With the number of patient visits dropping by nearly half, additional costs to prepare for a potential influx of COVID-19 patients and denial of critical federal CARES Act funds, the Calais Regional Hospital is facing a financial crisis that threatens its ability to provide care and continue to be an economic engine in the community. With regular operations nearly coming to a halt, little revenue will be coming in to cover costs in the coming weeks.
     DeeDee Travis, vice president of community relations for CRH, points out that the hospital "operates on a very small operating margin. Remove almost half of the revenue, and it is pretty easy to imagine this could quickly turn into a crisis." Concerning the decline in patient volume, she adds,      "We are currently trending towards a decline of 50% compared to prior to COVID‑19."
     According to Travis, the hospital was told it did not qualify for the federal Paycheck Protection Program (PPP) because of Small Business Administration regulations that prevent hospitals and health systems with a prior loss to the government from being eligible for the loans. Travis says the "prior loss to the government" restriction has not been specifically defined but is being applied both because of the hospital's Chapter 11 bankruptcy protection filing last year and because, in "a very broad sense," of funds owed from past years' cost reports with Medicare and outstanding payment plans for monies owed to the Centers for Medicare and Medicaid Services. She is aware of only one other hospital in Maine that was denied a Paycheck Protection Program loan, the Penobscot Valley Hospital in Lincoln, which also filed for bankruptcy protection last year.
     While the initial funding for the Paycheck Protection Program has run out, on April 21 the U.S. Senate approved an additional $484 billion coronavirus aid package that includes $320 billion more for the Paycheck Protection Program. The package also includes $75 billion to aid hospitals. The House approved the funding on April 23.
     The strains being placed on rural hospitals are getting noticed. In an April 20 telephone press conference to open "Rural Health Care Week" -- especially the unique coronavirus‑related strains on the healthcare system -- U.S. Senator Angus King participated in a Medicaid Awareness Month event with Protect Our Care. In addition to Senator King, the call featured Maine Rep. Anne Perry of Calais and Brad Woodhouse, executive director of Protect Our Care. "The impacts of coronavirus -- including the costs of preparation and loss of expected revenue -- are hitting our rural healthcare providers hard, many of whom were already facing challenges," said Senator King. "These hospitals are cornerstones of rural communities across Maine, providing not only jobs but also peace of mind that, in the event of an emergency, someone is there to help. We need to make sure that these providers are able to continue to serve rural Maine communities, both during this crisis and after it's over."

Waiver sought from SBA
     According to Travis, the government's promotion of the CARES Act was to protect hospitals with immediate funds needed for operations as the preparations for COVID‑19 moved forward. The Paycheck Protection Program was the most promising option of the potential programs for the Calais hospital. The program would provide finances to protect the pay of the staff despite the significant downturn in revenue.
     After CRH was informed that it did not qualify, the American Hospital Association (AHA) appealed to the Small Business Administration (SBA) concerning the roadblock to much needed funding. In a letter to SBA Administrator Jovita Carranza, the AHA implored: "We ask that you waive regulations that would prevent hospitals and health systems with a prior loss to the government (including bankruptcy) from being eligible for these loans. Some hospitals and health systems may either be in or have previously entered bankruptcy. However, these organizations form the backbone of the health care and workforce infrastructure in many communities, and the PPP could be the difference between solvency and insolvency. It is particularly critical to preserve these vital health care resources as they are the frontline of our COVID‑19 defense, and, particularly in smaller and more rural communities, often the sole source of hospital‑based care. We therefore urge you to make an exception for hospitals and health systems."
     No waiver, though, has yet been given, leaving hospitals like CRH scrambling to figure out how to cover costs and make payroll in the coming weeks. CRH did receive a smaller relief payment recently. However, in comparison, the PPP would provide funding for eight additional weeks to get to the other side of the crisis and restored volumes, versus the two-week respite the relief funds provided.
     CRH continues to seek out other grant and loan options available; however, with limited cash resources, the hospital does not have much time to wait out the government's decision. According to Travis, CRH is not eligible for most of the CARES Act programs because of the Chapter 11 filing. She notes, "The draw and biggest benefit of the PPP is the ability for most, if not all, of the funds to convert to a grant. Being in Chapter 11 the hospital is not really in a position to take on debt."
     The hospital is asking community members to contact their representative, senator or SBA director about supporting the waiver for the Paycheck Protection Program and to utilize CRH for their medical services. Letters in support of a waiver can be sent to: federal SBA Administrator Jovita Carranza at <jovita.carranza@sba.gov>; Regional SBA Deputy District Director Diane Sturgeon at <diane.sturgeon@sba.gov>; Senator Susan Collins staff at <carol_woodcock@collins.senate.gov>; Senator Angus King staff at <chris_rector@king.senate.gov>; Representative Jared Golden staff at <barbara.hayslett@mail.house.gov>. Sample wording for a letter can be found on the CRH website at <www.calaishospital.org/ppp‑sample‑letter/>.