Hearing delayed for bill challenging Calif. AG’s oversight of hospital sales

A California bill that would restrict the state attorney general from imposing what the authors called “unreasonable, unworkable, and unnecessary conditions” on rural hospitals seeking to stay open by merging with, or selling to, another hospital was pulled from committee.

Senate Bill 774, slated to be heard in the Senate Health Committee on Wednesday was pulled by its authors Sen. Brian Jones, R-San Diego, and Sen. Shannon Grove, R-Bakersfield. The entire California Senate Republican caucus co-authored the bill.

Jones tweeted the bill’s hearing has been postponed, but it helped spark fruitful conversations on funding that could help save many California hospitals from collapse. The bill is being held over for another hearing to give time for those conversations to occur, said Nina Krishel, Jones’ communications director.

Madera Community Hospital, is one of several hospitals in California, that has been struggling financially.

Rob Bonta, the state attorney general, has to sign off on mergers involving not-for-profit hospitals in California to ensure the facilities aren’t converted to for-profit hospitals that limit access to healthcare for the state’s poorer residents.

Bonta faced criticism for the closure of Madera, after merger talks with Trinity, a Michigan-based not-for-profit Catholic health system with 92 hospitals in 22 states, failed, the San Joaquin Valley Sun reported. Madera Hospital is located 26 miles north of Fresno, where Trinity runs the St. Agnes Medical Center.

Reimbursements from Medi-Cal, the state’s Medicaid healthcare problem, have been cited as the primary reason for the failed merger.

Bonta had conditionally approved sale of the hospital to Trinity in December. He asked that the hospital remain in service at least five years and that it continue to serve Medicare and Medicaid patients, as well as other conditions.

Madera was a 106-bed general acute care hospital, and the only hospital operating in Madera County serving the general population.

The hospital, along with three rural health clinics that it operated, closed at the end of December, with the hospital board attributing the closure to costs and losses incurred as a result of the pandemic, as well as inadequate government and health plan rates for the services it provided, according to a Senate analysis of the bill. Madera began negotiations with Trinity in August, and the larger hospital system called off the deal a week after the AG’s conditional approval was granted, the analysis said.

The California Hospital Association is requesting $1.5 billion as part of the 2023-24 budget process as a one-time emergency infusion of cash for California’s hospitals, to be proportionally disbursed based on Medi-Cal utilization.

CHA has come out in support of the bill saying it “would put some guardrails around the conditions that the AG may impose on hospitals that seek to partner.”

Health Access California has opposed the bill, saying “it would severely limit the authority of California’s AG to protect access to, and affordability of, hospital services provided by most hospitals in California.”