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California Establishes Hospital Emergency Loan Program

California Gov. Gavin Newsom (D) on May 15 signed legislation that establishes the state’s Distressed Hospital Loan Program through Jan. 1, 2032.

Bill AB-112 will provide $150 million in interest-free loans to nonprofit and public hospitals in “significant financial distress” or to “governmental entities representing a closed hospital to prevent the closure or facilitate the reopening of a closed hospital.”

California’s Department of Health Care Access and Information (HCAI) will administer the program. HCAI will work with other state departments to develop a framework for evaluating hospitals’ eligibility, including factors such as serving a disproportionate share of Medi-Cal patients. Nonprofit hospitals that belong to an integrated health care system with two separately licensed hospital facilities will not be eligible for the program’s assistance.

To apply for a loan, hospitals must provide HCAI and the California Health Facilities Financing Authority with financial information and a plan for regaining financial stability.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Faridat Animashaun is a policy analyst at America's Essential Hospitals.

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