Health industry organizations that receive state funds have been grappling in recent years with efforts by New York Governor Andrew Cuomo, and by the Department of Health (DOH), to limit the amount of compensation paid to their executives.
Following the issuance of a 2012 Executive Order by the Governor, the enactment of regulations by DOH limiting the compensation permitted to be paid to health industry executives, several actions were filed challenging the regulations. Two of those cases were consolidated at the Supreme Court level—In the Matter of LeadingAge New York, Inc. v. Shah and In the Matter of Coalition of New York State Public Health Plans v. New York State Department of Health (collectively, LeadingAge). LeadingAge reached the Court of Appeals, which on Oct. 18, 2018 struck down a critical prohibition contained in the regulations.
This article analyzes how the New York legal landscape has evolved with respect to compensation paid to health industry executives, and the state of the law in light of the Court of Appeals’ ruling in LeadingAge.
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