U.S. Senator John Boozman (R-AR) has urged Senate leadership to expand eligibility for the Paycheck Protection Program (PPP) to public hospitals.
The Small Business Administration administers the PPP loans authorized in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. For-profit and non-profit hospitals are eligible for access to funds, however public-owned or partially public-owned hospitals, including seven in Arkansas, are currently prevented from accessing PPP assistance.
Magnolia Regional Medical Center is a city-owned hospital, making it currently ineligible for past PPP funding.
In a letter to Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader Chuck Schumer (D-NY), Boozman and a bipartisan group of senators urged the leaders to clarify publicly owned hospitals and similar entities are eligible for PPP relief.
“Our small rural hospitals regularly struggle with their razor-thin margins but are now facing difficult choices that range from significant staff furloughs to permanently closing the doors of the community’s lone hospital,” the senators wrote.
“The health and economic burdens of these institutions shutting down due to temporary cash-flow complications during this crisis is something that is entirely avoidable,” the senators continued.
The letter -- authored by Senators Jerry Moran (R-KS) and Cindy Hyde-Smith (R-MS) -- was also signed by Senators Kevin Cramer (R-ND), Joni Ernst (R-IA), Cory Gardner (R-CO), Joe Manchin (D-WV), Shelley Moore Capito (R-WV) and James Lankford (R-OK).
The letter is as follows:
Dear Leaders McConnell and Schumer,
Thank you for your efforts and collaboration on the substantial assistance packages passed through Congress to address the economic consequences of the COVID-19 crisis. As you know, the economic difficulties facing our hospitals during this crisis threaten significant, long-term consequences. As routine procedures and appointments are canceled due to cautionary guidance from the Centers for Disease Control and Prevention our hospitals in many areas are facing revenue declines as high as 80%. Our small rural hospitals regularly struggle with their razor-thin margins but are now facing difficult choices that range from significant staff furloughs to permanently closing the doors of their community’s lone hospital. Many of these hospitals are small, county-owned public hospitals who are currently denied access to funding included by Congress in the CARES Act. We ask that you clarify that publicly owned hospitals and similar care providers are eligible entities for the Paycheck Protection Program relief program administered by the Small Business Administration.
According to the National Rural Health Association and the Cecil G. Sheps Center for Health Services Research at the University of North Carolina, 128 hospitals have closed since 2010 and an additional 450 were considered at-risk of closure leading into this crisis. These hospitals are often not only an important care provider, but are also one of the largest employers in many small towns. The health and economic burdens of these institutions shutting down due to temporary cash-flow complications during this crisis is something that is entirely avoidable. This issue is particularly difficult for our public hospitals who are ineligible for this assistance since they operate similar their for-profit and non-profit colleagues who are already eligible for the SBA loan program during this crisis.
Many of these hospitals are the sole provider for health needs in their community and their closure would leave wide areas of America with even greater access to care issues than ever before, which we simply cannot risk during this pandemic. As nearly one quarter of rural hospitals were financially struggling before the burden of COVID-19, Congress must provide immediate relief in the form of eligibility for the loans in the Paycheck Protection Program to allow them to continue operating until additional assistance can be made available.
As a Congress, we must prevent an unnecessary loss of providers and health workforce during this pandemic. This can be avoided by ensuring these needed entities are able to access the assistance Congress has already deemed necessary in the CARES Act. We would like to work with you to address this oversight through appropriate legislative changes in the upcoming additional funding package for the Paycheck Protection Program.