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State To Offer $9M in Loans to Clinics During Budget Stalemate

On Thursday, the state Treasurer's Office announced that California would offer interest-free loans to help rural hospitals and community clinics stave off financial strain until lawmakers pass a budget package, the AP/San Francisco Chronicle reports (AP/San Francisco Chronicle, 9/2).

Background

On July 1, California suspended Medi-Cal payments for more than 1,000 health centers because the state lacked a budget for the new fiscal year. Medi-Cal is California's Medicaid program.

To pay the health centers during the budget impasse, the state dipped into a $2 billion emergency pool that has since run out (California Healthline, 8/30).

Loan Details

The state established the loan program -- called the California Health Facilities Financing Authority -- during previous periods of budget gridlock when health centers faced the possibility of closing.

For the latest financing round, CHFFA will offer up to $9 million in loans to rural hospitals and community clinics that have experienced delays in receiving Medi-Cal reimbursements.

The maximum loan amount is set at $750,000, and loans must be paid back within 45 days after a state budget is passed.

As of Thursday, loans for eight rural facilities had been approved (AP/San Francisco Chronicle, 9/2).

This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
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