asane

NUMC’s president is suing the state, possibly in a move to block a takeover

Online Niel November 21, 2024

Daily point

Blakeman’s position on the dispute is uncertain; discussions continue with NY over control

Nassau University Medical Center has filed a $1.06 billion lawsuit against New York State, saying the state “orchestrated a ruse to defraud the federal government” in handling funds it was owed as part of the federal Disproportionate Share Hospital program .

The legal showdown comes amid intensifying negotiations for control of the facility. State officials discussed the possibility of installing a temporary operator at NUMC, a conversation that included Nassau County Executive Bruce Blakeman and Nassau Interim Finance Authority Chairman Richard Kessel.

A spokesman for Blakeman declined to comment. A source familiar with the matter said the claim notice would have “no impact” on negotiations over a temporary operator.

But it’s unclear whether Blakeman, who has been part of ongoing negotiations with the state, supports the lawsuit by NUMC President Matthew Bruderman. If Blakeman sided with the hospital, the negotiations could fall apart. That would force the state to take unilateral action to install a temporary operator. If Blakeman sides with the state, it’s more likely that a joint county-state deal on new leadership, which would likely include removing Bruderman, Blakeman’s choice, could go forward.

The hospital’s legal notice, filed with Attorney General Letitia James, comes just two days after the NUMC board authorized interim executive director Megan Ryan to negotiate contracts with two outside law firms, Susman Godfrey and Pollock Cohen, to you offer them up to $325,000. each for “legal services”. Wednesday’s notice of claim was filed by Susman Godfrey attorney Steven M. Shepard.

But Kessel told The Point that NIFA had not seen or approved the two legal services contracts.

“We are required during the control period to approve all contracts over $50,000 entered into with the hospital,” Kessel said. “We haven’t seen these contracts yet — and we haven’t approved them at this point, so spending any money before our approval would be inappropriate.”

A NUMC spokesperson, in response to questions from The Point, wrote in an email: “The initial detentions did not require NIFA approval, but any amendments that may be required will be duly submitted to NIFA , as is our usual practice. Any suggestion of impropriety on the part of NUMC should deviate from NIFA, and the state’s deviation here does not hold water.”

When asked for additional questions, the spokesperson told The Point in another email that any “additional questions will be answered by counsel as we proceed with the lawsuits and other consequences associated with this state misconduct.”

The lawsuit comes as NUMC continues to owe the state more than $380 million in payments to the New York Health Insurance Program, which provides health insurance coverage to employees and retirees — a fact Kessel pointed out in his own response to the legal requirements of the hospital.

“As for the lawsuit, I think it’s frivolous and unnecessary, and I think they should spend their time cleaning up their own act and figuring out how they’re going to pay the $380 million they owe NYSHIP, rather than to file a silly, frivolous case. lawsuits,” Kessel said.

In the claim notice letter, NUMC claimed it was owed $100.2 million in payment this year, but only received half of that money after some convoluted maneuvering.

Typically, half of this disproportionate share payment comes from federal funds, while half is provided by local or state governments. But in its claim notice, NUMC said that while it received the federal portion, the local portion was provided through a complicated mechanism where NUMC itself initially provided the funds which were later returned to the hospital. The state, NUMC said, required the hospital to turn over $50.1 million to the Nassau County treasurer earlier this year. In turn, the county sent the same amount to the state Department of Health, which in turn sent the money back to NUMC.

The letter claims the hospital “has been the victim of similar schemes since at least 2001.”

However, multiple sources said the payment system is based on ongoing and past agreements between NUMC and Nassau County. The county, not the state, they said, is ultimately responsible for the local DSH quota.

But a NUMC spokesman wrote to The Point in response to a question: “The state is responsible.”

State officials said they continue to work on potential strategies for NUMC going forward.

“We care about the hospital’s fiscal health and patient care and are working toward a solution for the future of NUMC,” said Gordon Tepper, a spokesman for Gov. Kathy Hochul. “This is all noise.”

— Randi F. Marshall [email protected]