Sunday, January 12, 2025
The Nassau Health Care Corporation and Nassau University Medical Center say they intend to file legal claims against New York state for $1.06 billion, plus interest, for withholding Medicaid payments that the hospital says it is entitled to.
According to notice-of-claims documents distributed to reporters at a Nov. 20 news conference in the lobby of the East Meadow hospital, a disproportionately large share of patients served by NUMC are eligible for Medicaid. NUMC is one of three public hospitals in New York that serve all patients, regardless of their ability to pay for medical care.
Because of the large number of Medicaid patients, the hospital receives federal funding through the Disproportionate Share Hospital program and the Upper Payment Limit program — both Medicaid programs authorized under the Social Security Act. In order to receive payments from the federal government, states — in NUMC’s case, New York — must contribute their assigned share, commonly referred to as the state share or non-federal share, to hospital funding.
Typically, the state share matches the federal contribution.
According to the notice-of-claims documents, in 2024 NUMC was due to receive DSH payments totaling roughly $100.2 million.
The federal share of the DSH payments was half of that total, around $50.1 million, which was transferred to the State Department of Health for distribution. The state was required to provide the other $50.1 million from either state funds or local contributions. The state was then required to combine the federal and non-federal shares and wire the total to NUMC.
The documents allege that the state orchestrated a ruse to mislead the federal government by requiring NUMC to front the state’s contractual share of the DSH funds from its own operating account. As a result, NUMC received only half of the DSH payments it was entitled to, because the state required the hospital to fund its own non-federal share.
The hospital is alleging that is has been a victim of similar schemes since at least 2001. Over the past 23 years, NUMC has received approximately $1.08 billion from the federal government in DSH payments, but has not received a total of roughly $1.06 billion in non-federal shares.
“What New York state did is not just deliberate financial deception,” Steve Cohen, an attorney representing the hospital, said. “It risked the future of a hospital that is dedicated to our area’s most at-risk people. It should shock every taxpayer.”
Cohen told reporters after the news conference that the hospital is required to notify the state attorney general’s office of its intentions, so the state has time to prepare for legal proceedings. When additional litigation is filed, information about the case will be made public, Cohen added, and all legal proceedings will take place in New York’s Court of Claims.
“We are continuing to work with Nassau County on an appropriate solution for the future of NUMC,” Gordon Tepper, the Long Island press secretary for Gov. Kathy Hochul, emailed in a statement to the Herald. “Our concerns are the fiscal health of the hospital and patient care.”
At a special meeting on Nov. 18 of the Nassau Health Care Corporation board, which oversees the operations of NUMC and the A. Holly Paterson Extended Care Facility in Uniondale, the board authorized a contract with two law firms, Susman Godfrey LLP and Pollock and Cohen, to provide legal services to the health care corporation. The contract amount, at a contingency rate based on collections and additional funds, is not to exceed $325,000, according to the meeting’s agenda, which is posted on NUMC’s website.
According to Richard Kessel, the chairman and director of the Nassau County Interim Finance Authority, a public-benefit corporation that monitors and oversees the county’s finances, NIFA must approve hospital contracts over $50,000.
“We’re required to approve the law firm contracts that they voted on a few days ago,” Kessel said. “We put them on notice that those contracts should be submitted to NIFA, and that no money should be spent until we’ve reviewed and approved them.”
According to the state, if NIFA does not approve the contracts, the law firms cannot be paid for their services. Asked about that possibility, Cohen told reporters that he hoped the finance authority “does the right thing.”
“You shouldn’t be retaliating against the people who are trying to uncover the wrongdoing,” he said.
The hospital has been under fire for years, accused of financial mismanagement, but this year NUMC has made significant strides toward recovery, receiving positive audits and upgraded safety ratings from a variety of organizations. Matthew Bruderman, chairman of the Nassau Health Care Corporation board, attributes much of the hospital’s recovery to the work of Meg Ryan, NUMC’s interim president and chief executive, and her leadership team.
“As we prepare to initiate litigation, the facts will reveal that the state of New York deliberately violated federal law, depriving this hospital of the resources it needs to be financially sustainable,” Ryan wrote in a news release. “NUMC is a lifeline for Nassau County’s most vulnerable residents. The state’s financial misconduct has hurt this institution and the people it serves. Today marks the beginning of holding the state accountable and ensuring this community gets the resources it deserves.”
