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California legislators approve bill that could help reopen Madera Community Hospital

Madera Community Hospital
Soreath Hok
Madera Community Hospital sits empty after closure. Photo taken February 2023.

Updated Thursday, May 4, 2023 at 7:00 p.m.

MADERA, Calif. – Madera Community Hospital could soon have access to state funding to help reopen services.

The California Senate and Assembly approved AB 112, outlining the “Distressed Hospital Loan Program.” The final step in the law is a signature from the governor – which would allow the law to go into effect immediately.

The program would open up $150 million in state funds to help reopen struggling hospitals like Madera Community Hospital.

According to the bill’s language, the loan program will provide “interest-free cash flow loans to not-for-profit hospitals and public hospitals in financial distress or to governmental entities representing a closed hospital to prevent the closure or facilitate the reopening of a closed hospital.”

Assemblywoman Esmeralda Soria acknowledged the Distressed Hospital Loan Program is only a short-term solution to a much bigger problem. Soria said it’s meant to incentivize a potential operating partner who would shoulder the total costs and responsibilities of a reopening process.

“At minimum, this will provide a gap-filler,” Soria said. “And I'm sure that whoever comes as a willing partner will put a proposal together that is sustainable.”

Soria has been working on the loan program as part of Assembly Bill 412, which she introduced in February. In late April, it was incorporated into a budget trailer bill, Assembly Bill 112. A budget trailer bill typically goes through budget committees and outlines specific details of a program that will be implemented under the budget.

The urgency to pass the bill was accelerated in April and coincided with an impending deadline to renew the Madera County hospital’s license with the California Department of Public Health, which expires May 26.

“Madera has been the driving force behind this,” Soria said.

Although the hospital suspended its license following the closure, the license still remains active and would require a $100,000 fee to renew it this month.

A lapse in the license renewal would force the hospital to meet all-new hospital building standards in order to qualify for another license, something that could sink the chance of the 1971-era building to reopen for services.

“[The state is] very fully aware of the licensing issue and made a commitment that it wouldn't be a hurdle when Madera would attempt to reopen,” Soria said.

Kaweah Medical Center in Visalia is another struggling Central Valley hospital that could benefit from the program. Chief Executive Officer Gary Herbst issued a statement Thursday in response to passage of AB 112.

He said, "Hospitals like Kaweah Health with high Medi-Cal rates suffered some of the biggest losses in the state. This funding is an important step in keeping hospitals open and helping them get back on their feet.”

A hospital financial report released in April showed 20 percent of California hospitals are at risk of closure.

The California Hospital Association, a hospital advocacy group, has pushed for the state to approve$1.5 billion in emergency funding to bail out hospitals that it says have suffered$8.5 billion in losses, just in the last year alone.

Soria said in addition to the hospital loan program, she hopes to initiate talks with UC Merced to turn the facility into a teaching hospital for its medical education program. But so far, no plans are in the works.

Soreath Hok is a multimedia journalist with experience in radio, television and digital production. She is a 2022 National Edward R. Murrow Award winner. At KVPR she covers local government, politics and other local news.