NUMC deficit plan: restrict OT and appeal more insurance claim denials

Operators of Nassau University Medical Center, which is seeking tens of millions of dollars in emergency state aid, have filed a financial improvement plan with the state Department of Health that commits to reducing deficits by appealing more insurance claim denials and restricting overtime and physician bonuses.

But state officials, Nassau County legislators and health care experts expressed skepticism about whether the proposal could cure deep fiscal problems at NuHealth, the public benefit corporation that runs NUMC.

On March 1, State Health Commissioner James McDonald asked NuHealth to submit a deficit reduction plan and launch a search for a permanent CEO and president in order to qualify for $83 million in emergency state aid.

Newsday obtained a copy of a letter NuHealth chairman Matthew Bruderman and interim president and CEO Megan Ryan sent in response to McDonald on March 25, as well as a letter Bruderman wrote to Gov. Kathy Hochul.

But budget shortfalls would continue even under the NuHealth plan, according to an attachment to the NuHealth letter. The deficit would range from $18 million to $67 million in 2027, compared with a projected shortfall of $78.2 million to $121 million in 2024, NuHealth said.

Hospital officials said their plan to aggressively appeal insurance claim denials could yield millions of dollars in new revenues. Officials said they also expected to boost revenues after updating prices for medical procedures for the first time in more than a decade.

NUMC told the state it already had cut overtime for staff and was reducing what physicians can earn from the Faculty Practice Plan, a $13 million pool of revenue that physicians and administrators can access for treating patients.

In response to McDonald's request, NuHealth officials also identified their 20 highest paid employees, with 18 of them making more than $500,000 each. NuHealth also said it had cut ties with its outside lobbyist, Park Strategies, founded by former Republican U.S. Sen. Alfonse D'Amato.

Richard Kessel, chairman of the Nassau Interim Finance Authority, which controls hospital and Nassau County finances, told Newsday: “Whil e there’s been some progress made overall, the hospital is still not showing the kind of compliance in full that’s necessary to be eligible for further st ate aid considerations.”

The cash crisis at NuHealth, Nassau's only public hospital system, comes amid warnings by a consulting firm hired by NIFA that NuHealth could run out of cash in coming weeks.

Political tensions also are high. Last week, the county mailed a taxpayer-funded placard accusing Hochul, a Democrat, and some state legislators of “defunding” the hospital. The mailer features a portrait of Republican Nassau County Executive Bruce Blakeman, who urges recipients to sign an online petition: “Tell Governor Hochul: Keep NUMC Open!” 

Ryan, the interim CEO, told Newsday NUMC was “overhauling everything” and was engaged in a “multi-front war … of saving the hospital and making it a better place.”

“We're doing a whole change of culture here,” Ryan said. “Things are fluid; we are looking for strategic partnerships. We're looking at every opportunity we can to make this place better, reduce our costs and increase our revenue.”

Vikas Saini, president and CEO of the Lown Institute, a health care think thank based in Needham, Massachusetts,  said NUMC was right to pursue strategies to cut costs and boost revenues.

But, “it’s awfully late,” Saini told Newsday.

“All the things they're saying are things that a really highly effective management team would have to do, but at this late hour is it enough in the short term? Seems unlikely given where they are,” Saini said.

Martine Hackett, a professor of public health at Hofstra University, said: “The idea that you’re all the sudden going to be doing the thing you hadn't been doing before, begs credibility, without bringing new people in,” to run operations.

Democrats cited Blakeman's recent mailer in accusing him and Bruderman, a Republican, of sabotaging negotiations by lobbing political attacks at Hochul.

Blakeman and Bruderman have cited a decline in government subsidies.

McDonald argued the state has boosted funding for NuHealth, but said the health care system owes more than $300 million in unpaid health care premiums to the state.

Nassau Legis. Delia DeRiggi-Whitton (D-Glen Cove) told Newsday Blakeman was wrong to send it using taxpayer dollars.

In going after Hochul and the state, Blakeman is “blaming the people that might be helping him, which could be sabotaging the whole situation,” DeRiggi-Whitton said.

Blakeman spokesman Chris Boyle did not answer a question about the cost of the mailer.

By Scott Eidler

scott.eidler@newsday.com@ScottEidler

Scott Eidler covers Nassau County government and politics for Newsday. Scott has worked at Newsday since 2012 and previously covered municipal government and education.