Guam Hospital Waiting For Finalizing Of $25 Million Loan

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Loan will be used to pay debts to hospital vendors: administrator

By Amanda Francel Blas

HAGÅTÑA, Guam (Pacific Daily News, Jan. 2, 2014) – While Guam’s only public hospital hoped to borrow $25 million to pay some of its bills before the end of the year, Guam Memorial Hospital (GMH) is still waiting as loan documents are finalized.

"Both the hospital and the bank's lawyers are working on the loan documents," Joe Verga, GMH administrator, said. "We should have the loan by early (this) year."

The loan, which will be lent by Bank of Guam, will help the hospital repay an existing loan that was used to bail out the hospital about three years ago, Pacific Daily News files state.

The loan also will be used to pay debts to vendors. Verga said Supply Service Center, a federal wholesaler of pharmaceutical and medical supplies based in Perry Point, Md., will be among the first vendors to be paid once the loan is approved.

"They've already been assured by both myself and the hospital board," Verga said.

According to Verga, there is no Jan. 1 deadline to pay off the hospital's more than $5 million debt to the wholesaler. However, GMH hopes to repay the debt as soon as possible to avoid an automatic garnishment of Medicare reimbursement funds.

"The federal government and the supplier are being kept involved," Verga said. "While they won't be garnishing any of our funds, there's always the risk of a garnishment automatically kicking in with the new year."

Once the loan documents are finalized, Verga said, the documents will be given to the Office of the Attorney General for review.

"Everyone knows the loan is imminent and I'm sure it'll pull through," Verga said. "I'm cautiously optimistic."

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