Bill to assist rural hospitals in financial distress becomes law

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FRANKFORT, Ky. (KT) – A measure that will assist rural hospitals in financial distress at a time when the state is battling COVID-19, which would allow the Cabinet for Economic Development to provide loans to struggling hospitals, has become law and is codified.


Gov. Andy Beshear line-item vetoed a portion of the bill, giving him more flexibility in purchasing personal protective equipment (PPE). The legislature is seeking clarification on if the governor has the ability to take such action.


House bill 387 was sponsored by Rep. Danny Bentley, R-Russell, in the last session.


"This bill is simply another means to provide financial aid to rural hospitals and providers during harships to keep their doors open," Bentley said. “We are experiencing a catastrophic health care crisis in rural communities throughout our state. Before COVID-19, many rural hospitals were struggling, with half in danger of bankruptcy, because it has become harder and harder to keep up with health care costs."


Bentley's bill, was co-sponsored by House Speaker David Osborne, and establishes rural hospital operations and facilities revolving loan fund within the Cabinet for Economic Development. Loan financing through the fund would be available to rural hospitals for various purposes – including upgrading facilities, maintaining or increasing staff levels, and providing health care services not currently available. Any loan issued by the Kentucky Economic Development Finance Authority would not exceed 20 years. 


This legislation comes after reports that many rural hospitals in Kentucky are in poor financial health.


“Hospitals are some of the biggest job producers in our rural communities, and we must do everything we can to ensure continued success. Approximately 25 percent of Kentucky hospitals are in poor financial shape. If we want to increase the access to medical care, we have to start investing in our hospitals and communities,” Bentley said. “Kentucky ranks poorly on diabetes, heart disease, and obesity scales. Our citizens need access to hospitals because there are lives on the line.”

Specific details of the measure can be viewed here. 

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