Blythe and county officials are developing a plan to keep Palo Verde Hospital from shutting down after a local commission voted last month to dissolve the Palo Verde Healthcare District Board, which oversees hospital operations.
The hospital is scheduled to close in November following the board’s approval of filing for Chapter 9 bankruptcy.
As part of its decision, the Riverside County Local Agency Formation Commission, or LAFCO requested a dissolution plan that includes establishing a successor agency and securing at least one year of operational funding to stabilize and restore medical services. Blythe officials said Riverside County Supervisor V. Manuel Perez led the move by LAFCO.
The district started the process of closing the hospital Sept. 24, according to the California Employment Department.
The next-nearest health care facility for area residents is in the Coachella Valley, over 90 miles away from Palo Verde Hospital.
The county and city have formed a joint working group tasked with developing the succession plan that aims to ensure continued access to health care for Blythe residents.
“The City’s top priority is ensuring that emergency room services remain available to our residents and that hospital employees remain informed throughout this process,” Vice Mayor Johnny Rodriguez said in a statement Oct. 6. “We will continue working closely with our elected officials at the local, county, state, and federal levels to secure the funding necessary to keep the hospital open and sustainable.”
Rodriguez thanked LAFCO commissioners, Perez, county CEO Jeff VanWagenen and county staff for their support.
“They understand the critical role Palo Verde Hospital plays in our city, and their partnership gives us real hope for a sustainable path forward,” the vice mayor added.
LAFCO’s next meeting is set for Thursday, Oct. 16. The meeting’s agenda includes an item on beginning the Palo Verde Healthcare District dissolution process.
Blythe Mayor Joseph DeConinck formed an ad hoc committee on the troubled hospital that includes Rodriguez and Councilman Sam Burton.
“The people of Blythe deserve access to reliable, high-quality emergency medical care,” DeConinck said in a statement July 30. “Our City is fully committed to doing everything in our power to protect that access, working hand-in-hand with our partners at the County, State and Federal levels.”
Earlier this year the city requested LAFCO do a “municipal service review,” which the commission presented at its Sept. 25 meeting.
City officials said the county has organized “multiple working groups to support hospital operations, displaced staff and the broader community.” The county Housing and Workforce Solutions staff hosted a “rapid response event” and is working closely with the district to assist hospital employees facing layoffs or work stoppages.
U.S. Sen. Alex Padilla, D-California, announced the allocation of federal funding to support financially at-risk hospital districts, including Palo Verde. The funding, which is connected to the reinstatement of withheld Medi-Cal and Medicare payments, will help the district’s immediate cash flow. Long-term recovery, however, requires steady investment and strategic support, according to the city.
The city has asked for $4 million in emergency state funding from Gov. Gavin Newsom’s office.
“While this request is under consideration, state budget limitations mean the timing and availability of funds remain uncertain,” according to a city statement.
According to the Palo Verde Health Care District, despite receiving $4 million in emergency assistance from the state in May for payroll and operating costs, the hospital did not have enough money to sustain the facility and suspended inpatient services and surgeries.
The district’s financial problems were the result of several factors — COVID-19 pandemic-related expenses, a cyberattack that delayed billing and collections, a reduction in Medicare funding, Provident Bank seizing about $2.8 million to satisfy the district’s line of credit and a turnover of four chief financial officers.
As of Sept. 30, the district had about a week’s worth of cash to operate the hospital, officials said.
According to a district staff report, as of Sept. 1 available cash totaled just under $1.26 million. Outstanding liabilities totaled over $5.28 million.
“Chapter 9 is the last tool left while we work to fix the financial management challenges that have so drastically impacted the hospital during the past several years,” board President Carmela Garnica said in a statement. “Our community deserves a functioning hospital. We are doing everything we can to keep it open.”
The hospital is set to close on Nov. 23, with a layoff of 94 employees, according to the state Employment Development Department. Officials sent a notice to the state Sept. 24 to satisfy terms of the Worker Adjustment and Retraining Notification Act. The law requires employers to provide employees with 60 days’ notice of layoffs or closures.
The LAFCO meeting Thursday starts at 9 a.m. at Board of Supervisors Meeting Room and the First Floor of 4080 Lemon St. in Riverside. The meeting is streamed on the county’s website, accessible via tinyurl.com/mryfxtv5.
