Visalia, Calif.-based Kaweah Health may receive a $50 million shot in the arm as a result of new legislation likely to pass aimed at helping financially distressed hospitals in the state, CEO Gary Herbst said May 3.
The legislation, to be voted on May 4, is California AB 412 and would provide loans as a bridge to eventual improved financial health for health systems in the state.
"It is categorized as a loan but also a forgivable loan," Mr. Herbst said on a May 3 call with investors. "I fully expect it will pass tomorrow."
In addition, there are several other pieces of legislation being negotiated in Sacramento, including one allowing distressed hospitals to forgo a strict deadline on meeting new seismic regulations.
Kaweah Health would likely have to pay $700 million to meet such changes, something it cannot afford to do presently, Mr. Herbst said. The legislation would allow for five-year extensions on meeting the requirements.
Kaweah Health launched a "Back in Black" recovery program in the summer of 2022 and posted a net income of almost $1 million in the third quarter of fiscal 2023 ending March 31.