N.Y. court lifts some lim­its on providers’ and in­sur­ers’ ex­ec­u­tive pay

Modern Healthcare - - Regional News - —Alex Kacik

The New York state Court of Ap­peals re­cently ruled that providers and health plans that con­tract with the state may pay ex­ec­u­tives more than $199,000 a year as long as they are not us­ing state funds.

Chief Judge Janet DiFiore said it was un­con­sti­tu­tional to pe­nal­ize such providers or plans if they paid their ex­ec­u­tives more than $199,000 an­nu­ally from any source of fund­ing—state or pri­vate. The De­part­ment of Health ex­ceeded its author­ity with “soft caps” by “at­tempt­ing to reg­u­late com­pen­sa­tion from all sources,” ac­cord­ing to the ap­pel­late court, which agreed with a lower court rul­ing.

But the “hard cap” is still in­tact, ab­sent any waivers. Un­der that pro­vi­sion, con­tracted providers and in­sur­ers can’t use state funds for ex­ec­u­tive com­pen­sa­tion that ex­ceeds $199,000. It also caps ad­min­is­tra­tive spend­ing to 15% of their to­tal op­er­at­ing ex­penses.

Gov. An­drew Cuomo signed an ex­ec­u­tive or­der in 2012 seek­ing to curb abuses in ex­ec­u­tive com­pen­sa­tion and ad­min­is­tra­tive costs. It ap­plies to providers or in­sur­ers that re­ceive more than an av­er­age of $500,000 from the state, namely from Med­ic­aid, dur­ing a two-year pe­riod.

Also, 30% of the or­ga­ni­za­tion’s to­tal an­nual rev­enue has to come from the state.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.