Hospitals would have access to $970 million annually in capital financing assistance from the federal government under the healthcare reform bill being debated by the House Ways and Means Committee.
Health facilities eligible for aid would include those designated as essential access community hospitals, rural primary-care facilities and hospitals with a Medicare disproportionate-share case load of 40% or more. Investor-owned hospitals would not be eligible.
Facilities that needed the funds to comply with government regulatory standards or to beef up the provision of essential services would be first in line for aid. Recipients would have to agree "to provide a significant volume of services" to individuals who wouldn't be eligible for health insurance under the reform plan. This group would likely be illegal immigrants.
The provision would extend aid to a much broader group of hospitals than industry representatives on Capitol Hill initially believed would be the case. Last month, it appeared that such assistance was tailor-made for Chicago-area hospitals by former Ways and Means Committee Chairman Dan Rostenkowski (May 30, p. 40).
The proposal would create four categories of aid. In each category, 10% of the funds would be reserved for rural health facilities.
The largest sum, $400 million, would be set aside for direct grants to facilities with urgent capital needs. Priority would be given to financially distressed facilities, and no single recipient would get more than $25 million in grant money.
Grants could only be used for certain types of projects, including improvements to avoid closure or loss of accreditation or certification, and renovations, expansions or replacements needed to provide essential services such as obstetrics, perinatal, emergency and trauma care, as well as primary-care and preventive services.
Another $150 million would be available for loan guarantees. As much as $220 million would be available for interest subsidies, although no single state could get more than 25% of those funds.
Some $220 million would be available in the form of direct matching loans for essential facility development, replacement or modernization.
These loans primarily would be reserved for small projects and could not exceed 75% of the total cost of a project. Individual loan amounts would be limited to $50 million.