CEO Sandra Anaya of bankrupt Palo Verde Hospital announced resignation plans Wednesday.
Her last day on the job after 13 years will be April 23, according to the Palo Verde Healthcare District, the business entity that runs the fiscally strapped hospital.
It was unclear if district and county officials would seek a replacement chief executive.
The hospital’s finances began to steadily decline over the last 10 years, however no one has attributed the losses to decision by Anaya on any other individual member of the hospital’s management staff.
In February, the Riverside County Board of Supervisors OK’d a six-month rescue plan in an attempt to keep the hospital’s emergency room open — it is the only component of the facility that still operates and the only available emergency room within 70 miles of Blythe.
“Anaya’s departure does not change the terms of the management services agreement with the county,” PVHD officials said in a statement. “Ownership of the hospital does not change, and the district remains the licensed hospital operator and retains all regulatory, licensure and emergency medical treatment and Labor Act responsibilities. Hospital employees remain employees of the district.”
As part of the new management agreement, supervisors in March authorized $3.44 million from the county’s General Fund as payment to the California Department of Health Services on behalf of the hospital. County spokeswoman Brooke Federico said the payment covered the PVHD’s obligation to the California Voluntary Rate Range Program, which is part of Medi-Cal and administered by the state Department of Health Care Services.
The “intergovernmental transfer” payment enabled the district to access over $9 million in taxpayer-backed credit available through Medi-Cal to support hospital operations.
DHCS spokesman Anthony Cava said in a statement that 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.
The county Board of Supervisors also authorized a “strike team” of medical professionals from the Riverside University Health System that initiated reform measures Feb. 23 intended to stabilize the Blythe hospital’s emergency care capability. The RUHS team was added to a $1 million stabilization loan the board OK’d in January for the fiscally struggling facility.
County supervisors have also filled one of two vacancies on the PVHD Board of Directors with the appointment last month of Palo Verde College administrator Jaclyn Randall. Voters will choose who fills the other vacant seat in the November general election.
Under the management services agreement, RUHS staff are tasked with implementing all necessary processes connected to the county’s 180-day strike team support plan, with the primary goal of maintaining emergency operations at the hospital. Without Palo Verde Hospital’s emergency room, the area’s nearly 20,000 residents would lose access to “timely treatment for life-threatening conditions where minutes matter,” according to a county statement in January.
The agreement between the county and PVHD specifies the county will have “first priority” among creditors and will not be liable for any of the district’s debts.
In late September, the PVHD board voted to pursue federal Chapter 9 bankruptcy protection amid efforts to reduce financial losses. Administrators said the hospital had struggled to remain solvent since the start of the current decade, with revenue streams declining despite patient loads remaining unchanged.
The California Health Facilities Financing Authority provided $8.5 million from the Distressed Hospital Program in 2023, but that turned out to be a short-term fix, according to the PVHD.
Officials also expressed frustration about the inability to find a chief financial officer who would remain in place to solve the financial woes — the district had four CFOs in an 18-month span.
The county’s initial $1 million loan will cover hospital staff salaries and benefits, pharmaceuticals, equipment purchases, utilities, billing operations and some legal expenses associated with Chapter 9 proceedings.
The possibility of a wholesale county takeover of the hospital’s emergency department has not been ruled out publicly.
