Supervisors OK actions to assist bankrupt Blythe hospital

RIVERSIDE, Calif. (KESQ) - Riverside County supervisors signed off today on the terms of a loan expansion for bankrupt Palo Verde Hospital, following the Executive Office's decision last week to go ahead with committing an additional $3.4 million to sustain the facility.

In a 4-0 vote without comment -- and with Supervisor Chuck Washington absent -- the Board of Supervisors formally approved county Chief Executive Officer Jeff Van Wagenen's decision on Feb. 24 to commit $3.44 million from the General Fund as payment to the California Department of Health Services on behalf of the Palo Verde Healthcare District.

Van Wagenen initiated the disbursal on his own authority while the board was not in session. Executive Office spokeswoman Brooke Federico said the funds covered the district's obligation to the state's Voluntary Rate Range Program.

The "intergovernmental transfer" payment, which Van Wagenen did not point to as a pressing concern during the board's prior public session on Feb. 10, has enabled the 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 Friday, adding that because of Medi-Cal requirements, "immediate action was required'' and could not wait on
the Board of Supervisors to convene.  

A "strike team" previously authorized by the board and composed of medical professionals from the Riverside University Health System initiated a reformation on Feb. 23 intended to stabilize the Blythe hospital's emergency clinic. The team's deployment was appended to a $1 million stabilization loan previously authorized by the board for the insolvent hospital.

The supervisors also have been requested to fill two vacancies on the Palo Verde Healthcare District Board of Directors. The vacant seats have hamstrung the district's ability to muster 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.

The appointments were expected to be announced soon.   

Under a management services agreement additionally approved by the board Tuesday, RUHS staff can now 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.

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 health care is more than 70 miles away.  

The monetary agreement between the county and district specifies the county will have ``first priority'' status among the district's creditors and will under no circumstances be liable for any of its debts.

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 said 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 $1 million 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.