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After two failed deals, two other companies look to run bankrupt Madera Community Hospital

Signs bearing the Madera Community Hospital logo are covered up with tarps after the sudden closure of the facility
Esther Quintanilla
Signs bearing the Madera Community Hospital logo are covered up with tarps after the sudden closure of the facility

MADERA, Calif. – A recent filing in federal bankruptcy court names two companies that have put in bids to reopen Madera Community Hospital. The ailing facility closed abruptly late last year and later filed for bankruptcy.

So far, two deals to purchase Madera Community Hospital have fallen through. In late 2022, Trinity Health, which runs Saint Agnes Medical Center in Fresno, walked away from a merger that would have kept the hospital open.

The hospital chain blamed the failure of the deal on conditions imposed by California Attorney General Rob Bonta.

Then, earlier this month, Adventist Health pulled out of a deal to purchase and reopen the facility citing financial concerns. That deal had been in the works since the summer.

What we know about one company

One of the two remaining suitors is American Advanced Management, whose business model is built around taking over ailing or shuttered hospitals.

The Modesto-based company runs nine facilities in California and one in Texas. Its portfolio includes nearby Coalinga Regional Medical Center, which reopened under the company’s management in 2020 after closing in 2018.

Chief Strategy Officer Matthew Beehler said his company’s current bid for Madera Community Hospital is the latest of many months of negotiations since they first met with the hospital’s board of trustees this past spring.

“The opportunity to restore care for this community is something that is a passion project for us, just like many of the other small rural communities that we’re in,” he said.

Although Beehler couldn’t reveal specific details of his company’s bid, he said the economics are more favorable for his company because this hospital would be one of many facilities under the same management.

“Things like human resources, and billing and collections, and financial management, IT services…we can do those at scale and at much lower cost than small rural facilities can provide that to themselves,” he said.

In September, the Fresno Bee reported that the company had blurred ethical lines when it presented former hospital CEO Karen Paolinelli with an unsolicited $150,000 check during the competitive bidding process.

Who is the other company?

Little information is known publicly about the hospital’s other suitor, named in the filing as Praise Healthcare, LLC.

According to Riley Walter, an attorney representing the hospital in its bankruptcy proceedings, this company formed recently and is affiliated with two other hospitals in California.

It is unrelated to a medical training organization with the same name based in Pikesville, MD.

A long saga

Walter acknowledged that this is one of the most unusual bankruptcy cases he’s ever been a part of.

“I’ve never had a creditors committee allow things to drift along for as long as these creditors have,” he said. “They’ve been giving the debtor, Madera, chance after chance after chance to pick a suitor and get the hospital reopened.”

Between these two potential buyers, Walter is optimistic a deal can be brokered soon.

“My own bet is that by the end of December, probably well before that…a suitor will be selected and then Madera will enter into earnest negotiations over the specific terms of the deal,” he said, which will include how to pay back the tens of millions owed to the hospital’s creditors.

Updated: November 30, 2023 at 11:46 AM PST
This story was updated to clarify that American Advanced Management has been engaged in long-term negotiations with Madera Community Hospital.
Kerry Klein is an award-winning reporter whose coverage of public health, air pollution, drinking water access and wildfires in the San Joaquin Valley has been featured on NPR, KQED, Science Friday and Kaiser Health News. Her work has earned numerous regional Edward R. Murrow and Golden Mike Awards and has been recognized by the Association of Health Care Journalists and Society of Environmental Journalists. Her podcast Escape From Mammoth Pool was named a podcast “listeners couldn’t get enough of in 2021” by the radio aggregator NPR One.