Congress will hold a hearing today to consider the Protecting American Taxpayers and Homeowners Act of 2013, which would repeal the hospital mortgage insurance program.
The Federal Housing Administration's Section 242 Hospital Mortgage Insurance Program allows acute-care hospitals to obtain low-interest, highly rated mortgages. In March, the U.S. Department of Housing and Urban Development issued a final rule that amended the program to allow hospitals without FHA-issued mortgages to access loans or refinance through the program without requiring new construction or renovation. HUD estimated the new program would lead to a $1.26 million transfer per year per healthcare facility.
The American Hospital Association has urged the House Committee on Financial Services to retain the program, according to an AHA News Now report.
"The Section 242 program has been the key to keeping vital hospital services available to many communities," wrote Rick Pollack, AHA's executive vice president, in a letter to Congress. "State and local governments would otherwise be called upon to provide these necessary services. If that were the only alternativethe resulting increased borrowing cost to state and local governments would be borne by taxpayers and ratepayers in every local jurisdiction."
More Articles on Hospital Finances:
Smart Moves: How Hospitals Manage Risk When Borrowing
Refinancing Debt to Stay Solvent: Q&A With The Brooklyn Hospital Center CFO Joe Guarracino
5 Best Practices for Accessing Capital