Senape v. Constantino

936 F.2d 687, 1991 WL 104161
CourtCourt of Appeals for the Second Circuit
DecidedJune 18, 1991
DocketNo. 804, Docket 90-7677
StatusPublished
Cited by12 cases

This text of 936 F.2d 687 (Senape v. Constantino) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Senape v. Constantino, 936 F.2d 687, 1991 WL 104161 (2d Cir. 1991).

Opinion

WINTER, Circuit Judge:

This appeal arises from the dismissal of a complaint brought under 42 U.S.C. § 1983 seeking (1) to enjoin appellees from denying appellant’s application for reenrollment as a physician-provider in New York State’s Medicaid program and (2) to recover damages for the deprivation of property and liberty interests without due process. The district court held that appellant has no property interest in his continued enrollment as a Medicaid provider and that, even if he has such an interest, he was accorded due process. The district court also rejected appellant’s deprivation of liberty claim on the ground that he failed to plead facts sufficient to establish the publication of stigmatizing information. 740 F.Supp. 249. For the reasons stated below, we affirm.

BACKGROUND

In 1979, Saverio Senape, M.D., was enrolled as a qualified medical provider in New York’s Medicaid program, which provides medical services to indigent people. See 42 U.S.C. § 1396a et seq. (1988); N.Y. Social Services Law § 363 et seq. (McKinney Supp.1991). The instant action arises out of a decision by state officials not to reenroll him.

1. The Regulatory Scheme

Under New York Soc. Serv. Law § 363-a (1) and (2), the Department of Social Services (“DSS” or “Department”), which administers the Medicaid program, is authorized to make regulations governing the selection of medical services providers.1 See N.Y.Comp.Code R. & Regs. (“NYCRR”), tit. 18 § 500 et seq. (1988). Two portions of these regulations — Parts 504 and 515 — are pertinent to the instant appeal. We discuss each briefly.

Prior to 1987, a physician who had been accepted into the Medicaid program could be terminated only upon a finding of a failure to comply with DSS regulations, 1.e., for cause. However, in January of that year, DSS issued a regulation under which all existing providers were required to apply for reenrollment. See 18 NYCRR § 504.10. Judge Tenney explained the effect of these new regulations as follows:

Although DSS retains the authority to terminate a provider for cause, the new regulations in effect allow DSS, at its option, to invert the process. Instead of investigating each provider for deficiencies and terminating those found inadequate, DSS may require all providers to re-enroll en masse in the program and then choose whom it wishes to renew.

The standard governing reenrollment is the same as that applied to first-time applicants, “the best interest of the medical assistance program,” 18 NYCRR § 504.4(e)(2), and, although many factors enumerated in the regulation focus on past or current conduct or competence, id. at § 504.5(a)(l)-(13), the regulation explicitly permits the Department to consider “any other factor which may affect the effective and efficient administration of the program, including, but not limited to, the current availability of medical care, services or supplies to recipients.... ” Id. at § 504.5(a)(14). As the district court observed, the regulation affords DSS a mechanism by which a provider’s participation may be terminated notwithstanding the applicant’s apparent qualifications and lack of evidence of wrongdoing.2

By contrast, Part 515 sets forth the standards and procedures for sanctioning providers who engage in “unacceptable prac[689]*689tices” such as fraud or other specifically enumerated violations of DSS regulations. See 18 NYCRR § 515.2(a) and (b). A provider sanctioned under this provision is subject not only to termination of his reimbursement contract, see Kelly Kare, Ltd. v. O’Rourke, 930 F.2d 170 (2d Cir.1991), but to exclusion from the program for a reasonable period of time, censure and the recovery of overpayments. 18 NYCRR § 515.3. Pursuant to federal regulations, moreover, notice of the provider’s exclusion must be published. See 42 C.F.R. § 1002.206(c) (1990).

A disappointed applicant for enrollment or reenrollment under Part 504 is afforded less procedural due process than a provider facing sanctions under Part 515. A provider whose enrollment or reenrollment application is denied under Section 504.10, or whose participation in a reimbursement contract is discontinued under Section 504.-7(a), is not entitled to a hearing. Id. at § 519.4(b). A provider charged with sanc-tionable practices, however, has the right to an evidentiary hearing. See 18 NYCRR § 515.8.

2. The Instant Action

In October 1987, appellant received a letter from DSS, sent according to a prearranged schedule involving all Medicaid providers, informing him that he would have to submit an application for reenrollment within sixty days. In November, shortly after appellant submitted the requisite forms, a DSS investigator visited appellant’s office and requested copies of the medical records of ten patients. On March 8, 1988, DSS informed appellant that it had found various violations of DSS regulations in reviewing the patient records and had decided to terminate appellant’s participation in the program effective immediately. Initially, the Department based its termination decision on Part 515, which permits, inter alia, the immediate suspension of a provider upon a determination that the health or welfare of Medicaid recipients would be endangered by the provider’s continued participation in the program. Appellant promptly contested this ruling and submitted various documents to DSS for further review. On March 15, before responding to the Part 515 appeal, DSS informed appellant that, based on its review of patient charts, it had decided pursuant to Part 504 not to reenroll him in the program. At that time, DSS also advised appellant that he could submit a written appeal of the Part 504 decision, which he did. On April 18, DSS informed appellant that it had reversed its earlier Part 515 termination decision but that the Part 504 reen-rollment appeal was still under consideration. On July 29, DSS told appellant that it had denied his Part 504 appeal and that his participation in the program would cease effective August 12.

DISCUSSION

We assume for purposes of this appeal that DSS denied appellant’s application for reenrollment under Part 504 because it was simpler than terminating appellant for cause under Part 515. By proceeding under Part 504, DSS avoided the need for an evidentiary hearing and availed itself of the discretion conferred by Section 504.5(a)(14). Appellant claims that this resort to Part 504 deprived him of a protected property right to continued enrollment in the Medicaid program and, additionally, of a liberty interest in his good name and professional reputation without due process. We disagree. In light of the broad discretion afforded state officials charged with administering the Medicaid program, a provider has no reasonable claim of entitlement to continued enrollment in that program. Nor does appellant’s complaint plead facts sufficient to establish publication of stigmatizing information, an essential element of his deprivation of liberty claim.

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Senape v. Constantino
936 F.2d 687 (Second Circuit, 1991)

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Bluebook (online)
936 F.2d 687, 1991 WL 104161, Counsel Stack Legal Research, https://law.counselstack.com/opinion/senape-v-constantino-ca2-1991.