August 8, 2011

Gov. Cuomo Announces Task Force to Review Taxpayer Funded Not-for-Profits

On Wednesday, August 3, 2011, Governor Cuomo announced that he has created a new task force to “to investigate the executive and administrator compensation levels at not-for-profits that receive taxpayer support from the state.”  Although the task force will presumably review all taxpayer funded non-profits, the press release from the Governor’s office acknowledged that the creation of the task force was a reaction to reports of excessive executive compensation at non-profits funded with Medicaid dollars through the Office of People With Developmental Disabilities (OPWDD).  One of these reports was an August 2, 2011, front-page article in the New York Times which questioned executive compensation at New York City non-profits that serve the developmentally disabled.  That report noted that New York spends $10 billion annually to service the developmentally disabled, with half of that amount going to private providers.

The article also reported that the Commissioner for OPWDD, Courtney Burke, sent a one-page letter to those non-profits on Tuesday seeking their assistance to develop “a consistent and rational model of compensation,” in light of  “heightened concerns about the growth of Medicaid and Medicare.”   According to the article, a spokesman for Commissioner Burke “said that if the providers were unable to agree on an approach, her office had the authority to write compensation standards into state regulations and contracts with providers.”

The Governor’s press release also defined the scope of the task force. “The Governor’s task force will determine the protocol and scope of the investigation in order to target the audit to focus on ensuring that state taxpayer dollars meant to help and protect New Yorkers, particularly the poor and indigent, are going to that purpose and are not being diverted to compensation.  It will also provide recommendations for State agency policies and procedures that will ensure that taxpayer dollars are not being diverted to excessive compensation.”

One of the members of the task force is Medicaid Inspector General Jim Cox and the press release alluded to the exclusion remedy available to the State in dealing with health care fraud: “The State’s Medicaid Inspector General has the authority necessary to exclude providers from participation in the Medicaid program if it is found that they have engaged in fraudulent or abusive practices.”

This post was contributed by David Nardolillo.