2023 California Code › Health and Safety Code - HSC › DIVISION 107 - HEALTH CARE ACCESS AND INFORMATION › PART 6 - FACILITIES LOAN INSURANCE AND FINANCING › CHAPTER 4 - Distressed Hospital Loan Program › Section 129383.

129383. (a) In collaboration with the State Department of Health Care Services, the Department of Managed Health Care, and the State Department of Public Health, the department shall develop a methodology to evaluate an at-risk hospital’s potential eligibility for state assistance from the program.
(1) (A) The methodology shall consider factors, including, but not limited to, whether the hospital is in financial distress, as solely determined by the department, whether the hospital is small, rural, a critical access hospital, a trauma center, an urban hospital providing access for an underserved area, a hospital that serves a disproportionate share of Medicaid patients, or serving a rural catchment area, whether closure of the hospital would significantly impact access to services in the region, and whether the hospital is publicly owned.
(B) The methodology for determining financial distress may consider such factors as the hospital’s prior and projected performance on financial metrics, including the amount of cash on hand, and whether the hospital has, or is projected to experience, negative operating margins.
(2) The methodology shall also be used for identification and monitoring of hospitals at risk of financial distress.
(b) A hospital or a closed hospital applying for aid under this program shall provide the authority and the department with financial information, in a format determined by the authority and the department, demonstrating the hospital’s need for financial assistance due to financial hardship.
(c) (1) Before receiving state assistance under this program, an eligible hospital shall submit a plan to the authority, which it shall share with the department, with projections detailing the uses of the proposed loan and strategies proposed by the hospital’s governing body to regain financial viability and continue to operate.
(2) Before issuing a loan under this chapter, the department shall review the plan submitted by an eligible hospital and make a determination that the plan is viable and there is a reasonable likelihood that the hospital will be able to regain financial viability and continue to operate as a hospital. The department shall not issue a loan award if the department is unable to make this determination.
(d) The department shall issue the loan award to a qualifying hospital as soon as reasonably practicable following its eligibility determination.
(e) Not-for-profit hospitals and public hospitals that belong to integrated health care systems with more than two separately licensed hospital facilities shall be ineligible for state assistance under the program.
(f) The department shall, in consultation with the authority, determine the application process, underwriting review, and methodology for approval and distribution of the loans under the program.
(g) The department shall have the authority to determine service provision requirements in approving, and for the duration of, loans to eligible hospitals. In making its determination, the department shall consider the impact of any changes to the hospital’s service delivery on access to necessary medical care, particularly for beneficiaries of the Medi-Cal program.
(h) The department shall make the methodology publicly accessible on its internet website.
(Added by Stats. 2023, Ch. 6, Sec. 3. (AB 112) Effective May 15, 2023. Repealed as of January 1, 2032, pursuant to Section 129387.)