The New York State Court of Appeals recently (October 22, 2013) issued a decision in the case of Koch v. Sheehan, which states that a physician may be removed from the New York State Medicaid program based upon a Consent Agreement that the physician reaches with the Office of Professional Medical Conduct. The physician entered into a Consent Agreement with the Office of Professional Medical Conduct “in full satisfaction” of charges of professional misconduct lodged against him with regard to the treatment of two patients in 2006. In the Consent Agreement, the physician pleaded “no contest” to charges that his care and treatment of both patients “failed to meet accepted standards of care”. The Consent Agreement called for the physician to be placed on a 36 month period of probation subject to 11 specific terms, including that the petitioner would practice medicine only when monitored by another doctor acceptable to OPMC,,and that the physician would enroll and complete a continuing education program.
OPMC sent the results of its investigation, including the Consent Order in question, to the Office of the Medicaid Inspector General (OMIG). Both OPMC and OMIG are part of the Department of Health. Based upon the Consent Agreement entered into with OPMC by the physician, OMIG, exercising its discretion, removed the physician from the New York Medicaid program. The physician brought a lawsuit and the Supreme Court annulled the determination of OMIG and directed that the physician be reinstated in the Medicaid program. The Department of Health appealed and the Appellate Division for the Fourth Department affirmed, holding that it was arbitrary and capricious for the agency to bar the physician from treating Medicaid patients when OPMC permitted the physician to continue to practice medicine. The Appellate Division ruled that OMIG was required to conduct an independent investigation before excluding a physician from Medicaid on the basis of the OPMC Consent Order. The case was then appealed to the New York State Court of Appeals.
The Court of Appeals majority affirmed the annulment of the Order terminating the participation of the physician in the Medicaid program. The majority ruled that since OMIG exercised its discretion, it was required to explain what it was about this case that caused it to exercise its discretion. A rationale for the determination of OMIG was completely lacking in this case. However, and most significantly, the Court of Appeals ruled that OMIG can remove a physician from the Medicaid program based upon a Consent Order that the physician entered into with OPMC.
The consequences of the decision of the Court of Appeal are far ranging. If a physician is barred from participating in the Medicaid program, the ability of the physician to earn a living is drastically impaired. Further, it is likely that if a physician is barred from participating in Medicaid, the physician may also see his relationships with private insurers terminated. Further, hospitals may very well be reluctant to grant admitting privileges to a physician who is not allowed to care or treat Medicaid patients. It has been said that being barred from the Medicaid program is the functional equivalent of losing one’s right to practice medicine.
Maynard, O’Connor, Smith & Catalinotto, LLP has a number of attorneys who regularly deal with issues involving professional misconduct both in front of the Office of Professional Medical Conduct, as well as the Office of Professional Discipline housed within the Education Department.