The state’s health care agency issued a statement Tuesday on the denial of a multimillion-dollar cash infusion to Palo Verde Hospital, which is the only hospital with emergency care capability in Blythe and surrounding areas and has file for bankruptcy.
Hospital and local government officials have wondered publicly why the California Department of Health Care Services stopped a “voluntary rate range intergovernmental transfer” for $9.9 million in credit for remaining operations, according to a Jan. 14 statement from the Riverside County Executive Office.
On Tuesday DHCS spokesman Anthony Cava said the agency “understands the serious challenges facing Palo Verde Hospital and the concern this creates for the community. After a thorough review, DHCS determined that the funds provided by the Palo Verde Healthcare District to participate in the Voluntary Rate Range Program did not meet federal and state requirements for permissible funding sources.”
The federal government requires that the nonfederal portion of Medi-Cal funding comes from allowable sources, Cava said.
“In this case, the Intergovernmental Transfer contribution was funded through a loan that required repayment using Medi-Cal payments that were funded with the IGT, a structure prohibited by federal rules,” he said.
“DHCS worked with Palo Verde Healthcare District several times — first to explain which funding sources were allowed before any funds were transferred, and later to review the situation before declining to accept the IGT to protect Medi-Cal’s integrity and ensure compliance with federal law,” according to Cava.
Cava referenced the agreement that took effect Monday between the county and the Palo Verde Healthcare District, which operates the hospital, to a have a county “strike team” take over day-to-day management of the facility in an effort to keep open the only emergency room for 70 miles.
“DHCS is aware of the agreement between Riverside County and the Palo Verde Health Care District to stabilize Palo Verde Hospital’s operations,” Cava said. “DHCS continues to have discussions with local partners to ensure Medi-Cal members maintain uninterrupted access to essential health services.”
PVHD officials did not immediately respond to a request for comment.
In 2023 The California Health Facilities Financing Authority provided the hospital with $8.5 million from the Distressed Hospital Program in 2023, but PVHD officials said that was a short-term remedy. A noteworthy problem was the inability to recruit a chief financial officer willing to put forth the effort to find solutions to the financial problems. The PVHD had four CFOs in an 18-month time period.
Riverside County supervisors recently OK’d a $1 million loan to keep the hospital afloat. That followed a $330,000 bridge loan in January from the city of Blythe.
