The State University of New York’s (University) University hospitals must purchase new and/or replacement equipment on an on-going and continuous basis to ensure patient safety and support the needs of the hospitals’ strategic plans. This equipment will be used in the provision of patient care in each of the three University hospitals. Since 1997, the hospitals have financed the purchase of this equipment through the Tax-Exempt Equipment Leasing Program (TELP) and administered by the Dormitory Authority of the State of New York. To access TELP program funds, certain administrative procedures must be completed before the funds are available for use. These procedures include the bidding and selection of a vendor, preparation of the bond documents and obtaining the approvals of state officials, the State University of New York Board of Trustees and the Board of Directors of the Dormitory Authority. The procedure below details the necessary steps.

I.   TELP Processing

The State University of New York’s (University) University hospitals must purchase new and/or replacement equipment on an on-going and continuous basis to ensure patient safety and support the needs of the hospitals’ strategic plans. The hospital’s financial administration is required to prepare a detailed equipment list of items to be funded using the TELP Program on Form A (for new equipment) or Form B (for replacement equipment).

A.   For new equipment, the hospital must provide the following information:

• The departmental location where the new equipment will be used and whether the equipment is for diagnostic or therapeutic procedures;
• A brief description of how this new equipment will affect quality of care; and
• The financial impact of the new equipment (incremental revenue, cost reductions and net financial impact).
  

B.   For replacement equipment, the hospital must include the following information:

• The departmental location where the replacement equipment will be used and whether the equipment is for diagnostic or therapeutic procedures;
• The age of the equipment being replaced;
• The useful life of the equipment being replaced;
• A brief description of any relevant quality of care issues associated with the equipment being replaced; and
• The financial impact of purchasing the replacement equipment (revenue loss avoidance, cost savings or reduced medical malpractice risk).

C.   For all equipment, indicate if a Certificate of Need (CON), administrative review or limited architectural review from the department of health (DOH) is required. For those transactions requiring DOH approval, please provide the appropriate CON application number and the approval letter(s).


D.    Upon completion, the hospital’s TELP equipment list should be forwarded to the office of hospital and clinical services which is responsible for the following:

• Review of the documentation for completeness and securing any outstanding CON approvals;
• Preparation of the TELP application for submission to the dormitory authority;
• Execution and filing of a declaration of intent with the dormitory authority to ensure that the hospital will be able to reimburse itself if operating funds are used to purchase equipment prior to the loan closing;
• Obtaining appropriate approvals from the University board of trustees, dormitory authority and the public authorities control board. These approvals will be documented in the bond documentation; and
• Preparation of a publication notice for the New York State Contract Reporter and Request for Proposal (RFP) to solicit bids from the dormitory authority’s list of approved financing vendors. The procurement will be completed in accordance with University purchasing and contracting procedures.

E.   Once a vendor has been selected, the office of the university counsel will be notified and the TELP documentation process will begin. A master lease with attachments will be reviewed by the University, office of the state comptroller (OSC), attorney general, dormitory authority and bond counsel.

F.    After the closing, the funds will be deposited into an appropriate escrow account. The funds will be drawn down by the hospital after submitting the appropriate documentation to the escrow agent.

G.   The hospital will follow the applicable procurement requirements, outlined in University purchasing and contracting procedures, for the purchase of equipment utilizing TELP funds.

II.   Escrow Monitoring

A.   All existing TELP issues will be recorded on a centralized database maintained by the the office of hospital and clinical services. The information to be recorded will include the following:

• Date of closing;
• Dollar value of loan; and
• The interest rate of the issue.
  
  Note: An amortization schedule should be obtained but not entered on the database.

B.   The hospitals must spend the funds deposited into the escrow account within the 18-month time limit defined by law to the extent possible. If funds still remain in the escrow account after the 18-month period, the hospital will be contacted and informed that it is required to rebate any interest earnings that exceed interest expense on the funds that remain in the escrow account after the 18-month period. The office of hospital and clinical services will request the appropriate information that allows for the calculation of the amount of interest to be rebated.

FORM A - TELP New Equipment Listing

FORM B - TELP Replacement Equipment Listing

There are no related procedures relevant to this procedure.

There is no other information relevant to this procedure.

Chapter 83 of the Laws of 1995 (Health Care Financing Consolidation Act).

New York State Medical Care Facilities Finance Agency Act as amended in 1997

To ensure that the State University of New York hospitals provide an environment for the safe and effective care of patients, it is necessary to acquire equipment either to provide new or improved services or to replace major moveable equipment that is either technologically outdated or requires frequent repair. Prior to 1997 the University hospitals accessed capital to acquire moveable equipment through New York State’s Certificate of Participation Program (COPs). However, access to this program ended leaving the University hospitals with no ability to fund equipment acquisition. In 1997, legislation was enacted authorizing the University hospitals to access the Tax-Exempt Equipment Leasing Program (TELP). Each of the University hospitals has successfully utilized this program to finance equipment at very competitive rates.

There are no appendices relevant to this procedure.