What's at stake:
As Madera Community Hospital continues litigating its debts in bankruptcy court, Gov. Gavin Newsom’s signed a bill Monday, which would aid in reopening Madera Community Hospital. Madera County also kicked in $100,000 on Tuesday to cover the expense to renew the hospital’s license.
California will soon administer a loan program to support financially distressed nonprofit and public hospitals, after Gov. Gavin Newsom signed a bill proposed by four state legislators.
Newsom’s signature graced AB/SB 112 on Monday, along with four other early action trailer bills, which allocates $150 million for interest-free loans available to struggling hospitals.
The new Distressed Hospital Loan Program will be run by California’s Department of Health Care Access and Information, which has begun the process of creating eligibility criteria for hospitals to apply for loans.
“Alongside my colleagues like Senator Caballero, we have been working non-stop since December to convey the urgency of this matter, which is why we were able to expedite the passage of this important bill,” said Assemblymember Esmeraldo Soria, a co-author of the bill and whose district includes Madera County.
Hospitals that are eligible for a loan would have to pay it back within three years. However, that timeline could get extended, or the loan could even be forgiven, if financial circumstances are so poor. Hospitals seeking a state loan would also need to provide detailed financial information, along with evidence that they serve a notable local Medi-Cal patient population.
The new program brings hope that Madera Community Hospital could be reopened, especially since interest-free loans could be made available to assist. However, state legislators have told Fresnoland that the hospital needs new leadership if it were to make a comeback.
But that relies on whether a third party approaches Madera Community Hospital’s executives with a proposal to get it out of bankruptcy and reopen it, which hasn’t yet materialized.
As the Madera hospital continues litigating its debts in bankruptcy court, its license was set to expire on May 26. However, the Madera County Board of Supervisors, during a Tuesday meeting, voted to cover the hospital’s license renewal — a $100,000 bill.
Using pandemic relief funds from the American Rescue Plan Act, the supervisors voted unanimously to foot the expense. Supervisor Robert Poythress, who sits on the Madera Community Hospital’s Board of Trustees, did not recuse himself from the vote.
Right now, the California Department of Public Health has placed Madera Community Hospital’s license in suspense. It closed down in December and filed for bankruptcy in March, citing more than $27 million in debt at the time.
“The bottom line is if it’s going to reopen as an acute care hospital, that licensing is very important,” said County Administrative Officer Jay Varney at a county supervisors meeting on May 9. “I think that that would be a reasonable commitment on behalf of the county to pay for that licensing.”
The California Department of Public Health was not immediately available to answer questions about Madera Community Hospital’s license.