A Manatt team led by Manatt Health Leader Bill Bernstein and Manatt Financial Services Partner Neil Faden and including Manatt Health Senior Manager Christopher Cantrell represented the City of New York in structuring and negotiating the creation of a landmark loan fund to support safety net hospitals throughout the city in their ongoing response to the COVID-19 pandemic. The NYC COVID-19 Hospital Loan Fund will be operated by the New York City Economic Development Corporation (NYCEDC), which borrowed money from Goldman Sachs to provide up to $45.5 million in loans to safety net hospitals.
Primarily serving low-income residents and communities of color who have been disproportionately impacted by the pandemic, safety net hospitals continue to be on the frontlines of fighting COVID-19 and are bearing the brunt of COVID-related hospitalizations. With patients who predominantly rely on Medicare, Medicaid or are uninsured, safety net hospitals are critical to the city’s health care infrastructure, but run on tight margins and have limited access to capital.
The NYC COVID-19 Hospital Loan Fund addresses safety net hospitals’ pressing need for more capital and increased cash flow by providing funds for additional staffing; PPE; employee testing; staffing expenses—including wage, incentives and child care—and vaccination efforts. The loans are being offered to safety net hospitals at cost through a simple application and approval process that makes cash quickly accessible. The loan are unsecured and designed to allow hospitals to use FEMA and provider relief funds as repayment sources.
This fund is the latest initiative in the city’s ongoing support of safety net hospitals. At the start of the pandemic, the city convened a working group of safety net hospitals to guide efforts in response to COVID-19 and has been providing these essential institutions with access to materials, technical assistance, financial planning support, group purchasing arrangements to deal with surge staffing, and funding for expanded community outreach and testing.
In addition to NYCEDC and Goldman Sachs, New York City Emergency Management and Community Preservation Corporation are also part of the partnership to provide the special funding to safety net hospitals. This funding is critical to ensuring that safety net hospitals can continue to provide services to the communities hardest hit by the COVID-19 pandemic.