NuHealth owes $93 million in employee health care premiums

NuHealth, the public benefit corporation that runs Nassau University Medical Center, owes New York State more than $93.3 million in health care premiums for its employees, a significant jump from February, when the balance was $66.4 million.

The state Department of Civil Service administers insurance through the New York State Health Insurance Program (NYSHIP) for 4,400 NuHealth employees and retirees. Earlier this year, the department warned enrollees’ coverage could be canceled if the corporation did not begin to make the late payments, documents show.

NuHealth operates NUMC, the county's only public hospital, as well as satellite health clinics and the A. Holly Patterson Extended Care Facility in Uniondale. The public benefit corporation has struggled to keep up with monthly premium bills to the state health insurance program, which covers more than 1.2 million state and local government employees, retirees and family members.

J. Marc Hannibal, special counsel for the state civil service department, alerted NuHealth to the $93.3 million in arrears in a May 29 letter. Hannibal urged the corporation to agree to a payment plan for the overdue balance.

Under the terms of the proposed payment plan, NuHealth would make a $15 million down payment by July 1 on the overdue balance, and monthly payments of at least $3.55 million for 24 months, beginning July 25.

NuHealth also would have to keep up with its regular monthly payments, according to a draft agreement supplied by the civil service department.

If any of the payments are not made on time, the department “is empowered to place the corporation in default and terminate the corporation’s NYSHIP coverage …,” according to the proposal.

“This situation is untenable and must be resolved,” Hannibal said in his May 29 letter.

George Tsunis, NuHealth board chairman, said the health system's premium bills total about $7 million a month, and the public benefit corporation neither can make those payments nor pay its past due balance.

“We have $93 million in arrears," Tsunis said in an interview. "This arrearage has been happening for a long time. Plus, every month we have a $7 million payment, and we are unable to afford either one of them. So we have worked with the Department of Health and New York State Civil Service to work out a payment plan. I believe we have an agreement in principle.”

Tsunis also said the corporation has participated in talks about paying a smaller monthly amount to the state. 

“We have worked out an agreement in principle where we’re going to write a significant check toward their arrearage and guarantee them a monthly check going forward,” Tsunis said.

Jian Paolucci, a spokesman for the state Civil Service Department, said in a statement: "While retaining all options available, the Department remains committed to working with Nassau University Medical Center to establish a repayment plan to address these long-standing arrears so that their employees and dependents are able to maintain health coverage."

The state has been trying since 2010 to get NuHealth to make its health premium payments. 

In a letter on Feb. 6, Raquel Gonzalez, the department’s deputy commissioner for administration, asked NuHealth to sign an agreement to make monthly payments of at least $5.5 million toward the past due insurance premiums.

At that time, the corporation owed the state more than $66.4 million, about 10 months' worth of premiums, Gonzalez said. 

In the letter, Gonzalez for the first time also noted the possibility that the department had the power to terminate health insurance for NuHealth employees.

And in a Feb. 13 letter to NuHealth chief financial officer John Maher, Gonzalez said if a repayment plan agreement were not established that day, “NuHealth has an obligation to immediately notify its enrollees that their health insurance will be terminated effective April 1, 2019.”

Jerry Laricchiuta, president of Civil Service Employees Association Local 830 said, which represents many NuHealth employees, said, “I think that the government, the state and the local government … have forgotten that we’re a safety net hospital and these are the bills that accumulate for any hospital.”

The health care bill, “has to be paid. It’s the most urgent pressing bill right now; along with dozens of other ones, this needs to be paid," Laricchiuta said. "You cannot fail."

Gonzalez said NuHealth had cut its arrears from $63 million to $33.2 million between May and August 2018. But by February, NuHealth again was “substantially in arrears," she wrote.

The past due balance “has grown substantially during the past two years, due to NuHealth’s failure to pay billed premiums,” Gonzalez said.

Tsunis said the arrears were due in part to the fact that NuHealth “lost a bunch of grants, a decline in some state payments to NuHealth and increases in health insurance premium costs."

Newsday obtained the state's letters through a Freedom of Information Law request.

Last May, when the past due health care premiums totaled $62.6 million, Tsunis acknowledged NuHealth was “woefully behind.”

He continued, “It’s a lot of money, but we’re going to start to chip away.”

Gonzalez wrote on Feb. 6 that NuHealth will be in default if it does not adhere to the repayment plan proposal and “is unable to provide a letter from a bank explaining why a loan is unavailable" to repay the balance. 

If NuHealth defaults, the civil service department “may terminate NuHealth’s member coverage retroactive to the last date premiums were paid in full.” Further, the civil service department “will also take legal action to recover claims paid after termination,” Gonzalez wrote.

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.