The opinion of the court was delivered by: WEINFELD
EDWARD WEINFELD, District Judge.
Plaintiff, a physician licensed to practice in the State of New York, was a provider of professional medical services under the Medicaid program. His practice consisted largely of treating Medicaid patients, which provided his principal source of income. The defendants are thirteen state and city officials charged with the administration of the Medicaid program in New York City, where plaintiff practiced. On January 29, 1976, plaintiff was notified by letter that effective February 16, 1976, he would be disqualified from statewide participation in the Medicaid program for alleged violations of the rules and regulations of the program. Plaintiff then commenced this action under the Civil Rights Act,
alleging various violations of his federally protected constitutional rights. He seeks a declaratory judgment annulling all proceedings taken against him to date and an injunction against any further proceedings; he also seeks three million dollars compensatory and eight million dollars punitive damages from the defendants. Before the Court now are plaintiff's motions for the convening of a three-judge court to consider one of his claims,
for a preliminary injunction and for partial summary judgment, and defendants' cross-motions that the Court abstain from asserting jurisdiction or that it dismiss the complaint.
The focus of the controversy is Item 35 of the New York State Medical Handbook, comprising regulations prepared by the New York State Department of Health applicable to the Medicaid program.
Item 35 is entitled "Unacceptable Practices and Fraud by Providers." Under Item 35, when a physician is suspected of engaging in "unacceptable practices" he is called to a conference with a representative of the State Department of Health at which an effort is made to resolve the matter. If no informal resolution is reached at this conference the representative, in consultation with the official in charge of the local Medicaid program, may decide upon some administrative action ranging from censure or audit, through denial of payment on disputed claims, to suspension or permanent disqualification from the program. The physician must be notified in writing of any administrative action and of his right to a hearing to appeal the decision. If he requests a hearing he is entitled to notice of the charges, to be represented by counsel, to cross-examine witnesses and to present evidence on his behalf. Implementation of any decision must be delayed until after the determination of his appeal.
The events that triggered this litigation commenced on November 19, 1975, when plaintiff was called to a conference with the Deputy Executive Medical Director of the New York City Medicaid program pursuant to Item 35. He was advised that an audit of the invoices he had submitted to the Medicaid program revealed an excessive number of prescriptions for Valium and Elavil, two mood-altering drugs;
that his records were inadequately kept and did not indicate sufficient basis for the prescriptions which had been written; and that plaintiff had received Medicaid payments for services and consultations that were not medically justified. Plaintiff was further told that the City Department of Social Services, the agency in charge of administering the Medicaid program within New York City, would withhold payment of approximately $25,000 in invoices previously submitted by plaintiff pending a determination of what amount would be sought as restitution for plaintiff's alleged overbillings during his entire participation in the Medicaid program, and that further administrative action might be taken against him.
Plaintiff subsequently abandoned his medical practice in New York and moved to Florida, where he is also admitted to practice.
He also retained an attorney and on December 29, 1975 commenced an action in the Supreme Court of the State of New York seeking to compel immediate payment of the $25,000 in withheld invoices. That action was dismissed on September 9, 1976, as prematurely brought since plaintiff had not exhausted his administrative remedies. The state court specifically held that state law authorized the defendants to withhold payments pending an investigation and possible administrative action; that issue is not before the Court in this case.
Meanwhile plaintiff received the letter of January 29, 1976, previously referred to, informing him of his disqualification from participation in New York State's Medicaid program. Plaintiff's disqualification was stated to be due to allegedly "improper practices," including (1) keeping improper and incomplete medical records; (2) improper prescribing of Valium and Elavil; (3) submitting invoices for first visits when "proper first visit care" was not rendered; and (4) submitting invoices for "follow-up visits of undocumented medical necessity." The letter also informed plaintiff of his right to a hearing at which he could be represented by counsel, could cross-examine witnesses, and could present evidence on his behalf. The letter further stated that if plaintiff requested a hearing "all administrative action will be held in abeyance until a final decision is reached."
Upon receipt of the letter plaintiff's attorney promptly requested a hearing and demanded that he be given detailed notice of the specific charges against plaintiff and that the hearing be delayed "pending a determination of the Constitutionality of Item 35 and all other regulations permitting you to proceed as you are doing." The hearing was convened on April 5, 1976, at which time plaintiff placed his constitutional objections on the record. The hearing was thereupon adjourned. The administrative proceeding has been held in abeyance pending this Court's determination of the pending motions.
The main thrust of plaintiff's claims appears to be that (1) Item 35 of the New York State Medical Handbook is a "nullity" because of failure to comply with provisions of the New York State Constitution requiring filing of regulations with the Secretary of State; (2) even if Item 35 is not a nullity, it is unconstitutionally vague in many respects; (3) defendants have conspired to deny plaintiff due process of law with respect to the hearing; and (4) defendants have also conspired to deprive him of equal protection of the laws and such other rights as he may have as a provider of services.
Plaintiff's most vigorously pressed claim is that proceedings against him under Item 35 deny him due process of law because the definition of "unacceptable practices"
contained therein is so vague as to be unconstitutional.
Even if it is not a formally promulgated regulation of the state,
Item 35 is "an order made by an administrative board or commission acting under State statutes"
intended to effectuate a statewide policy. Plaintiff's claim that Item 35 is unconstitutionally vague is thus within the category of cases for which a statutory three-judge court is required if a substantial issue is presented.
However, after careful consideration the Court has concluded that plaintiff's claim is so insubstantial that a three-judge court need not be convened to consider it.
A statute or regulation is unconstitutionally vague only if its meaning is so ambiguous or unclear that the persons affected must guess at its meaning.
Plaintiff's claim of vagueness must be considered in light of the purposes and effects of this particular regulation.
First, since Item 35 does not inhibit the exercise of any First Amendment freedoms, the strict scrutiny appropriate when such fundamental liberties are at stake is not appropriate here.
Moreover, Item 35 does not carry such severe sanctions as criminal penalties or total denial of the right to practice medicine. Rather, this case concerns the state's enumeration of conditions under which it will maintain contractual relations with a doctor who has freely chosen to participate in the Medicaid program. Such a regulation calls for less exacting review than a criminal or licensing statute.
While the wording of Item 35, as is true of most regulations, could be improved, it is difficult to believe that a physician of average intelligence would not understand what is meant, for example, by "care of poor and unacceptable quality" or "provision of excessive, unnecessary, professionally unacceptable, unproven or experimental care."
Instead of attempting to compile a lengthy list defining every conceivable form of "unacceptable practice" -- an approach which might unduly fetter the exercise of a doctor's professional judgment -- the state has chosen to give general notice of the categories of activity it will not tolerate. This alternative is not unconstitutional.
Moreover, plaintiff cannot seriously contend that he was not aware that the practices with which he is charged -- including unwarranted and excessive prescriptions of potentially dangerous drugs, one of which is a controlled substance under New York law,
and billing for services which were unnecessary or not actually performed -- were improper and that even apart from the proscriptions of Item 35 the state might be under no obligation to pay for such practices.
"[Even] if the outermost boundaries of [the regulation] may be imprecise, any such uncertainty has little relevance here, where [plaintiff's] conduct falls squarely within the 'hard core' of the statute's proscriptions . . . ."
Of controlling importance, however, is the Supreme Court's affirmance, in Association of American Physicians and Surgeons v. Weinberger,21 of a lower court decision rejecting a vagueness challenge to a strikingly similar federal statutory scheme.
The purpose of the federal law there under consideration, like that of Item 35, is to limit the unnecessary and improper use of medical facilities and medical care under, inter alia, the Medicaid program. To achieve this goal ...