At Gillibrand Urging, Feds Agree to Extend Deadline So Hospital Projects Can Move Forward - Billions of Dollars for NY Hospitals Now Restored

Press Release

After U.S. Senator Kirsten Gillibrand (D-NY) urged the Department of Health and Human Services (HHS) and Office of Management and Budget (OMB) Director Jacob J. Lew to extend an important construction completion deadline in order to ensure that critical federal-funded projects at New York State hospitals and other health facilities can move forward, Senator Gillibrand announced today that HHS agreed to extend the construction completion deadline for 30 months. The deadline--originally set for September 30 of this year--put hundreds of health facilities' projects at risk of being stopped in their tracks. Health facilities were in danger of losing billions of dollars in funding if projects were not completed. With the deadline now extended until March 30, 2014, New York hospitals have more time to plan for the future and complete their pre-approved projects.

The program, through which these 350 projects in NY are being funded, is called Federal-State Health Reform Program (F-SHRP). The program provides help to modernize hospitals and create jobs across the state by investing in infrastructure projects. The F-SHRP program's goals are to promote the efficient operation of the State's health care system; consolidate and right-size New York's health care system by reducing excess capacity in the acute care system; shift emphasis in long-term care from institutional-based to community-based settings; expand the adoption of advanced health information technology and improve ambulatory and primary care provision.

In 2006 New York was awarded $2.5 billion for capital improvements at hospitals and health care facilities across New York State, with the stipulation that the projects needed to be completed by September 30th, 2011. Due to bureaucratic red tape at the state and federal level, it took an unexpectedly long time to get the projects underway. Many projects across the state were in danger of being stopped in their tracks, which meant major job losses, unless the deadline is extended. Projects at St. Francis Hospital in Poughkeepsie, NY; St. Joseph's Hospital in Syracuse; Bassett Healthcare Network in Little Falls, NY; Oswego Health in Oswego, NY; would have been particularly hard hit.

This past January, Senator Gillibrand, along with New York's Congressional delegation, wrote a letter to HHS Secretary Kathleen Sebelius and OMB Director Jack Lew calling for an extension to help restore the critically-needed funding. The state of New York has also requested an extension.

"Extending the waiver is common sense and represents exactly the kind of solutions we need right now," said Senator Gillibrand. "This federal-state partnership has resulted in greater oversight and accountability. It has saved taxpayer money and improved care for millions of New Yorkers."

Through the F-SHRP program, New York State has been empowered to implement significant reform to the health care system including long-overdue and necessary modernization of the state's health care infrastructure. Further, F-SHRP has increased access to patient care, while improving the quality of care through the establishment of medical homes. As a condition of the waiver, the state has consistently met annual goals to reduce Medicaid fraud and abuse.

Beginning in 2006 and continuing through 2010, New York State made grant awards of approximately $2.5 billion in state and federal funds to finance more than 470 projects. These awards are providing necessary financial support to help facilities undertake major projects, including developing supportive housing options as alternatives to nursing homes, revamping behavioral health services to better integrate medical and mental health care, and assisting facilities in developing health information technology interfaces to help coordinate care for patients with multiple chronic conditions. Many hospitals also are in the process of using these funds to help finance major projects to improve efficiency and expand access, including developing new primary care clinics and shifting inpatient beds to outpatient space.

While the funds have been committed to all of these worthy and complex projects, final completion of 350 of them may not occur before the September 30th expiration of the F-SHRP program.

The extension would not require additional federal funds, but simply provide the state with authority to use the federal funds already committed under the waiver. In fact, it is expected that full implementation of all F-SHRP programs will result in Medicaid savings to both the state and federal government. An extension of F-SHRP would allow hundreds of reform and restructuring projects to be completed, including job-creating capital projects throughout the state

As the continuation of F-SHRP becomes increasingly uncertain, many facilities in early stages of their projects are reconsidering moving ahead, further endangering the job-creating capital projects and long-term reform that will help build a more efficient and cost-effective health care system.

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