The American Hospital Association (AHA) is urging the Department of Housing and Urban Development (HUD) to back off from a proposal to increase premiums for its Section 242 program that insures mortgages on hospitals, AHA News Now reported.
According to a recent entry in the federal register, the proposal includes boosting the premium by 20 basis points. The Federal Register does not give any reason for the changes in financing.
"The proposed increase is unnecessary to maintain the positive financial balance of Section 242 program," AHA Executive Vice President Rick Pollack wrote in a letter to HUD's general counsel. "Not only does the program have some of the best credit scoring within HUD, but the department's own numbers show that credit scoring for fiscal year 2012 improves over fiscal year 2011 for all healthcare programs without an MIP increase."
The Section 242 program gives hospitals billions in saved interest. Even a small hospital can benefit generously: Rio Grande Hospital in Del Norte, Colo., recently refinanced through HUD and will save about $1.7 million over the 10-year life of the loan, HUD announced earlier this month.