NIFA approves legal contracts for NUMC's $1B suit against NY

The Nassau County Interim Finance Authority approved the hiring of two law firms representing the Nassau Health Care Corporation following a preliminary court ruling involving a more than $1 billion lawsuit against the state, officials said.

NIFA, which has approval power over county contracts including those issued to outside law firms, approved a pair of contracts for two separate lawsuits on Friday following the court order, officials said. Those contracts, for $325,000 each, were for two Manhattan-based law firms, Susman Godfrey LLP and Pollock Cohen LLP, hired by hospital executives.

NHCC, which oversees Nassau University Medical Center, is also suing NIFA, urging the oversight board be stripped of its power to approve NUMC's finances.

Friday’s ruling follows months of sparring between hospital executives, county leaders and state officials, who have threatened to take over the cash-strapped hospital. On Friday, Gov. Kathy Hochul told Newsday that Nassau County and hospital officials need to "step up" in its management of the hospital.

In NHCC’s suit against the state filed on Dec. 27, NUMC claims state officials dodged their legal obligation to fund the so-called Disproportionate Share Hospital, a designation for hospitals that treat a large share of low-income patients. Hospital executives claim NUMC has been stiffed $1.06 billion owed by the state dating to 2001.

The previously unreported suit alleges the state broke federal Medicaid laws through a "systematic theft of Medicaid funds" from NUMC in which the Department of Health "deprived" the hospital of hundreds of millions of dollars over the course of nearly 25 years.

The state "denies the allegations in the complaint, and we will be filing a response in court," a spokesperson for the Department of Health wrote in a statement to Newsday.

"They don’t want us fighting back because they want Albany politicians in charge of Nassau’s health care," Matthew Bruderman, chairman of the NHCC Board, wrote in a statement on Friday.

In a statement, NIFA Chairman Richard Kessel — a Hochul appointee — said NIFA will "continue to argue the merits of the case and work to ensure the continued financial stability of the hospital."

"NIFA is dedicated to finding a path forward that is in the best interest of the hospital and the residents and communities that it serves," Kessel added.

Lawyers for NIFA acknowledged the agency had "provisionally approved" the contracts and said it "continued its review of the contracts in the normal course, making reasonable inquiries to NHCC but receiving no response," according to court papers filed Friday.

Nassau County Executive Bruce Blakeman told Newsday in a statement that the state has been blaming NUMC’s financial woes on the hospital’s management "when all along they were shorting the hospital by hundreds of millions of dollars."

"With the state calling for more oversight at NUMC, it’s equivalent to putting a fox to guard a chicken coop," he said.