N.Y. Public Health Law § 2818: Health care efficiency and affordability law of New Yorkers (HEAL NY) capital grant program

§ 2818. Health care efficiency and affordability law of New Yorkers

(HEAL NY) capital grant program. 1. The commissioner and the director of

the dormitory authority of the state of New York shall enter into an

agreement, subject to the approval of the director of the budget, for

the purpose of administering the funds available to the health care

efficiency and affordability law for New Yorkers (HEAL NY) capital grant

program as authorized under section sixteen hundred eighty-j of the

public authorities law, in a manner that will encourage improvements in

the operation and efficiency of the health care delivery system within

the state. A copy of such agreement, and any amendments thereto, shall

be provided to the chair of the senate finance committee, the director

of the division of budget and the chair of the assembly ways and means

committee.

Such agreement shall include criteria, to be developed by the

commissioner and the director of the authority, to be considered in

their evaluation of applications and determination of awards, including,

but not limited to:

(a) determination of eligible applicants, provided that such eligible

applicants shall include entities representative of any part of the

health care delivery system;

(b) consideration of statewide geographic distribution of funds;

(c) minimum and maximum amounts of funding to be awarded under the

program;

(d) the relationship between the project proposed by an applicant and

identified community need; and

(e) the extent to which the applicant has access to alternative

financing.

Such agreement shall be provided to the chair of the senate finance

committee, the director of the division of budget and the chair of the

assembly ways and means committee no later than thirty days prior to the

scheduled approval of the first bond issuance for the program by the

public authorities control board. The authority shall also report

quarterly to such chairpersons on the awards made through the program,

including the name of the applicant, a description of the project and

the amount of the award.

The commissioner and the director of the authority shall award grants

to eligible applicants after due public notice of the availability of

funds and through a process which ensures to the maximum extent

practicable and where appropriate, competition among such applicants,

consistent with the following requirements: the commissioner and the

director of the authority shall publish the priorities and goals that

are to be achieved through grant funding, and regularly provide public

notice of the availability of funding. These priorities and goals shall

be consistent with objectives and determinations of the Commission on

Health Care facilities in the Twenty-First Century established pursuant

to a chapter of the laws of two thousand five, provided, however, that

nothing shall prohibit the commissioner and the director for the

authority from awarding grants prior to a final report by the

commission. For each project that will be recommended for approval, the

commissioner and the director of the authority shall report to the chair

of the senate finance committee, the director of the division of budget

and the chair of the assembly ways and means committee how the project

meets the priorities, goals and criteria established pursuant to this

section.

Contracts awarded to eligible applicants shall require that work

performed thereunder shall be deemed "public work" and subject to and

preformed in accordance with articles eight, nine and ten of the labor

law and the contractors performing such work shall also be deemed a

state agency for the purpose of article fifteen-A of the executive law

and subject to the provisions of such article.

2. Notwithstanding the provisions of subdivision one of this section,

the commissioner and the director of the dormitory authority may award,

in an amount not to exceed twenty-five percent of the health care system

improvement capital grant program allocation in any given fiscal year,

grants to eligible applicants without the process set forth in

subdivision one of this section. With respect to the process for the

awarding of such funds without the process set forth in subdivision one

of this section, the commissioner and the director of the dormitory

authority shall determine eligible awardees based solely on an

applicant's ability to meet the following criteria:

(i) Have a loss from operations for each of the three consecutive

preceding years as evidenced by audited financial statements; and

(ii) Have a negative fund balance or negative equity position in each

of the three preceding years as evidenced by audited financial

statements; and

(iii) Have a current ratio of less than 1:1 for each of three

consecutive preceding years; or

(iv) Be deemed to the satisfaction of the commissioner to be a

provider that fulfills an unmet health care need for the community as

determined by the department through consideration of the volume of

Medicaid and medically indigent patients served; the service volume and

mix, including but not limited to maternity, pediatrics, trauma,

behavioral and neurobehavioral, ventilator, and emergency room volume;

and, the significance of the institution in ensuring health care

services access as measured by market share within the region.

(c) Prior to an award being granted to an eligible applicant without a

competitive bid or request for proposal process, the commissioner and

the director of the dormitory authority shall notify the chair of the

senate finance committee, the chair of the assembly ways and means

committee and the director of the division of budget of the intent to

grant such an award. Such notice shall include information regarding how

the eligible applicant meets criteria established pursuant to this

section.

3. Notwithstanding subdivisions one and two of this section, sections

one hundred twelve and one hundred sixty-three of the state finance law,

or any other inconsistent provision of law, of the funds available for

expenditure pursuant to this section, thirty million dollars may be

allocated and distributed by the commissioner without a competitive bid

or request for proposal process for grants to residential health care

facilities for the purpose of restructuring such facilities to achieve a

reduction in certified inpatient bed capacity. Consideration relied upon

by the commissioner in determining the allocation and distribution of

these funds shall include, but not be limited to, the following: (a) the

existing and projected need for inpatient nursing home beds and

community based long-term care services in the area in which a facility

applying for such funds is located; (b) the quality of the care being

provided by the facility; (c) the ability of the facility to access, in

a timely manner, alternative sources of funding, including other sources

of government funding; and (d) whether additional funding would permit

the facility to achieve greater stability and efficiency in the delivery

of needed health care services.

4. Notwithstanding the provisions of subdivision one of this section,

the commissioner and the director of the dormitory authority may award,

in an amount not to exceed twenty-five million dollars of the health

care system improvement capital grant program allocated in any given

fiscal year, grants to eligible applicants without the process set forth

in subdivision one of this section to provide necessary restructuring

support to hospitals for transition to a new reimbursement methodology.

(a) With respect to the process for the awarding of such funds without

the process set forth in subdivision one of this section, the

commissioner and director of the dormitory authority shall determine

eligible awardees based solely on an applicant's ability to meet the

following criteria:

(i) have a loss of operations for each of the three consecutive

preceding years as evidence by audited financial statements; and

(ii) have a negative fund balance or negative equity position in each

of the three preceding years as evidence by audited financial

statements; and

(iii) have a current ratio of less than 1:1 for each of three

consecutive preceding days; or

(iv) be deemed to the satisfaction of the commissioner to be a

provider that fulfills an unmet health care need for the community as

determined by the department through consideration of the volume of

Medicaid and medically indigent patients served; the service volume and

mix, including but not limited to maternity, pediatrics, trauma,

behavior and neurobehavioral, ventilator, and emergency room volume;

and, the significance of the institution in ensuring health care

services access as measured by market share within the region; or

(v) be deemed to the satisfaction of the commissioner to have incurred

operating losses resulting from the implementation of reimbursement rate

reforms and other reductions enacted by a chapter of the laws of two

thousand nine, to provide for the continued financial viability of the

applicant.

(b) Prior to an award being granted to an eligible applicant without a

competitive bid or request for proposal process, the commissioner and

the director of the dormitory authority shall notify the chair of the

senate finance committee, the chair of the assembly ways and means

committee and the director of the budget of the intent to grant such an

award. Such notice shall include information regarding how the eligible

applicant meets criteria established pursuant to this section.

5. (a) Notwithstanding subdivision one, two or three of this section,

the commissioner, with the approval of the director of the budget, may

expend funds for the purpose of providing cost effective increased

access to the capital markets, including but not limited to through the

use of mortgage insurance, credit enhancement, letters of credit, bond

insurance or other arrangements, for capital projects that are

determined to meet one or more of the following objectives for hospitals

licensed under this article:

(i) securing financing for facilities in a manner that will improve

the operation and efficiency of the health care delivery system within

the state;

(ii) securing financing for facilities in a manner consistent with the

objectives and determinations of the Commission on Health Care

Facilities in the Twenty-First Century, established pursuant to chapter

sixty-three of the laws of two thousand five;

(iii) securing financing for facilities in a manner that will help

rightsize the state's acute care infrastructure, including reducing

inpatient capacity, downsizing, restructuring, and closing facilities;

(iv) securing financing for facilities in a manner that advances the

reform of the long-term care system, including through rightsizing and

providing community-based services;

(v) securing financing for facilities in a manner that improves the

primary and ambulatory care system including programs undertaken in

collaboration with a local development corporation incorporated pursuant

to sections four hundred one and one thousand four hundred eleven of the

not-for-profit corporation law to foster the development and expansion

of high quality, cost effective primary health care services and related

ambulatory care and ancillary services benefiting medically underserved

communities, principally in the state, to increase access of community

residents to such services, to improve the health status of such

residents and to lessen the burdens of government and act in the public

interest; and

(vi) such other objectives as the commissioner deems appropriate to

effectuate the intent of this subdivision.

(b) The commissioner may transfer funds to other state agencies or

public authorities, with the approval of the director of budget, to

effectuate the purposes of this subdivision.

6. Notwithstanding any contrary provision of this section, sections

one hundred twelve and one hundred sixty-three of the state finance law,

or any other contrary provision of law, subject to available

appropriations, funds available for expenditure pursuant to this section

may be distributed by the commissioner without a competitive bid or

request for proposal process for grants to general hospitals and

residential health care facilities for the purpose of facilitating

closures, mergers and restructuring of such facilities in order to

strengthen and protect continued access to essential health care

resources. Provided however, that to the extent practicable, the

commissioner shall award such grants equitably among health planning

regions of the state. Prior to an award being granted to an eligible

applicant without a competitive bid or request for proposal process, the

commissioner shall notify the chair of the senate finance committee, the

chair of the assembly ways and means committee and the director of the

division of budget of the intent to grant such an award. Such notice

shall include information regarding how the eligible applicant meets

criteria established pursuant to this section.

7. Notwithstanding subdivisions one and two of this section, sections

one hundred twelve and one hundred sixty-three of the state finance law,

or any other inconsistent provision of law, of the funds available for

expenditure pursuant to this section, the commissioner may allocate and

distribute, without a competitive bid or request for proposal process,

grants to accountable care organizations under article twenty-nine-E of

this chapter for the purpose of promoting their formation and improving

their operation. Consideration relied upon by the commissioner in

determining the allocation and distribution of these funds shall

include, but not be limited to, the need for and capacity of the

accountable care organization to accomplish the purposes of article

twenty-nine-E of this chapter in the area to be served.

8. On or before December first, two thousand fourteen, the department

shall issue a report to the governor, the temporary president of the

senate and the speaker of the assembly regarding grants made pursuant to

this section to support health information technology.