Senate Leader Revives Loan Program for Rural Hospitals | Eastern North Carolina Now

Publisher's note: This post appears here courtesy of the Carolina Journal, and written by Julie Havlak.


    Senate leader Phil Berger, R-Rockingham, has resurrected a loan program aimed at saving rural hospitals from financial ruin.

    The Rural Healthcare Stabilization Act would channel $20 million to distressed rural hospitals in the form of a loan administered by UNC Health and the N.C. Local Government Commission.

    Berger tried to push the loan program before, under Senate Bill 681. The House approved the measure only after adding other unrelated policy items to the bill. The Senate didn't accept the House's changes.

    The House version of S.B. 681 had included provisions to increase sales tax flexibility and to expand access to utility account funds.

    The Senate refused to pass the bill with the other two provisions attached. Instead, Berger resurrected the original bill by stripping H.B. 704, which started as a dental bill of rights.

    The bill would help struggling hospitals fund construction of new facilities or a transition to a new facility. To receive the loan, the hospital must show UNC Health Care their plan to recover financially.

    "We feel very strongly that the bill needs to be addressed as a separate entity, and are sending it back to the House in this House Bill 704," Berger said, according to NCInsider.

    Randolph Health, a struggling hospital in Asheboro, stands at the front of the line for such a loan.

    The financial woes of rural hospitals made headlines after 113 hospitals closed across the nation in the years since 2010. North Carolina was home to six of the hospitals that were shuttered, according to the Cecil Sheps Center.

    One of those hospitals closed after it fell prey to EmpowerHMS, which racked up millions from fake lab tests and drove 20 hospitals into bankruptcy or outright closure. Washington County Hospital in Plymouth was among them.

    Randolph Health is far from the only rural hospital entangled in financial difficulties. One in five rural hospitals classify as high risk across 43 states, placing 430 hospitals at risk of collapse, according to a Navigant study.

    The communities surrounding these hospitals share the risks of hospital closure. When a hospital closes, studies show, incomes drop 4%, while unemployment rises by 1.6 percent.

    The hospital loan program has been caught up in the debate over Medicaid expansion, as Democrats argue the program is only needed because the state hasn't expanded Medicaid.

    H.B. 704 is waiting in the Senate Rules Committee.