- The Washington Times - Tuesday, February 28, 2006

Federal officials who will evaluate the District’s joint venture with Howard University to build a new hospital say the makeup of the management will be a key factor when they scrutinize the deal.

“Since a proposed hospital has no history [of] financial performance, other factors become even more important in evaluating the financial feasibility of the project,” said Lemar Wooley, a spokesman for the U.S. Department of Housing and Urban Development.

Officials with the Federal Housing Administration (FHA) will examine financial projections, the size and quality of the medical staff and “management’s demonstrated ability to operate effectively,” Mr. Wooley said.

The plans call for Howard and the District to split the costs of building a new $400 million medical center at the site of D.C. General Hospital. The project hinges on getting backing for loans from the FHA.

Mayor Anthony A. Williams last week told the D.C. Council that a requirement that hospitals at least break even financially for FHA backing doesn’t apply to the District’s deal with Howard.

The FHA will decide whether the project should qualify for federal mortgage insurance.

Without a financial track record, the National Capital Medical Center must have a “board that is appropriately constituted, that can be expected to provide effective oversight,” Mr. Wooley said.

Mr. Wooley said federal officials also have not yet decided whether the project should go through a certificate-of-need regulatory review, which Mr. Williams and Howard officials oppose.

“To date, FHA has not received a request for a preliminary review of the project,” Mr. Wooley said. “That is the stage at which all eligibility requirements, including the need for a [certificate of need], would be reviewed.”

Mr. Williams and Howard officials have said the project should be exempt from certificate-of-need review. They say the process could take years and federal and city officials will already be scrutinizing the deal.

Several D.C. Council committees are expected to review the project before it comes up for a full vote.

D.C. Council member Vincent C. Gray, Ward 7 Democrat and a candidate for the council chairmanship, said he had preferred that the entire council review the deal, rather than have separate committees hold hearings on different aspects of the project.

“I really thought from the beginning that the project should be retained in one package because everything is inextricably tied together,” Mr. Gray said.

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