NIFA approves takeover of Nassau County hospital
The Nassau Interim Finance Authority has taken control of finances for the public benefit corporation that runs a struggling county hospital facing persistent operating deficits.
The NIFA board of directors unanimously approved a financial takeover Tuesday of NUHealth, the operator of Nassau University Medical Center in East Meadow, New York. NUHealth, which is also known as Nassau Health Care Corporation, recorded a cumulative loss of $193.9 million between 2015 and 2018, according to the NIFA resolution. Nassau County backs $188 million in NUMC debt.
NIFA, which has controlled Nassau County’s finances since 2011, previously had exempted NUHealth from its strict contract review process rules. The New York State fiscal control board opted this week to take over NUHealth finances after deeming that it “poses a material threat” to Nassau County. The NIFA resolution noted concerns about NUHealth’s “fiscal stability” following recent turnover of the hospital’s chair and chief executive positions.
Nassau County Executive Laura Curran and NUHealth’s president will now have until early March to present NIFA with “proposed guidelines” for contracts and other obligations that the medical center should submit for approval. Until the guidelines are set, NIFA must approve all personal services contracts exceeding $50,000, employment agreements and revenue contracts. NUHealth CFO John Maher is also required under the takeover resolution to submit documents to NIFA on applications for borrowing, financial statements and budget revisions.
“By reviewing NUMC’s procurements and contracts NIFA will get a clearer picture of the hospital’s finances,” Christine Geed, a spokeswoman for Nassau County Executive Laura Curran, said in a statement. “We want to see the hospital stabilized.”
Fitch Ratings affirmed NUHealth’s debt rating last November at A for roughly $172 million in outstanding county-guaranteed bonds. Moody’s Investors Service affirmed NUHealth’s Aa1 letter of credit-backed rating on the bonds last September. The Moody’s underlying rating on the bonds is A2.
Nassau County’s general obligation bonds are rated A2 by Moody’s Investors Service, A by Fitch Ratings and A-plus by S&P Global Ratings. New York State’s sixth-most populous county located on Long Island has around $2.4 billion of outstanding GO debt, according to Fitch.