Oklahoma Delegation Urges Trump Administration to Make Publicly Owned Hospitals Eligible for CARES Act Programs

Norman, OK – Today, Oklahoma's Congressional Delegation, led by Congressman Frank Lucas (OK-03), penned a letter to U.S. Treasury Secretary Steven Mnuchin, U.S. Small Business Administrator Jovita Carranza, and Federal Reserve Chairman Jerome Powell urging that publicly trusted hospitals be made eligible for Paycheck Protection Program loans and other financial assistance programs. In Oklahoma, 43 rural hospitals are designated as a Public Trust making them ineligible for the Paycheck Protection Program (PPP).

"Our rural hospitals are in the perilous position of being on the front line against this public health emergency while also weathering the significant economic challenges and financial strain. In Oklahoma, 43 rural hospitals are established as a Public Trust under 60 O.S. § 176 of the Oklahoma Statutes. Many of these hospitals are not a 501(c)(3) or have both a 501(c)(3) and Public Trust designation, still making all of these hospitals ineligible for these critical financial assistance programs. In addition, these hospitals often receive no funding from the city or county of which the hospital is owned. These facilities are vital to rural Oklahoma, typically serving as both the largest employer and the only option for inpatient care in their communities," wrote Oklahoma's Congressional Delegation.

"We have seen in the case of PPP that lenders are unsure if these hospitals are eligible for the program, leading many lenders to not move forward in processing the loan application. It is imperative that guidance be issued to clarify that these rural hospitals are eligible for PPP as soon as possible, and that upcoming lending programs are equipped to support our hospitals."

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.

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:

April 17, 2020

The Honorable Steven Mnuchin
Secretary
Department of the Treasury
Washington, D.C. 20220

The Honorable Jovita Carranza
Administrator
U.S. Small Business Administration
Washington, D.C. 20416

The Honorable Jerome H. Powell
Chairman
Board of Governors of the Federal Reserve
Washington, D.C. 20551

Dear Secretary Mnuchin, Administrator Carranza, and Chairman Powell:

Thank you for your diligent work to ensure that our small businesses persevere through the difficult economic conditions brought by COVID-19. As the Department of Treasury, Small Business Administration (SBA), and Federal Reserve continue the ongoing effort to support small businesses through this difficult time, it is imperative that our rural hospitals are in no way prevented from accessing these critical programs, such as the Paycheck Protection Program (PPP), the Main Street Business Lending Program, and other critical financial assistance programs.

Our rural hospitals are in the perilous position of being on the front line against this public health emergency while also weathering the significant economic challenges and financial strain. In Oklahoma, 43 rural hospitals are established as a Public Trust under 60 O.S. § 176 of the Oklahoma Statutes. Many of these hospitals are not a 501(c)(3) or have both a 501(c)(3) and Public Trust designation, still making all of these hospitals ineligible for these critical financial assistance programs. In addition, these hospitals often receive no funding from the city or county of which the hospital is owned. These facilities are vital to rural Oklahoma, typically serving as both the largest employer and the only option for inpatient care in their communities.

We have seen in the case of PPP that lenders are unsure if these hospitals are eligible for the program, leading many lenders to not move forward in processing the loan application. It is imperative that guidance be issued to clarify that these rural hospitals are eligible for PPP as soon as possible, and that upcoming lending programs are equipped to support our hospitals.

As we all move forward in responding to this pandemic, I ask that you bear in mind the unique business structure of hospitals in Oklahoma. I appreciate your substantial efforts and success in swiftly implementing the programs authorized by the CARES Act. Thank you for your attention to the challenges faced by rural hospitals during this public health crisis.

Sincerely,

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