An Act establishing the Distressed Hospital Grant Program to award grants to distressed hospitals to prevent the reduction of services or cessation of operations; and making an appropriation.
HB271 would create the Distressed Hospital Grant Program within the Pennsylvania Department of Health to provide state grants to financially struggling hospitals that are at risk of reducing services or closing. To qualify as a “distressed hospital,” a facility must have had a negative profit margin for at least three consecutive years and be located more than 25 miles of roadway travel from another hospital in the Commonwealth. The bill is aimed at hospitals that serve communities with limited nearby alternatives, including hospitals in medically underserved areas and rural counties.
The program would be funded by a $100 million General Fund appropriation and would operate until the money is exhausted or December 31, 2029, whichever comes first. Applications would be accepted on a rolling basis, and the Department of Health would be required to approve or deny completed applications within 60 days. Grants could be awarded in increments of $1,000, with no distressed hospital receiving more than 20% of the total program funds. Recipients would have to certify that they intend to remain open for at least two years, will use the money to prevent service reductions or closure, and will not use the funds for executive or administrative compensation.
The bill would also require hospitals seeking aid to show that they have already taken steps to affiliate with or otherwise arrange a business relationship with another entity to avoid reducing services or shutting down. False statements in an application would be punishable under Pennsylvania’s unsworn falsification law. The department would enter into grant agreements with recipients, and those agreements would include applicable legal terms and reporting requirements, with electronic signatures permitted.
HB271 would also add reporting and oversight requirements. The Department of Health would have to publish annual reports listing each grant, the recipient’s name and address, the amount awarded, and the financial impact on the recipient, and submit those reports to the relevant House and Senate appropriations and health committees. A final report would be required once all funds are spent or by the end of 2029. Overall, the bill would create a new state grant program and appropriation intended to stabilize vulnerable hospitals and preserve access to care in areas with few nearby alternatives.
HB271 would amend state policy by creating a new Department of Health grant program and appropriating $100 million from the General Fund for distressed hospitals. It would not directly change hospital licensing standards, but it would add a new statutory framework for eligibility, application review, grant agreements, reporting, and enforcement tied to hospital financial distress and service preservation. The bill would affect distressed hospitals, especially rural and medically underserved facilities, and would impose conditions on how grant funds may be used.
Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the bill appears to be framed in a generally supportive, problem-solving way focused on preserving hospital access and preventing closures. The bipartisan sponsorship list suggests broad interest in addressing rural and financially fragile hospital systems. No recorded opposition or formal vote history is provided here, so there is no clear evidence of controversy in the available context.
The main policy tensions in HB271 are likely to center on the size and use of the $100 million appropriation, whether state grants are the best way to stabilize failing hospitals, and how to ensure accountability for public funds. The bill tries to address some of those concerns by limiting awards, requiring certifications, barring use of funds for executive or administrative pay, and requiring hospitals to show efforts to affiliate or restructure before receiving aid. Another possible point of contention is the prioritization scheme, which favors hospitals already notifying the department of planned service reductions or closures, as well as facilities in medically underserved areas and rural counties.