00001 1 2 3 4 NEW YORK STATE DEPARTMENT OF HEALTH 5 HEAL NEW YORK UNIT 6 7 8 90 Church Street 9 New York, New York 10 Friday, February 8, 2008 11 2:05 P.M. 12 13 14 CHRISTOPHER DELKER, Moderator 15 16 17 18 19 20 21 22 23 24 25 00002 1 2 PANEL: 3 Tracy Raleigh 4 Robert Schmidt 5 Larry Volk 6 Christopher Delker 7 James W. Clyne, Jr. 8 Michael J. Barbaro 9 Cynthia Miner 10 Marybeth Hefner 11 Doug Riley 12 13 14 15 16 17 18 19 20 21 22 23 24 25 00003 1 2 MR. DELKER: Good afternoon. Can 3 everybody hear me in the back? 4 Everybody should have picked up a copy 5 of the agenda as you came in with the copies of the 6 slides attached. If you want to look at the 7 slides, they're on this wall, those of you in the 8 back, if you want to come and stand and look over 9 that way. We're only going to use those for the 10 first two minutes or so. It's up to you. 11 I'd just like to give you a preview of 12 the agenda. We'll have opening remarks by Jim 13 Clyne from the Office of Health Systems Management. 14 He'll talk about how this RGA fits in with other 15 restructuring and change activities that are going 16 on. Then, we'll talk about eligible costs and 17 activities, what we will and won't pay for, what 18 you should and shouldn't ask for. Then, the facts 19 that we consider as the basis of awards, the review 20 by teams and, in general terms, the scoring factors 21 that we'll look at. Then we'll walk you through 22 the application briefly. 23 You're probably aware that there are two 24 parts: The technical application and the financial 25 application. Then, we'll talk about how to submit 00004 1 2 applications, the number of copies, what type of 3 media and so on. 4 Then, we'll get to the main purpose of 5 this, which is the question-and-answer session. 6 You will all get an opportunity to ask questions. 7 We ask you to hold your questions until after we're 8 done going through the agenda, and we'll have 9 ground rules for questioning at the appropriate 10 time. 11 I see a lot of faces who were here this 12 morning. If this is all redundant, bear with us. 13 To get started, let me talk about a 14 competitive procurement. This is a competitive 15 procurement. With a categorical grant there are 16 very prescribed provisions on information under 17 this process. Any information about this grant, 18 about the RGA, has to be available at all times to 19 the same parties, so we do that in forums like 20 this. Also, questions can be submitted to us on 21 our website. The information for that is on the 22 front part of the RGA application form. 23 So what this means is that you will not 24 be able to follow up with any of us later on, if 25 something occurs to you later and you want to give 00005 1 2 us a call to clarify something. If you want to do 3 that, you have to submit questions to the website, 4 the Q and A. It also means that at this session 5 you can not come up afterwards and follow up with 6 us while we're still here in the room or out in the 7 hall or out at the elevator or something. If you 8 do, we will have to pretend that we didn't hear 9 you, because we really cannot give any information 10 one on one. 11 We will publish a transcript of this 12 proceeding, as we are for the other three that have 13 been held, two in Albany and one here this morning. 14 Nothing we say here is considered final until that 15 transcript is published. 16 Now we do feel that we can answer most 17 of your questions fully, but we do reserve the 18 right to issue corrections and clarifications of 19 anything here that we need to revisit, and we will 20 do that -- when we issue the transcript, we will do 21 that, if necessary. 22 I think I hit it all. To keep this 23 moving along, I'll turn this over to Jim Clyne, 24 Deputy Commissioner of the Office of Health Systems 25 Management. 00006 1 2 MR. CLYNE: Thank you. 3 The Berger Commission, in the final 4 report, stated that it was only at the beginning of 5 the need to restructure healthcare in New York. 6 This RGA offers assistance to hospitals and nursing 7 homes that want to voluntarily down size, 8 consolidate, share services and governance in order 9 to make a more efficient and better delivery 10 system. The RGA also recognizes conference 11 partners who will have to pick up the slack in 12 areas where Berger recommendations are taking place 13 with hospitals and nursing homes that have closed 14 or down sized. 15 One of the tools that is going to be 16 available fairly shortly for all providers to look 17 at is going to be a new effort by the Department to 18 correct a web-based tool for planning that will 19 look at a statewide mapping of PQI data that will 20 be available both by zip code and by hospital. The 21 reason I wanted to mention that is, when we are 22 looking at the issue of Berger coverage partners, 23 we really want to see how a Berger implementation 24 of a recommendation in a given area is really 25 affecting those facilities around it. We're going 00007 1 2 to be very strict in looking at changes in 3 utilization, to ensure that they're actually as a 4 result of some of the recommendations that the 5 Berger Commission has made. 6 The other thing that we're going to look 7 at is the PQI data to see that as we start to try 8 and address some coverage needs in given areas, 9 that we don't recreate or overbuild the capacity. 10 The Berger Commission, in its recommendations, 11 specifically stated that beds that were recommended 12 to be closed, should be closed and not reallocated 13 in the system. What could be reallocated would be 14 services within a given area, but we're going to be 15 very tough on looking at not adding beds, unless 16 it's absolutely necessary to focus on a particular 17 need that can be demonstrated by data, and that 18 there's not an alternative way to address that same 19 need without building institutional services, but 20 instead developing community-based care. 21 As with most RGA's, we're probably going 22 to receive way more requests for funding than will 23 be available. We urge you to propose projects that 24 offer substantive changes in the way that you do 25 business: More collaboration, new ways of 00008 1 2 organizing and delivering care, and innovation in 3 connecting people to services. 4 This RGA is going to have much more 5 focus on the collaboration side, including joint 6 governance. We are much more interested in seeing 7 providers coming together under a joint governance 8 structure, which does not mean it has to be a 9 merger, but it could be a strong affiliation, a 10 unified government structure. We're much more 11 interested in that than consumers coming to us and 12 simply asking to be paid for down sizing beds. So 13 that's going to be something that we look at. 14 This is an opportunity to be 15 resourceful, to be innovative. We don't think we 16 have all the solutions. We're anxious to see what 17 the field can come up with for ways to improve and 18 restructure healthcare, and we look forward to 19 reviewing the applications. 20 MR. DELKER: I just neglected to 21 introduce some of the panel. You can connect the 22 names with our faces here and our titles on the 23 agenda, but there's an anonymous person at the far 24 left, Michael Barbaro, who is from our Division of 25 Legal Affair, who is here to explain any questions 00009 1 2 regarding the intent of the HEAL legislation, plus 3 to talk about any trust concerns, which we'll get 4 to in a minute. 5 Guy Warner is here and has with him 6 several of his staff who he may want to introduce 7 right now. 8 MR. WARNER: Going from your left -- 9 going from your left to right, Doug Riley, resident 10 expert on nursing homes and home care. Joe 11 Malovnik (ph) and Dave Maloko (ph), our resident 12 experts on assisted living programs and assisting 13 living residences. 14 MR. DELKER: We are also joined by 15 Marybeth Hefner and Cynthia Miner, from the Office 16 of Fiscal Management, and they send us non-verbal 17 signals and queues about financial restrictions and 18 things that can and cannot be allowed under the 19 State Finance Law when we err in that regard, but 20 they are two of the most important people here, 21 because when it comes to contract time, they are 22 the ones who kind of pave the way with the Office 23 of the State Comptroller and the Attorney General's 24 Office, along with Matt's development of the 25 contracts, that really gets these things flowing. 00010 1 2 So they're here to hear your concerns and keep them 3 in mind as contracts go forward. 4 I think on the next slide which you see 5 up there, going to Phase 7, I think Jim covered 6 several of these in his remarks, so we'll just 7 proceed on the next one. 8 We'd like to focus for a minute on 9 eligible applicants. As it says in the RGA, there 10 is a large category of applicants eligible to apply 11 for these funds, and in the RGA, although it's not 12 shown on the slide, are the statutory citations 13 that authorize these various types of providers, so 14 if you meet one of those, you are an eligible 15 applicant. 16 I'd like to focus for a minute on the 17 third one down, established Article 28 network. 18 There are lots of organizations that refer to 19 themselves as "systems" or "networks." Some of 20 them may even be formally incorporated as 501(c)(3) 21 entities. Be careful. An Article 28 network is 22 defined in Part 401 of our health regulations. If 23 you're not under that, you are not a network for 24 these purposes and cannot be an applicant. Another 25 way to put it is: Somewhere in an operating 00011 1 2 certificate that network's name has to appear. So 3 if it's not in an operating certificate, it's not 4 an eligible applicant. 5 We've had to disqualify several 6 applications under previous HEAL iterations by 7 entities that, "Well, we're network so we can 8 apply," but they were not an Article 28 network, so 9 I would caution you about that one. 10 Again, Jim's comments reflected some of 11 this, but this takes place in the context of the 12 changes mandated by the Berger Commission, and if 13 you need to clarify any of those or are not sure of 14 them, take a look at the Commission's final report, 15 and kind of keep it in mind as you're proposing 16 your application, along with priorities that Jim 17 described about innovation and governance and 18 expansion of services. 19 Again, these are priorities. They do 20 appear in the RGA. As Jim said, just reducing your 21 plain old, garden variety debt reduction is not 22 what we're looking for. We want to see something 23 broader, some reconfiguration and change along with 24 it. 25 Okay, with that, what Jim referred to as 00012 1 2 collaborations, affiliations, shared governance or 3 whatever, these often raise issues of competition 4 and Federal and State anti-trust laws. To advise 5 us on that, I'll turn to Matt Barbaro to do some 6 explanation on some of the things you should keep 7 in mind. 8 MR. BARBARO: Thanks, Chris. 9 It's worthwhile to spend a few minutes 10 discussing some anti-trust issues that might arise 11 under this RGA. 12 This RGA offers funds to facilities that 13 collaborate and join together in activities that 14 promote quality and efficiency in healthcare 15 services. These joint projects may have an impact 16 on competition and, consequently, may raise issues 17 under the anti-trust laws. By discussing them in 18 advance, hopefully, we can address some of your 19 concerns about potential anti-trust liability, how 20 both Federal and State anti-trust laws prohibit 21 agreements that are in restraint of trade; that is 22 essentially agreements that are anti-competitive in 23 nature. 24 For example, two facilities cannot 25 allocate services among themselves. Hospital A 00013 1 2 cannot say, "We will do all the cardiology, and 3 Hospital B says, "We take only oncology," nor can 4 they divvy up a geographic region, Hospital A 5 saying, "We'll take everything on the west side," 6 and Hospital B saying, "We'll do the east side." 7 In a case where facilities come together in a 8 formal merger or in a joint governance, 9 particularly in a merger where there's a 10 possibility of a monopoly post-merger, again, that 11 will raise anti-trust concerns. So that if half of 12 a hospital, for example, in New York City merges 13 into one, you have some anti-trust issues there. 14 The idea behind the anti-trust laws is 15 that competition is the best method of allocating 16 resources, meeting supply and demand in a free 17 market economy. So along comes Berger -- and I'm 18 sure many of you are aware of Berger -- in the face 19 of this strong policy of competition, Berger comes 20 along and with its sole purpose or one of its 21 purposes being to reduce competition. In fact, the 22 legislation that created Berger said that the 23 purpose was to align supply with demand. Now, 24 ordinarily that's a mechanism that is regulated 25 through competition in a free market. 00014 1 2 So how did Berger get away with this 3 policy of reducing competition? The reason that 4 the Berger Commission was able to do what it did is 5 because of what is known as the "State Action 6 Doctrine." That essentially says that any action 7 by the State is exempt from anti-trust laws. There 8 are two aspects to the State Action Doctrine: When 9 the State itself is the actor, the State itself is 10 engaging in anti-competitive conduct, either 11 through legislation, as in Berger where we passed 12 the statute, or also, as in Berger, by ordering 13 private facilities to engage in anti-competitive 14 conduct. When the State is acting as sovereign in 15 that capacity and ordering entities to do that, the 16 action is exempt from anti-trust laws per se. 17 That, of course, would apply in the case of Berger, 18 where facilities were compelled to take certain 19 actions that otherwise might be anti-competitive. 20 Occasionally, as with this HEAL grant, 21 the State is not ordering you to do anything. 22 You're coming here voluntarily, presumably to 23 engage in activities that we refer to as Berger 24 look-alikes. So how do these voluntary private 25 actions become exempt under anti-trust laws? The 00015 1 2 answer is, it has to fall within the rubric of the 3 State action exemption. 4 There are two parts to this State action 5 exemption: The first is that the activity 6 undertaken, the anti-competitive activity must be 7 pursuant to a clearly articulated State policy in 8 support of the activity. The second prong to the 9 State action exemption is that the State must 10 actively supervise what it is you're doing. If you 11 meet both of those prongs, then presumably your 12 private actions, your anti-competitive actions 13 would be exempt under anti-trust laws. 14 Now, the first test to clearly 15 articulate State policy, will be satisfied for 16 virtually every successful applicant here; that is 17 you will be acting pursuant to a clearly 18 annunciated State policy in making proposals that 19 have, as their purpose, to improve the quality of 20 care, efficiency of operation, access to care, and 21 affordability of healthcare -- all of those being 22 goals of Berger, a clear statutory policy. So 23 there is an articulated State policy for your 24 facilities to engage in the Berger look-alike 25 activities that we're promoting through this RGA. 00016 1 2 Now, the second requirement, that the 3 State actively supervise what you're doing, may be 4 problematic for some of you. It's a little 5 difficult, more of a difficult standard to meet. 6 In the case of a one-time event, such as a 7 reduction of beds which is linked to improvements 8 in the healthcare system, there may be sufficient 9 State supervision of your activity, merely by our 10 passing on your application and giving it the sign 11 of approval. However, there are other potential 12 activities that you might take, such as mergers, 13 where the anti-competitive effects cannot be 14 measured right away, but occur over time. In those 15 cases, the need for State active supervision will 16 be ongoing in order to ensure that your activities 17 are exempt under the State Action Doctrine. 18 So if your application includes any 19 anti-competitive proposals, whether it's a merger, 20 an allocation of services between two facilities, 21 you should describe in your application how the 22 State will actively supervise those activities, 23 whether by merely approving them for the 24 application process or by requirement of some 25 ongoing supervision, such as reports that are 00017 1 2 reviewed by the State over a period of time. Your 3 request for supervision should be reasonable. For 4 example, we're not going to supervise your rate 5 negotiations with managed care companies. 6 You cannot be held responsible for 7 violating the anti-trust laws merely by submitting 8 an application proposing anti-competitive conduct. 9 That's so because there is a separate doctrine 10 under the anti-trust law, known as a "Moer" -- 11 M-o-e-r, for our stenographer -- Pennington 12 Doctrine, which excludes from the anti-trust laws 13 any facility that is petitioning the government for 14 relief, and certainly, you have a First Amendment 15 right to propose actions that might be anti- 16 competitive. So your application to us is 17 protected. 18 Let me summarize: You can submit an 19 application that may propose anti-competitive 20 activities, and if you do have anti-competitive 21 components, you should describe how the State will 22 actively supervise that conduct. 23 Let me add two caveats in closing: 24 First, this RGA should not be used as a means to 25 engage in anti-competitive conduct that is 00018 1 2 unrelated to your application. So, for example, if 3 you're proposing to eliminate beds, you're not 4 authorized to engage in price fixing along with 5 that. 6 Second, your proposal cannot be 7 structured as a means of avoiding the anti-trust 8 laws. It has to be a real transaction, not a sham 9 transaction. Some of you may be familiar with the 10 Vassar Brothers, St. Francis case in Poughkeepsie. 11 In that case, the hospital developed a joint 12 negotiating strategy by negotiating rates to 13 third-party payers through an active parent. Even 14 though DOH supported that proposal, the Courts 15 struck that down because there was no expressed 16 State policy authorizing joint negotiations with 17 third-party payers and there was no active 18 supervision by the State over those negotiations. 19 So if you stray over the line too far, 20 there's nothing we can do at DOH to help you, even 21 if we wanted to. But in a case like this, we 22 certainly will advise you to consult your private 23 attorney; our advice can only go so far, obviously. 24 Since this is competitive grant, we really can't 25 assist you on a case-by-case basis, but with this 00019 1 2 guidance, hopefully, you can consider an 3 application that won't run afoul of the anti-trust 4 laws and, certainly, run it by your attorney before 5 you submit it to us. 6 MR. DELKER: Thanks, Matt. 7 Now we're going to start looking at some 8 eligible costs and some of the details of the 9 application. For that, I'm going to introduce Bob 10 Schmidt, who is Director of the HEAL implementation 11 team. Up front, he is our face to the world of 12 HEAL. He is the main person. 13 MR. SCHMIDT: I don't know if that is 14 good or bad. 15 MR. DELKER: He is the main person who 16 is out there on HEAL, behind the phone calls, 17 e-mails and everything else. 18 MR. SCHMIDT: I'd also like to introduce 19 Janice Dee (ph). She is at the registration table. 20 If you called or sent a Q and A in or registered, 21 in person or at the other end of the e-mail, it's 22 Janet. 23 We'll start going through the eligible 24 costs. The eligible costs are listed in the RGA 25 under 1.8.1. It basically consists of two 00020 1 2 categories of costs, one capital cost for 3 restructuring, and the other section talks about 4 eligible costs for closing. These are not an 5 exhaustive list of costs. Basically, if they can 6 fit into a category of restructuring or a 7 short-term cost incurred in the closing of the 8 facility, it can be considered. 9 I'm going to talk briefly about the 10 basis of awards, the criteria listed in this 11 bullet list of what we're going to be looking at 12 when we do the evaluations, but I also wanted to 13 add in how the awards will be reviewed. If you sat 14 through the morning session, it's basically the 15 same stages as a review. 16 The first stage is a completeness 17 review, which basically determines if all the 18 components of the applications have been submitted, 19 and if not, the opportunity exists where you may 20 not be allowed to go on to further review. The 21 second stage is an eligible applicant review. This 22 is where we want to make sure that you're on our 23 short list of eligible applicants, and that it's 24 verifiable. 25 Stage 3 is when the scoring starts to 00021 1 2 take place, and that's -- we'll go on to the next 3 slide -- that's 75 percent of the score will be for 4 the technical portion of the application and, then, 5 25 percent will be for the financial section. 6 That's derived through a uniform scoring criteria. 7 It hasn't been explained earlier, but basically, 8 it's like the earlier session. The applications 9 have two sections, financial and technical. There 10 can't be any financial information in the technical 11 section, and at Stage 3 is where they're separated, 12 and they go to different review teams. 13 Okay. One thing I have to mention, the 14 first bullet in the application template is the 15 Executive Summary. I want to just stress the fact 16 that the Executive Summary really needs to be 17 brief. We don't want to see an Executive Summary 18 that's more than two pages. There are a lot of 19 functions for the Executive Summary as we go 20 through the review process, so don't make it more 21 than two pages. There is a section in the 22 application template that allows you to explain the 23 project in a lot more detail, so use that to talk 24 about the specifics. 25 Community need: We'd like to see 00022 1 2 documented community need, that this project is 3 important and it's essential and it's going to 4 improve outcomes and health status in ways that we 5 have discussed earlier in the segment. We want you 6 to use health status indicators, demographics, the 7 insurance status, the Medicaid status of the 8 potential groups you want to reach. We really just 9 don't want generalized statements on need or 10 capacity; it has to be documented. 11 Chris wants to mention a statement about 12 the PQI. 13 MR. DELKER: Some of you heard this 14 morning, the Department is working on a mapping of 15 the statewide zip codes for prevention quality 16 indicators, health outcomes, linking it to hospital 17 discharge data and to demographic and other data in 18 local jurisdictions. We hope that this will be 19 available statewide in the next few weeks, and it 20 would be available through the Department's 21 website, so that certainly would be helpful in 22 describing the needs of the communities. Keep your 23 eye on the web page for that. 24 I'd also like to -- the bullet 25 addressing impact of Commission mandates, if you're 00023 1 2 applying as a coverage partner, that is you are 3 serving clients that were formerly served by 4 hospitals or other facilities that were down sized 5 or closed because of Berger Commission mandates, we 6 need documented information on that, too. You 7 might say, "Well, we've had a spike in our ED's 8 ever since that hospital X closed, so that must be 9 the reason." Well, there may be another reason. 10 We would need documentation. What are the 11 residents, the patients you are serving, were they 12 from zip codes formerly certificated by the closed 13 hospital or the closed nursing home? Are 14 physicians from that other facility that closed 15 referring clients to you now or whatever? Just 16 saying that it's an increase and that's the reason 17 isn't stringent enough. It isn't strong enough. 18 So keep that in mind if you're describing serving 19 clients of former facilities that are affected by 20 the mandates. 21 MR. SCHMIDT: Thank you, Chris. 22 One of the objectives -- really there 23 are two separate objectives. One of the process 24 objectives, which is basically the seventh step 25 that takes place in completing the project, like, 00024 1 2 there's Stage 1, 2, 3 and 4 of the building 3 process. 4 If you look at the outcome objective, if 5 you want to see what your goals are or how you're 6 going to reach or change health status. So you're 7 going to start with a baseline of information and, 8 then, how is this project going to change how you 9 do things and reach a final point of an outcome 10 measure? 11 As far as the time line goes, I'd like 12 to see the project divided into quarterly 13 milestones that dovetails with the budget as 14 quarterly costs. I know the RGA says that we will 15 not voucher more frequently than monthly, but we 16 really, we're here to set up a system with 17 quarterly vouchering. We want to see that your 18 project is segmented in a way that you can receive 19 quarterly payments. 20 Project monitoring: This has always 21 been traditionally, in the earlier HEAL phases, the 22 weakest part of the application. We'd like to see 23 a good monitoring plan, something with sufficient 24 detail, not just a description of, "Yes, we're 25 going to monitor this project." 00025 1 2 One thing that I want to mention on this 3 subject is that progress reports are required for 4 three years after completion of the project. So it 5 has to be kept in mind on how you're going to 6 demonstrate after the project is over, how, you 7 know, if the proposed impact was actually affected. 8 The next two slides are on the financial 9 application in view of the project budget fund 10 sources, and the project expenses and 11 justifications. I think I can ask Larry to talk to 12 this. 13 MR. VOLK: Sure. The project budget, 14 not surprisingly, really should be fairly detailed. 15 It should include everything that is necessary, 16 reasonable, and in the public interest. It should 17 have a close and very descriptive version of what 18 it is you're going to do, why you're going to do 19 it, how much it's going to cost, and what do we, 20 the healthcare system, get for the expenditure? So 21 that it is probably everything that you want to 22 know. We need to have that not only numerically, 23 but also with a description providing as much 24 richness to it as possible. 25 As a general matter, the financial 00026 1 2 reviewers will probably not see the technical 3 application. So, to the extent that it is 4 important to know details about what it is that you 5 propose to do programmatically and clinically for 6 the reviewer, for the financial reviewer to be able 7 to make a determination as to whether or not this 8 is a good investment for the State, you need to 9 include that in your application. 10 The scoring, similarly, is going to be 11 based on the overall cost, the reasonableness of 12 the cost. So they shouldn't be overinflated, and 13 what will be the effectiveness of making this 14 expenditure in reducing the healthcare cost? 15 MR. SCHMIDT: Thanks, Larry. 16 You know, I neglected to mention 17 something that needs to be said. Going to the 18 stages of review, if you look in your RGA for Phase 19 7, there's a sentence that shows up under Stage 2, 20 that basically states that you need to have a 50 21 percent match. That's an error and that should be 22 deleted. We're going to post an amendment to the 23 RGA on our website to that effect. We mentioned it 24 at Monday's session and I let you know today. 25 Nowhere else in the RGA does it say a match is 00027 1 2 required. 3 MR. VOLK: That does bring up the fact 4 that the budget that you include should describe 5 all of the sources of funds that you do have, and 6 that while there is not a required match, certainly 7 having an investment in the project is a beneficial 8 thing from the reviewer's perspective. So you need 9 to describe and specify what that will be, to the 10 extent that there is one. 11 MR. SCHMIDT: Okay. This is a 12 competitive procurement which means there are no 13 negotiations involved. There are no adjustments to 14 the application once it's submitted. Once you 15 submit your budget, that's the application that has 16 to go through the complete review process. We 17 talked about that this morning, but it needs to be 18 said again. 19 So, again, there's no advantage to 20 sending the application in early. The application 21 deadline is April 3rd; it won't be opened until 22 after April 3rd. So do a good job and be careful 23 with your budgeting and your work plan and make 24 sure it's a good final copy, that you won't have to 25 worry about that. 00028 1 2 Lastly is, just as in the earlier phase, 3 the technical and financial applications are two 4 separate applications. So you need to send two 5 complete originals of each technical and financial, 6 four hard copies of each, the technical and 7 financial, and six flash drives or CD's with the 8 complete application in PDF format. It doesn't 9 have to be one complete PDF copy, you can have 10 multiple copies, but we didn't want to get into a 11 situation where we have applications submitted with 12 57 different documents that rolled up into one 13 application, which is not practical for reviewers. 14 The Q and A's are due in by February 15, 15 2008. If you want to e-mail a question, 16 HEALNewYorkPhase7@health.state.NewYork.us/RGA. 17 Also, for those of you that were here in the 18 morning, this is an earlier deadline. This is an 19 April 3rd deadline, earlier than the Phase 6 20 applications. 21 All right. Chris will lay out some 22 ground rules for the Q and A and we can get started 23 with that. 24 MR. DELKER: Before we do that, just to 25 go back a little bit to what Bob said about 00029 1 2 competitive procurement and no negotiation. Those 3 of you who were involved, or perhaps still are, in 4 the HEAL phase 4 process, you know that there were 5 some negotiations that took place. That was not a 6 competitive procurement. So not only do we mean 7 there's no negotiation after you submit the 8 application, but if you receive notification of an 9 award, there will be no adjustments for negotiation 10 of the deliverables. So don't assume that you're 11 going to have the flexibility that there was in 12 Phase 4 if, indeed, you get an award under this 13 iteration. 14 Okay, for the questions. There are a 15 lot of people here and the procedure is this: You 16 come up to the microphone and the podium that are 17 in the forward part of the room here and ask your 18 question. You can ask only one question to start 19 and, if necessary, a related follow up, so don't 20 plan to come up and ask more than one question. 21 We'll let everyone have an opportunity to do that 22 and, then, if time permits, we'll allow people to 23 do a second round of questioning. 24 So, who wants to go first -- oh, yeah, 25 make sure you state your name and your organization 00030 1 2 when you get to the microphone. 3 Excuse me, sir. These microphones only 4 work if it's very close to your mouth like it is to 5 mine right now, so raise it up or lean forward. 6 MR. ANDREWS: Thank you. Ralph Andrews, 7 New York Eye and Ear Infirmary. 8 A lot of us are pleased that the PQI 9 data is proposed by the Department and will be up 10 in a few weeks. You mentioned inpatient data. 11 Will there also be ambulatory care sensitive data, 12 as there has been by some of the City people, 13 that's posted in relation -- 14 MR. DELKER: I'm not sure your mike is 15 on. Press the green button. 16 MR. ANDREWS: Will there be ambulatory 17 care sensitive data as well as the inpatient or 18 data referred to? 19 MR. DELKER: No, not initially. We're 20 using Sparks data, inpatient data. The ambulatory 21 care data, as you're probably aware, is not what it 22 should be. This is kind of the ground floor of 23 what we hope will be a more comprehensive data. 24 For the time being it will be based on the Sparks 25 inpatient discharge data. 00031 1 2 MR. ANDREWS: Thank you. 3 MR. IRELAND: Daniel Ireland, United 4 Memorial Medical Center. 5 My question revolves around activities 6 eligible for funding and what you emphasize a lot 7 about debt closures and consolidations. For those 8 organizations who have service lines that could 9 benefit from modifications or upgrading to either 10 improve access or reduce healthcare costs overall 11 in the long run by being more efficient, is that an 12 eligible project for this type of a grant? 13 MR. DELKER: Well, yes. Improvements 14 and efficiency are eligible, but, you know, if 15 you're talking about your facility and just 16 improving its efficiency, it's frankly not going to 17 score all that high. As Jim said in his remarks, 18 we're looking for some collaboration and innovation 19 and some new approaches. So I would issue that 20 caution to you, if you're going to take that 21 approach. 22 MR. IRELAND: Okay. Thank you. 23 MR. CLYNE: As we said in the earlier 24 RGA -- excuse me, I'm thinking it makes sense just 25 to say it up front now. As people talk about 00032 1 2 eligible cost, there's lots of things that could be 3 eligible, and we kept flexibility in that, but just 4 because a cost is eligible, if it comes in as a 5 single eligible cost that's not part of a 6 comprehensive plan of performing the way healthcare 7 is being delivered in your area, as Chris said in 8 that particular question, it's not going to score 9 very high. So just because a cost is eligible 10 doesn't mean you should send in an application with 11 just one or two isolated costs. 12 We make those eligible. As we've gone 13 through the HEAL 4 process, it's amazing, the costs 14 that come up that stymied facilities being able to 15 come together. So we want to be able to have 16 flexibility to fund those things, but really, in 17 the context of changing the way care is being 18 provided in a given area. 19 MR. OSBORNE: Mike Osborne, Catholic 20 Health System, Buffalo, New York. 21 My question related to, earlier you 22 mentioned that Berger changes will -- you should 23 show any Berger changes that are happening. In our 24 particular region there will be changes, they have 25 not happened as of yet. Would you suggest we 00033 1 2 document what we believe will happen with the 3 changes? Most of the changes in our region, 4 hospitals will be closed, but the time lines are 5 pushed out. 6 MR. CLYNE: If the time lines are pushed 7 out, you could send in an application that 8 described how you would see, for example, the 9 rearrangement of ambulatory care versus ER care in 10 Buffalo. That would be something that would be 11 eligible. 12 MR. OSBORNE: Thank you. 13 MR. HIRSCH: Jerry Hirsch, North Shore/ 14 LIJ health system. 15 In the thralls of the RGA, on item 16 number 3 it says: "Promotion of ambulatory 17 community-based care at appropriate levels of cost, 18 based upon community need." Can you explain how 19 that differs, if any, from the HEAL 6 requirements? 20 MR. DELKER: I think the principal 21 emphasis there is more in the long-term care 22 continuum of services; assisted living, adult homes 23 and so on. That, I think, is more what it has in 24 mind there. Although there could be some reduction 25 in size and use of alternate space for ambulatory 00034 1 2 care in the future, that's not the emphasis. 3 MR. CLYNE: It is certainly some of the 4 Berger recommendations where you've seen a 5 requirement that beds be taken down or facilities 6 closed. The idea, again, is not to then recreate 7 those beds somewhere else, but if the answer, then, 8 is to serve the, for example, 20,000 ED visits that 9 have to get disbursed somewhere, we would much 10 rather have those covered in a planned-out clinic 11 or ambulatory-care setting, rather than flooding 12 the surrounding facilities with those visits. 13 I think that would be something that 14 would be, indeed, worthwhile to look at funding, 15 but, again, you're going to have to draw the direct 16 connection between the closure of the Berger 17 facility and the need to build up the ambulatory 18 care services in the area. 19 MR. MOLISANI: Mark Molisani, Visiting 20 Nurse Service. 21 Just a clarification. I didn't see any 22 RFA, in terms of eligibility, but I did see it on 23 the slide. I just wanted clarification. 24 MR. DELKER: We did issue an amendment 25 that the RGA Hospices are eligible. 00035 1 2 MR. MOLISANI: Thank you. 3 MR. SHORT: Jeff Short, 4 PricewaterhouseCoopers. If your project requires a 5 CON, will that CON application be accelerated if 6 the application is approved for the project, for 7 the grant? 8 MR. DELKER: Yes. We have been doing 9 that all along with HEAL-related CON projects, so 10 we'll do our best to accelerate them. 11 MS. HOUSER (ph): Hi, Diane Houser, with 12 the Institute for Family Health. 13 My question is: Does the project have 14 to address specifically a mandated closure or 15 reduction or can it be as a result of some other 16 strategic planning? 17 MR. CLYNE: For the ones that are 18 dealing with the Berger coverage partners, they 19 would have to be tied directly to a Berger facility 20 implementing the recommendation, but for them we 21 also talk about the Berger look-alikes, where we've 22 had a number of facilities contact us who said, 23 "Gee, we wish we didn't have the Berger 24 recommendations, now that we see that there would 25 have been funds available to come together." 00036 1 2 If you were talking about generating 3 something on your own to reconstruct healthcare, 4 that's perfectly fine. I don't think you can send 5 in an application saying, you know, "I hope the 6 hospital down the road closes and then I'll take 7 your business." That's not going to score too 8 well, but if it's something that's happening in 9 your community right now and you're going to be 10 able to restructure services in a way that makes 11 more sense than what would otherwise happen, that 12 would be eligible. 13 MS. HOUSER: Thanks. 14 MR. DELKER: Any more? Is there anyone 15 who wants to ask a question who has not asked one 16 yet? 17 MS. McDADE: Ruth McDade, Long Island 18 Home. 19 Can you advise if there will be specific 20 awards made per region, and if so, is there a 21 suggestion as to what the budget range should be? 22 MR. DELKER: Well, the total pool of 23 funds is allocated according to the regional 24 breakdowns you see there in the application. 25 Generally it reflects the population in those 00037 1 2 jurisdictions, so roughly 40 percent would go to 3 the five boroughs. We do reserve the right to 4 distribute those awards, you know, in another 5 manner if we see fit, and if it's in keeping with 6 the general purposes of HEAL, but the maximum award 7 per application is 20 million. 8 MR. GILMARTIN (ph): Thomas GilMartin, 9 Jay Schulman (ph) Hospital. 10 I was wondering if you would 11 differentiate what you're looking for under HEAL 7 12 and under the HEAL 8 application that just came 13 out, and also, if you could let us know if there's 14 going to be a public forum such as this for the 15 HEAL 8 application? 16 MR. SCHMIDT: I'll speak to HEAL 8. 17 That's 30 million dollars for nursing 18 home rights. It is to work in conjunction with the 19 right sizing program, which I can discuss in a 20 little more detail. 21 There won't be a bidders' conference for 22 that. It's basically under the framework of a non- 23 competitive procurement. 24 MR. GILMARTIN: Could you define that a 25 little bit better, "non-competitive"? 00038 1 2 MR. SCHMIDT: I don't know how familiar 3 you are with our Phase 4 process, but it will run a 4 little more like that. Submit an application. If 5 more information is needed, we have that ability, 6 just ask for it. It's a little bit more of a 7 collaboration between the Department and the 8 applicant. 9 MS. HEFNER: There's not much more you 10 can say. 11 MR. SCHMIDT: There is a Q and A 12 session, not session but there is a Q and A period. 13 You can send in a question and it will be answered 14 before you send your application in. 15 MR. GILMARTIN: Okay. Thank you. 16 MR. WARNER: Doug, could you kind of 17 give us a very brief description? 18 MR. RILEY: Yes. Well, the right 19 sizing will be very similar to the first two rounds 20 we had. Basically, you can turn in nursing home 21 beds and get some adult day healthcare, long-term 22 home healthcare slots or assisted living slots, 23 basically on a one-for-one basis. All those 24 applications are given consideration in kind of how 25 they come in. We look at need and what goes on at 00039 1 2 the local level and, hopefully, that initiative 3 will come out very soon. 4 MR. WARNER: Thank you. That will be 5 in the next week, I think. 6 MR. RILEY: Hopefully. 7 MR. WARNER: We'll see. 8 MR. DELKER: It's a "we think" 9 prediction. 10 MS. HEFNER: I think it's out. 11 MR. CLYNE: It's out. HEAL 8 was issued 12 a couple of days ago. Right size is something 13 different. 14 MR. RILEY: Right sizing, hopefully 15 that will go out. 16 MR. WARNER: HEAL 8 was 68, 69 pages 17 worth of information. It's already been released, 18 I think. 19 MS. MARK: Hi, I'm Jeanine Mark from 20 Logan Trauber (ph). 21 If HEAL 8 is not competitive or 22 comparative or collaborative, can we talk to you 23 about HEAL 8? 24 MR. CLYNE: Yeah, just not now. That's 25 not because we don't want to, it's just that, you 00040 1 2 know, Mark Kissinger, who is the Deputy 3 Commissioner for the long-term care is really 4 taking the lead for that initiative. He's got to 5 set up his own operation for how he handles that. 6 MS. WONG: This is Grace Wong, 7 representing University Physicians of Brooklyn. 8 Now, based on the eligible applicants, 9 it says co-operator of a hospital, is a practice 10 plan eligible for that? 11 MR. DELKER: No, we mean a co-operator 12 under Article 28. The name of the entity that is 13 to appear under an operator's certificate 14 somewhere, and a physician practice plan is not 15 eligible. 16 MS. McCOY-PINDERHUGHES: I'm Paula 17 McCoy-Pinderhughes from New York Presbyterian 18 Hospital. 19 Maybe I should be talking to legal about 20 this, but I just -- what makes me nervous are the 21 anti-trust concerns and the mergers. Can you be a 22 little bit more specific. I have no legal mind. 23 MR. BARBARO: Well, if you're successful 24 with your application you won't have to worry about 25 the first part of the anti-trust formula. You 00041 1 2 would be acting pursuant to a clear State policy 3 which was expressed in the Berger legislation, so 4 that's not a concern. 5 The more problematic thing is the active 6 State supervision, so if you're contemplating a 7 merger, you will have to include suggestions about 8 how we can supervise that over a period of time, to 9 make sure that you're meeting the goals of the 10 Berger Commission in down sizing, right sizing, and 11 so forth. 12 As I say, the active State supervision 13 may be a little more difficult to meet for some 14 facilities, but it's a requirement. It's for your 15 protection, so that you can claim an exemption 16 under anti-trust laws; they're in the challenges. 17 We'll certainly, although we can't talk to you 18 specifically with respect to this HEAL grant, you 19 can certainly address that issue with your 20 attorney, private counsel. 21 MR. CLYNE: I think the key is for 22 anybody who is putting in an application, to at 23 least give us an idea of how you view what our 24 active supervision would be. We don't want to have 25 to take an application, look at it, and have us 00042 1 2 come up with what our active supervision is. So we 3 really need, if there's going to be any issue of 4 anti-trust or what active State supervision is 5 going to be, we really need to be able to judge the 6 application. We need to know what you think we're 7 going to be doing in order to judge them. 8 MR. DELKER: More questions? 9 (No response.) 10 Is there anyone who has not yet asked a 11 question who wants to? 12 (No response.) 13 Is there anyone who has asked a question 14 who would like to ask another one? 15 (No response.) 16 You can tell it's Friday afternoon. 17 This is your last chance to see us live and in 18 person. 19 MR. BERENYI: I'm going to ask a 20 question, my first question. Is that all right? 21 MR. DELKER: Yes, sir. 22 MR. BERENHYI: My name is John Berenyi, 23 Greenbrier Adult Home. 24 Can you explain on the priorities, the 25 last bullet point in greater detail, "Commission 00043 1 2 priorities"? It says poster innovation, et cetera. 3 Can any of you address that as to -- these are very 4 big buzz words and I'd like to understand your 5 thinking behind it. 6 MR. DELKER: Well, I think it goes back 7 to what Jim said in his opening remarks. Your 8 plain, ordinary improvement or enhancement of your 9 facility isn't really what we're looking for here. 10 We're looking for new ways for, perhaps, your 11 facility or service to connect with others in the 12 community, to address and identify the need. Is 13 what you're doing, could it be complemented by 14 working with another provider, a nursing home, a 15 hospital, another community-based provider, 16 something like that? I think that's the kind of 17 innovation that's thought of. 18 On a larger scale, on the institutional 19 side, perhaps new approaches to care and new 20 approaches to, you know, using new models of 21 inpatient care on the long-term care side or 22 something like that. You know, "think outside the 23 box," to use the cliche. 24 Anyone else for a first question or a 25 second question? 00044 1 2 SPEAKER: If a proposal is looking at a 3 mental health service -- 4 MR. DELKER: Could you raise up the mike 5 a little? 6 SPEAKER: In the psychiatric emergency 7 room, where there will be a patient who will be 8 coming from a Berger-approach facility, will there 9 be coordination between DOH and not only the CON 10 application, but the application with the Office of 11 Mental Health? 12 MR. CLYNE: Yes. If you put in an 13 application that looks at a specific service line 14 like mental health or alcoholism and substance 15 abuse, we would always check with a State agency on 16 what their needs analysis is and how they would 17 look at that application. 18 SPEAKER: The reason I raised it is very 19 often DOH will defer to the other agency for need 20 an vice versa. 21 MR. CLYNE: Yes. We would do the same 22 thing in that if we saw applications like that, we 23 would go to them and put it on them to make sure we 24 were judging the need correctly. 25 SPEAKER: Thank you. 00045 1 2 MR. DELKER: Any more questions, first 3 or a second? 4 (No response.) 5 Thank you all for coming. Again, you 6 can continue to submit questions to our website for 7 another couple of weeks. 8 If you asked a question, please leave 9 your business card with the stenographer, it will 10 help her in doing the transcript. 11 (Time noted: 2:59 P.M.) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 00046 1 2 3 C E R T I F I C A T I O N 4 5 I, SHANASIA ILGNER, a Shorthand 6 Reporter and Notary Public, within and for the 7 State of New York, do hereby certify that I 8 reported the proceedings in the within-entitled 9 matter, on February 8, 2007, at 90 Church Street, 10 New York, New York, and that to the best of my 11 ability, the above proceedings are an accurate 12 transcription of what transpired at that time and 13 place. 14 IN WITNESS WHEREOF, I have hereunto 15 set my hand this day of , 16 2008. 17 18 19 SHANASIA ILGNER, 20 Shorthand Reporter 21 22 23 24 25