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

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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).

Christy Smith
We live in times of financial crisis and that’s why it’s not surprising that there are many institutions which are in need of additional funding. Medical industry is very important to our society and it makes no difference if there’s a crisis or no – people still need medical services and spend money to buy medicines. And that’s why it’s good that local governments help clinics and provide financial assistance. Prices for medical equipment are very high and it’s hard to cover all the expenses without borrowing money.

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