$50 Million Available to Aid Hospitals

Change in Medicaid Rates Drives Hospitals' Transition Plans

ALBANY, N.Y. (April 2, 2010) - Governor David A. Paterson announced today that the state will make $50 million available to aid hospitals in adjusting to changes in Medicaid payment formulas designed to reduce over-reliance on inpatient services in favor of outpatient care more appropriate to patients' needs.

Governor Paterson said, "Hospitals in New York State are expanding their primary and preventive care services to help their patients stay healthy. As the health care marketplace moves to emphasize outpatient care, our hospitals need to invest in construction and medical equipment to give their patients safe, modern, efficient facilities. This funding will help them achieve their goals."

Grant applications will be due May 14, 2010 for up to $50 million. This money will fund proposals to support the applicant hospital's approved transition business plan to restructure and improve the facility's financial operations and provide for its continued financial viability in response to changes in Medicaid payments.

Eligible projects include restructuring and renovations to convert inpatient space to outpatient care; upgrading outpatient services to improve efficiency and treatment capacity; and renovation of emergency departments to improve treatment time and reduce inpatient admissions. Grants will also support the purchase of medical equipment, architectural and design fees, and expenditures associated with the preparation of Certificate of Need applications required for construction, renovation or other activities.

The funding will be administered by the State Department of Health (DOH) and the Dormitory Authority of the State of New York under the Healthcare Efficiency and Affordability Law for New Yorkers - HEAL NY.

Like its predecessors, this HEAL NY funding allocation will further the transition to a more stable, efficient and higher-quality health care system. "We recognize the need to provide additional assistance to hospitals that serve large numbers of Medicaid clients as these facilities adjust to the new Medicaid rate structure," said State Health Commissioner Richard F. Daines, M.D. "HEAL NY funds will help these institutions to be resourceful in accommodating changes in payments for inpatient care while strengthening outpatient services to be responsive to the needs of their communities."

The request for grant applications (RGA) and related application materials are available on the DOH's public Web site, www.nyhealth.gov/funding/.