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Matter of L T Drug Co., Inc. v. Dowling

Appellate Division of the Supreme Court of New York, First Department
Feb 1, 1996
224 A.D.2d 193 (N.Y. App. Div. 1996)

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.


Summaries of

Matter of L T Drug Co., Inc. v. Dowling

Appellate Division of the Supreme Court of New York, First Department
Feb 1, 1996
224 A.D.2d 193 (N.Y. App. Div. 1996)
Case details for

Matter of L T Drug Co., Inc. v. Dowling

Case Details

Full title:In the Matter of L T DRUG CO., INC., Appellant, v. MICHAEL DOWLING…

Court:Appellate Division of the Supreme Court of New York, First Department

Date published: Feb 1, 1996

Citations

224 A.D.2d 193 (N.Y. App. Div. 1996)
637 N.Y.S.2d 387

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