OPINION OF THE COURT
Read, J.We hold that the Office of the Medicaid Inspector General (OMIG or the agency) is authorized to remove a physician from New York’s medical assistance (Medicaid) program in reliance solely on a consent order between the physician and the Board for Professional Medical Conduct (BPMC), regardless of whether BPMC chooses to suspend the physician’s license or OMIG conducts an independent investigation (see 18 NYCRR 515.7 [e]). OMIG has a responsibility to insure that scarce Medicaid dollars are spent on quality medical care for Medicaid recipients, who are often unable to vote with their feet. The agency may therefore properly decide that when the government is paying for the medical care of disadvantaged citizens, providers must possess more than the minimum level of competence necessary to avoid license suspension (see generally Matter of Medicon Diagnostic Labs. v Perales, 74 NY2d 539, 545 [1989] [“the agency charged with the responsibility of administering the medicaid program has inherent authority to protect the quality and value of services rendered by providers in that program”]). Indeed, federal law requires, as a condition of receipt of federal funding, that states institute administrative procedures enabling them to exclude Medicaid providers for furnishing substandard services, regardless of whether those services were supplied to Medicaid recipients (see 42 CFR 1002.210, 1001.701 [a] [2]).
In this litigation, Supreme Court annulled OMIG’s determination to terminate petitioner physician’s participation in the Medicaid program on the basis of a BPMC consent order, and directed his reinstatement. In the consent order, petitioner physician pleaded no contest to charges of professional misconduct *701and agreed to 36 months’ probation. Upon OMIG’s appeal, the Appellate Division affirmed, holding that it was arbitrary and capricious for the agency to bar petitioner physician from treating Medicaid patients when BPMC permitted him to continue to practice; and that OMIG was required to conduct an independent investigation before excluding a physician from Medicaid on the basis of a BPMC consent order (see 95 AD3d 82 [4th Dept 2012]). We subsequently granted OMIG permission to appeal (19 NY3d 813 [2012]).
We disagree with the Appellate Division’s rationale, but affirm because OMIG’s determination was arbitrary and capricious for another reason. Specifically, OMIG did not explain why the BPMC consent order in this case caused it to exercise its discretion pursuant to 18 NYCRR 515.7 (e) to exclude petitioner physician from the Medicaid program.
I.
The Office of Professional Medical Conduct (OPMC) comprises an investigatory arm (also called the Office of Professional Medical Conduct) and an adjudicatory arm, the BPMC. OPMC is the authority within the Department of Health (DOH) charged with investigating complaints of physician misconduct, and BPMC imposes sanctions if misconduct is found to have occurred. Frequently, BPMC will enter into a consent order with the physician under investigation, as happened here. OMIG, also housed within DOH, is responsible for policing New York’s Medicaid program. The legislature consolidated the powers of several extant state entities into one unit when it created OMIG in 2006 and placed it under the umbrella of DOH.
OPMC sends the results of its investigations, including consent orders, to OMIG, which then determines whether the physician in question should be terminated from participating in the Medicaid program. Sometimes, as in this case, OMIG removes the physician from the program even though the sanctions imposed by BPMC do not include license suspension. Petitioner physician questions the wisdom of this “collateral consequence” of a BPMC consent order, and argues that OMIG must defer to BPMC. But the applicable statutes and regulations authorize OMIG to exclude a physician from the Medicaid program regardless of the nature of the sanctions directed by BPMC.
When it established OMIG, the legislature enacted an extensive list of its functions and duties, including responsibility to
*702“pursue civil and administrative enforcement actions against any individual or entity that engages in fraud, abuse, or illegal or improper acts or unacceptable practices perpetrated within the medical assistance program, including but not limited to . . .
(c) imposition of administrative sanctions and penalties in accordance with state and federal laws and regulations .... In the pursuit of such civil and administrative enforcement actions under this subdivision, the inspector shall consider the quality and availability of medical care and services and the best interest of both the medical assistance program and recipients” (Public Health Law § 32 [6] [emphases added]).
And long before OMIG’s creation, the Department of Social Services, which was responsible for overseeing Medicaid prior to 1996 when this function was transferred to DOH, promulgated numerous regulations governing participation in and removal from the Medicaid program (see e.g. 18 NYCRR parts 504, 515). These Medicaid regulations empowered the successive responsible governmental entities to sanction and exclude medical professionals from the program (see e.g. 18 NYCRR 515.3 [a]). As relevant here, “the department” (meaning, in the current context, OMIG) is authorized to take “immediate action” to impose sanctions in certain circumstances “upon notice to the person” (18 NYCRR 515.7 [a]); specifically,
“[u]pon receiving notice that a person has been found to have violated a State or Federal statute or regulation pursuant to a final decision or determination of an agency having the power to conduct the proceeding . . . or after resolution of the proceeding by stipulation or agreement, and where the violation resulting in the final decision or determination would constitute an act described as professional misconduct or unprofessional conduct by the rules or regulations of the State Commissioner of Education or the State Board of Regents” (18 NYCRR 515.7 [e] [emphases added]).
The consent order at the heart of this case is without doubt a “stipulation or agreement” resolving a proceeding alleging professional misconduct; thus, OMIG’s decision to terminate petitioner physician’s participation in the Medicaid program falls squarely within the agency’s explicit powers. Notably, *703OMIG is not required by any statute or regulation to conduct an independent investigation or develop additional information or defer to BPMC before making such a decision. Of course, OMIG may always take additional investigatory steps if, in its discretion, it deems them necessary to inform its decisionmaking. Likewise, the agency may always decide, in a particular case, not to remove a disciplined physician from the Medicaid program. Indeed, in the majority of cases resolved by BPMC consent orders, OMIG apparently does not exclude the physicians involved. But nothing in the law or regulations requires this forbearance.
II.
The record includes a form—a “Consent Order Review Sheet”—completed by the OMIG auditor, a registered nurse with 41 years of experience, including extensive service on hospital audit committees for professional services and quality assurance. This review sheet includes, under the section captioned “Recommendation,” a few handwritten, barely legible, crossed out and interlined notes. These notes appear merely to repeat that there were two charges of negligence and that petitioner physician was placed on probation for 36 months, the same information summarized in a previous section of the review sheet, captioned “Consent Order Information.”
In this case there were indeed two serious charges of professional misconduct, involving the treatment of two elderly women, both of whom died soon after coming under petitioner physician’s care. But the basis for the auditor’s recommendation to terminate petitioner physician’s participation in the Medicaid program, which was approved without comment by four additional agency reviewers, does not appear anywhere in the administrative record. Although OMIG is, as already discussed, authorized to remove a physician from the program solely on the basis of a BPMC consent order, its decision to do so is concededly discretionary. The agency therefore has an obligation to explain why in a particular case exclusion was thought to be warranted.
On this record, there is no telling. Did the auditor recommend termination because there were two charges of professional misconduct? because both patients died? because the patients were elderly and the Medicaid program serves a significant elderly population? for some other reason(s) evident in the charges, which were available to the auditor? We simply do not *704know. In short, although OMIG is not required, by law, and surely should not be commanded by the courts, to defer to BP-MC’s judgments or undertake additional time- and resource-consuming investigations, here there is inadequate record support for the decision to exclude this particular sanctioned physician from the Medicaid program. As a result, OMIG’s decision was arbitrary and capricious and an abuse of discretion.
III.
Finally, another aspect of this case merits discussion. Petitioner physician settled with BPMC “in full satisfaction” of the charges of professional misconduct lodged against him. He complains that, as a result of OMIG’s subsequent action to exclude him from the Medicaid program, he did not achieve the complete settlement that he bargained for, even though BPMC and OMIG are both “units” within DOH. But BPMC and OMIG have separate statutory authority and different purposes. When resolving charges of professional misconduct with BPMC, physicians and their attorneys should be mindful that a settlement with BPMC does not bind OMIG, as petitioner physician discovered in this case.
Accordingly, the order of the Appellate Division should be affirmed, with costs.