What's at stake?
Madera County’s 160,000 residents have been without a general acute care hospital since late 2022 when the hospital abruptly shuttered and filed for bankruptcy a few months later.
The Madera Community Hospital Board selected a proposal for “temporary management services” with a Modesto-based company to “reopen and operate” the city’s shuttered hospital.
In a news release late Tuesday, officials with the Madera hospital and the selected company, American Advanced Management, said they would begin work on a “transitional plan that will lead to an acquisition” of the 106-bed hospital, pending bankruptcy court approval.
The hospital’s board unanimously approved the deal Monday.
“We’re honored and pleased that the Madera Community Hospital leadership and board support our proposal to reopen the hospital through this management agreement and eventual acquisition,” Matthew Beehler, chief strategy officer for American Advanced Management, said in the joint statement. “Our goal is to restore services to the Madera community as quickly as possible.”
“We hope the bankruptcy court will approve the management services agreement quickly so that the work of reopening the hospital can begin,” Beehler added.
Madera hospital’s bankruptcy proceedings will resume in court on Jan. 9, a court clerk told Fresnoland.
In Tuesday’s news release, officials with American Advanced said they have “reopened or restored” nine hospitals and other healthcare services, including Central Valley Specialty Hospital in Modesto, Coalinga Regional Medical Center and Orchard Hospital in the north state community of Gridley, among others.
“American Advanced Management has the vision, experience and resources to reopen our hospital and create a strong future for our community’s health care,” Madera hospital CEO Karen Paolinelli said in the statement. “They have a track record of successfully reopening and sustaining closed hospitals in California, which uniquely qualifies them to move this forward. We’re excited about their leadership and partnership.”
Madera County’s 160,000 residents have been without a general acute care hospital since late 2022 when the hospital abruptly shuttered and filed for bankruptcy a few months later.
The AAMI announcement comes just about a month after Adventist Health backed out of negotiations to take over the Madera Hospital.
Unlike Adventist Health’s plan, which largely relied on state funds to reopen the Madera hospital, AAMI’s pitch since the beginning was that it would be able to pay off the majority of the hospital’s debts. In September, AAMI’s legal team said in court that they could pay off $30 million of the Madera hospital’s debts.
Although AAMI had been in talks with the Madera hospital before the closure, the hospital board preferred other proposals on at least three occasions, court records show.
While officials have remained tight-lipped about the internal negotiations, some conflicts and struggles emerged during the protracted court process.
At one point, AAMI offered Paolinelli a $150,000 check, which she called an inappropriate offer in September. AAMI’s legal team said the offer was not a bribe and not meant to give them an advantage in the competitive process to take over the hospital.
Then in October, about a month before Adventist Health backed out of negotiations, the hospital’s board contacted AAMI to review its proposal once more.
Earlier this month, creditors proposed a plan to liquidate the facility to recoup millions of dollars owed to them.
In a statement to Frensoland late Wednesday, state Sen. Anna Caballero, D-Merced, said she was hopeful the AAMI would help the hospital reopen.
“My main goal and focus has been to see Madera Community Hospital reopened and equipped to serve the community that depends on them for care,” Caballero said. “It is my hope that the hospital board’s decision to accept American Advanced Management’s proposal will support that goal to reopen the hospital and the clinics to begin providing services, and to assure the community that the management and quality of service are of the highest caliber.”
