A loan guarantee for over $1.5 million is headed to the Barnwell County hospital.
The funds are being guaranteed by the United States Department of Agriculture.
The announcement was made Aug. 6 by Agriculture Secretary Tom Vilsack.
The funds being guaranteed are part of the Recovery Act Investments made through the Obama administration.
Starsky Bomer, the hospital Chief Financial Officer, said the majority of the funds will be used to take care of debt, particularly the Centers for Medicare Services debt.
Currently the hospital owes approximately $850,000 with high interest rates, topping 11.375 percent, said Mary Valliant, the Chief Executive Officer at the Barnwell County Hospital.
The debt comes from changes in the Medicaid criteria for how the hospital classifies patients as outpatient or inpatient, she said.
The new guidelines were placed in 2007 but were made retroactive to 2003, Valliant said.
Thus the hospital was forced to pay back funds to the CMS.
The loan will be paid back with an interest rate much lower than what the hospital is currently paying, Bomer said.
Although Valliant said they do not plan to use any of the funds to add positions at the hospital, “We are looking at expanding some services.”
The remaining funds will be used for capital purchases including replacing aging equipment, Bomer said.
Although the loan guarantee announcement has been made, Bomer said he doesn’t know exactly when the hospital will actually have the funds in hand.
“We are ready to move immediately with our plans,” Bomer said.