ADL, Inc. v. Perales

Judgment, Supreme Court, New York County (Harold Baer, Jr., J.), entered December 10, 1990, dismissing petitioner-appellant’s CPLR article 78 petition challenging as arbitrary and capricious respondent’s denial of petitioner-appellant’s application for re-enrollment as a Medicaid provider pursuant to 18 NYCRR part 504, unanimously affirmed, without costs. The scope of judicial review of an administrative determination is limited to ascertaining whether it is rationally-based. (Matter of Pell v Board of Educ., 34 NY2d 222.) Here, denial of petitioner-appellant’s application for re-enrollment as a Medicaid provider cannot be considered arbitrary or capricious, in light of numerous documented practice deficiencies detected through State Department of Health surveys of petitioner-appellant’s laboratory practices, and in light of the findings of petitioner-appellant’s employment of unqualified laboratory personnel, lack of quality control, improper handling of specimens, inadequate record-keeping, and poor laboratory management. As the New York State Department of Social Services has wide discretion to determine whether to enter into a contract with an applicant under the Medicaid provider program, and as the basis for its determination to deny re-enrollment in this case was conveyed to petitioner-appellant and is quite rational, there is no merit to petitioner-appellant’s claim that respondents’ denial of its application for re-enrollment was arbitrary and capricious. (See, Matter of Karanja v Perales, 163 AD2d 264.) We have reviewed petitioner-appellant’s additional claims [443] and find them to be without merit. Concur — Carro, J. P., Ellerin, Wallach, Kupferman and Kassal, JJ.