Appeals Court Upholds Executive Order #38 Regulations

In a Dec. 30, 2015 decision in Agencies for Children’s Therapy Services, Inc. v. NYSDOH, the NYS Appellate Division, Second Department, unanimously upheld regulations promulgated by the Department of Health (DOH) under Executive Order (EO) #38. The regulations limit executive compensation and administrative costs for certain State-funded providers. The latest ruling reverses the April 2014 decision of Nassau County Supreme Court Justice Thomas Feinman. LeadingAge New York’s Counsel, Hinman Straub, is preparing a summary of the decision which will be made available to members later this week.  

The latest decision resolves conflicting NYS Supreme Court decisions within the Second Department. In this case, the trial court had ruled that DOH exceeded its statutory authority by imposing the regulations and improperly engaged in legislative policymaking. In another case in Suffolk County, the Supreme Court had upheld the regulations. 

As previously communicated to members, State Supreme Court, Albany County issued a decision in the matter of LeadingAge New York et al v. Shah, a case we brought with other groups challenging EO #38 and the associated regulations. The decision partially upheld our contention that the regulations inappropriately limit executive compensation.

Legal counsels for LeadingAge NY and other groups challenging EO #38 are carefully analyzing these decisions and considering next steps. In the meantime, the regulations and filing requirements associated with EO#38 remain in effect throughout the State, with the exception of Nassau County where the 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.

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