New York State wrongly barred from the Medicaid program a physician who had pleaded no contest to disciplinary charges involving non-Medicaid patients, an upstate appeals court has held on an issue that has divided the trial courts.

The Appellate Division, Fourth Department, adopted the reasoning of one Supreme Court justice in Manhattan and another in Buffalo, and rejected others, in limiting the scope of the Medicaid inspector general’s authority over physician conduct that does not implicate the Medicaid program.

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