Safety Net Transformation Program Questions and Answers

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Application Instructions Will the Department of Health accept applications on a rolling basis, and if so, how much turnaround time does the Department anticipate between the date the application is made available to the applicant and the application due date? Yes. The Department will selectively release the application to qualifying parties who have submitted a Letter of Interest and will review received applications on a rolling basis. There will be no application deadline once released to qualifying parties.
Application Instructions Is there a cap on the amount of capital and/or operating funds that can be requested by each applicant? There is no limit to the funds that can be requested, but the purpose and rationale for the requested funds must be detailed in the 5 year Transformation Plan. The benefit of the transformation project, including its likelihood to improve access, equity, quality, and outcomes while increasing the financial sustainability of the safety net hospital, will be weighed against the available funding within the given time period.
Application Instructions When will the full application be released? After reviewing the Letter of Interest submitted by interested parties, the Department will selectively release the application to qualifying parties and will review applications received on a rolling basis.
Awards Are there any limitations to the non-capital projects that will be funded under the Safety Net Transformation Program? For example, can an applicant seek funding for debt retirement under this Program? Awards may include capital funding, operating subsidies, or a combination of both. Debt retirement may be funded under this Program, but applicants must detail within their proposed Transformation Plan how the debt retirement is critical to the safety net hospital's transformation, including an explanation as to why debt retirement assistance is critical to achieving the objectives of the Transformation Plan. The benefit of the transformation project, including its likelihood to improve access, equity, quality, and outcomes while increasing the financial sustainability of the safety net hospital, will be weighed against the available funding within the given time period.
Awards Because DOH will make awards on a rolling basis, how will DOH make yes/no determinations on applications? For example, will DOH make yes/no determinations as applications are received, or will applications be considered potentially fundable until all funding is awarded? All eligible applications will be considered on a case by case basis in light of available funding and the benefit of the transformation project to the safety net institution. While some applications may not meet the objectives of the Safety Net Transformation Program, based upon review of the proposed Transformation Plan's ability to improve access, equity, quality, and outcomes while increasing the financial sustainability of the safety net hospital, other meritorious applications which meet the objectives of Public Health Law section 2825-i may stay open for consideration by the Department of Health should future funding become available.
Awards How will funding flow to safety net hospitals and partner organizations? That is, will safety net hospitals receive funding directly and be responsible for providing funds to partner organizations, or can partner organizations receive direct funding? Public Health Law section 2825-i(2) allows funding to go to the safety net hospital and/or the partner organization(s). Specific decisions on funding flow will be made on a case by case basis depending on the application.
Awards Can applicants receive both capital funds and non-capital funds in their award? Awards may include capital funding, non-capital operating funding, or a combination of both. The benefit of the transformation project to improve patient care and the financial sustainability of the safety net hospital will be weighed against the available capital and/or operating funding within the given time period.
Eligibility Could a company focused on IT projects or revenue cycle outsourcing be considered an eligible partner organization within the definition of Public Health Law section 2825-i(3)? Public Health Law section 2825-i(3) sets forth the definition of an eligible "partner organization" for the purposes of the Safety Net Transformation Program. All Letters of Interest should articulate how the proposed partner organization(s), such as the company described here, classifies as a "healthcare entity" under the statute and how a safety net hospital's partnership with such a company will help transform the hospital to improve access, equity, quality, and outcomes while increasing the financial sustainability of such hospital. If, however, the relationship between the company and the safety net hospital is a only straightforward project for a simple EMR implementation, without other transformative initiatives or plans for the safety net hospital, such a partnership would be unlikely to pass eligibility review and/or a review on the merits of the Letter of Interest.
Eligibility Does a collaborative partnership have to be new? For example, could a safety net hospital partner with a hospital or other provider within the same health system, with its current parent hospital, or with a preexisting partner organization? The intent of the Safety Net Transformation Program is to support new collaborative partnerships--those partnerships which will help safety net hospitals achieve long-term financial sustainability to continue to provide care to their communities. If a safety net hospital is interested in submitting a Letter of Interest based on a same-system or other existing partnership, the potential applicants must articulate in their Letter of Interest what aspects of the partnership are new: for example, whether there will be a change to the organizational structure to fully acquire or merge the safety net hospital into another hospital or change clinical structures. The Letter of Interest must also explain how new or increased sustainability/financial viability levels can be achieved for the safety net hospital which would not otherwise be possible by virtue of their existing relationship.
Eligibility Is any type of Public Health Law Article 28 hospital eligible to apply for funding under the Safety Net Transformation Program if they meet the definition of a safety net hospital, or are there restrictions on the types of hospitals that may apply, even if they meet the safety net criteria? The applicable statute, Public Health Law section 2825-i, allows an Article 28 hospital (as defined Public Health Law section 2801[1]) to apply for funding under the Safety Net Transformation Program, provided that it meets the definition of a "safety net hospital" as set forth in Public Health Law section 2825-i(2) and an eligible partner is identified. The Letter of Interest must explain how the potential hospital applicant meets the definition of asafety net hospital, including the criteria applied and data used to make that determination.
Eligibility How is a "public hospital" defined to determine whether a hospital is an eligible "safety net hospital" under this Program? PHL section 2825-i, which establishes the Safety Net Transformation Program, does not define the term 'public hospital'. However, other sections of Article 28 define a 'public hospital' to mean a 'general hospital operated by a county, municipality, or public benefit corporation.' A general hospital which meets this definition of a 'public hospital' is encouraged to submit a Letter of Interest to the Department and explain its rationale for meeting the definition of a safety net hospital. The Department will take the party's explanation under consideration when reviewing the LOI, including whether basic eligibilitycriteria are met.
Eligibility What is the definition of a partner organization? For example, can a partner organization be another health system or a local behavioral health organization? The definition of an eligible partner organization is set forth in Public Health Law section 2825- i(3). It includes, but is not limited to, the following types of entities; entity types that seem particularly relevant to your inquiry are underlined below: health systems, hospitals, health plans, residential health care facilities, physician groups, community-based organizations, or other identified healthcare entities that can serve as partners in the transformation of the safety net hospital. Eligible partner organizations should also: have ahistory of regulatory compliance, be in good financial standing, and be in good standing in terms of participation in the Hospital Capacity Direct Access program, if applicable.
Eligibility Under the eligibility requirements for the Safety Net Transformation Program, it states that safety net applicants must be in good standing in the Hospital Capacity Direct Access program. Are safety net hospitals ineligible if they don't participate in the Hospital Capacity Direct Access program? Safety net hospitals and partner organizations are eligible for the Safety Net Transformation Program even if they are in delayed or deferred status in the Hospital Capacity Direct Access program. Participation in the Hospital Capacity Direct Access Program is not a statutory criterion of the Safety Net Transformation Program. Per the webpage language, applicants shouldbe in compliance with the program; thus it is not an eligibility criterion, but rather a preferred qualification of potential applicants. For more information about the Hospital Capacity Direct Access program, please see Department of Health guidance at DHDTC DAL#: 21-04 Revised and DHDTC DAL#: 23-09, which "affirmatively [told] hospitals thatparticipation in HCDA is now mandatory for all hospitals."
Eligibility What type of transformation initiatives does the DOH envision this program will address? For example, are there any specific access to care priorities or clinical scope priorities that partner organizations are expected to cover in their partnership with a safety net hospital? The Letter of Interest allows potential applicants to outline their own transformation plan for the Department to consider. Overall, the Safety Net Transformation Program aims to support the transformation of safety net hospitals to improve access, equity, quality, and outcomes while increasing the financial sustainability of safety net hospitals through a collaborative partnership with a partner organization(s).
Eligibility How will the Department of Health determine which hospitals qualify as safety net hospitals for the Safety Net Transformation Program? During the Letter of Interest phase, potential applicant facilities should articulate under the "Basic Eligibility Information" section of their Letter of Interest how they have determined they meet the definition of a safety net hospital, including the data source(s) and methodology used to make this determination (for example, ICR data and year).
Eligibility The program website indicates that the identified partner organization should be in "good financial standing." What does the Department consider to be "in good financial standing"? What criteria / measures are being used to determine if a partner is in good financial standing? As an initial matter, please note that the financial standing of a partner organization is not a statutory criterion of the Safety Net Transformation Program. Per the webpage language, potential partner organizations "should"be in good financial standing; thus it is not an eligibility criterion, but rather a preferred qualification of potential applicants. With respect to how the Department will determine "good financial standing," the Department will consider generally-accepted accounting principles and industry standards indetermining financial standing, including but not limited to the entity's operating margins and number of days cash on hand.
General Information Can applicants apply for funding under both the Statewide IV grant and the Safety Net Transformation Program for the same or substantially similar projects? Yes; given that the Statewide IV awards have not been announced as of the date of these Q&As, parties may submit a Letter of Interest for the same or a similar project under the Safety Net Transformation Program. However, parties should not simply re-submit portions of their pending Statewide IV application as their Letter of Interest; instead, parties should thoughtfully respond to each of the elements required within the Letter of Interest in a manner that addresses the unique intent of the Safety Net Transformation Program: that is, how the proposed partnership will facilitate the transformation of the safety net hospital to improve access, equity, quality, and outcomes while also increasing the financial sustainability of the safety net hospital. The LOI and the eventual application should include the Application number(s) and RFA number(s) for any capital projects submitted to a Statewide IV RFA.
General Information Do prevailing wage laws apply to capital projects funded through this initiative? The prevailing wage requirements of New York State Labor Law Section 224-a may be applicable to a publicly funded construction project if the total cost of construction exceeds$5 million and the "public funding" for the construction is 30% or more (a "covered project" under the statute). Given the fact-specific nature of this inquiry, for further information, please seek legal counsel when developing a budget for any construction costs anticipated under the proposed 5-year transformation plan to assess whether prevailing wage standards must be figured into the projected budget.Additional helpful resources to review for guidance include the New York State Department of Labor, Bureau of Public Work October 2023 "Overview of the Prevailing Wage and Bureau of Public Work", available at Overview of the Prevailing Wage and Bureau of Public Work
General Information Can DOH provide a list of eligible (and ineligible) expenses that the capital funds may be used for? Expenditures eligible for funding under the Safety Net Transformation Program for capital projects may include, but are not limited to: • The planning or design of the acquisition, construction, demolition, replacement, major repair or renovation of a fixed asset or assets, including the preparation and review of plans and specifications including engineering and other services;• Construction costs;• Renovation costs;• Asset acquisitions;• Equipment costs; and• Consultants' fees and other expenditures associated with the preparation of Certificate of Need (CON) applications required for the proposed establishment action, construction activity or service expansion (so long as the costs incurred are in connection with original construction and not an ownership transfer).Expenditures eligible for funding may include debt retirement and restructuring and other non-capital projects such as:• Debt restructuring including costs to reduce, retire or refinance long-term liabilities such as mortgages, bank loans, capital leases and other liabilities, payments of debt service for such long-term liabilities and costs for restricting including professional fees, penalties, and interest; and• Start-up operating expenses directly connected to the Eligible Project for which funding is being sought under this RFA.Budget requirement details will be included in the application for Eligible Applicants. Eligible Applicants should note, however, that if their budget includes costs for non-capital debt retirement and restructuring, working capital, and other non-capital projects, a detailed description must be included of how the debt restructuring will enable the Eligible Applicants to conduct the transformation plan outlined in the parties' Letter of Interest and further detailed in their application. Costs may also be disallowed if they are not sufficiently described and/or justified in type or amount by an Eligible Applicant or are considered to be unrelated to the proposed Eligible Project. Disallowed costs will be excluded from the amount considered as the grant request. Only expenses determined allowable under the contract budget and work plan and incurred on or after the start date of the contract (expected no earlier than October 1, 2024) may be vouchered for reimbursement. Any obligations assumed by an Eligible Applicant prior to execution of the MGC are assumed atrisk.
General Information Can capital grants be provided for "buy out" of operating leases where the developer financed assets? No; capital grants may not reimburse a "buy out" of operating leases where a developer financed assets.
General Information Is there a distribution list for information about this program? No; at this time there is no distribution list for the Safety Net Transformation Program. Please visit the Department's webpage at Safety Net Transformation Program for updates.
General Information What is the current timeline for implementing the program? At this time the Department is soliciting Letters of Interest; however, awards will not be decided based upon the Letter of Interest. Once the application is released to qualifying parties who have submitted a Letter of Interest, awards will be announced on a rolling basis.
Letter of Interest Instructions Once the full application is released, will applicants still be required to submit a Letter of Interest first? Yes; the Letter of Interest is the first step of the application process. This step allows the Department of Health to review potential applications for both eligibility and merits, and provide preliminary guidance to potential applicants on their proposed transformation plan before the parties are required to submit a more detailed transformation plan in the formal application.
Letter of Interest Instructions Is there a deadline for submitting a Letter of Interest? No; there is no deadline at this time for submitting Letters of Interest. At this time, Letters of Interest will be accepted on a rolling basis.
Letter of Interest Instructions Where should the Letters of Interest for the Safety Net Transformation Program be submitted? Please send directly to: SafetyNetTransformation@health.ny.gov
Letter of Interest Instructions Is there a template available for the Letter of Interest? There is no template for the Letter of Interest. Interested safety net hospitals and their identified partner organization(s) should respond to each of the items listed on the Safety Net Transformation Program's webpage under the header "Application Process > Letter of Interest". See Safety Net Transformation Program for details.
Letter of Interest Instructions If a Letter of Interest is submitted, can the applicant(s) subsequently decide to withdraw? Yes; if a potential applicant submits a Letter of Interest but subsequently is no longer interested in applying for funding under the Safety Net Transformation Program, the potential applicant safety net hospital and identified partner organization(s) should email the Department at SafetyNetTransformation@health.ny.gov with a request to withdraw their Letter of Interest.
Letter of Interest Instructions How should the potential safety net hospital applicant demonstrate that the Letter of Interest is jointly submitted with a partner organization(s)? There is no prescribed way to demonstrate this partnership for the purposes of submitting the Letter of Interest. For example, the Letter of Interest with all prescribed components could be jointly signed by the CEOs of both the safety net hospital and the partner organization, or the partner organization's CEO may sign a separate letter indicating support for the Letter of Interest that could be included by the safety net hospital with its Letter of Interest.