Emergency Loan Efforts for Clinics Win Backing From Insurer, Hospitals
Health Net is joining three hospital chains in financing loan assistance for clinics that face financial challenges without Medi-Cal funding, the Sacramento Business Journal reports. Medi-Cal is California's Medicaid program.
California officials confirmed that after July 28, Medi-Cal payments to health care institutions will be frozen until the state budget is approved.
Medi-Cal reimbursements account for 40% to 50% of operating revenue at most clinics.
Carmela Castellano-Garcia, president and CEO of the California Primary Care Association, said CPCA approached several health plans about helping to finance loans for clinics, but the plans did not join the effort.
Woodland Hills-based Health Net has committed $5 million in no-interest loans to safety net clinics in the Central Valley.
Dave Meadows, vice president of state health programs for Health Net, said the insurer would disburse $2.5 million in loans on Aug. 1.
Health Net provided about $700,000 in loans during last year's budget impasse.
Meadows said the loans were repaid within 20 days of the state resuming Medi-Cal payments.
Separately, Catholic Healthcare West and Sutter Health have each committed $5 million toward loans, and the Sisters of Mercy of the Americas Burlingame Regional Community will contribute $300,000.
Eighty percent of the hospital chain's contributions will be used for clinics in areas that they serve, and the remainder will be channeled to needy clinics statewide.
The loans will be available on a first-come, first-served basis at 4.5% interest, according to Kim Dempsey, business development officer for the fund, which will be administered by NCB Capital Impact (Robertson, Sacramento Business Journal, 7/28).