Opinion
February 1, 1996
Appeal from the Supreme Court, New York County (Carol Huff, J.).
As the relationship between a Medicaid provider and respondent is an "at-will" contractual relationship terminable by either party upon thirty days notice without cause (18 N.Y.CRR 504.7 [a]; see, Matter of Ray Pharmacy v. Perales, 169 A.D.2d 633), the IAS Court properly upheld respondent's determination terminating petitioner's participation as a Medicaid provider. As respondent "has broad discretion in administering the [Medicaid] program to adequately protect the public interest in assuring that funds are not dispensed to untrustworthy providers" ( Matter of Khawaja v. Kaladjian, 207 A.D.2d 398, citing Schaubman v. Blum, 49 N.Y.2d 375, 379-380), termination resulting from petitioner's affiliation, by common ownership, with another pharmacy excluded from the Medicaid program for cause pursuant to 18 NYCRR 515.7 (d), was neither arbitrary and capricious nor made in bad faith ( see, supra). Nor was the termination excessive or discriminatory, since a section 504.7 (a) termination was not a penalty or sanction ( see, Senape v. Constantino, 936 F.2d 687 [distinguishing discontinuing a contract pursuant to section 504.7 (a) and imposing a sanction pursuant to part 515]), and petitioner may apply for re-enrollment.
Concur — Sullivan, J.P., Wallach, Rubin and Tom, JJ.