Nassau University Medical Center sues former CEO over allegations of misconduct, self-enrichment and sabotage
The lawsuit paints a new picture of the alleged corruption that unfolded behind the scenes of Long Island's largest hospital, which prompted the state to take over the board to stabilize the facility.
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A new bombshell lawsuit filed by Nassau University Medical Center accuses its former CEO, Megan Ryan, of a sweeping pattern of misconduct, self-enrichment and deliberate sabotage leading up to her dramatic exit earlier this year.
The filing accuses Ryan of abusing her position by enriching herself and other top administrators, seeking reimbursement for luxury expenses and fake trips, destroying hospital records, coordinating a mass resignation of senior leadership and pursuing meritless lawsuits against New York State.
NUMC, Long Island's largest hospital, is partially publicly funded using taxpayer dollars.
“Our goal with this complaint is to be fully transparent about what occurred and to take decisive steps toward a stronger future,” NUMC Board of Directors Chair Stuart Rabinowitz said in a press release announcing the lawsuit.
Specifically, the lawsuit claims Ryan authorized over $1 million in improper payouts to herself and 13 executives, sought reimbursement for luxury expenses, including a $1,400 Lobster Club dinner and a $7,800 trip to Chicago that never happened and orchestrated widespread data destruction.
"Ryan's tenure at NUMC was marked by a collapse of institutional governance, financial discipline and ethical leadership," the lawsuit reads in part. "Ryan's mismanagement of NUMC was systemic."
A spokesperson for Ryan responded to the lawsuit in a statement to News 12: "This frivolous suit was clearly developed in retaliation for Ms. Ryan’s discovery of the State’s massive Medicaid fraud scheme, filed today as a smokescreen to distract from the Hochul-appointed board's actions to drop the lawsuits against the State, and the new leadership’s recent approvals of $10 million in no-bid contracts - including to a firm run by the Nassau Democratic Party’s vice chairman – as well as repeated violations of the state’s transparency, procurement and public officers laws. If the political hacks who have been put in charge of NHCC to cover up the state’s massive fraud want a fight – they’ll get one. We have the evidence, the witnesses and the facts to ensure Ms. Ryan will be vindicated on all fronts.”
Earlier this year, the state passed new legislation to reshape NUMC's operations, including expanding the board to 11 members with a majority appointed by the state. Gov. Kathy Hochul's office said the goal was to stabilize the hospital's operations and finances after it had reported losses of $142 million in 2023 and $149 million in 2024, according to the lawsuit.
Ryan announced her resignation as the hospital's CEO on May 21, effective July 20, but the board ultimately removed her on June 18.
On July 11, Ryan announced her intention to sue Nassau Health Care Corporation, the hospital's parent company, and Gov. Hochul for alleged wrongful termination, lost wages and intentional reputational damages.
“Ms. Ryan did absolutely nothing wrong," her attorney Alex Hartzband said in a press release last month. "The payments she authorized were permissible under hospital policy and consistent with years of established practice by the CEOs who preceded her. NHCC is trying to whip up controversy where none exists to deny Ms. Ryan severance payments she is owed under her employment agreement—plain and simple. The shameless media campaign undertaken by NHCC’s new Board Directors to defame Ms. Ryan before even properly effectuating her termination speaks volumes about their true motivations. Ms. Ryan looks forward to vindicating her rights in court, clearing her name, and being made whole for the harm NHCC and its new leadership have caused her."
Gordon Tepper, a spokesperson for the governor's office, responded to the lawsuit in a statement to News 12: "The breathtaking level of waste, abuse, and mismanagement under NUMC’s previous leadership is an insult to taxpayers and a betrayal of the hospital’s mission. The recent revelations further validate Governor Hochul’s decisive action to restructure the board and restore accountability to this critical safety-net institution."
A spokesperson for the Nassau County District Attorney's office told News 12, "NCDA previously initiated an investigation into NUMC management. That investigation remains active and ongoing."
