What would come back — and remain closed — if Madera hospital reopens in July

If a reopening plan is approved in federal bankruptcy court Tuesday, Madera Community Hospital could reopen this summer with an emergency room, pharmacy and medical imaging.

However, the Madera hospital will not reopen with a labor and delivery room, so expecting mothers would still have to travel to a neighboring county to give birth. 

The Madera hospital’s reopening plan depends on whether Judge René Lastreto approves American Advanced Management Inc.’s plan on Tuesday. If the judge greenlights the deal, AAMI will assume full responsibility over the Madera hospital’s operations Feb. 27.

Through a California Public Records Act request, Fresnoland obtained AAMI’s turnaround plan for the Madera hospital, which spells out a four-month reopening process to restore Madera County’s only general acute care hospital by July.

Matthew Beehler, AAMI’s chief strategy officer, told Fresnoland the decision to forgo obstetrics and gynecology services was due to the department losing up to $4.5 million a year while the hospital was still open.

“We definitely want to engage on prenatal care close to home for the residents of Madera County but it’s just not feasible to start out with obstetrics out of the gate,” Beehler said, adding that reimbursements from health insurance companies for labor and delivery services are too low.

Along with restoring Madera County’s only emergency room for adults, the Madera hospital’s reopening plan would reestablish at least two of the hospital’s health clinics — one in Chowchilla and the one on Almond Avenue at the hospital campus.

Beehler said complications have come up in Chowchilla, where AAMI is looking to open the health clinic at a new site since the old location has now been leased to a different health provider. It is unclear whether the rural health clinic in Mendota will be reopened.

A surprise twist with UCSF Health and Adventist Health in the picture

Tuesday’s hearing on the Madera hospital’s reopening plan also faces uncertainty after UCSF Health and Adventist Health surprised officials with the announcement of a new plan to buy the Madera hospital facility out of bankruptcy. According to a July 2023 third party appraisal, the hospital facility is worth $37.9 million, and its remaining land is worth about another $2 million.

“If the outcome of Tuesday isn’t the approval of our management service agreement,” Beehler said, “it’s going to mean months and months and months of delays.”

It’s unclear how the two medical institutions could intervene in the Tuesday vote — and even Beehler wasn’t sure. AAMI promised creditors that it could wipe away up to $30 million of the hospital’s debt. The hospital is about $31.2 million in debt, according to a January operating report.

Beehler said there’s no situation where the UCSF-Adventist arrangement is a better financial option for creditors than AAMI’s plan.

“If there’s some barrier out there, it’s certainly not anything that we’re aware of,” Beehler said.

For AAMI’s reopening transaction to go through, it needs approval from Attorney General Rob Bonta. His office has already issued conditions on AAMI’s reopening plan, according to court documents, and AAMI has already agreed to them, Beehler told Fresnoland.

For UCSF Health and Adventist Health to purchase the hospital, they are essentially calling on a judge to look past a plan that has been approved by the debtor and creditors. 

How AAMI plans to reopen Madera hospital in four months 

If approved Tuesday, AAMI’s executives plan to spend March and April completing necessary inspections, obtaining certifications and securing licenses and permits. They also plan to begin hiring and training employees in March, which would fill positions all over the hospital including the nursing, radiology, pharmacy and records departments.

By May, AAMI will have purchased supplies, reagents and drugs for its lab, and pharmacy departments. It will also have reinstated an electronic health records system. AAMI would spend May and June training staff and preparing for a final reopening inspection.

Besides restoring an emergency room and intensive care unit to Madera County, AAMI also plans to restore the hospital’s imaging department to provide X-ray, MRI, ultrasound and CT scan services. 

While AAMI’s Madera hospital reopening plan does not include a labor and delivery room, its executives’ long-term plans include opening a geriatric emergency department, an outpatient cardiology program and a stroke program.

AAMI is greatly relying on $57 million in state funds through California’s Distressed Hospital Loan Program. The Madera hospital would receive more than a third of the funds in the statewide program meant to support struggling nonprofit or public hospitals in California. 

AAMI’s turnaround plan includes how it will take two to three years to stabilize Madera Community Hospital. 

“This is not a hypothetical reopening of the hospital,” Beehler said. “When we were selected by the debtor, had creditors approval, that’s a lot further than anyone else has ever gotten in this.”