx, New York, with the bulk of his patients being members of minority groups and Medicaid recipients. Medicaid (42 USC § 1396 et seq.) provides medical assistance to the poor. It is financed by Federal and State funds, and administered by the States. In New York, health care providers such as physicians, pharmacies, and laboratories, enroll with the Department of Social Services as providers and receive reimbursement for services rendered to those eligible for Medicaid assistance. Petitioner has been enrolled in the Medicaid program as a provider since 1979.

[65]*65Effective January 5, 1987, the Department of Social Services promulgated 18 NYCRR part 504, new regulations governing the enrollment of providers in the Medicaid program. Prior "to the adoption of the new regulations, the Department regulations ensured that a provider’s participation in the program would not * * * be terminated without cause and until the provider had been given notice and an opportunity for a hearing” (Empire State Pharm. Socy. v Perales, 672 F Supp 146, 147 [SD NY]). Part 504 dramatically altered the right to notice and a hearing by requiring every previously enrolled provider to make a new application, with the Department having broad discretion to reject such application. As originally promulgated, part 504 made no provision for any administrative hearing or appeal from the denial of an application. Subsequently, subdivision (e) was added to section 504.5 which provides:

"(1) If an application is denied, the applicant may appeal the denial by filing a written request for reconsideration with the department within 60 days of the date of the notice of denial. A timely request stays any action to terminate a provider currently participating in the medical assistance program pending the decision on reconsideration.

"(2) The request for reconsideration must include all information which the applicant wishes to be considered in the reconsideration, including any documentation or arguments which would controvert the reason for the denial or disclose that the denial was based upon a mistake of fact.

"(3) The department will review its determination to deny enrollment and issue a written determination after reconsideration within 60 days of receipt of the request. The determination after reconsideration may affirm, revoke, or modify the denial and will be the final decision of the department”.

18 NYCRR part 515 governs the Department’s authority to impose sanctions against Medicaid providers for engaging in practices unacceptable under, or abusive to, Medicaid. Part 515 provides for detailed notice to the provider of the alleged wrongdoing. On March 25, 1988, the Department served Dr. Okoli with specific charges pursuant to 18 NYCRR 515.6. Because of the detail of the charges, he knew exactly what he was accused of, and was able to retain a board-certified internist as an independent medical expert to review the charts in question. The internist rendered an opinion that petitioner’s treatments and methods were consistent with good [66]*66medical practice. Not content to pursue Dr. Okoli’s removal under part 515, the Department, by a letter dated April 19, 1980, notified petitioner that he was being terminated from the Medicaid program under part 504 because, after a peer review of 10 of his patients’ charts:

"[it] was determined that there are multiple deficiencies including:

"1. The charts are grossly illegible which is a violation of 18 NYCRR 540.7 [a] [10].

"2. There are excessive numbers of visits for each patient.”

The letter went on to advise Dr. Okoli of his right to request a reconsideration and to submit written arguments and documentation concerning any mistake of fact with that request. Dr. Okoli retained counsel who by letter dated April 15, 1988, requested that the Department not simultaneously pursue two administrative proceedings against Dr. Okoli, and in the event that the Department went forward with the part 504 termination, petitioner’s counsel demanded an itemized specification of the charges and deficiencies. By letter dated May 6, 1988, the Department responded that: "Please be advised that it is the judgment of the Department of Social Services that Mr. Pogoda’s letter is sufficiently specific to enable Dr. Okoli to understand the nature of the Department’s findings and to prepare a detailed response. No further clarification is required”.

By letter dated May 16, 1988, petitioner’s counsel advised the Department that Dr. Okoli was unable to present a coherent appeal because: "(1) We have been refused disclosure of what part of the records have been determined to be grossly illegible, (2) we have been refused details as to what visits were excessive and the reason for them being determined to be excessive and, (3) we have been refused details of other 'multiple deficiencies’ alleged in the Department’s April 19, 1988 letter”.

On July 29, 1988, the Department sent its final determination stating in pertinent part that: "I regret to advise you that the determination after reconsideration is to affirm the denial. The request for reconsideration was not sufficient to controvert the reason for the denial, nor did it disclose sufficient basis that the denial was based upon mistake of fact to warrant a change in our decision as outlined in the April 16, 1988, letter from Ralph Pogoda to Dr. Okoli”.

This CPLR article 78 proceeding ensued. Petitioner’s pri[67]*67mary contention is that he has been denied due process of law, in that he was not given adequate notice of the charges against him and was denied an evidentiary hearing to clear his reputation. Petitioner alleges that respondent must report petitioner’s termination from the Medicaid program to the Federal Government, which termination, in turn, will disqualify him from Medicaid and Medicare programs on a nationwide basis. Petitioner further asserts that "almost all states on license applications, hospitals on staff privilege applications, original and renewal, as well as insurance carriers, third party payors, medical groups, HMOs, etc. * * * inquire as to whether or not a physician has been terminated or suspended from programs such as Medicaid”. Petitioner contends that such applications are rejected because of a Medicaid termination. In essence, petitioner claims the respondent’s conduct has besmirched his professional reputation and will cause his financial ruin. Respondent’s position is that a provider has no property interest in continued participation in the Medicaid program giving rise to due process protection, and, even if a provider were entitled to such protection, petitioner received all the due process that is constitutionally required.

The time has come to hold that a physician denied participation in the New York State Medicaid program on an allegation of incompetent or fraudulent conduct has the right to due process of law including written detailed charges and an evidentiary hearing. Petitioner’s entitlement to due process arises from two sources. The first source is a property interest in continued participation in Medicaid. Medicaid and government regulation of the practice of medicine have grown to such a degree that expulsion of a physician from the program is tantamount to professional ruin.

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Related

Senape v. Constantino
740 F. Supp. 249 (S.D. New York, 1990)
Bora v. New York State Department of Social Services
152 A.D.2d 10 (Appellate Division of the Supreme Court of New York, 1989)

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Bluebook (online)
141 Misc. 2d 63, 532 N.Y.S.2d 701, 1988 N.Y. Misc. LEXIS 597, Counsel Stack Legal Research, https://law.counselstack.com/opinion/okoli-v-new-york-state-department-of-social-services-nysupct-1988.