SACRAMENTO – Governor Gavin Newsom took decisive action today by signing several early action budget trailer bills, providing support to various sectors in California. One of the notable bills, AB 112, establishes a $150 million Distressed Hospital Loan Program aimed at assisting not-for-profit and public hospitals that are on the brink of closure or have recently closed. The program will provide zero-interest cash flow loans to ensure these hospitals can continue serving their communities.
Governor Newsom emphasized the importance of swift assistance for hospitals facing extreme financial distress, stating, "This new program will help hospitals in extreme financial distress get the assistance they need as quickly as possible. My administration has been working closely with hospitals across the state, and we will continue to do all we can to ensure communities can continue to access the care and services they need without disruption."
The creation of the Distressed Hospital Loan Program was a collaborative effort involving the Governor's Office, California Health and Human Services Agency, the Department of Health Care Access and Information (HCAI), the California Health Facilities Financing Authority (CHFFA), and the California Legislature. The program aims to expedite the provision of financial support to struggling hospitals in a timely manner.
Assemblymember Soria, who has been actively advocating for Madera Community Hospital, expressed gratitude for the Governor's prioritization of state assistance. The closure of Madera Community Hospital has had a significant impact on the community, leading to the loss of vital health care services. The new loan program offers hope for restoring emergency health care, labor and delivery services, and preventative care access that are critical to the community.
Senator Caballero acknowledged the catastrophic consequences of the closure of Madera Community Hospital, which resulted in the loss of clinics and hundreds of jobs. She emphasized the need for adequate funding for the healthcare system and highlighted the importance of evaluating the services provided by struggling hospitals to ensure their fiscal stability and viability.
Under the Distressed Hospital Loan Program, the Department of Health Care Access and Information (HCAI), in collaboration with the California Health Facilities Financing Authority (CHFFA), will administer zero-interest cash flow loans to eligible nonprofit or public hospitals. The eligibility criteria will consider factors such as cash on hand, the hospital's size, whether it serves rural or critical access areas, its role in providing care to Medi-Cal patients, and the impact of closure on regional service access.
Qualifying hospitals will be required to submit plans detailing how they will achieve financial viability and operate sustainably in the long term. Loans disbursed through this program may be eligible for forgiveness under certain conditions, to be determined by the Department of Health Care Access and Information (HCAI).
In addition to the support for struggling hospitals, Governor Newsom also signed several other early action budget bills. AB 100 introduces amendments to the 2021 and 2022 Budget Acts, impacting various programs and departments. AB 110 authorizes the use of available federal funds to provide temporary stipends to the California State Preschool Program and state-subsidized child care program providers. It also extends the waiver of family fees for state-subsidized child care programs and the California State Preschool Program. AB 111 provides tax relief to Californians who had student loans or fees discharged as part of financial relief during the COVID-19 pandemic. Lastly, AB 113 amends AB 2183, creating additional methods for California farmworkers to elect a collective bargaining representative.