Once again, the County Board of Supervisors has extended the loan to Kern Medical Center, to keep the hospital running while state and federal reimbursements continue to lag.
In September, the county advanced $70 million to the hospital to help it pay its vendors as the bureaucracy from the Affordable Care Act has slowed reimbursements, particularly Medicare payments.
The loan was raised to $88 million in January.
Now, it has been raised again, another $9 million, to $97 million.
Hospital CEO Paul Hensler explains why the reimbursements continue to be delayed.
"The issue for cash flow is that we're out of the amount we advanced to the state for anywhere from two to four weeks. It used to be that was on a very predictable basis. We knew we would receive it back within about ten business days. This past year it's taken a bit longer on these and some of those have gone longer than a month, but we seem to be back on track to have it as fairly predictable. So, our loan balance actually becomes worse before it improves when the funds that are drawn down from the federal government are then returned to us," said Hensler.
Hensler says the loan balance is expected to reach $113 million in April, but the turning point will come that month.
He says that's when state and federal officials have agreed to more timely payments.
Hensler adds, the loan balance is expected to be chopped down substantially by June to $60 million.