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NEW YORK STATE PSYCHIATRIC ASSN. v. BLUM

August 7, 1979

NEW YORK STATE PSYCHIATRIC ASSOCIATION, a division of AREA II COUNCIL OF THE AMERICAN PSYCHIATRIC ASSOCIATION, INC., BIZHAN NIA, M.D. and MARVIN KAPLAN, M.D., Plaintiffs, against BARBARA BLUM, as Commissioner of the New York State Department of Social Services and DAVID AXELROD, M.D., as Commissioner of the New York State Department of Health, Defendants.


The opinion of the court was delivered by: WARD

Plaintiffs, New York State Psychiatric Association, a division of Area II Council of the American Psychiatric Association, Inc., Bizhan Nia, M.D. and Marvin Kaplan, M.D., seek a preliminary injunction pursuant to Rule 65(a), Fed.R.Civ.P., enjoining defendants, Barbara Blum, Commissioner of the New York State Department of Social Services and David Axelrod, Commissioner of the New York State Department of Health, from implementing and enforcing Part 85.28-31 of the Administrative Rules and Regulations, Subchapter K, Chapter 11, Title 10 of the Official Compilation of Codes, Rules and Regulations ("Part 85"). For the reasons hereinafter stated, plaintiffs' motion is denied.

The Facts

Plaintiffs are a not-for-profit corporation representing professional psychiatrists and two private practicing member psychiatrists. Their complaint challenges, on various constitutional and statutory grounds Part 85, a regulation issued on February 26, 1979 by the New York State Department of Health ("the Department"). The regulation was issued pursuant to the Department's authority to establish standards for all non-institutional medical care and services rendered under the state's medicaid program. *fn1" See N.Y.Soc.Serv.Law § 364.2(b) (McKinney 1976 & Supp.1978).

 Part 85 by its terms requires a private psychiatrist treating a Medicaid recipient who seeks more than 15 visits in a six-month period to submit a treatment plan before the 15th visit to the local professional director of the county Department of Social Services "for review and decision as to need for continued care and services." If the local professional director does not approve the plan, the director is required to consult with a "qualified psychiatrist" for "advice, opinion and recommendation." All final decisions as to the coverability of benefits, however, are to be made by the local professional director. Part 85 also requires that after the initial treatment plan review, the local professional director fix a date for submission of subsequent treatment plans. Finally, although Part 85 directs psychiatrists to continue to provide care and services pending review, it makes no provision for payment to the psychiatrist for care already provided prior to the local professional director's final determination.

 On May 9, 1979 plaintiffs filed the instant complaint alleging that defendants in promulgating and implementing Part 85 violated the Equal Protection, Due Process and Supremacy Clauses of the United States Constitution, the Equal Protection and Due Process Clauses of the New York State Constitution, and the federal Medicaid Act, 42 U.S.C. § 1396, Et seq., and the regulations issued thereunder. The complaint seeks declaratory and injunctive relief. By order to show cause dated May 14, 1979 plaintiffs moved for a preliminary injunction.

 Plaintiffs' application for a preliminary injunction was scheduled for hearing on June 4, 1979. At that time, the Court adjourned the matter until June 18, 1979 to allow the parties to enter into settlement negotiations. In addition to resolving certain points concerning standards of review to be applied in enforcing Part 85, the parties preliminarily agreed that defendants would provide all fair hearing rights guaranteed to Medicaid recipients under federal and state law.

 During the course of the parties' subsequent settlement negotiations counsel for plaintiffs, however, was informed by defendants' counsel that although defendants were willing to afford fair hearing rights to Medicaid recipients in treatment with private practicing psychiatrists, the hearings that defendants would allow would be Post -termination rather than Pre -termination. Since post-termination hearings were unacceptable to plaintiffs, plaintiffs' counsel suggested that the Court entertain oral argument on this aspect of plaintiffs' application for a preliminary injunction and reserve plaintiffs' right to a later hearing on the unresolved aspects of the application for a preliminary injunction. The Court heard oral argument on this question on June 22, 1979 and received additional submissions from the parties.

 Thus, the sole issue *fn2" before the Court upon the instant motion is whether defendants should be preliminarily enjoined from implementing and enforcing Part 85.

 Plaintiffs argue that an injunction should be granted because the regulation in its present form fails to provide Medicaid recipients in treatment with private practicing psychiatrists pre-termination fair hearings before treatment plans are disapproved by the local professional director. They contend that the United States Constitution and existing federal and state law require that all Medicaid recipients, including those in treatment with private practicing psychiatrists, be afforded pre-termination fair hearings prior to suspension, termination or reduction of their benefits.

 Defendants argue that the post-termination procedures provided by Part 85, as it is presently administered, are in full compliance with all constitutional and statutory requirements.

 Discussion

 Plaintiffs premise jurisdiction upon 28 U.S.C. § 1331, 28 U.S.C. § 1343(3), and principles of pendent jurisdiction. Since plaintiffs' constitutional claims are neither insubstantial nor wholly without merit, under the doctrine of Hagans v. Lavine, 415 U.S. 528, 534-39, 94 S. Ct. 1372, 39 L. Ed. 2d 577 (1974) jurisdiction exists under 28 U.S.C. § 1343(3). See Lynch v. Philbrook, 550 F.2d 793 (2d Cir. 1977); Andrews v. Maher, 525 F.2d 113 (2d Cir. 1975). Having found jurisdiction properly established under this section, the Court finds it appropriate to exercise pendent jurisdiction over plaintiffs' statutory claims. Hagans v. Lavine, supra, 415 U.S. at 536; Lynch v. Philbrook, supra, 550 F.2d at 795. In light of these findings, the Court need not determine whether jurisdiction also exists under 28 U.S.C. § 1331.

 The recently reiterated standard in this Circuit for issuance of a preliminary injunction calls for a clear showing of (a) irreparable harm And (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief. Jackson Dairy, Inc. v. H. P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979); Accord Caulfield v. Board of Education, 583 F.2d 605, 610 (2d Cir. 1978); See also New York v. Nuclear Regulatory Commission, 550 F.2d 745, 750, 755 (2d Cir. 1977); Triebwasser & Katz v. American Telephone & Telegraph Co., 535 F.2d 1356, 1358-59 (2d Cir. 1976). It is clear that such relief is "extraordinary" and "drastic" and should not be routinely granted. Medical Society of State of New York v. Toia, 560 F.2d 535, 538 (2d Cir. 1977); See also Pride v. Community School Board, 482 F.2d 257, 264 (2d Cir. 1973); Dopp v. Franklin National Bank, 461 F.2d 873, 878 (2d Cir. 1972). In order to determine whether plaintiffs are entitled to a preliminary injunction, it is necessary first to examine plaintiffs' showing on the merits and second their showing of irreparable harm.

 Plaintiffs contend that defendants' refusal to provide pre-termination hearings in implementing Part 85 blatantly violates existing federal and state regulations applicable to all Medicaid recipients. *fn3" Specifically, plaintiffs point to 42 C.F.R. § 431.230 *fn4" which directs state Medicaid agencies not to terminate or reduce services when a recipient requests a fair hearing prior to the date of proposed agency action. Plaintiffs further argue that state regulations, in compliance with federal law, also provide for a pre-termination fair hearing. 18 N.Y.C.R.R. § 358.8 *fn5" provides that when a recipient requests a fair hearing within the timely notice period (10 days prior to agency action), assistance shall be continued until the fair hearing decision is rendered. The section, moreover, specifically applies to proposed action "to discontinue or reduce . . . medical assistance authorization." See 18 N.Y.C.R.R. § 358.8(a). ...


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