The operator of Nassau University Medical Center will be reviewed...

The operator of Nassau University Medical Center will be reviewed again by a Manhattan consulting firm to determine if it's in danger of running out of money. Credit: Barry Sloan

The Nassau Interim Finance Authority has rehired a consultant to review the public benefit corporation that runs Nassau University Medical Center amid heightened concern over the financial health of the county's only public hospital system.

NIFA voted 4-0 Thursday to hire Manhattan advisory firm Alvarez & Marsal under a new $250,000 contract that will be paid for by NIFA, a state board that oversees county and hospital finances. The firm most recently reviewed NUMC in 2020 and suggested a significant downsizing.

In January, NIFA warned that NuHealth is likely to run out of cash by year's end, a prospect that officials said would cause significant disruption to the community that NUMC serves. NUMC treats more than 300 patients daily, provides health care to underserved patients at a low cost and serves inmates at the county correctional center in East Meadow.

“It’s an urgent matter right now. We’re getting very close to the point where they might be running out of money," NIFA chairman Adam Barsky said Thursday.

NuHealth had an operating loss of $164 million in 2022, a $28 million increase over 2021 that represented its widest budget gap ever. The system has run deficits exceeding $100 million for the past three years. 

In a statement, NuHealth officials said the situation is not as dire as NIFA has projected. 

"Contrary to reports, [NuHealth] is increasing its cash balances due to the comprehensive reforms being undertaken by leadership. [NuHealth] is not running out of cash by December. In fact, daily cash on hand has actually been increasing. As an example, the hospital had $23 million on Aug. 24, 2023 and had $34 million by Sept. 8," according to the statement.

Officials added that the "finance department is being overhauled and changes to collections practices are already yielding success."

They said they "welcome" the consultants' review and have "identified a top notch candidate" to serve as chief financial officer, a position that has been vacant for three years. They did not name the candidate.

"We believe this [review] will further validate the numerous financial and operational reforms already underway," according to the statement.

Barsky said the consultants "are there to tell us what is the current state, to validate it rather than just take what the hospital says." 

"We need our own independent verification of whatever's being presented by the hospital to be able to evaluate any potential plans they put forth about its viability," Barksy said.

NUMC is one of three county-controlled hospital systems in New York State that receives most of their funding from state and federal government. The system is suffering in large part because of the end of programs that provided tens of millions of dollars each year to the hospital and the A. Holly Patterson Extended Care Facility in Uniondale, also operated by NuHealth.

Nassau County no longer provides a direct subsidy, but it backs $115 million in hospital system debt.

Outside auditors have issued "going concern" notes in NuHealth's five prior financial statements. Accountants use the term when there is substantial doubt an organization will survive without a major infusion of recurring revenue.

In 2020 NIFA hired Alvarez & Marsal under an $845,000 contract. The firm's 43-page report, issued in 2021, recommended a major restructuring.

It said the hospital should consider selling its nursing home, which has run millions of dollars in deficits in recent years and treats a population of mostly Queens residents. It also suggested closing NUMC's emergency room and reducing staff levels to about 300, from more than 3,400. NuHealth objected to the report.

Also Thursday, NIFA approved a 13-year contract between the county and the Nassau Civil Services Employees Association that provides wage increases and is expected to cost Nassau $765 million.

“It’s a fair contract, it’s good for the employees to have certainty for a long period," Barsky said. "It's also good for the county to have certainty what their costs are going to be for a long period of time."

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