Cuomo administration accused of undermining health official overseeing large health program

ALBANY — A top Cuomo administration official has systematically undermined an administrator leading a massive health initiative in New York state, a top health official testified Wednesday.

The allegation — contained in a lawsuit filed in federal court in Manhattan against Governor Andrew Cuomo and more than a dozen top officials — is that Health Department officials were kept in the dark about billions of dollars in stimulus money intended to improve access to care, particularly for the poor.

In a dispute between the Health Department and the governor’s office over policy specifics, Glen Stassen, the state’s Medicaid director, testified under oath in the Manhattan court that he repeatedly reached out to Tom Galante, a deputy secretary in the governor’s office who oversaw Gov. Andrew Cuomo’s $4 billion health project. He said Galante refused to talk about the details of the grants.

As the lawsuit against the governor and other state officials progresses, authorities are finding a wide gap in their recollections and details of decisions on how the money was spent, including the amounts. Officials say they are working with the state comptroller’s office to make sure more accurate numbers are presented in court.

The effort is trying to determine who committed gross mismanagement in spending a $4 billion federal stimulus package for New York’s health program aimed at improving access to care, especially for the poor. A decision on how much of the federal money the state will receive to help it resolve the dispute is expected in December.

A spokeswoman for the Cuomo administration issued a statement: “Out of respect for the judicial process, we do not comment on pending litigation. The governor and the New York Health Department maintain that their legal right to pursue corrective action and recover a share of the fraud was violated and such legal action is warranted.”

Stassen, who has run the state’s Medicaid program since December, took the stand Wednesday during the first day of testimony in a lawsuit filed against Cuomo by Stassen, the New York state secretary of health and human services. The lawsuit is being filed under section 54a of the federal False Claims Act, which allows federal authorities to file a lawsuit on behalf of the state and recover funds being misused.

Stassen testified he and the Cuomo administration were blindsided by spending policies and procurement proposals that turned up in his mailbox and emails in March 2010, leading to the contract awarding to Spectrum Health System, a nonprofit in Boston and the only bidder. Spectrum won a $139 million contract to run the state’s Medicaid program — the largest in the state’s history.

The contract was given a green light by six state officials from Stassen’s agency, including himself. It was not sent to the Finance Division, which involves law enforcement and legal review. It was not sent to the Department of Public Service, which includes a licensing division. And it did not go to the comptroller’s office, which approves all state contracts worth more than $15,000.

There also was no direct communication between Stassen and Cuomo, who became governor Jan. 1.

Through Stassen’s testimony, the lawsuit alleges that department officials knew for weeks about the scope of the bid, the amount of funding available, how many individuals could be cared for and details of how the grants would be spent. Stassen said he never heard back from Galante after several conversations.

The specific projects include $42 million for outreach for Indian-American Indians on reservations, $83 million to make primary care clinics easier to access for those who lack health insurance, and $54 million for a program aimed at making primary care accessible for drug users and the homeless.

Attorney General Eric Schneiderman’s office also is suing the administration to get additional money allocated.

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