HUD Archives: News Releases

HUD No. 03-063
(202) 708-0685

For Release
May 15, 2003


WASHINGTON - HUD Secretary Mel Martinez today announced the first ever, $28.5 million commitments under the Federal Housing Administration (FHA) Section 242 Hospital Insurance program for rural Critical Access Hospitals for the Rio Grande Medical Center in Del Norte, Colorado, and Shoshone Medical Center in Kellogg, Idaho.

The Critical Access Hospital (CAH) program is operated by the Department of Health and Human Services and was authorized by the Congress as an amendment to the Social Security Act in 1997. CAH certification grants hospitals with 25 or fewer beds and located 35 miles from the nearest hospital (15 miles in mountainous terrain) advantages in their Medicare reimbursements, including cost-based payments.

"The Section 242 program has been associated with large, urban hospitals for many years," said Martinez. "Our commitments on these two hospitals in Colorado and Idaho are important to ensuring that people in rural communities have access to this program to improve health care delivery. We are looking forward to this new direction in the program and hope to consider more of these vitally important hospitals in the coming year."

The insurance on the Rio Grande Medical Center in Del Norte, Colorado, a town of 1,709 located in south central Colorado, will allow the hospital to build a much-needed replacement facility of 35,000 square feet on a donated parcel of land, including 14 private patient rooms, an expanded Emergency Room facility and additional space for laboratory, physical therapy, pharmacy and administration functions. FHA will insure $10 million of the $11.5 million cost of the project.

The Shoshone Medical Center, in the northern Idaho town of Kellogg, will be a $20.5 million 25-bed replacement facility serving as the principal healthcare provider for Shoshone County, a mountainous area of 2,640 square miles with a population of approximately 15,000. The new facility will include a permanent MRI, a breast cancer screening unit and expanded outpatient diagnostic and surgical services. FHA will insure $18.5 million of the total cost of the project under the Section 242 program.

According to FHA's Office of Insured Health Care Facilities, which oversees the Section 242 program, of the 33 hospital loans endorsed in the past 10 years, only three have been for rural hospitals with fewer than 50 beds. The smallest was a 41-bed facility in Danville, Arkansas, which did not qualify for the Critical Access designation.

Congress is currently considering legislation proposed by the Administration that would assist Critical Access Hospitals seeking financing. In states that no longer offer a Certificate of Need process, H.R. 659, sponsored by Congressman Bob Ney (R-Ohio) would simplify an alternative process for establishing the need for such hospitals. H.R. 659 passed the House of Representatives in March by a vote of 419 to zero and is currently awaiting action in the Senate Banking Committee.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet.


Content Archived: April 22, 2010