HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.
![handle is hein.sag/sagme0064 and id is 1 raw text is: 2024-01
4anuary 30, 20F4
The Honorable Joseph M. Baldacci
Tile Honorable Michele Meyer
Committee on H ealth and Hu1man Services
100 State HouM'ise Station
Augusta, ME 04333-0100
Dean Senator Baldacci and RepresentativeMeyer
I am writing in response to your' letter requesting Imy thloughits regarding the legality of
capping executive pay at hospitals and the means by which such a cap could be enforced. As you
note, last session the Committee on Health and Hu1man Services considered L.D. 1321, An Act
to Address Income Disparity in Health Care by Limiting the Compensation of Hospital
Executives. This bill would have limited hospital executive pay to no more than five times the
median compensation of the hospital's full-time registered professional nurses. While the
Committee voted ought not to pass on the bill, you indicate that the Committee may consider
other legislation limiting hospital executive pay in the upcoming session. You ask for Imy opinion
regarding the legality of capping executive pay at hospitals; and ]low such a cap could be
implemented and enforced.
With respect to the legality of capping executive pay at hospitals, the only reported
decisions I am aware of relate to an executive order issued by New York's governor in 2012
directing the Department of Health (DOH-) and other state agencies to promulgate regulations
requiring that at least 75 percent of state funds be used for direct care and prohibiting using state
funds for executive compensation in excess of $ 199,000 per year. The DOH adopted regulations
imposing these limits on health care providers. 10 NYCRR § 1002.3 (2013). Tie DOI- regulations
went beyond the executive order by capping executive compensation at $ 199,000 regardless of the
funding source. Id. at § 1002.3(b). This cap could be exceeded, though, if 1) the compensation
did not exceed the 75°i percentile of the compensation provided to comparable executives in
comparable facilities in the same geographic area, or 2) the compensation was reviewed and
approved by the provider's governing body following ;an assessment of appropriate comparability
data. Id.
Various providers challenged the regulations in state court, alleging, among other things,
that the DOI I regulations violated the separation of powers principle and their due process rights.](ViewImageLocal?handle=hein.sag/sagme0064&div=1&collection=&method=preview&ext=.png&size=3)