ALBANY, N.Y., December 10 – The New York Appellate Division, Third Department, upheld the Department of Healths denial of a Colorado firm to provide durable material equipment for the New York State Medicaid program because there were no unmet needs for mail order durable medical supplies.

Senior Care Services, Inc. (SCS), a provider of incontinence products, requested reconsideration to review the departments decision, which SCS termed arbitrary and capricious, and a violation of the Commerce Clause of the U.S. Constitution and a provision of the General Medicaid Statute. A Division of Medicaid Fraud Control and Program Integrity review confirmed the denial.

SCS?then brought a CPLR Article 78 against the department and commissioner of health seeking, among other things, annulment of the denial. SCS later sought to amend the petition to allege that the departments policy constituted an un-adopted rule in violation of the state Administrative Procedures Act and the N.Y. Constitution Article IV Section 8, and to seek summary judgment.

The Supreme Court denied the motion to amend and for summary judgment and dismissed the petition because it was untimely and lacking in merit.

Judge Anthony V. Cardona, writing for the Appellate Division, found no abuse of discretion, but affirm primarily because the proposed amendment is without merit. Whether to grant or deny leave to amend a pleading lies solely with the discretion of the trial court, and its determination will not be disturbed on appeal absent a clear abuse of discretion, the judge said.

Based on the existence of over 4,000 facilities in the state which supply incontinence products, the total lack of consumer complaints of an inability to obtain such products, and in light of the broad regulatory discretion that OMM [Office of Medicaid Management] has to assess the Medicaid programs needs for certain medical products and services and to limit the enrollment of providers accordingly, it cannot be said that the denial of petitioners application was arbitrary and capricious.

Judge Cardona also found SCS claims that the denial violated the free choice of provider provision of the Federal Social Security Act and the Commerce Clause of the U.S. Constitution unavailing.

Judges Robert S. Rose and John A. Lahtinen concurred.