Imperial Valley hospitals receive millions in zero

SACRAMENTO – Governor Gavin Newsom announced nearly $300 million in zero-interest loans to 17 community hospitals across California.

According to a press release from the Office of Gov. Gavin Newsom, the funding was made possible through the Distressed Hospital Loan Program created in partnership with the state legislature. This will amount in Assembly District 36 hospitals – namely El Centro Regional Medical Center and Pioneers Memorial Healthcare District – receiving $28,000,000 each, according to a press release from Assemblymember Eduardo Garcia’s office.

Palo Verde Hospital will also receive $8,500,000, per the release from the Assembly member’s office.

“The program, established through Assembly Bill 112, offers interest-free, working capital loans to nonprofit and publicly operated financially-distressed hospitals, including facilities that belong to integrated healthcare systems with less than three separately licensed hospital facilities,” a HCAI press release reads.

Of the 17 hospitals listed in a separate press release from the Department of Health Care Access and Information (HCAI), only TriCity Medical Center in Oceanside and Dameron Hospital Association in Stockton received more funds than the Valley’s two hospitals, at $33,200,000 and $29,000,000, respectively.

“The Distressed Hospital Loan Program is jointly administered by the California Department of Health Care Access and Information (HCAI) and the California Health Facilities Financing Authority (CHFFA) at the California State Treasurer’s Office,” the HCAI release reads. “The two departments have notified the eligible hospitals what loan amounts they have been approved for, with the loans scheduled to be released in the coming weeks.”

According to the HCAI release, some key loan details are the “loans will be at zero-percent interest,” “loans are repayable over 72 months, with an initial 18-month grace period at the beginning of the loan term,” and “the program will sunset on December 31, 2031.”

In addition, “lending parameters will be focused on financially distressed hospitals in areas where demand for services and service adequacy are of concern,” it reads. “Loans are secured using Medi-Cal checkwrite payments for participating hospitals.”

“The legislation also includes provisions for requiring hospitals to submit quarterly financial data to HCAI, for use in monitoring the financial health of hospitals throughout the state,” the HCAI release reads. “This will enable HCAI to better prepare for and identify developing fiscal challenges at hospitals statewide.”

“HCAI will contract with CHFFA (California Health Facilities through an Inter-Agency Agreement to administer the loan program,” it reads.

“We stepped up to create the Distressed Hospital Loan Program to ensure an eligible source of relief for our community’s urgent healthcare crisis,” Assemblymember Garcia said in the press release from his office. “In partnership with the Governor and Legislators in districts experiencing similar challenges, we moved quickly to provide aid and prevent closures in underserved areas. We welcome this loan announcement as we continue other legislative initiatives underway to protect and improve access to medical care.”

According to Newsom’s press release, in May as part of early budget action, Gov. Newsom announced the creation of the Distressed Hospital Loan Program (DHLP) for an initial $150 million. The DHLP focuses on certain public and nonprofit community hospitals that are experience the most severe financial distress – using the funds to either reopen a recently closed facility or keep a facility on the brink of closure or reducing its services from closing.

“Gov. Newsom brought an additional $150 million into the program through the Managed Care Organization (MCO) Provider tax, doubling the financial support available to these critical facilities,” per Newsom’s release.

“Many of the community hospitals are experiencing financial stress like never before. These hospitals are often the only acute health care access point in their area,” Governor Newsom said in the release. “In partnership with the legislature, we are working to keep the doors open so Californians can access critical care close to home.”

According the HCAI release, “HCAI and CHFFA received 30 applicants for the program, however, not all hospitals were awarded funds. During the extensive loan application review process, HCAI considered a diverse set of criteria. Hospitals that demonstrated the greatest levels of financial distress, at-risk of closing in the near term, and had a well-founded plan to remain open and provide services and care, were prioritized and issued loans through this program. Hospitals that did not receive funds from this program demonstrated less financial distress when compared to other hospitals that applied.”

“Many of the community hospitals being supported today across California are in more rural areas of the state, serving communities with lower income, and communities of color,” Newsom’s release reads. “Keeping these health care access points open means Californians can continue to access the health care services they want or need in their community.”

“The Distressed Hospital Loan Program extends a lifeline to economically underserved hospitals, like those in our rural area, struggling to keep their doors open,” Assemblyman Garcia said in his release. “We are grateful that our legislative efforts have delivered resources to protect access to emergency healthcare services in our district and help save lives.”

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