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Health care projects here in danger of losing key aid ; Consolidation, data plans confront federal deadline

Tens of millions of dollars in federal aid for Buffalo's efforts in hospital consolidation and health information technology are in danger because of an inability to complete the projects before a Sept. 30 federal deadline.

Upward of $47 million is at risk at Kaleida Health Systems alone, including $32.1 million for its move of essential services from Millard Fillmore Hospital at Gates Circle to Buffalo General Hospital at the Buffalo Niagara Medical Campus.

"It could have an impact on jobs and could result in a delay of the project," said James R. Kaskie, president and CEO of Kaleida.

Meanwhile, HEALTHeLINK -- Buffalo's much-touted electronic medical records effort -- says $13.8 million is at risk. The state, which allocates federal funds for the health care reform projects, just awarded HEALTHeLINK those grants late last year for projects that are planned to take two years to complete.

"To try to complete two years of work in three quarters just isn't feasible," said Daniel E. Porreca, HEALTHeLINK's executive director.

Facing such realities, the state's congressional delegation has begun a bipartisan push to persuade the Department of Health and Human Services to give the state three more years to spend the federal funds, which were originally awarded to the state in 2006.

"This is a fight to build on the progress under way that is creating quality jobs in the construction and health sectors and delivering enhanced treatment and care to patients across New York," said Rep. Brian Higgins, D-Buffalo.

While lawmakers last week attributed the delays in the projects and the looming deadline to federal foot-dragging, the real reasons for the problem are more complex, varying from project to project.

Kaleida used the federal funds as seed money, then sought private matching funds to help pay for its hospital consolidation. Then plans had to be drawn up, and all of that takes a considerable amount of time, Kaskie said.

For those reasons, the hospital system so far has been able to use only a little more than half of a $65 million grant for the Millard Fillmore-Buffalo General consolidation. In addition, Kaleida has not been able to draw down any of the $12.4 million it won for a new 300-bed long-term care facility adjacent to Buffalo General.

"Now we're being told, 'Spend it or lose it,' " Kaskie said.

The state Department of Health sent Kaleida and dozens of other health care organizations letters in December warning of the impending federal deadline.

But in some cases -- such as HEALTHeLINK's -- the state put health care organizations in a bind by delaying the awarding of grants until last year.

"The state's budget constraints slowed the department's awarding of grants," said Jeffrey W. Hammond, a Health Department spokesman.

Just as the reasons for the funding crunch are varied, so are its potential effects.

Congressional sources said they are worried about losing some of the $20 million that UB Associates won for the construction of a home for patients with serious medical conditions connected to diabetes.

Some of a $7 million award to UB Associates for health information management for renal patients could be at stake, too, sources said.

Dr. Russell W. Bessette -- the University at Buffalo's associate vice president for health sciences and the person who oversees the projects did not respond to a request to comment.

Beyond that, the potential impact of the approaching federal deadline remains unclear.

The office of Sen. Kirsten E. Gillibrand, D-N.Y., released a list of 70 health care projects in the area from Rochester westward, plus the western Southern Tier, that were awarded funds under the Federal-State Health Reform Partnership Program.

The total amount of federal funding for those projects is $332.3 million, with Kaleida's $65 million Millard Fillmore-Buffalo General project being the largest, and UB Associates' $20 million diabetes project ranking second.

Some of the money -- including $25.6 million in various grants for Catholic Health System's hospital consolidations and other projects -- has already been allocated and spent, or will be long before the Sept. 30 deadline.

But Joseph D. McDonald, Catholic Health's president and CEO, said his organization could lose a major share of its $6.9 million grant for restructuring its hospital operations to control costs and improve care.

"We're very much in favor of an extension for this program," McDonald said.

That's exactly what the state's congressional delegation asked for last week in a letter to Health and Human Services Secretary Kathleen Sebelius. Her agency has until March 31 to decide whether to grant an extension.

"The waiver should absolutely be extended," Gillibrand said. "These are exactly the kind of solutions we need right now. It is common sense."

Rep. Peter T. King, R-Seaford, who is concerned about losing federal money for projects on Long Island, agreed.

"The failure to secure an extension," King said, "would shut down shovel-ready projects and cost New Yorkers good jobs."

e-mail: jzremski@buffnews.com

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