A shuttered Northern California hospital is getting a lifeline from Congress, but it surely doesn’t include cash to really reopen and serve sufferers.
A brand new federal regulation will restore the “essential entry” designation for Glenn Medical Middle, the one hospital in Glenn County. Because of this, as soon as it reopens, the hospital qualifies for full Medicare reimbursement, a key income.
Individually, final week a California lawmaker launched a invoice to create state loans for struggling hospitals, which may assist the ability discover the cash it must reopen.
For now, Glenn Medical Middle says it wants $40 million to $50 million to restart operations and convey again workers.
Glenn Melnick, a well being economist at USC, says as a result of a federal determination led to the hospital’s closure, it will make sense for the federal authorities to supply funds for the hospital’s reopening.
“In a great world this [congressional] invoice would have restored their standing and made them complete, proper?” he mentioned. “However failing that, you’re gonna must look to the state.”
Regaining essential entry standing
The issue with Glenn Medical Middle, in accordance with the U.S. Facilities for Medicare and Medicaid Providers, was distance.
Vital entry hospitals should be at the least 35 miles from the subsequent closest facility, and a evaluation confirmed that Glenn Medical was solely 32 miles from a hospital in Colusa County. Hospital officers appealed, arguing that the hospital’s location had not modified because it certified for the designation a quarter-century earlier, however their appeals had been unsuccessful, and the hospital closed final fall.
A essential entry designation brings hospitals regulatory flexibility and elevated reimbursement for Medicare sufferers. With out the income that comes from having essential entry standing, operations at Glenn Medical could be unsustainable, hospital administration beforehand informed CalMatters.
The closure meant a county of 28,000 folks not had a neighborhood emergency room.
Final fall, Sen. Adam Schiff (D-Calif.) and the late Republican Rep. Doug LaMalfa launched efforts in Congress to revive Glenn Medical’s designation. The deal that was finally signed into regulation directs the federal well being company to waive the gap requirement for any essential entry hospital that had this designation as of Jan. 1, 2024, and that obtained a notification of noncompliance earlier than Jan. 1, 2026.
“Returning the [critical access] designation is a superb step, but it surely doesn’t remedy the issue,” mentioned Matthew Beehler, a spokesperson for American Superior Administration, the corporate that owns and operates Glenn Medical Middle.
“We’re making an attempt to be sensible about how a lot cash it can take to reopen as a result of it can take vital recruitment efforts,” he mentioned.
Distressed hospital loans 2.0
In Sacramento, a state invoice now might pave the best way for the monetary assist that Glenn Medical is in search of.
Assemblymember Esmeralda Soria (D-Fresno) on Thursday launched the sequel to a 2023 regulation that created the state’s Distressed Hospital Mortgage Program. That fund is out of cash after distributing about $300 million to hospitals. Soria’s new proposal, Meeting Invoice 1923, is in search of a brand new spherical of $300 million for struggling hospitals. If the invoice makes it out of the Legislature and beneficial properties Gov. Gavin Newsom’s help, hospitals may then apply for the loans.
That earlier mortgage program afforded then-closed Madera Group Hospital $57 million, permitting it to reopen in March 2025. It’s the one hospital in Madera County.
American Superior Administration took over and reopened Madera Group; it additionally owns Glenn Medical.
“Realistically we must discover funding from the state like Madera did,” American Superior Administration’s Beehler mentioned. “As we’ve seen in Madera…we have to cowl a couple of 12 months’s value of bills earlier than you get reimbursements.”
The continued challenges of rural hospitals
Glenn Medical’s bureaucratic challenges are distinctive, prompted by a reinterpretation of a longtime federal rule. However just like many rural and group hospitals, it had been working within the purple for years. That precarious monetary state makes these hospitals significantly susceptible to any change.
“Right here’s the factor, most of those rural hospitals are on a shoestring,” Melnick mentioned. And particularly unbiased hospitals, these that aren’t half of a bigger well being system, “they’re dwelling 12 months to 12 months proper now.”
The primary spherical of loans to distressed hospitals pushed by way of in 2023 occurred as a number of hospitals warned they had been on the brink — which they mentioned was the results of larger labor prices and low reimbursement charges. In asserting the invoice, Soria mentioned she is making an attempt once more partly due to the federal finances invoice President Trump signed final 12 months that makes sweeping cuts and modifications to the nation’s security web applications.
That regulation, consultants say, will starve hospitals in rural and underserved areas of tens of billions of {dollars} within the subsequent decade. “Dozens of hospitals are dealing with a monetary cliff proper now, because of the biggest federal healthcare cuts in historical past that arrived with this new federal administration in 2025,” Soria mentioned.
In an try to cushion this blow, Congress created a $50-billion Rural Well being Transformation Mission. California will obtain $233 million from that fund this 12 months, with extra anticipated over the subsequent 5 years. However consultants have famous that this federal mission makes up solely a couple of third of the anticipated losses in rural areas. It’s not but clear whether or not Glenn Medical may qualify for a bit of this cash.
Ibarra writes for CalMatters.
