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Friday, July 28th 2006

Rules Docket Clerk - Regulations Division
Office of General Counsel – Room 10276
Department of Housing and Urban Development
451 Seventh Street, S.W.
Washington, DC 20410-0500

RE: Federal Register Vol. 71, No. 124 June 28, 2006, (Docket No. FR-4679-N-11)

To Whom It May Concern:

On behalf of the American Hospital Association (AHA) and our 4,800 member hospitals, health

care systems and other health care organizations, and our 35,000 individual members, we

appreciate the opportunity to submit the following comments regarding the Department of

Housing and Urban Development’s (HUD) Notice of Changes in Certain Multifamily Mortgage

Insurance Premiums.

The department proposes increasing the mortgage insurance premium for HUD’s 232 and 242

health care insurance programs by 30 basis points. Many hospitals have used the 242 program as

a lower-cost option for improving their health care facilities and the services they provide to their

communities. For large hospitals, the premium increase would cost millions of dollars more and

could pose a significant debt-service burden. Critical Access Hospitals (CAHs) also would feel a

deep impact. Often the sole providers of hospital care in their communities, CAHs historically

have had problems accessing capital for renovations and new construction. A 1997 Medicare

payment change made CAHs more financially stable, and many have used HUD’s 242 program

as a source of funding. Even a small increase in the mortgage insurance premium could pose a

significant financial hurdle for these hospitals.

The Federal Credit Reform Act of 1990 specifically mandates that administrative costs associated

with loan guarantee programs be paid from discretionary appropriations rather than being

reflected in credit program financing. The department has provided no justification for the

increase in the mortgage insurance premium. We urge the department to withdraw its

proposal to increase the 242 program’s mortgage insurance premium.

Rules Docket Clerk – Regulation Division

July 28, 2006

Page 2 of 2

The AHA appreciates the opportunity to submit these comments. If you have any questions,

please feel free to contact me or Don May, AHA vice president for policy, at (202) 626-2356 or

dmay@aha.org.

Sincerely,

Rick Pollack

Executive Vice President

 

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