NASSAU HEALTH CARE CORPORATION MISSES
PENSION PAYMENT TO NEW YORK STATE

A monthly review by the Nassau County Comptroller has discovered that the Nassau Health Care Corporation (NHCC) has failed to make its full required 2003 pension contribution to the New York State Retirement System, Comptroller Howard S. Weitzman revealed today.

"Citing cash-flow problems, the Corporation to date has paid only 20 percent of its employee pension bill for the current year – $1.6 million out of the $8 million it owes," Mr. Weitzman said. "The failure to make full pension contributions on behalf of its employees is, unfortunately, further evidence of the NHCC’s inability to meet its current obligations."

The Nassau County Comptroller’s Office has been conducting monthly reviews of the Health Care Corporation's cash balances, after a review in September 2003 found a precipitous decline in NHCC's cash-on-hand during the first eight months of the year.

Also in September, New York State Comptroller Alan G. Hevesi issued a state audit that concluded that NHCC’s multi-year financial plan was unrealistic and that it would likely lose more money than projected.

The Corporation has made two payments to the New York State and Local Employees Retirement System this month. The first was a payment of $2,375,810 representing the first installment on its contribution to the 2002 local government retirement incentive program. The second payment, of $1,610,277, represents 20 percent of NHCC’s regular pension payment for the current year. In a December 12 letter to the retirement system, the Corporation wrote that "…cash flow problems at Nassau Health Care Corporation prohibit us from providing payment in full at this time."

"Paying the retirement incentive program contribution in installments, at 8 percent interest, may be allowed under the State’s requirements," Mr. Weitzman said, “but it is not acceptable for NHCC to withhold regular pension payments on behalf of its employees.

"The decision to withhold regular pension payments is all the more egregious considering that the health care corporation had originally budgeted for a larger contribution." In addition to charging 8 percent interest, the State could ultimately intercept Medicaid funds due the Corporation to make up the shortfall if the payment is not made, the Comptroller noted.

"Moreover, there is currently no indication that the Corporation will be in a better position to make this payment in the future, in addition to next year’s payment, which is projected to be approximately $21 million."

"Nassau County residents, especially our neediest citizens, depend on the Nassau University Medical Center and the A. Holly Patterson Extended Care Facility," Mr. Weitzman said. "NHCC’s management must manage its resources better in order to meet its obligations. Otherwise the future of the hospital itself, and the vital services it provides to the community, is in serious doubt."