By Liz Gonzalez for Fox26 News

"It's an emergency relief fund for hospitals that are at risk of filing for bankruptcy or that have already filed,” says 14TH District State Senator, Anna Caballero (D-Merced).

Caballero says some of the money could potentially be used to reopen Madera Community Hospital, which closed in January after filing for bankruptcy in late 2022.

“They’re going to have to do a lot of work to be able to get there,” Caballero said. Caballero says lawmakers discovered a number of challenges in drafting the legislation, also sponsored by Assemblymember Esmeralda Soria (D-Fresno).

She says the COVID pandemic forced a lot of hospitals to use their reserve funds, the cost of prescriptions increased, supplies were more expensive, and hospitals were forced to hire traveling nurses after others left the profession during the pandemic.

Medi-Cal also continues to reimburse just a fraction of the cost of services.

And in the case of Madera Community Hospital, Caballero says more patients with commercial and private insurances — which reimburse at higher rates-- chose to seek medical care outside of the county.

“It was a combination of a number of things that hit them all at the same time,” Caballero says.

The Distressed Hospital Loan Program will be administered by the Department of Health Care Access and Information (HCAI), in coordination with the California Health Facilities Financing Authority.

HCAI will create eligibility criteria, with priority given to hospitals with a high proportion of Medi-Cal patients.

They would also need to submit a detailed plan on how they plan to return to financial viability and operate long-term.

The $150 million is just a fraction of what struggling hospitals in California need to stay open.

According to a report last month commissioned by the California Hospital Association, 20 percent of the state’s hospitals are at risk of closing.

State Senator Caballero says the legislature may consider even more loan money in the next budget year, which starts July 1st.

You can view the hospital report, below:

CHA Financial Impact Report by Peter Lopez on Scribd

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