Opinion
May 23, 1994
Appeal from the Supreme Court, Queens County (Durante, J.).
Ordered that the order and judgment is affirmed, with costs.
An administrative agency's decision in terminating an "at will" relationship must be sustained upon review unless it is found to have been made in bad faith (see, Matter of Rivoli v. Stern, 160 A.D.2d 601, 602). This applies, inter alia, to the "at will" contractual relationship of Medicaid providers with the New York State Department of Social Services (see, 701 Pharmacy Corp. v Perales, 930 F.2d 163, 166; Matter of Kothari v. Perales, 174 A.D.2d 621; Matter of Akhtar v. Perales, 173 A.D.2d 539, 540; Matter of Garcia v. Perales, 168 A.D.2d 577; Matter of Barata v Perales, 157 A.D.2d 623, 624). We agree with the Supreme Court that the petitioner has not met the requirements necessary to obtain the relief sought.
As to the petitioner's constitutional claims, it has been held that 18 NYCRR 504.7 (a) does not violate Medicaid providers' due process rights (see, Matter of Ray Pharmacy v. Perales, 169 A.D.2d 633; Matter of Bora v. New York State Dept. of Social Servs., 152 A.D.2d 10). The United States Court of Appeals for the Second Circuit has held that this regulation is not violative of the equal protection or due process rights of Medicaid providers (see, 701 Pharmacy Corp. v. Perales, supra; Senape v Constantino, 936 F.2d 687; Kelly Kare v. O'Rourke, 930 F.2d 170). Nor has the petitioner demonstrated "bad faith" on the part of the respondent. The specific conduct alleged in support of the notice of termination involved deficient services to Medicaid clients, which this Court has held to be a sufficient basis to deny reenrollment as a provider (see, Matter of GS Pharmacy v Perales, 151 A.D.2d 668, 669; accord, Matter of Barata v. Perales, supra, at 624; Matter of Bezar v. New York State Dept. of Social Servs., 151 A.D.2d 44). Moreover, the policy established by decisional law is that the charges do not have to amount to abuse of the Medicaid program in order to justify termination (see, 701 Pharmacy Corp. v. Perales, supra; Matter of GS Pharmacy v Perales, supra; Matter of Bezar v. New York State Dept. of Social Servs., supra; accord, Matter of Karanja Pharmacy v. Perales, 163 A.D.2d 264; Matter of Barata v. Perales, supra). The respondent's termination of contracts with a provider which he determined had furnished poor services was rational and was not arbitrary and capricious (see, Matter of Medicon Diagnostic Labs. v. Perales, 74 N.Y.2d 539, 545; Matter of Camperlengo v. Blum, 56 N.Y.2d 251, 255-256; Schaubman v. Blum, 49 N.Y.2d 375, 379). Accordingly, the Supreme Court properly refused to substitute its judgment for that of the agency in determining that termination of the petitioner's provider status was necessary.
We have considered the petitioner's remaining contentions and find them to be without merit. Ritter, J.P., Copertino, Hart and Goldstein, JJ., concur.