Bipartisan Legislation Would Waive SBA Affiliation Rules for Small Health Care Facilities

WASHINGTON, D.C. [7/23/20] – This week, U.S. Senators Tina Smith (D-Minn.) and Roger Wicker (R-Miss.) introduced a bipartisan Paycheck Protection Program (PPP) fix for rural hospitals. The PPP Access for Rural Hospitals Act would waive the Small Business Administration (SBA) affiliation rules for non-profit critical access hospitals and hospitals that serve rural areas so that they may qualify for PPP loans.

Granting smaller non-profit and rural hospitals access to the PPP program would allow facilities to retain critical staff and focus their resources on providing quality care to patients for the duration of the coronavirus pandemic.

“Rural hospitals aren’t just vital to public health; they’re economic engines for their communities,” said Sen. Smith. “And as hospitals across the country continue to face the pandemic, it's important that they have financial support. That's why we introduced this bipartisan bill to make non-profit, rural, critical access hospitals eligible for the Paycheck Protection Program. I will do my part here in Washington to continue to fight for rural areas and the support that they need.” 

Our nation’s critical access hospitals and rural hospitals have risen to the challenge of the coronavirus pandemic despite substantial increases in operating costs and an uncertain future,” said Sen. Wicker. “The PPP Access for Rural Hospitals Act would ensure these vital facilities are able to apply for much-needed financial relief from the Paycheck Protection Program so that they can continue to serve their communities.”

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) established the PPP to provide immediate relief to small business owners with fewer than 500 employees in the form of forgivable loans. Many small hospitals operate as part of a larger health system that exceeds the 500-employee limit under SBA’s affiliation rules, making these smaller hospitals ineligible for PPP.\

In addition to facing increased costs for staff, personal protective equipment, and other safety measures as a result of the coronavirus pandemic, hospitals and medical facilities have lost significant revenue because of prohibitions on elective procedures. Many hospitals already operate on thin margins and the pandemic has placed them under even greater financial stress.

The legislation is also sponsored by U.S. Senators Cindy Hyde-Smith (R-Miss.) and Doug Jones (D-Ala.).