The American Hospital Association has criticized the tighter eligibility standards applied by the Department of Housing and Urban Development under new rules for refinancing hospital debt under the Section 242 Hospital Mortgage Insurance Program.
In a July 27 letter to HUD Assistant Secretary David Stevens, AHA Executive Vice President Rick Pollack wrote that the tighter standards would "limit program access to otherwise creditworthy facilities."
Pollack faulted some of the eligibility standards outlined in a July 1 HUD notice that explained how the agency would implement new hospital debt refinancing standards.
The AHA has said it is pleased that HUD is moving toward refinancing that is not limited to new construction or renovation, Nevertheless, Pollack wrote, the proposed standards "raise baseline thresholds above those currently used for underwriting inherently riskier (from a real estate perspective) new construction projects" and warned that they could "exclude hospitals critically in need of relief."
HUD is expected to propose a debt-refinancing rule later this year.
Nine other advocacy groups signed onto Pollack's letter. The co-signers include the Greater New York Hospital Association, the National Association of Health and Education Facilities Finance Authorities and the National Association of Public Hospitals and Health Systems.