The opinion of the court was delivered by: Spatt, District Judge.
Plaintiff Sidney Gellman, M.D. ("Dr. Gellman"), moves for a
preliminary injunction to restrain the defendant*fn1 from
terminating Dr. Gellman's participation in Medicare and
Medicaid programs until such time as he is afforded an
administrative hearing and a decision thereon. Dr. Gellman also
seeks to preliminarily enjoin the defendant from notifying any
state agencies to terminate his participation in the Medicare
program, and also from publishing or otherwise informing the
public that Dr. Gellman has been excluded from the programs.
For the reasons stated below, Dr. Gellman's motion is denied.
Dr. Gellman has been a licensed physician since 1956. He is a
board-certified pathologist, and was Director of Pathology at
Franklin General Hospital, Valley Stream, New York ("Franklin
General"), from 1963 to 1989. Although no longer the Director,
he is presently a staff pathologist at Franklin General.
In 1981, while still employed with Franklin General, Dr.
Gellman became a Director of Sunrise Medical Laboratories
("Sunrise"), a private clinical laboratory. During his
employment at Sunrise, Dr. Gellman performed laboratory work
consisting of pathology and cytology evaluations. Although
Sunrise allegedly possessed the requisite Department of Health
permits to perform various laboratory work, it did not have the
required permits for pathology and cytology studies. Similarly,
Dr. Gellman had no such permits on his own.
In 1988, Dr. Gellman was charged with the violation of two
misdemeanor criminal offenses: (1) violation of N.Y. Public
Health Law § 574, for failure to obtain necessary permits; and,
(2) violation of 10 N.Y.C.R.R. § 58-1.9, for removing certain
specimens from Sunrise to his home for analysis. Dr. Gellman
pled guilty to both counts on November 7, 1988. As a result, he
was sentenced to a conditional discharge, fined $500 on each
conviction, and referred to the New York State Department of
Health ("DOH") for a review of
the circumstances surrounding the convictions.
After a review of the convictions, the DOH took the following
action: (a) imposed a $5,000 fine; and, (b) forced Dr. Gellman
to resign the Directorships at both Franklin General and
Sunrise. Dr. Gellman was also placed on three years probation
by the Office of Professional Medical Conduct.
By letter dated January 5, 1990, the defendant notified Dr.
Gellman that as a result of these convictions, he would be
excluded from participation in the Medicare programs and any
similar state health care programs, including Medicaid,
pursuant to 42 U.S.C. § 1320a-7(a), the "mandatory" exclusion
provision. The letter also afforded Dr. Gellman an opportunity
to provide the defendant with any mitigating information that
it should consider. Dr. Gellman ultimately submitted such
information. On July 20, 1990 the defendant gave Dr. Gellman
final notice of the determination to terminate his
participation in Medicare and any similar state programs for a
period of five years, effective twenty days from the date of
the letter. This second notice, however, based the termination
under 42 U.S.C. § 1320a-7(b), rather than subsection 7(a),
which is the "permissive" exclusion provision.
Dr. Gellman commenced this action on August 20, 1990, pursuant
to 42 U.S.C. § 405(g) and 1320a-7(f)(1), seeking to restrain
and enjoin the defendant from excluding him from participating
in the Medicare and related state programs prior to an
administrative hearing and disposition. On August 20, 1990,
Circuit Judge George C. Pratt, sitting by designation, signed
an Order to Show Cause which scheduled the preliminary
injunction hearing before this Court on August 22, 1990. Judge
Pratt also denied Dr. Gellman's request for a Temporary
In opposition, the defendant argues first, that the Court lacks
subject matter jurisdiction over the action and requests
dismissal under Fed.R.Civ.P. 12(h)(3); and second, even
assuming jurisdiction exists, Dr. Gellman has failed to
establish the traditional elements entitling him to a
This Court heard oral argument on the preliminary injunction
application on August 22, 1990, at which time the parties
stipulated that Dr. Gellman could continue as a Medicare
provider and that he would be afforded the opportunity to
submit a response to the defendant's final exhaustion notice
dated July 20, 1990. This was done to ensure that Dr. Gellman
had received the proper notice of the specific statutory
provision under which he was being excluded, namely, 42 U.S.C. § 1320a-7(b).
Thereafter, by letter dated October 30, 1990, the
defendant notified Dr. Gellman that the original determination
of suspension would stand. The parties appeared for a
conference on November 16, 1990 before this Court, at which
time additional briefing was requested on the issue of the
Court's subject matter jurisdiction.
Concurrent with this action, Dr. Gellman is also attempting to
exhaust his administrative remedies. At this time, the parties
have made written submissions to the Secretary and a
pre-hearing conference is scheduled for sometime in the near
future. No final administrative determination has been made.
At the outset, the Court must first determine whether subject
matter jurisdiction exists (see Fed.R.Civ.P. 12[h];
Republic of the Philippines v. Marcos, 806 F.2d 344, 352 [2d
Cir. 1986], cert. dismissed sub nom. Ancor Holdings, N.V. v.
Republic of the Philippines, 480 U.S. 942, 107 S.Ct. 1597, 94
L.Ed.2d 784, cert. denied sub nom. New York Land ...