Erlanger Health System has secured a $50 million line of credit from First Horizon Bank to help the hospital weather the COVID-19 pandemic.
Britt Tabor, Erlanger's chief financial officer, shared the news during an Erlanger Board of Trustees meeting on Thursday and said the money will help the hospital through "uncharted waters" presented by the pandemic.
Tabor said the loan is a "tool," and Erlanger will not necessarily need to access the entire $50 million.
"This is an option that we have, and it's important to have this option based on all the uncertainty," Tabor said. "I think it's very important financial stewardship to have this available."
Jim Coleman, chairman of the board's budget and finance committee, said that he's hopeful Erlanger will not need to access the loan once they know more about the COVID-19 relief funds coming from the state and federal government.
"But I think it's very prudent that we have it given the changes that we're seeing," Coleman said. "We know the amounts globally that are there for the hospitals. We just don't know how they're going to be distributed yet."
On Wednesday, the U.S. Senate passed a bill that would allocate more than $100 billion for hospitals across the country to cover COVID-19 expenses and lost revenue. A large part of the hospital's lost revenue is due to suspension of elective surgeries, which Tabor called "the backbone of our financial margin."
The relief money would come in the form of a grant, meaning Erlanger will not have to repay it. In addition, Medicare is providing increased reimbursement for COVID-19 patients and additional loan options for hospitals. The U.S. House plans to vote on the bill on Friday morning.
The Erlanger board met via teleconference for their regularly scheduled monthly meeting in order to prevent possible exposure to the coronavirus.
After approving the line of credit, Chairwoman Linda Moss Mines led trustees into a closed executive session "based on quality and peer review" to discuss other matters related to COVID-19. Although the agenda had Dr. James Bolton, Erlanger chief of staff, and Erlanger CEO Will Jackson slated to speak, neither returned to give their reports to the public.
Mines said the public hospital's lack of transparency is a product of the uncertainty surrounding COVID-19.
"The thing that's so difficult about all this is we don't know," Mines told the Times Free Press after the meeting adjourned unexpectedly. "We know what we need. We know what we're hoping and praying for, and that's that we will not follow the curve that we've seen in other countries and states."
Contact Elizabeth Fite at email@example.com or 423-757-6673.