Madera Community Hospital crossed an important milestone Monday as California officials approved a $57 million loan.

With Modesto-based American Advanced Management now operating the hospital, Gov. Gavin Newsom announced the state approved the hospital’s no-interest loan through the Distressed Hospital Loan Program.

“I am thankful to the Governor and his office for their partnership and support,” said state Sen. Anna Caballero (D-Merced). “I remain cautiously optimistic that our work over the last two years will result in the successful reopening of the hospital. Madera and the surrounding communities are in desperate need of healthcare services and access.”

Matthew Beehler, chief strategy officer with American Advanced, said the loan speeds up the reopening. They expect an opening in late summer or fall.

California officials also approved American Advanced’s change of management application.

“Getting this hospital back open and on its feet financially will allow Madera County residents to get the care they need — in their own community,” Newsom said in a news release. “We are doing everything we can at the state level to keep crucial health care access points open and accessible.”

Related Story: Madera Community Hospital Lands an Operator. Goal Is to Re-open ASAP.

Securing the Loan Essential to Operating the Hospital

When Adventist Health withdrew its original offer to operate the hospital in November 2023, it put the state loan in jeopardy.

Force 10, a third-party analyst hired by Madera County Board of Supervisors, said the loan to the hospital would be essential to operate sustainably.

“As you open a hospital, there’s a significant delay in when you get to start billing and then eventually get paid for the services you provide,” Beehler said.

Terms of the loan limit the funding to operations and can’t go to creditors. Much of the money from when Madera operated went to repay debts, Beehler said.

Trinity Health, which at one time was set to operate Madera Community, is the hospital’s biggest creditor.

Under American Advanced’s repayment plan, creditors would be paid if not in full, then nearly in full, Beehler said.

“American Advanced Management is grateful to Governor Newsom and the multiple state agencies who have been working hard behind the scenes for taking this action,” Beehler said.

Madera’s Emergency Department Expected to Open Late Summer or Fall

In February, bankruptcy courts approved American Advanced’s offer to operate the hospital that closed in January 2023. Crews have been deep cleaning the hospital and getting medical equipment online, Beehler said.

“There’s a lot of work the biomedical equipment, lab and pharmacy, and imaging — getting all that equipment back online and preventative maintenance done,” Beehler said.

Without any patients or staff in the hospital, they can change out flooring where necessary. Beehler expects by May that the preventative maintenance can be finished.

By late summer or fall, basic services, including emergency services should reopen — including everything it takes to operate those departments.

When Madera Community shut down, it had 106 licensed beds.

To operate licensed hospital beds, all the necessary staffing and equipment has to be in place as if each bed has a patient, so American Advanced will have to phase in those beds as it rehires and restocks staff, Beehler said.

“The good news is that you’re able to certify those additional beds as needed when you are growing into them. That’s a process we’ve accomplished at other facilities,” Beehler said.