NUMC saga: The Empire State strikes back

Daily Point

State threatens NUMC ahead of Thursday meeting; Bruderman responds

State Department of Health Commissioner James V. McDonald issued a sharply worded letter to Nassau University Medical Center chairman Matthew Bruderman Thursday afternoon, just hours before the NUMC board was scheduled to meet to approve an arrangement that would make interim chief executive Megan Ryan permanent — and, according to the board agenda, pay her $750,000 annually for five years.

The letter threatened that if the hospital and its public benefit corporation, Nassau Health Care Corp., went ahead with formalizing Ryan’s contract or conducted other "noncompliant actions," the state would consider taking further action, including "debt recovery" — likely a reference to the more than $380 million the hospital owes to the New York State Health Insurance Program.

"These actions are deeply concerning and appear to contravene the conditions previously communicated by the Department as requirements for any state operating support in response to your application for Vital Access Provider Assurance Program (VAPAP) funding," the letter, obtained by The Point Thursday afternoon, said.

NUMC’s board was scheduled to meet at 6 p.m. Thursday to approve the Ryan arrangement, along with a slew of other salary increases, vendor contracts and other moves. The board is also expected to assess the hospital’s budget at Thursday’s meeting.

In an interview with The Point late Thursday afternoon, Bruderman said Ryan has agreed to receive $550,000 annual compensation, rather than the $750,000 initially agreed upon.

"She’s a good sport," Bruderman said. "People are making a stink."

Bruderman, who said he received the state's letter and would respond to it soon, added that NUMC now has $70 million in cash on hand and would be reporting financial results at Thursday’s meeting that show the hospital to be profitable. He noted that by his assessment, the hospital no longer owes the health insurance program funds, as it should be considered within the $1 billion that he says the state owes NUMC, as per a notice of claim the hospital filed last month.

"The hospital is not failing anymore… The hospital is in great shape," Bruderman said. "Anyone who says anything else about the hospital is a political sleazeball."

In his letter, McDonald noted that the Department of Health had previously asked NUMC’s public benefit corporation, Nassau Health Care Corp., to conduct a "professional, public and comprehensive" external search for a new chief executive. The hospital, McDonald wrote, never provided any documentation to show that it undertook such a search — and therefore, department officials "assume you have not."

"Proceeding with the planned CEO appointment, who seemingly lacks the relevant experience and expertise to lead a hospital, or similar noncompliant actions will affirm that NHCC is no longer in need of state assistance, and the State will act accordingly," McDonald wrote.

Bruderman defended Ryan, calling her a "brilliant attorney" and citing her institutional knowledge, the support she has within the community and the progress she has made at the hospital both in terms of its finances and its quality of care.

"I would actually say that I think that’s the misogynistic, disgusting politicians and men who are primarily complaining about a woman who in some cases might make more than they do," Bruderman said of state officials and others who’ve criticized Ryan. "I truly believe it’s disrespectful to all women. If she were a man, no one would question her compensation versus what she’s done for the hospital."

McDonald’s letter also pointedly referred to NUMC’s recent decision to file an Article 78 lawsuit against the Nassau Interim Finance Authority — Nassau County’s state-appointed fiscal control board.

"NHCC’s recent expenditures further raise serious questions about the institution's financial priorities," the letter continued. "If NHCC can allocate substantial resources for activities that appear designed to dodge or eliminate the fiscal oversight of the Nassau Interim Finance Authority (NIFA), as well as a multi-million dollar executive compensation package, it seems apparent that state financial assistance through VAPAP is unnecessary."

McDonald wrote that in order to avoid further "consequences," the NHCC board should "halt any action to establish new management contracts, including but not limited to a CEO appointment" and should submit additional information that the Department of Health previously requested but "which remains outstanding." That includes a five-year transformation plan, a quality improvement plan and additional information on the hospital’s corporate structure, gross compensation and consultant and lobbyist costs.

"Additionally, NHCC must comply with reporting requirements to NIFA regarding new management hires, significant contracts, and financial oversight," McDonald wrote. "Any actions that violate NIFA’’s authority or the terms outlined above may trigger further intervention by the State."

But Bruderman told The Point that he thinks "NIFA has no jurisdiction" over the hospital.

"We’re continuing to give them information but NIFA doesn’t have any authority over our contracts and certainly not over contracts that allow us to sue them and sue the state," Bruderman said.

Bruderman also told The Point that once "things have settled down" with the state and the county, he would like to retire as the hospital’s chairman.

"If the state and the county can sit down with me and make sure the place is in good hands, I’m out of there next month," he said.

— Randi F. Marshall randi.marshall@newsday.com

Pencil Point

The Trump revolution

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Final Point

Hochul’s deadline nearing for signing emergency contract oversight bill

In the traditional year-end flurry of legislation hitting Gov. Kathy Hochul’s desk is an emergency contract oversight bill Comptroller Tom DiNapoli is urging her for the second year in row to sign. It has been passed twice, unanimously, by the State Legislature but Hochul vetoed the measure last year and it’s unclear whether it will meet the same fate this year. Hochul has called for the bill and has until Dec. 13 to sign it.

It almost always seems that malfeasance in the contracting process involves these very contracts that are done hurriedly without oversight, really without anyone knowing they were issued for months. Usually it’s federal prosecutors who get the first sniffs at what are sweetheart deals

The state comptroller must by law review all contracts $50,000 and above unless the money is being spent in furtherance of an executive order declaring an emergency or the legislature puts a rare exemption of review in a spending bill. It’s part of the checks and balances of state government but also part of the Albany power struggle.

"This bill would make a major difference on transparency and accountability for contracts that are fast-tracked during an emergency or bypass our routine oversight," said DiNapoli. "This is information that New Yorkers deserve to have available to them."

Often, it turns out the connection of the contract with a real emergency is tangential. The governor tied a $12.2M State Police building purchase for a forensic lab and another $10.8M for a training academy to a gun violence executive order that has been in place for three years.

In vetoing the bill last year, Hochul said it "imposed a significant burden" on state agencies during emergencies such as natural disasters and other life-threatening situations, "putting the state’s disaster response and emergency preparedness at risk." DiNapoli counters that the bill has been streamlined to accommodate those concerns, and it now requires posting just the basics of the contract, such as the name of the vendor, how it relates to the emergency, whether it was no bid and if so, why, within 30 days on the website of the administrative agency that is spending the money.

Newsday’s editorial board wrote an August editorial in support of the bill. Read it here. 

— Rita Ciolli rita.ciollii@newsday.com

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