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Two Buffalo hospitals among six seeking exemption from reform

Six hospitals in the state, including two in Buffalo, are asking lawmakers to exempt them from a bill to reform New York's public authorities.

Roswell Park Cancer Institute, Erie County Medical Center and the other hospitals organized as public benefit corporations say the Public Authorities Reform Act of 2009 will impose financial and administrative burdens on them, as well as place them at greater -- not less -- risk of political interference.

"The [proposed] law was well intentioned, but it is too broad," said Dr. Donald Trump, president and chief executive officer of the cancer center.

New York State's hundreds of authorities are quasi-public agencies that perform public functions, such as the Thruway Authority and the Niagara Frontier Transportation Authority.

Many of them have run into problems and criticism by operating largely behind closed doors, running up massive debts, and raising tolls and rates to customers.

The legislation would create an independent authority budget office, give the state comptroller oversight for contracts exceeding $1 million, provide whistle-blower protections and require that board members acknowledge that they have a fiduciary responsibility to the authority, not to elected officials who appointed them.

The six hospitals that want an exemption from the bill are public benefit corporations, quasi-public entities created by the state to give the facilities greater management flexibility. The others are Nassau Health Care Corp., Westchester Medical Center, Clifton-Fine Hospital in Star Lake, and New York City Health and Hospitals Corp.

The hospitals' concerns center around a handful of provisions.

The legislation would limit the ability of public authorities to create subsidiary corporations, yet officials at Roswell Park and ECMC said one of the purposes of gaining state approval to reorganize as public benefit corporations was to allow them to collaborate with private groups, such as physicians.

The selection of a chief executive would be subject to review by the State Senate, a provision hospital officials contend will complicate and politicize the process of finding new leadership.

The bill require state comptroller approval of contracts for equipment and services at or above $1 million. Hospital officials argue the measure would impose delays in their business dealings with vendors, physicians and health insurers.

The hospitals also oppose the bill's added oversight provisions, including a requirement to report pending litigation. They contend hospitals already operate under intense scrutiny.

"We're not one of the rogue authorities at issue. If this legislation is signed by the governor, we will go back to the political cesspool," said Jody Lomeo, president and chief executive officer of ECMC.

At Erie County's request, the state converted ECMC into a public benefit corporation in 2004. Currently, the medical center and Kaleida Health, a private hospital system, are working on plans to share services under the auspices of a board overseeing both organizations.

The state oversaw Roswell Park until 1999, when the cancer center became a public benefit corporation. After an audit in 2007, the state comptroller described Roswell Park as an example of how public authorities should operate.

The bill, which the Legislature passed in July, was co-sponsored by Assemblyman Richard Brodsky, D-Westchester, and Sen. Bill Perkins, D-Harlem.

Brodsky said he is willing to discuss changes before a bill is sent to Gov. David A. Paterson to sign or veto, but strongly defended the measure.

"Let's detail the parts of the bill that are causing the problems. But getting out of the fiduciary responsibility and whistle-blower provisions -- that's not going anywhere," said Brodsky, a longtime proponent of overhauling the state's authorities.

Paterson has voiced support for the bill, but has called for changes to a handful of elements that he characterizes as operating against reform.

e-mail: hdavis@buffnews.com

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