Health Department Offers Funding to Help Health-Care Facilities Implement Berger Commission Requirements

ALBANY, May 16, 2007 - New York State is offering up to $550 million in financial assistance in the current fiscal year to help health care facilities implementing the Berger Commission mandates.

In a formal Request for Applications (RFA), New York State Health Commissioner Richard F. Daines, M.D., announced today that the 81 affected hospitals and nursing homes can apply for financial assistance by 3 p.m. July 16 to support implementation of their Berger compliance plans. An applicants' conference will be held from 1-4 p.m. May 24 in the New York State Museum's Carol Huxley Theatre.

The recommendations of the Commission on Health Care Facilities in the 21st Century, also known as the Berger Commission, became a legal mandate on January 1. Grant applications must outline how the facility will implement the Berger directives by June 30, 2008, in a reasonable and cost-efficient manner.

"This is the primary – and perhaps the best – opportunity for the affected facilities to ask for financial assistance to comply with the Berger directives," Commissioner Daines said.

Dr. Daines said funding will be available to reimburse facilities for expenses incurred since January 1, 2007, because many facilities' efforts to comply with Berger have already incurred significant costs. Applications will be reviewed on a rolling basis, and Dr. Daines acknowledged that applications received earlier in the review period stand a greater chance of accessing this dedicated pool of funds.

"We will award funding in relation to the costs of implementing Berger, taking into account an institution's financial resources," Dr. Daines said. "The best applications will fully comply with the Commission's mandates, have the fewest barriers to implementation, and be considered financially feasible and cost-effective.

"The goals of the Commission – to strengthen New York's delivery of acute and long-term care – are being realized," Commissioner Daines said. "Health Department staff are working with all the affected facilities to ensure that their plans are implemented in a cost-effective manner, keeping in mind the need to ensure local health and safety of affected nursing home residents and hospital patients. We will achieve better health-care quality and a more affordable health care system with the community-based services that New Yorkers truly need."

The grants are funded by the Health Care Efficiency and Affordability Law for New Yorkers (HEAL NY) and the Federal-State Health Reform Partnership (F-SHRP).

The Berger Commission's final report in November 2006 spells out the principles underlying these grants:

  • Public funds for implementation of Commission mandates must be used judiciously and in the most prudent possible manner;
  • Facilities must self-fund their own closure, conversion, affiliation or rightsizing as much as possible, and can use private third-party financing and, in the case of closures, the sale of assets; and
  • The costs of implementation must be shared among all interested parties, and the State need only contribute a portion of these costs.

DOH and the Dormitory Authority of the State of New York (DASNY) will review applications to determine the minimum public investment needed. Applications should cover the entire implementation period, which began January 1, 2007, and must be completed by June 30, 2008.

The grants will be awarded through a contract to implement a facility's compliance plan and the Commission's requirements.

The health and safety of the public must be preserved during implementation of Berger directives. Examples of reimbursable costs are:

  • Payment of debt, outstanding Health Care Reform Act Restructuring Pool loans, and discharges of long-term debt or mortgage associated with a facility closure;
  • Security contracts for abandoned buildings or equipment;
  • Building insurance and medical malpractice liquidity obligations during the closure process;
  • Severance, pension payments and worker retraining expenses;
  • Construction costs to renovate inpatient space into ambulatory or community-based services; to expand and improve space as needed; and to build or relocate beds or services to achieve shared or consolidated services; along with related architectural and design costs;
  • Medical equipment associated with required changes;
  • Related legal fees, such as the costs of developing dissolution plans of the governing entities, transferring assets, establishing new corporate governing entities and the transferring medical records;
  • Initiation or expansion of home- or community-based health services;
  • Consultant fees and other costs to prepare Certificate of Need (CON) applications and similar approval requests; and
  • Preparation of "swing space" to accommodate patients and support services during renovation and construction.

Dormitory Authority Executive Director David D. Brown IV said, "As the primary provider of health care capital and the largest holder of hospital and nursing home debt, the Dormitory Authority is excited to participate in another round of HEAL grant evaluations. These awards to be funded, in part, with tax exempt bonding will assist the health care industry in its efforts to restructure."

"All issues decided by our state's courts so far have upheld the Berger Commission's creation and results as constitutional," Dr. Daines said. "Several institutions have already taken major steps to implement the Berger mandates." Among those institutions are:

  • The Ann Lee Infirmary and Albany County Nursing Home, Albany County. DOH has approved the County's plan to close the Ann Lee Home and relocate its 135 residents to Albany County Nursing Home by June 30, 2008. Residents of both facilities will eventually be housed in a new nursing home that will also offer services to residents who wish to remain in their homes.
  • Brunswick Hospital Center, Suffolk County. DOH has approved the Center's plans to close its Brunswick Nursing Home and relocate its 60 residents by the target date of June 30, 2007. The Berger report called for closing the Brunswick Nursing Home and adding an assisted living program in Suffolk County.
  • Orange Regional Medical Center, Orange County. The Center's CON to combine two sites has been approved, and design development has begun.
  • Mercy Hospital Skilled Nursing Facility, Erie County. Mercy has begun construction at the site for the former Our Lady of Victory Hospital, which is being converted into a facility resembling a continuing care retirement community. Mercy will move all its 74 beds, plus 10 more, to the new site.
  • Manhattan Eye, Ear and Throat Hospital, Manhattan. The hospital has received approval to eliminate its 150 beds and transfer sponsorship to Lenox Hill Hospital.

The State Health Department anticipates offering another round of HEAL NY grant awards later this year regarding community services, such as long-term care, primary care, women's health care, health information technology, and other efforts in which health-care institutions are expected to seek local input as they design more outpatient services for their area to meet Berger mandates.

For more information about the Berger Commission directives, visit www.health.ny.gov. To read the HEAL NY Phase 4 RFA, visit http://www.health.ny.gov/funding/rfa/inactive/0705141214/