Thursday, October 1, 2026
The Nassau County Interim Finance Authority has filed a motion to dismiss what it calls a meritless lawsuit by the Nassau Health Care Corporation, which seeks to overturn NIFA’s declaration of a control period over NHCC and challenges the authority’s financial oversight.
NIFA argues that NHCC’s claims ignore controlling federal and New York state laws related to Medicaid non-federal share funding. NHCC, which operates Nassau University Medical Center, has been contributing to these payments but erroneously claims the state is responsible.
“This frivolous litigation is a gross waste of public funds by NHCC’s management, which they brought to avoid responsibility for structural deficits, a deferred pension payment of almost $40 million, and approximately $420 million in overdue health care insurance premiums, an outstanding balance which continues to grow by approximately $7.5 million each month,” NIFA Chairman Richard Kessel said. “NHCC is ailing, and the only medicine its leadership can prescribe is to file vexatious lawsuits in the desperate hope to pressure the state into providing funding without requiring reforms. Instead, NHCC must work cooperatively with the state Department of Health to institute changes necessary to take advantage of available funding programs.”
NIFA’s motion asserts that NHCC’s claims are legally baseless because state law clearly makes Nassau County and/or NHCC—not the state—responsible for the Medicaid payments in question. It also states that federal law allows local governments, including public authorities like NHCC, to fund Medicaid payments.
“In other words, the entire premise of NHCC’s claim—that NIFA failed in its financial oversight of NHCC—fails as a matter of law because both the applicable federal law and regulation and state statutes clearly permit the transactions about which NHCC complains,” NIFA’s motion states.
A federal healthcare expert with three decades of experience supported NIFA’s argument, stating in court papers, “Petitioners erroneously claim that federal law prohibits public hospitals from contributing the local share of DSH and UPL funding, when in fact the law only prohibits private hospitals from doing so.”
NIFA also criticized NHCC for demonstrating a lack of understanding of laws and funding mechanisms related to the public benefit corporation it manages. The authority pointed out that NHCC had previously retained an expert attorney from a national law firm in 2010 to advise on the Medicaid payment structure now being contested and had twice extended that contract in 2011.
“In a letter from NIFA counsel to NHCC counsel, NIFA reminded NHCC that it retained an expert attorney from a national law firm way back in 2010 for purposes of providing advice and counsel regarding the Medicaid payment structure now at issue and extended that contract twice in 2011, who has a long public record of approving the legality of such funding,” the motion states. “Remarkably, NHCC has refused to withdraw its lawsuit in light of this damning fact.”
NIFA Vice Chairman Rory Lancman strongly criticized NHCC’s legal action, calling it an attempt to distract from its financial mismanagement.
“The jig is up. The gaslighting is over,” Lancman said. “As our filing with the court makes crystal clear, NUMC’s lawsuit is nothing more than a baseless publicity stunt to obscure the reality that NUMC’s leadership has brought this critically important hospital to the brink of collapse, and to put off the inevitable reckoning for those responsible for this debacle. I implore NUMC’s leadership to search within themselves for some remaining vestige of a sense of responsibility to the public, their patients, and their employees, and to drop this expensive waste of legal fees in favor of working with NIFA and the governor to save NUMC.”
Furthermore, NIFA’s motion seeks to dismiss NUMC as a party in the lawsuit, arguing that it lacks the capacity to sue. The authority contends that NUMC is an operating division of NHCC with no separate legal existence or authority to initiate litigation.
In response to NIFA's motion, Steven Cohen, an attorney representing NHCC said: “Even in filing this motion, NIFA demonstrates its continuing failure as a so-called watchdog agency. It took them nearly four months to assert their position, without providing a single expert to corroborate their interpretation of the law. NIFA shockingly believes that Nassau's only public safety net hospital that serves the poor and uninsured is actually expected to front the state share of money to receive payment for services rendered a year ago. It’s nonsensical. Sadly, NIFA again makes clear its true mission is political - to carry the water of the governor and cover up the State’s corruption. After misrepresenting NUMC’s financial position for years, they are doubling down on an agenda that will lead Nassau County into a healthcare crisis instead of standing up for taxpayers and patients.”
The case remains pending in court.
