PRESS RELEASE

December 2011

New York, NY - Loeb & Troper is Pleased to Provide an Overview of $450 Million in Grant Funding Available Under a DOH/Dormitory Authority/HEAL Initiative—Restructuring Initiatives in Medicaid Redesign

Overview 

The New York State Department of Health and the Dormitory Authority of the State of New York recently jointly announced the availability of $450 million in grant funding under a new phase of the Health Care Efficiency and Affordability Law of New York State (HEAL) and the Federal–State Health Reform Partnership (F-SHRP). The grant funds have been earmarked to help health care facilities address excess bed capacity in the health care system, improve primary and community-based care, and reduce over-reliance on inpatient care in hospitals and nursing homes.

This initiative corresponds with an objective and recommendation of the Medicaid Redesign Team (MRT) to improve healthcare by helping health care facilities deliver more efficient and higher quality care through the restructure, merger and reconfiguration of operations, and encourages collaboration among health care providers which can include shared services agreements, bed consolidations, joint governance arrangements, mergers and closures. Grant monies will primarily support capital projects, such as the conversion of hospital inpatient space to outpatient and ambulatory care and of inpatient nursing home capacity to assisted living and other less restrictive forms of long-term care. Awards can also be used to support specific operational projects, including the organizational changes necessary for mergers and other collaborative activities.

Support available through this initiative will take the form of short-term adjustments to Medicaid reimbursement rates, temporary enhancement of APG rates and capital grants (awarded under HEAL). Facilities eligible for assistance include those associated with one or more of the following: facilities undergoing closure, facilities impacted by closure of other health care facilities, facilities subject to mergers, acquisitions, consolidations or restructuring, or facilities impacted by the merger, acquisition, consolidation or restructuring of other facilities. Only hospitals, residential healthcare facilities, Article 28 networks or an active parent or co-operator of a general hospital or an RHCF are eligible for HEAL capital grant monies, however additional provider categories may be eligible for Medicaid Rate adjustment and/or APG enhancement. 

Eligible Activities

Activities eligible for funding fall into four general categories: 1) mergers, consolidation and shared governance; 2) closures and conversions of hospitals or nursing homes, including closure of a nursing home’s inpatient beds and conversion of the building to an assisted living facility ; 3) bed reduction and service configuration of staffed inpatient beds and 4) operational activities that would help ensure a smooth transition to a reconfigured arrangement resulting from the implementation of the restructuring activities in 1, 2, or 3 above.

Specific examples of projects that will be funded under this round of funding include, but are not limited to:

1. HEAL-funded capital projects — Construction, renovation equipment and other fees (a) for the consolidation of services between collaborative facilities including mergers, shared governance or shared service agreements designed to promote efficiency, eliminate duplication of beds and services or enhance access to care; (b) to support the conversion of hospital inpatient space to outpatient and ambulatory services; (c) for the conversion of challenged but needed hospitals to levels of care more consistent with community needs and d) costs necessary to support functions and activities that will enable applicants to implement a closure or downsizing plan. The objective of such projects should be to remove operational and closing cost expense barriers which may otherwise impede efforts to downsize;

2. Operational expenditures — As noted, also through this grant, some facilities could be eligible for temporary increases in their Medicaid payment rates, including hospitals, nursing homes, diagnostic and treatment centers (clinics) and certified home health agencies (CHHA's). These rate adjustments will support the costs of operational activities designed to help ensure a smooth transition to the delivery of services resulting from mergers, consolidations, bed reductions, closures and other restructuring activities such as: a) staffing and other costs to accommodate displaced patients; b) referral and follow-up of displaced patients to appropriate providers; c) transfer of medical records to new or remaining providers; d) transition of services from emergency departments to ambulatory settings; e) expansion of residency and related GME training capacity to enhance primary/ambulatory services

Key Dates

It is anticipated that grant projects will be effective for a 24-month period, from on or about March 1, 2012 through on or about February 28, 2014.

The Department will respond to questions submitted by December 7, 2011 with written answers to be posted on the DOH website within two weeks of that date. Applications must be received by 3:00 P.M. on January 17, 2012.

Further details and information will be posted to this website as available.

For further information, please contact Deborah Lynch, Principal, Strategic Planning, at 212-697-3000 or dlynch@loebandtroper.com.

_______________________________________________________________________________

About Loeb & Troper LLP

Loeb & Troper LLP is a leading regional professional services firm with a targeted focus and specialized expertise. Established in 1919, the firm specializes in meeting the unique needs of health care, not-for-profit and special needs organizations by providing comprehensive audit, tax and consulting services. The firm's industry specialization has made it a highly valued advisor and resource to some of the leading organizations in its fields of practice. The firm has remained true to its core promises of industry-specific expertise, industry-specific leadership, active partner involvement, superior client service and a culture of integrity for ninety years.