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Oral Argument Set for LeadingAge NY Challenge to Executive Order #38 Regulations

As previously reported, the New York State Court of Appeals has accepted the appeal of LeadingAge New York et al v. Shah, a challenge we brought along with other groups to Executive Order #38 (EO #38) and the resulting regulations which cap executive compensation and administrative costs. The parties have submitted their briefs and reply briefs, and the case will be argued before the Court of Appeals in Albany on Wed., Sept. 5th. A companion case challenging the EO #38 requirements, Coalition of New York State Public Health Plans et al. v. New York State Department of Health et al., is also being heard that day.

The New York State Appellate Division, Third Department issued a decision in June 2017 in the LeadingAge New York case. The Third Department’s decision annulled the “soft cap” portion of the EO #38 regulations, which caps executive compensation paid from all funding sources, but upheld the “hard cap,” which limits executive compensation paid from state funds. The decision by the Third Department conflicted with earlier decisions issued by the Second Department upholding the regulations in their entirety, which made it likely that the Court of Appeals would take the case. The Court of Appeals has agreed to hear arguments on both the hard cap and the soft cap.

Pending consideration by the Court of Appeals, the regulations and filing requirements associated with EO #38 remain in effect throughout the state, except for Nassau County, where an earlier Supreme Court decision had stayed their implementation. As this issue of Intelligence goes to press, the EO #38 website still indicates that the stay remains in effect in Nassau County. For Medicaid providers, the due date for EO #38 filings is the due date associated with the provider’s cost report.

The legal briefs submitted to the Court of Appeals in these cases are posted on the NY Courts website here. Simply enter the APL number, which is 2017-00150, to access the documents.

Contact: Dan Heim, dheim@leadingageny.org, 518-867-8866