MADERA, Calif. – A company with a history of taking over distressed or closed medical facilities is the newest potential operator of Madera Community Hospital – which at this time last year was teetering from a failed operating deal and in January closed before filing for bankruptcy.
In a unanimous vote on Monday, the hospital’s board of trustees selected American Advanced Management, Inc., as its potential new owner. The company currently runs eight hospitals in California and Texas as well as three urgent care facilities and 12 rural and specialty clinics. One of its hospitals is Coalinga Medical Center, which closed in 2018 and was reopened in 2020.
“We’re honored and pleased that the Madera Community Hospital leadership and board support our proposal to reopen the hospital through this management agreement and eventual acquisition,” said the company’s Chief Strategy Officer Matthew Beehler in a joint press release.
Madera Community Hospital CEO Karen Paolinelli added, “American Advanced Management has the vision, experience and resources to reopen our hospital and create a strong future for our community’s health care.”
According to Riley C. Walter, the bankruptcy attorney for the Madera hospital, the decision to move forward with American Advanced Management is a weight off of the shoulders of the hospital’s board members, who he said had been meeting as often as three times a week as a cascade of developments from the hospital’s closure unfolded throughout the year.
He pointed out, however, that although the hospital is now in exclusive negotiations with the company, a detailed reopening plan is not yet in place.
“Now we just hope that everything can be pulled together,” Walter said.
The vote triggers a series of next steps by hospital regulators, health departments and other agencies to get a formal deal in place. The hospital will also need to update its facilities and hire staff.
All of this, Walter said, will need to start with a detailed reopening plan that American Advanced Management must now complete. That will help determine how much of the $50 million loan offered by the state will actually be allocated to the facility.
“The creditors’ committee could object, the financing agency could object, the Attorney General could object, presumably even the county could object. We just don’t know,” Walter said.
As for how long all of these negotiations could take, “I’ve heard that it could take four months, I’ve heard it could take 12 months,” Walter said.
Decision came down to two companies
American Advanced Management had been in touch with Madera hospital leadership even before the most recent deal with Adventist Health fell through in November.
But as the Madera hospital leaders neared a new operating deal, it was also being sought out by a second company that KVPR learned withdrew its proposal last week. Walter said the board heard about the company’s withdrawal through a third party but was never officially notified.
The entity was named in a bankruptcy court filing as “Praise Healthcare, LLC.” No business appears to be registered in California with that name, though a company called “Praise Health LLC” was incorporated in Delaware in May.
In a statement to KVPR, Dede Tsuruoka, a spokeswoman on behalf of Praise, said the withdrawal to operate the Madera hospital was based on “the steps necessary to reopen the hospital and careful evaluations of the time lines and expectations.”
The company does not appear to have a website. Two of its administrators, Precious Mayes and Paul Tuft, have a sparse presence on the Internet and the few news reports available online cast their businesses in an unfavorable light.
Tuft, who could not be reached for comment, runs Southwest Healthcare Services, LLC. According to business filings in Arizona, where the company incorporated, Mayes was also listed as a managing partner until earlier this year.
According to news reports, Southwest has operated hospitals in the past. Another company Tuft formerly ran, Doctors Community Healthcare Corporation, operated a number of facilities including a hospital in Washington, D.C. Its tenure was marked by two public and rocky bankruptcies as chronicled by the Washington Post.
Mayes is CEO of Pacifica Hospital of the Valley, a general acute care facility near Los Angeles. According to her LinkedIn profile, she’s been involved in the healthcare world to some extent since 1996, and has been in her current role since 2018. In 2019, the San Fernando Valley Business Journal named her Business Executive of the Year as part of its annual Women’s Council Awards.
Pacifica Hospital of the Valley has faced concerns of its own. It receives only one of five stars in a national rating of quality of care and patient satisfaction compiled by the Centers for Medicare and Medicaid Services. A database with the California Department of Public Health also indicates that for the last four years, the hospital has been the subject of more complaints than the statewide average for facilities of its size and scope, and has been determined by state inspections to have more deficiencies.
The hospital also narrowly averted a nursing strike in 2019 after nurses there complained of low wages and high patient-to-nurse ratios.
Even though Mayes’s administration reached a deal with nurses at the time, Leo Perez-Ferrer, a Los Angeles-area nurse and the president of nurse union SEIU Local 121RN, said many of those issues have continued.
He said nurses who work there have complained about salary and benefits issues, including claims of bounced paychecks and unpaid health insurance premiums by their employer, as well as understaffed nursing units and unsafe patient ratios. Perez-Ferrer said these issues appear to be worse at Pacifica than at other area hospitals. He told KVPR he was concerned to learn a company involving Mayes was trying to purchase another hospital.
“If the money is there to acquire the facility,” he stated, “then why don’t you try to fix what you already have going on in your own facility that you own already?”
Tsuruoka, who is also the spokeswoman for Pacifica Hospital of the Valley, said she was sorry to hear the concerns raised by nurses. She added, “Pacifica takes seriously the well-being of its patients and staff, and is committed to working with nurses and the nurses’ union to address all issues in creating a safe, respectful, and healthy environment in the hospital.”
Even in the final days before the crucial vote by the Madera board of trustees to select a new operator, Madera bankruptcy attorney Walter said it wasn’t clear which company — American Advanced Management or Praise — the board would favor.
When asked if board members had raised any concerns about the track records of other entities associated with Praise, Walter responded, “the board is aware, and it has been the subject of extensive discussion.”
The board of the Madera hospital was facing possible liquidation and demands for payment by creditors if it could not find a company to operate the hospital.
