Date: 2003-03-12
Speaker: GARY G. MILLER (republican)
Chamber: H
State: California

Mr. Speaker. I yield myself such time as I may consume. I rise in strong support of H.R. 659. the Hospital Mortgage Insurance Act of 2003. and I urge my colleagues to vote in favor of this important legislation. This legislation would give the Department of Housing and Urban Development the authority to provide FHA mortgage insurance to hospitals across the country which are currently ineligible for the insurance due to the lack of a State Certificate of Need Program. The reduced costs for these hospitals will allow the modernization and rehabilitation of medical facilities across the country. We have all heard from hospitals in our districts about the significant challenge they are facing in providing care to patients who are covered by Medicare and Medicaid. Hospital budgets are further strained as improvements in technology and health care knowledge require capital improvements such as additions and renovations to existing buildings. The need for capital improvements at hospitals will continue to grow as hospitals are increasingly under pressure to acquire state of the art equipment and expand services. We all know that modern health care facilities can improve the quality of life and the health of the population. yet financing for these new improvements at hospital facilities is often not readily available. To assist States in providing modern health care facilities. Congress created section 242 of the National Housing Act. Section 242 permits FHA to insure mortgages used to finance the replacement. modernization. and rehabilitation of inefficient existing hospital facilities. Hospitals benefit from the low interest rate costs attributable to FHAinsured financing. Under the 1968 law. to be eligible for section 242 financing a h ospital must obtain a Certificate of Need from a designated State agency. The Certificate of Need determines whether the hospital applying for the loan meets certain eligibility requirements for the receipt of the FHA loan guarantee. In the absence of Certificate of Need authority. a State is allowed to commission a feasibility study. In addition. the hospital is required to demonstrate that there is a reasonable State or local minimum licensing and operating standard in effect. The Certificate of Need Program is established to control the number of hospital beds and expenditures. When the Federal Certificate of Need Program began. 49 States enacted legislation for its Certificate of Need Program. Louisiana was the only State that did not. As a result of continuing Federal policies encouraging deregulation. Certificate of Need authority has sunsetted in some States. In fact. over the last 20 years. at least 18 States have repealed the Certificate of Need Programs. My own State of California does not have a Certificate of Need process. Therefore. it is far more difficult for hospitals to secure FHAinsured financing. Under this new legislation. California would be put on a level playing field with other States. Even in States that have retained the Certificate of Need authority. some prbjects do not qualify. In States that do not have a Certificate of Need program. the relevant State agency often lacks the authority to commission alternative feasibility studies. The result of this is many States simply do not have access to this lowercost FHAinsured financing. In fact. of the 64 hoslital mortgages FHA currently insures under this program. only four are located in nonCertificate of Need States. Obviously. the section 242 program must be changed so that FHAinsured financing is accessible to hospitals in all States. H.R. 659 would give HUD the authority to establish a process for determining the need and feasibility for a hospitals proposed project. thus eliminating the requirement for States to provide a feasibility study where no Certificate of Need exists. This is an important bill that makes the necessary changes to ensure that the section 242 program is a viable program for all States. Again. I urge my colleagues to support this legislation and ensure that FHAinsured financing is available in each State for the purpose of building new hospitals. Mr. Speaker. I reserve .the balance of my time.