Outlines of the Madera Community Hospital sign being covered by a tarp at the Emergency Room entrance of the hospital on Jan. 2, 2023. Photo by Larry Valenzuela, CalMatters/CatchLight Local

Two state agencies approved a $57 million interest-free loan for American Advanced Management, Inc. to reopen Madera Community Hospital. 

The announcement Monday from California Gov. Newsom’s office put AAMI closer to restoring the only general acute care hospital in Madera County — which executives say they’ll get done by July. 

“American Advanced Management is grateful to Gov. Newsom, and the multiple state agencies who have been working hard behind the scenes, for taking this action and we are honored to serve the Madera community,” said Matthew Beehler, AAMI’s chief strategy officer. “Our teams have already started making significant progress on the path to reopen this hospital.”

The loan is being made available to AAMI through California’s new Distressed Hospital Loan Program, which has $150 million in total funding. That means more than a third of all loan funds in the statewide program will be used to restore Madera Community Hospital. 

“I remain cautiously optimistic that our work over the last two years will result in the successful reopening of the hospital,” said State Senator Anna Caballero in a press release. “Madera and the surrounding communities are in desperate need of healthcare services and access. I look forward to the day when the hospital can open its doors to serve the public.”

The hospital shuttered in December 2022 and its bankruptcy case has dragged on since March 2023. If AAMI succeeds, it would reopen a hospital that has sat dormant for more than 15 months now.

The loan announcement came about a week before an April 16 hearing, where U.S. Bankruptcy Court Judge René Lastreto will consider whether to put a final stamp of approval on AAMI’s reopening plan. 

Back in February, Lastreto approved a liquidation plan that would separate the hospital’s bankruptcy case from the hospital’s reopening process. That approval greenlit AAMI entering into a management services agreement with the Madera hospital board.

Since then, community opposition to AAMI’s takeover of the hospital has grown. In an objection filed in March, Fresno attorney Patience Milrod — representing the Madera Coalition for Community Justice — highlighted many concerns including how AAMI’s reopening plan fails to meet basic health needs in Madera. 

That includes how AAMI does not plan to restore the hospital’s labor and delivery room. The objection also claimed the liquidation plan was not proposed in good faith and does not commit to restoring health services for Madera’s residents. 

In a statement, Milrod wrote to Fresnoland that she expects state agencies will ensure that the $57 million in state funds will go directly to the Madera hospital. She also pointed to the need to fill in still outstanding gaps in service.

“With the State’s approval of this $57 million loan, AAM should now have no problem committing to essential safety-net medical services,” Milrod said, “like labor and delivery, and a physician onsite 24/7 in the Emergency Department — services the Attorney General’s conditions had made only optional upon AAM’s “exercise of Commercially Reasonable Judgment” and in AAM’s sole discretion.”