In his Executive Order 38, Governor Andrew Cuomo directed 13 state agencies, including the Department of Health (DOH), to issue regulations restricting the amounts of executive compensation and administrative expenses of health care and other service providers that receive state funding. The Health Department (and the other agencies) issued regulations that were to take effect on July 1, 2013. Three separate courts have now ruled on challenges to these regulations, with two upholding all or most of the regulations, and one striking them down.
Background
Following extensive press reports about excessive compensation and benefit packages for executives of a large not-for-profit agency that served the developmentally disabled and that depended heavily upon state Medicaid funding, in 2011 Governor Cuomo appointed a task force to investigate executive compensation at not-for-profit organizations that receive support from Medicaid or other taxpayer funding. The task force collected detailed information from thousands of not-for-profit organizations in New York that provide health and social services and receive Medicaid reimbursement or other state funding.
