Washington, D.C. – Yesterday, Congressman Frank Lucas (OK-03) joined a letter led by Reps. Jodey Arrington (TX-19) and Adrian Smith (NE-03) to Secretary of Treasury Steven Mnuchin and Administrator of the U.S. Small Business Administration Jovita Carranza to request that rural hospitals and rural health clinics (RHCs) who have facilities owned or operated by state or local government be made eligible for the Paycheck Protection Program (PPP) and other financial assistance programs created by the CARES Act.
“Americans and Oklahomans throughout the country rely on rural hospitals, as they are a critical component to our communities. These hospitals provide local access and services across the continuum of care, while often facing financial and staffing challenges, even before COVID-19 existed,” said Congressman Frank Lucas.
“I am proud to join this bipartisan letter to support our rural hospitals by requesting facilities owned or operated by state or local governments are eligible for the Paycheck Protection Program through the Small Business Administration. Assistance to these hospitals, so they can continue to operate, are vitally important at this time in our country. The closure of these hospitals, especially during this time, is a risk we cannot take.”
The U.S. Small Business Administration’s PPP defines eligibility as any business, 501(c)(3) non-profit organization, 501(c)(19) veterans’ organization, or Tribal business concern with 500 employees or less.
Currently, both for-profit and non-profit hospitals are eligible for assistance, but public hospitals are not, creating a disparity for Oklahoma’s rural hospitals.
Many of these publicly owned hospitals and RHCs are currently ineligible because they are defined as government-operated, despite receiving little to no taxpayer assistance.
In response to cautionary guidance from the Centers for Disease Control and Prevention (CDC), many hospitals are canceling routine procedures and appointments, resulting in revenue declines as high as 80 percent. Over the past decade, 128 hospitals have closed, and an additional 450 hospitals are at-risk of closure, especially those in rural areas. The COVID-19 pandemic puts public hospitals at increased risk of closure, which would potentially impact as many as 43 hospitals across Oklahoma.
Read the full letter here and below:
The Honorable Steven Mnuchin
Department of the Treasury
1500 Pennsylvania Avenue
Washington, DC 20220
The Honorable Jovita Carranza
U.S. Small Business Administration
409 3rd Street SW
Washington, DC 20416
Dear Secretary Mnuchin and Administrator Carranza:
Thank you for all the work you have done to help our small businesses respond to the COVID-19 crisis in these difficult times. As you work to administer vital emergency assistance programs, we are writing to bring an urgent issue to your attention regarding the Paycheck Protection Program (PPP), and to request you ensure rural hospitals and Rural Health Clinics (RHCs) who have facilities owned or operated by counties or districts are eligible for this program, as well as other critical financial assistance programs.
H.R. 748, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was signed into law with our support on March 27, 2020, enacting essential lifelines for struggling businesses. It is critical SBA ensure CARES Act programs, especially PPP, can be used to support our rural hospitals and clinics. We have heard concerns SBA is interpreting the CARES Act language in a way which would preclude rural hospitals and RHCs whose facilities are owned or operated in some way by a district or municipality which they serve from being eligible for certain assistance, despite often receiving no direct funding from these government entities.
Should Treasury and SBA interpret the language this way, it would negatively impact numerous rural hospitals and numerous RHCs across the country. Prior to the novel coronavirus (COVID-19) pandemic, many of these hospitals and clinics had operating deficits; their cash flow problems have become increasingly dire as rural hospitals and RHCs have been forced to cancel elective procedures, their primary source of revenue.
During any time period, these rural hospitals and clinics are essential to support rural communities, but they are especially vital during this time of public health emergency. In addition to their irreplaceable role in serving the everyday health needs of our rural communities, many of these health care providers are treating COVID-19 cases in their community and working to contain further spread of the disease. In many communities these hospitals are also the largest active remaining employer in the economy.
We urge you to take immediate steps to ensure rural hospitals and RHCs are eligible for the relevant CARES Act loan programs such as PPP in order to continue their work on the frontlines of fighting the COVID-19 pandemic, and look forward to serving as collaborative partners in both SBA and other agencies’ work to support rural health care providers as we respond to this crisis.