Board Set to Take Further Action to Assist Bankrupt Blythe Hospital

RIVERSIDE (CNS) - Riverside County supervisors are slated today to
review proposed terms of a loan expansion for bankrupt Palo Verde Hospital,
following the Executive Office's decision last week to go ahead with committing
a $3.4 million payment to sustain the facility.
  

A ``strike team'' previously authorized by the board and composed of
medical professionals from the Riverside University Health System initiated a
reformation intended to stabilize the Blythe hospital's emergency clinic.
  

The team's deployment was appended to a $1 million stabilization loan
for the hospital. However, on Feb. 24, county Chief Executive Officer Jeff Van
Wagenen signed off on a $3.44 million payment to the California Department of
Health Services. That disbursal was made without a vote by the Board of
Supervisors because the panel was not in session. Executive Office spokeswoman
Brooke Federico said the payment covered a Palo Verde Healthcare District
obligation to the state's Voluntary Rate Range Program, or VRRP.
  

The ``intergovernmental transfer'' payment, which Van Wagenen did not
mention publicly during the board's previous meeting, has enabled the Palo
Verde Healthcare District to tap into taxpayer-backed credit to bolster
hospital operations.
  

``As a result of the county's action, the ... district has already
received approximately $8.9 million in program funds, with the remaining
expected in the coming days,'' Federico said, adding that because of Medi-Cal
requirements, ``immediate action was required'' and could not wait on the Board
of Supervisors.
  

The board will scrutinize the proposed revised loan agreement with the
district, under which it would be on the hook for the county's $3.44
million outlay, on top of the $1 million previously authorized for the
insolvent hospital.
  

The supervisors also have been requested to fill two vacancies on the
Palo Verde District Board of Directors. The vacant seats have hamstrung the
district's ability to convene a quorum to vote on pending actions, according to
PVHD President Carmela Garnica.
  

``In the interest of restoring a fully functioning five-member board,
I respectfully request that the county ... complete the appointment process for
the two vacant seats,'' she said in a letter to Supervisor Manuel Perez, whose
Fourth District encompasses Blythe.
  

Under a proposed management services agreement additionally on the
agenda, RUHS staff can implement all necessary processes connected to the
county's 180-day strike team support plan, with the goal of maintaining
emergency operations at the cash-strapped hospital.
  

``We aren't just here to manage a transition; we are here to support
the incredible frontline staff and ensure that every resident has access to the
high-quality, stable care they deserve,'' RUHS CEO Jennifer Cruikshank said
last month.
  

Without emergency services at the Blythe facility, the area's roughly
20,000 residents would lose access to ``timely treatment for life-threatening
conditions where minutes matter,'' according to a county statement in January.
Outside of the hospital, the nearest option for emergency healthcare is more
than 70 miles away.
  

The monetary agreement specifies the county will have ``first
priority'' status among the healthcare district's creditors and will under no
circumstances be liable for any of its debts. The loan structure calls for a
roughly nine-month grace period, during which no payments on the loan are
required. However, starting in October, initial payment on loan principal will
be necessary. A 3% annual interest rate will be assessed beginning January
2027, and the $1 million will have to be fully amortized by October 2031.
  

At the end of September, the PVHD board voted to seek federal Chapter
9 bankruptcy protection while efforts were made to stanch ongoing financial
losses.
  

Administrators noted the hospital had been struggling to remain afloat
since the start of the current decade, with revenue streams withering while
patient loads remained unchanged.
  

The California Health Facilities Financing Authority extended an $8.5
million infusion from the Distressed Hospital Program in 2023, but that turned
into a short-term fix, according to the district. Administrators expressed
frustration at the time about the inability to recruit a chief financial
officer who would stay the course in sorting out possible solutions. Four CFOs
came and went in an 18-month span.
  

Only the emergency room remains open. All other hospital operations
have been shut down.
  

The county's original loan will pay for staff salaries and benefits,
pharmaceuticals, equipment purchases, utilities, billing operations and some
legal expenses associated with Chapter 9 proceedings.
  

The possibility of a wholesale county takeover of the hospital's
emergency department has not been ruled out publicly.
  

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