Thursday, January 23, 2025
Following the alleged discovery that New York state engaged in a decades-long Medicaid scam to deprive the largest safety-net hospital on Long Island of as much as $1 billion in aid, Nassau University Medical Center and its parent public benefit corporation, Nassau Health Care Corporation, have filed suit against the Nassau County Interim Finance Authority, accusing the authority of gross negligence and abuses of power.
NIFA assumed financial oversight of NUMC in 2020, citing poor financial conditions while failing to acknowledge that the state’s actions, including Medicaid fraud and reduced aid, caused these challenges, the hospital said in a Dec. 2 news release.
The petition alleges there were significant violations of the public’s trust on the part of the state-appointed fiscal watchdog to advance either its own or the state’s agenda to the reputational and financial detriment of the hospital.
“What my clients have uncovered eviscerates the credibility of NIFA as an independent financial oversight organization,” said Steve Cohen, partner at Pollock Cohen, who is representing NUMC. “NIFA’s repeated efforts to craft a misleading public narrative and manipulate data are clear attempts to justify its legally dubious oversight of NUMC’s finances.”
NUMC is currently pursuing legal action against the state. The hospital is alleging that the state orchestrated a ruse to withhold Medicaid reimbursement payments it was entitled to, since at least 2001. A notice-of-claims was sent to the state, outlining NUMC’s plan to file a lawsuit for $1.06 billion, on Nov. 20.
In response to the notice-of-claims, the state said: “We are continuing to work with Nassau County on an appropriate solution for the future of NUMC. Our concerns are the fiscal health of the hospital and patient care.”
Richard Kessel, the chairman and director of the finance authority, told the Herald that the finance authority has to approve hospital contracts over $50,000 — and the legal contracts that the health care corporation set up to file suit against the state are not to exceed $325,000, according to a recent meeting agenda posted on the hospital’s website.
Kessel said the hospital was notified that they needed to review the legal contracts. According to the state, if NIFA does not approve the contracts, the law firms cannot be paid for their services.
Regarding the new suits against NIFA, the petition lays out the finance authority’s failure or unwillingness to uncover the state’s Medicaid shell game, and it accuses NIFA of using it’s high-paid consulting firm, Alvarez and Marsal, to manipulate its reports to shield the state from responsibility for destabilizing the hospital.
“NIFA’s failure to uncover the state’s Medicaid fraud scam has deprived the hospital and those it serves of substantial aid — its unwillingness to provide basic fiscal supervision is truly shocking,” Cohen said. “If all this behavior wasn’t intentional, it was certainly grossly negligent.”
The suit asks the court to nullify NIFA’s financial oversight of NUMC, impose a monitor over NIFA to ensure it is fulfilling its statutory role competently, and independently, instruct NIFA to apologize publicly and correct two manipulated financial reports produced by its consultant, Alvarez & Marsal.
“They abused their authority to extend financial oversight to the hospital and then provided no oversight,” NHCC Chairman Matthew Bruderman said in the Dec. 2 news release. “What was worse, they lied to the public by omitting key data about state aid cuts and the state’s Medicaid scheme to justify recommending slashing our staff by 90 percent during the pandemic. They provided no solutions, despite paying their consultants millions.”
“NIFA has repeatedly misrepresented to the media, to the hospital’s staff, and to the public that the hospital was in the midst of a financial crisis and should be shut down,” Meg Ryan, the interim president and chief executive of the hospital said. “That is simply untrue, insulting to the dedicated people who work here and unnecessarily scares the patients who depend on this hospital.”
Kessel, in statement published by Newsday, said, “We’re reviewing the litigation but again, I think the hospital is wasting money that could be better spent on patient care rather than enriching law firms and lawyers in a frivolous, ridiculous lawsuit.”
The leadership team at the hospital has undertaken a substantial fiscal and operational reform program to dramatically improve the hospital’s financial position. NUMC recently received its Gold Star Certification from the Joint Commission and its first increase in its healthcare grades in six years.
“Our entire team has done an outstanding job putting this reform program into action to ensure that we continue to improve the range and quality of our services to everyone, regardless of their ability to pay,” Ryan said.
“We are an essential part of this community, and we won’t let Albany politicians play games with people’s healthcare,” Bruderman added.
