Opinion
No. 192–16.
04-28-2016
In the Matter of the Application of Suzanne DECHEINE, Petitioner, v. OFFICE OF the MEDICAID INSPECTOR GENERAL OF the NEW YORK STATE DEPARTMENT OF HEALTH and New York State Office for People with Developmental Disabilities, Respondents.
Brennan & White, LLP, Joseph R. Brennan, of counsel, Queensbury, Attorney for Petitioner. Eric T. Schneiderman, Attorney General of the State of New York, Adrienne J. Kerwin, of Counsel, Albany, Attorney for Respondents.
Brennan & White, LLP, Joseph R. Brennan, of counsel, Queensbury, Attorney for Petitioner.
Eric T. Schneiderman, Attorney General of the State of New York, Adrienne J. Kerwin, of Counsel, Albany, Attorney for Respondents.
DENISE A. HARTMAN, J.
In this CPLR Article 78 proceeding, petitioner Suzanne Decheine challenges determinations (1) of respondent New York State Office of the Medicaid Inspector General (OMIG) placing her on the Medicaid exclusion list, and (2) of respondent New York State Office for People with Developmental Disabilities (OPWDD) terminating her employment. Because she was afforded due process and the determinations were not arbitrary and capricious, the petition is denied.
Background
Petitioner, an OPWDD nurse, was indicted in April 2015, and charged with two counts of Offering a False Instrument for Filing in the First Degree (Penal Law § 175.35 ), two counts of Offering a False Instrument for Filing in the Second Degree (Penal Law § 175.30 ), and one count of Failure to Report to the Vulnerable Persons Central Register (Social Services Law § 491[3][a] ). The Bill of Particulars alleges that petitioner knowingly made false statements in hospital records and a Preliminary Witness Statement regarding an incident of alleged abuse or neglect, and failed to perform her duty as a mandated reporter to report abuse and neglect to the statewide register (see Social Services Law § 492 ). Petitioner awaits trial on the charges.
By letter dated September 11, 2015, the OMIG informed petitioner that, pursuant to 18 NYCRR 515.7 [b], she had been excluded from participation in the New York State Medicaid program. The letter further informed petitioner of her right to appeal the exclusion by written submission addressing only "whether the determination was based upon a mistake of fact ..., whether any crime charged in an indictment ... resulted from furnishing or billing for medical care, services or supplies [and] whether the sanction imposed was reasonable" (see 18 NYCRR 515.7 [g] ).
In May 2015, OPWDD instituted a disciplinary proceeding against petitioner, charging her with misconduct/incompetence based on the indictment. Petitioner grieved the discipline and the matter proceeded to arbitration. In December 2015, the arbitrator granted a motion to dismiss the disciplinary charges against her because the Notice of Discipline issued to her was not sufficiently detailed. The arbitration did not address petitioner's exclusion from the Medicaid program or termination from employment and is not at issue here.
Petitioner, through her counsel, submitted a letter appeal arguing that her indictments did not qualify for exclusion under 18 NYCRR 515.7 [b]. She also denied the allegations of the indictment and Bill of Particulars and argued that "the sanction of immediate exclusion [was] unreasonable, as there is no competent evidence against Ms. Decheine to support the allegations of the indictment." By letter determination dated November 20, 2015, the OMIG affirmed petitioner's exclusion, reasoning that the felony indictment did "relate to and result from the furnishing of medical care, services or supplies" and that, therefore, no reason existed to modify the exclusion determination.
Less than a week after the OMIG first notified petitioner of her exclusion, OPWDD notified her of her termination from employment because of her exclusion from the Medicaid program, pursuant to 18 NYCRR 515.5(c). That section states that "[a] person who is excluded from the program cannot be involved in any activity relating to furnishing medical care, services or supplies to recipients of medical assistance for which claims are submitted to the [Medicaid] program." According to Stephanie Jubic, a Human Resources Specialist with OPWDD, it is OPWDD policy to terminate excluded providers from employment.
Arguments of the Parties
Petitioner contends that (1) her exclusion from the Medicaid program was arbitrary and capricious because her alleged criminal activity did qualify for exclusion under 18 NYCRR 515.7 ; (2) exclusion violated her due process rights because she was not given an opportunity to be heard and was "contrary to the presumption of innocence"; (3) OPWDD's termination of petitioner's employment was arbitrary and capricious, and not supported by substantial evidence; (4) OPWDD's termination of petitioner's employment violated her due process rights because she was not given an opportunity to be heard and was contrary to the presumption of innocence rights. Respondents argue that the OMIG's exclusion of petitioner from participation in the Medicaid program was an appropriate exercise of discretion, that placement on the exclusion list did not deny petitioner due process, and that OPWDD's termination of petitioner was not arbitrary, capricious, or contrary to law.
I. Exclusion Pursuant to 18 NYCRR 515.7(b)
Contrary to petitioner's argument, her indictment relates to furnishing medical care. Section 515.7 provides that OMIG may exclude a provider from the Medicaid program when that provider has been indicted for a felony "which relates to or results from ... furnishing or billing for medical care ... or participation in the performance of management or administrative services relating to furnishing medical care." The criminal charges against petitioner allege that she made false statements in her notes and in a witness statement regarding an alleged incident of abuse or neglect and failed to report such abuse or neglect to the central register. Reporting to the OPWDD's records in the course of her duties as nurse and to authorities pursuant to statute are directly related to furnishing medical care. Accordingly, petitioner's argument that her crime was not related to the billing for or furnishing of medical care is meritless.
II. Petitioner Was Given Due Process with Respect to Her Exclusion from the Medicaid Program and Termination from Employment
Petitioner contends that her placement on the Medicaid exclusion list and termination violated her due process rights and the presumption of innocence. Starting with the latter, the presumption of innocence is a tenet of criminal law not applicable here (see Reed v. State, 78 N.Y.2d 1, 9 [1991] ; Bott v. Bd. of Educ., 41 N.Y.2d 265, 267–268 [1977] ). And because petitioner was afforded a meaningful opportunity to be heard and contest her exclusion from the Medicaid program, she received the process that she was due.
The State argues that providers do not have any constitutionally protected right to participate in the Medicaid program. Accordingly, the State contends that petitioner's placement on the Medicaid exclusion list did not implicate petitioner's due process rights. But exclusion in this case led inevitably to petitioner's termination. And Bora v. N.Y. State Dep't of Social Services, 152 A.D.2d 10 [3d Dept 1989] ), on which the State relies, involved a physician who contracted with the State to provide Medicaid services, not a State employee whose exclusion led to automatic termination from State employment. Thus, although continued participation in the Medicaid program is not ordinarily a protected property interest (see Matter of Koch v. Sheehan, 95 AD3d 82, 83 [4th Dept 2012] ), under these circumstances, the Court will analyze the Medicaid exclusion as a de facto termination from employment that is subject to due process.
Due process is not a rigid rule to be applied inflexibly, but a fluid concept that must be applied on a case-by-case basis (see Mathews v. Eldridge, 424 U.S. 319, 334–335 [1976] ). Thus, procedures that violate due process in one circumstance may satisfy due process in others. The process due is commensurate with the scope of the interest at stake (see Matter of Richie v. Coughlin, 148 A.D.2d 178, 183 [3d Dept 1989] ). That interest must be considered along with the value of additional procedures and weighed against the State's interest (Matthews, 424 U.S. at 334–335 ).
A public employee has a property interest in continued employment that cannot be extinguished absent due process of law (see Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 [1985] ; Bd. of Educ. v. Mills, 8 AD3d 834, [3d Dept 2004] ). The Third Department has held that a State employee facing discretionary termination for providing misinformation on an employment application must at a minimum be afforded a pre-termination opportunity to respond and post-termination administrative review (see id.; Matter of Niagara Frontier Tr. Metro Sys., Inc. v. Amalgamated Tr. Local Union 1342, 100 AD3d 1469, 1470 [4th Dept 2012] [where employee discipline involves discretion, employee must be given a meaningful opportunity to invoke that discretion]; cf. Gilbert v. Homar, 520 U.S. 924, 929 [1997] ["pretermination process need only include oral or written notice of the charges, an explanation of the employer's evidence, and an opportunity for the employee to tell his side of the story"] ). Where the employee is terminated in disciplinary proceedings pursuant to Civil Service Law § 75, a full hearing is required (see Matter of Jimenez–Reyes v. State of NY, 122 AD3d 1172, 1175 [3d Dept 2014] ). Conversely, where the termination does not involve Civil Service Law § 75, but occurs when an employee's actions render her ineligible for employment, a full hearing is not necessarily required (see Matter of Felix v. N.Y. City Dep't of Citywide Admin. Servs., 3 NY3d 498, 505 [2004] ; Matter of Beck–Nichols v. Bianco, 20 NY3d 540, 559 [2013] [where termination is due to employment ineligibility "due process mandates only notice and some opportunity to respond] ).
Here, OMIG's determination to exclude petitioner from participation from the Medicaid program and the attendant termination of her employment by OPWDD did not violate her due process rights. Applying the flexible due process test, petitioner's interest in continued State employment is substantial. However, the State's interests in protecting both Medicaid funds and the vulnerable population served by OPWDD are also substantial (see (Mental Hygiene Law § 13.07[c] ; Schaubman v. Blum, 49 N.Y.2d 375, 379 [1980] ).
In order to determine whether additional procedures would reduce the risk of erroneous deprivation of petitioner's property interest, it is necessary to review what process she received. OMIG informed petitioner by letter of its determination to exclude her from the Medicaid program and the opportunity to appeal. She took that opportunity and, by her counsel, argued that the indictment was unsupported, that the exclusion regulation did not apply to her indictment, and that exclusion was an unreasonable penalty. OMIG affirmed the exclusion in a written determination. That determination explicitly considered petitioner's arguments about the applicability of the exclusion regulation. And although it does not explain in detail why it rejected petitioner's contention that exclusion was unreasonable, it does specify that OMIG "reviewed the information contained in OMIG's record, including, but not limited to the indictment itself" (compare Matter of Koch v. Sheehan, 21 NY3d 697, 703 [2013] [holding that OMIG was permitted to exclude a provider from Medicaid participation based solely on a consent decree with the Board of Professional Medical Conduct, but that the OMIG was required to state the basis for exercising its discretion to exclude] ).
Petitioner contends that her due process rights were violated because she was denied the right to be heard and that OMIG did not possess evidence independent of the indictment to justify exclusion. However, as detailed above, petitioner was given an opportunity to be heard. By the time she submitted her administrative appeal, she had been terminated by OPWDD. Therefore, she was aware of the consequences of exclusion. Nor was she denied the opportunity to present evidence. The record is bereft of any indication that she attempted to present affidavits or other evidence in support of her administrative appeal or that OMIG would have rejected such evidence. Even now she has not specified what evidence should have been considered. Moreover, the indictment, which necessarily includes an independent finding of probable cause, acts as a safeguard against erroneous deprivation of petitioner's property interest (see Gilbert, 520 U.S. at 934 ).
Petitioner was also given a limited opportunity to contest OPWDD's determination to terminate her due to her Medicaid exclusion by showing that she was not excluded or had not been indicted (see Matter of Beck–Nichols, 20 NY3d at 559 ). Thus, petitioner was given pre-termination notice of her exclusion and attendant termination and a meaningful opportunity to respond through administrative appeal. Additional procedures would be unlikely to reduce the risk of erroneous deprivation of her right to continued government employment.
In sum, petitioner received a prompt post-termination opportunity to be heard by OMIG and OPWDD, her exclusion from the Medicaid program was founded on a felony indictment, and she does not allege that she was prevented from raising any evidence, defense or argument. She was, therefore, "provide[d] an ‘opportunity to be heard at a meaningful time and in a meaningful manner’ " (Matter of Kigin v. State of N.Y. Workers' Compensation Bd., 109 AD3d 299, 310 [3d Dept 2013], affd 24 NY3d 459 [2014], quoting Mathews, 424 U.S. at 333 ).
III. Petitioner's Exclusion from the Medicaid Program and Termination from Employment Were Not Arbitrary or Capricious
Petitioner's felony indictment for offering and filing a false instrument and failure to report to the vulnerable persons central register provides a rational basis for her exclusion from the Medicaid program (Fed. Deposit Ins. Corp. v. Mallen, 486 U.S. 230, 244 [1988] [indictment demonstrates suspension not arbitrary and "itself is an objective fact that will in most cases raise serious public concern"]; Gilbert, 520 U.S. at 934 ). Once she was excluded from the Medicaid program, her termination from employment was authorized by regulation (see 18 NYCRR 515.5 [c] ). The indictment, which is based on allegation that she failed to report the abuse or neglect of a vulnerable person, also provides a rational basis for her termination, as OPWDD is charged with providing a therapeutic environment for, and protecting the civil rights of, its clients (see Mental Hygiene Law § 13.07 ). Consequently, neither OMIG's discretionary determination to exclude petitioner from the Medicaid program, nor OPWDD's determination to terminate her employment was arbitrary and capricious. Accordingly, it is
ORDERED that the petition is denied and the proceeding is dismissed.
This constitutes the Decision and Judgment of the Court. The original Decision and Judgment is being transmitted to respondent's counsel. All other papers are being transmitted to the County Clerk for filing. The signing of this Decision and Judgment does not constitute entry or filing under CPLR 2220 or 5016 and counsel is not relieved from the applicable provisions of those rules respecting filing and service.
Papers Considered
Notice of Petition and Petition, with Exhibits A–G
Answer
Affidavit of Stephanie Jubic, with Exhibits A–G
Affidavit of Nicholas Braman, with Exhibits A–D
Memorandum of Law in Opposition