Hospital Vital Access Provider Assurance Program (Hospital VAPAP)

The State is accepting and reviewing applications on a rolling basis throughout the year.


The Department of Health (the "Department") manages a number of programs that provide supplemental funding to financially distressed hospitals (FDHs). These programs have evolved over the years, beginning with the Interim Access Assurance Fund (IAAF), which was introduced in 2015 as part of the Delivery System Reform Incentive Payment (DSRIP) grant program. The IAAF program was supplanted beginning in 2016 by the Value-Based Payment Quality Improvement Program (VBP-QIP) program, which established quality metrics for FDHs to meet as the threshold requirement for funding.

In SFY 23, the VBP-QIP program was replaced by three separate Directed Payment Template (DPT) programs. These programs include safety net hospitals with a minimum share of both inpatient Medicaid discharges and outpatient visits; Critical Access hospitals; and Sole Community hospitals. A DPT program authorizes the Department to require that managed-care organizations make enhanced payments at specified levels approved by the Centers for Medicare and Medicaid Services (CMS) to all providers eligible for the DPT. CMS must approve DPT programs on an annual basis.

In addition to these programs, the Department manages two other programs that provide supplemental funding to FDHs and financially distressed nursing homes. The Vital Access Provider (VAP) program provides temporary (up to three years) operating assistance to financially distressed providers for the purpose of redesigning their healthcare delivery systems to promote financial sustainability. Funding is provided for operational costs associated with transformation initiatives that address financial viability, community service needs, quality of care, and health equity. VAP grants approved by CMS receive federal financial participation, which is also the case with the DPT programs.

Providers interested in filing a VAP application should direct all inquiries to with "VAP" in the subject line. VAP is the primary funding vehicle the Department will use to support multiyear transformation initiatives. Although factors specific to individual applicants will determine the nature and scope of the transformation plan, applicants may be required to commit to significant changes in governance, affiliation relationships, and service types and levels if such changes are determined necessary to achieve long–term financial sustainability.

The Vital Access Provider Assurance Program (VAPAP) has replaced the IAAF program and provides State-only financial assistance to hospitals. At the discretion of the Department and the Division of the Budget, VAPAP may be available to hospitals meeting program eligibility requirements.

Purpose of Hospital VAPAP

Funding is made available under Hospital VAPAP to hospitals and health systems with serious financial instability and requiring extraordinary financial assistance to enable these facilities to maintain operations and provision of vital services while they implement longer-term solutions to achieve sustainable health care service delivery. The Department has determined need for VAPAP funds based on provider submission of financial documentation, plans for improving financial sustainability, and the Department's assessment of the risk of loss of vital services in the absence of this assistance.


The eligibility requirements for financial assistance under Hospital VAPAP are fairly expansive, since this is discretionary State funding program. All requests for hospital VAPAP financial assistance should be filed through the submission of a VAPAP application (refer to link below in application process section of this narrative). Because VAPAP is a discretionary program, eligibility for a VAPAP award does not ensure that an eligible hospital will receive funding under the VAPAP program, or receive the amount of funding that it has requested.

Eligible hospital facilities shall include:

  • A public hospital, which shall mean a general hospital operated by a county, municipality, or a public benefit corporation.
  • A federally designated critical access hospital.
  • A federally designated sole community hospital.
  • A general hospital that is a safety net hospital which shall mean a hospital in which; (1) at least thirty percent of its inpatient discharges made up of Medicaid eligible individuals, uninsured individuals or Medicaid dually eligible individuals and with at least thirty-five percent of its outpatient visits made up of Medicaid eligible individuals, uninsured individuals or Medicaid dually-eligible individuals; or (2) such hospital serves at least thirty percent of the residents of a county or a multi-county area who are Medicaid eligible individuals, uninsured individuals or Medicaid dually-eligible individuals; or (3) such hospital that, in the discretion of the commissioner, serves a significant population of Medicaid eligible individuals, uninsured individuals or Medicaid dually-eligible individuals

VAPAP Application Process

Eligible Applicants for funding under the VAPAP program should submit the Application template found here: application template (XLSX). This application can be submitted to

Evaluation Criteria for Awards

Although the eligibility requirements for the VAPAP program are intentionally broad to consider unanticipated circumstances, as a general rule, eligible applicants must be able to demonstrate that without a VAPAP award, they will be in serious financial instability as evidenced by the following factors, as reflected in the most recent year-end audited financial statements and interim financial operating statements for the current year:

  • Less than 15 days cash and equivalents;
  • Negative operating margin within the last two years;
  • No assets that can be monetized other than those vital to the operation;
  • No resources from other sources to meet financial needs.

The VAPAP program is a short-term source of liquidity to maintain core operations and vital services. All Eligible Applicants must identify the intended use of the requested VAPAP funds.

The Department will also consider the following factors in evaluating the application for VAPAP funding:

  • Quality of care, as reflected in publicly available CMS Star ratings and Leapfrog scoring;
  • The extent to which the application and transformation summary addresses community needs;
  • Hospital/Health System utilization and capacity at the applicant hospital and in immediate region;
  • Availability, distribution, and planned growth of ambulatory care services;
  • Access to critical services provided by the applicant (i.e., inpatient behavioral health substance abuse, trauma, and perinatal services);
  • Historical and projected financial sustainability;
  • Amount and length of financial assistance required compared to the expected positive impact on financial sustainability; and
  • Availability of VAPAP funding in light of the current State fiscal year's Budget appropriation and existing commitments for VAPAP funding.

The VAPAP Application must include the following supplemental information:

  1. An organizational chart identifying the corporate structure, including entity relationships and the core purpose of each organization.
  2. Copy of Audited Financial Statements for last two calendar years, most recent interim financial statements, and the current year operating budget for the facility, parent organizations, and any affiliated partners.
  3. Copy of most recent consulting strategic/operating performance outputs and reports.
  4. Please provide current CMS Star Rating and Leapfrog Grade as applicable.
  5. High level description and dollar value of your organization’s long-term debt including purpose, terms, and covenants.
    • If long-term debt covenant compliance is a significant driver of cash need, provide the calculation for the covenant(s) and projected/actual calculated values from 1/1/23-3/31/25.
  6. Managed care overview including value-based and/or capitated payment arrangement.
  7. Evidence that there are no assets that can be monetized other than those vital to operations.
  8. Evidence that the operator has exhausted all efforts to obtain resources from corporate parents and affiliated entities to sustain operations.

Additional documentation may subsequently be required.

Review Process

Each VAPAP application will be reviewed by Department staff with expertise in health care finance, reimbursement, and health care programs. Once the Department determines the applicant's eligibility for funding, Department staff will review each application based on the criteria listed earlier in this narrative. The amount of any award will be decided in consultation with the Division of Budget.


Awards will be made after the Department's analysis of an eligible hospital's application. Awards are made at the Department's discretion and may be an amount that is lower than the awardees' requested funding. Successful applicants will be subject to specific reporting requirements as determined by the Department.

The Department may institute criteria or requirements upon which an award of funds shall be conditioned, such as a transformation plan, savings plan, or quality improvement plan.

Notice of Awards

The Department will announce awards on a rolling basis.

Eligible Expenses

Eligible expenses shall include costs directly related to sustainability of operations. The VAPAP statute (NY Pub Health L § 2826(g)) excludes funding of capital expenditures, including, but not limited to: construction, renovation and acquisition of capital equipment, including major medical equipment, , or bankruptcy-related costs.

Payment Process

Payments under the VAPAP program may be awarded as a temporary adjustment to rates or as temporary lump sum payments.