Safety Net Transformation Program

The Department of Health is currently accepting Letters of Interest for funding under the Safety Net Transformation Program under Public Health Law (PHL) Section 2825-i. Interested facilities are advised to carefully read the following details concerning the Program's purpose, eligibility criteria, and application process, including requirements for Letters of Interest, to ensure that the facility is eligible, and that the proposal is sufficiently developed for the Department's consideration.

Questions about the Safety Net Transformation Program should be directed to: SafetyNetTransformation@health.ny.gov.

Background

The Safety Net Transformation Program is a new program for eligible safety net hospitals working with at least one partner organization to implement a transformation plan that improves the resilience of the safety net institution. The Program was enacted through the State Fiscal Year 2025 Budget (Chapter 57 of the Laws of 2024) and codified in PHL Section 2825-i. The law took effect on April 1, 2024.

Purpose of the Safety Net Transformation Program

The Safety Net Transformation Program aims to support the transformation of safety net hospitals (as defined under PHL 2825-i(2)) to improve access, equity, quality, and outcomes while increasing the financial sustainability of safety net hospitals by encouraging collaborative partnerships between safety net hospitals and partner organizations.

Applicants may request operating and/or capital funding to support the transformation proposals. Applicants may also request that certain regulations be waived for the life of the project if doing so would allow applicants to implement the proposed project more effectively or efficiently. Applicants should be aware that certain regulations cannot be waived, such as but not limited to, regulations pertaining to employee rights or minimum standards for hospital patient safety. Applicants should also be aware that the Department can decide to waive regulations for a shorter period of time than requested.

Eligibility

Applicant safety net hospitals must:

  • Be a safety net hospital as defined in PHL section 2825-i(2). Under the law, the hospital must meet at least one of the following four criteria to be eligible:
    1. be a public hospital, a rural emergency hospital, critical access hospital, or sole community hospital; or
    2. have at least 30% of its inpatient discharges made up of medical assistance program eligible individuals, uninsured individuals or medical assistance program dually eligible individuals and at least 35% of its outpatient visits made up of medical assistance program eligible individuals, uninsured individuals, or medical assistance program dually eligible individuals; or
    3. serve at least 30% of the residents of a county or a multi-county area who are medical assistance program eligible individuals, uninsured individuals, or medical assistance program dually eligible individuals; or
    4. in the discretion of the commissioner, serve a significant population of medical assistance program eligible individuals, uninsured individuals, or medical assistance program dually eligible individuals.
    and
  • Have identified at least one partner organization with which they jointly apply for the program. Applications for this program must be jointly submitted by a safety net hospital and at least one partner organization.

Safety Net Hospital applicants should also:

  • have a history of regulatory compliance and
  • be in good standing in terms of participation in the Hospital Capacity Direct Access program (i.e., not in delayed or deferred status).

Eligible partner organizations:

Per PHL section 2825-i(3), eligible organizations with which a safety net hospital can partner may include, but are not limited to:

  • 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 a history 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.

Application Process

All applications for this program must be jointly submitted by a safety net hospital and at least one partner organization. Applications which indicate that a partner organization has yet to be identified will not be considered.

Letter of Interest

A Letter of Interest is the first step of the Safety Net Transformation Program application process. An application template will be forthcoming. Pending this application, facilities currently interested in applying prior to release of the application must submit a Letter of Interest, which details the following:

  • Basic Applicant Identification. List the joint applicant names and explanation of eligibility, including:
    1. Hospital applicant name, Facility Identifier (formerly known as Permanent Facility Identifier [PFI]), and explanation as to how the hospital meets the definition of a safety net hospital under PHL section 2825-i(2).
    2. Partner organization(s) name(s), facility identifier (as appropriate), description of the organization's work, and explanation as to how the organization falls under PHL section 2825-i(3).
  • Organizational Information, including:
    1. An organizational chart and a description of the organizational structure of the safety net hospital, including any parent or subsidiary, and the interrelationship between all such organizations;
    2. An organizational chart and a description of the organizational structure of the partner organization(s), including any parent or subsidiary, and the interrelationship between all such organizations;
  • Regulatory Flexibilities Requested. Specifically identify any regulatory relief requested, including a citation to the regulation(s) and, for each regulation cited, include an explanation as to how the regulatory relief requested will help the applicants achieve an improved financial outlook for the safety net hospital and improved health outcomes for the communities it serves, as detailed in the proposed transformation plan.
    1. General references to Title 10 of the New York Codes, Rules, and Regulations, or entire Parts of such Title, will not be accepted.
  • Description of Collaborative Model Proposed Between the Safety Net Hospital and its Partner Organization(s). The model may include but is not limited to a merger, acquisition, management services contract, or clinical integration.
  • Description of the Anticipated Transformation Plan, including the estimated operating and/or capital funding the Applicants anticipate requesting.
  • Acknowledgment Regarding Necessity of Detailed Transformation Plan. For the purposes of the Letter of Interest, applicants do not need to submit a detailed Transformation Plan. However, applicants must acknowledge their understanding that a comprehensive Transformation Plan, deemed sufficiently detailed by the Department, will be required prior to any awards being made. Please refer to the "Detailed Transformation Plan" requirements listed under the "Advisory Regarding Forthcoming Application" below for further information; the Department will issue further requirements for the Transformation Plan in the application itself.

The Department will review the Letter of Interest for completeness. The Department reserves the right to request clarifying information regarding any entities' submission.

Advisory Regarding Forthcoming Application

As indicated above, an application for interested participants is forthcoming. While at this time only those elements set forth in the "Letter of Interest" requirements above are necessary, eligible safety net hospitals and potential partner organizations should be aware that the forthcoming application will require the following additional information:

  • Name, business address, and biography of each director (including other facilities and Facility Identifiers where they serve as directors) and officer of the safety net hospital;
  • Name, business address, and biography of each director and officer of each partner organization;
  • Name, business address, and biography of each director (including other facilities and Facility Identifiers where they serve as directors) and officer of any other organizations within either the safety net hospital's or the partner's organizational structure;
  • Detailed Transformation Plan, including:
    • The 5-year strategic and operational plan outlining the roles and responsibilities of the safety net hospital and partner organization.
    • Current audited financial statements for the last 3 full years from both the safety net hospital and the partner organization(s).
    • A timeline for meeting key financial, clinical, and quality metrics.
    • The amount and timeline of funding requested for the first 5 years and projected needs thereafter, including:
      • The rationale for why such funding is necessary for the transformation plan to achieve an improved financial outlook for the safety net hospital and improved health outcomes for the communities it serves; and
      • Description as to the amount of requested funds for capital versus operating costs.
    • Detailed plans for any operational surplus after reaching financial sustainability.

Awards

Awards will not be decided based upon the Letter of Interest. The following information is applicable only once the application has been issued and received by the Department:

Awarded funding under this program will be distributed after the Department's analysis and approval of the jointly submitted application and may require submission of additional information as requested by the Department.

Awards are made at the Department's discretion and may be an amount that is lower than the awardees' requested funding. Successful applicants will be subject to specific reporting requirements as determined by the Department.

Awards may include capital funding, operating subsidies, or a combination of both.

Award Contingencies:

Continued support under the program shall be contingent upon the implementation of the approved plan and key milestones, and support is further subject to the availability of appropriations in future NYS Budget years.

Additionally, the release of any funding will be contingent upon the applicants' compliance with the submitted and approved transformation plan and a determination that acceptable progress has been made with such plan.

If key milestones and goals are not met, as determined by the Department, additional financial resources may be withheld and redirected.

Notice of Awards

The Department will announce awards on a rolling basis.