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Schumer Reveals: Federal Red Tape Could Deprive Long Beach Med Center of $100m in Sandy Relief Money, Preventing it From Reopening

LBMC is eligible for potentially $100m in Sandy aid, but that aid won’t be transferable to future hospital operator.

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Long Beach, NY - February 3, 2014 - U.S. Senator Charles E. Schumer today launched an effort to clear the way for Long Beach Medical Center’s (LBMC) next operator to secure up to $100 million in federal funds that are owed to the hospital. These funds will help the next operator to repair and rebuild the badly damaged facility.  LBMC is eligible for potentially $100 million in Sandy aid, but currently that aid is non-transferable to a new ownership group if the current owner declares bankruptcy and sells, as is widely expected.  In order for the funds to be transferable, the Federal Emergency Management Agency (FEMA) has to issue a declaration, and so far that step has not occurred.  If FEMA refuses to issue an “Advisory Opinion” that the funds can be transferred, the in-the-works deal between Long Beach Medical Center and South Nassau Communities Hospital will be scuttled, and no free-standing 24-hour 911 emergency department will be built. 
Schumer called for FEMA to issue a positive Advisory Opinion immediately, so that South Nassau Communities Hospital can access the funds it deserves and so that residents of Long Beach are not left without an emergency medical facility.
“Up to 100 million dollars and the health of the Long Beach community is hanging in the balance here,” said Schumer.  “A positive ruling from FEMA will allow Sandy aid to flow to the medical center in the way congress intended, which can clear the way for new not-for-profit ownership that will re-establish sorely needed medical operations at the facility.”
In a letter to FEMA Administrator W. Craig Fugate, Schumer urged the Administrator to free up federal Sandy relief and disaster mitigation funds that LBMC is eligible to receive, but is at risk of not being able to receive due to a potential change in hospital operator. Since it is unclear whether the new hospital operator will be eligible to receive these federal funds, it has been difficult for an actual merger agreement to be reached. Schumer said that language in the Sandy bill around alternative projects – language that Schumer wrote into the Sandy bill – gives FEMA the ability to issue this Advisory Opinion.
Schumer also called on FEMA to make it clear that only not-for-profit 501(c)(3) hospitals should be eligible for these funds, so as to ensure the facility remains dedicated to providing healthcare.
According to Schumer, LBMC will have great difficulty re-opening in any form without FEMA issuing this Advisory Opinion, as any potential owner/operator needs clarity around whether these funds will be available.
“We are so close to bringing critical healthcare services back to thousands of people in Long Beach and South Nassau who have been without it since Hurricane Sandy,” added Schumer. “We need to make sure we are making the funds that LBMC is owed available to the next not-for-profit owner.”
Since being damaged by Hurricane Sandy, LBMC has yet to re-open, leaving thousands of South Nassau residents without critical healthcare services. LBMC is the only hospital that was shut down by Hurricane Sandy to not have re-opened yet.
A copy of Senator Schumer’s letter to FEMA Administrator W. Craig Fugate is below:
Dear Administrator Fugate:
I write in strong support of an advisory opinion from FEMA that would allow any not for profit 501(c)(3) that completes an asset purchase agreement of Long Beach Medical Center’s assets to be eligible for public assistance and mitigation funding that the heavily damaged Long Beach Medical Center (LBMC) is currently eligible for after it was battered and shut down by Superstorm Sandy. I also urge that you show flexibility in determining the exact scope of the rebuilding project is needed to ensure that the appropriate healthcare services are available and provided by any nonprofit entity that were to acquire the assets of LBMC. I am confident that the eligible applicant will work to ensure that the public welfare is best served by the rebuilding project. Estimates suggest that there are $100 million in repair costs and mitigation measures at LBMC that are eligible for FEMA public assistance, and a positive advisory opinion would greatly help expedite an asset purchase agreement that will help return critical healthcare services to the Long Beach community.
As you are aware, the Long Beach Medical Center was devastated by Superstorm Sandy and has yet to reopen. While there are currently no plans to reopen the hospital as a full service hospital as it was before Superstorm Sandy, a possible merger would allow the Long Beach Medical Center to reopen as a collaborative, coordinated network of healthcare services which would include a freestanding emergency department, ambulatory surgery facility, urgent care, primary care, imaging center, and other outpatient units. However, a successful close to any proposed merger has been thoroughly impeded by  the uncertainty surrounding whether an estimated $100 million in FEMA funding for permanent repairs and mitigation would be available to any 501(c)(3) not for profit hospital if it were to successfully acquire the assets of the Long Beach Medical Center. With $100 million in possible FEMA reimbursement hanging in the balance, no asset purchase agreement can move forward because it offers no clarity on the final financial terms of any merger.
A clear advisory opinion from FEMA indicating that any 501 (c) (3) non profit hospital that acquires the assets of Long Beach Medical Center would be eligible for FEMA public assistance funding for damages caused by Superstorm Sandy would dramatically help expedite a reopening of critical care services for the community of Long Beach. Asserting the terms on how $100 million in permanent repairs and mitigation would be eligible for FEMA reimbursement after a merger with a 501(c)(3) entity would help reopen the only hospital shut down by Superstorm Sandy that has yet to reopen its doors. I urge you to consider the merits of a positive advisory opinion that would offer essential guidance. 
Thank you for your attention to this matter. Please do not hesitate to contact me or my staff should you have any questions.
U.S. Senator Charles E. Schumer