The only California County hospital to have cleared the federal barrier, but it still needs millions to reopen
A closed Northern California hospital is getting help from Congress, but no money to reopen and serve patients.
A new federal law would restore the “essential access” designation for Glenn Medical Center, the only hospital in Glenn County. As a result, once reopened, the hospital is eligible for full Medicare reimbursement, which is an important source of revenue.
Separately, a California lawmaker last week introduced a bill to create state loans for struggling hospitals, which could help the facility get the money it needs to reopen.
Currently, Glenn Medical Center says it needs $40 million to $50 million to resume operations and bring back employees.
Glenn Melnick, an economist at USC, says that because the federal decision led to the hospital’s closure, it would make sense for the federal government to provide funding to reopen the hospital.
“In an ideal world this is [congressional] the bill would have restored their condition and healed them, right?” he said. “But if that fails, you will have to look to the government.”
Recovering critical access status
The problem with Glenn Medical Center, according to the US Centers for Medicare and Medicaid Services, was distance.
Critical access hospitals must be at least 35 miles from the next closest facility, and the review showed that Glenn Medical was only 32 miles away from a hospital in Colusa County. The hospital management appealed, saying that the hospital’s location has not changed since it qualified for the designation 20 years ago, but their appeal was unsuccessful, and the hospital was closed last fall.
Priority access designations bring flexibility to hospital management and increased reimbursement for Medicare patients. Without critical access revenue, operations at Glenn Medical will not continue, hospital administrators previously told CalMatters.
The closure meant the county of 28,000 people no longer had a local emergency room.
Last fall, Sen. Adam Schiff (D-Calif.) and Rep. The late Republican Doug LaMalfa introduced efforts in Congress to restore Glenn Medical’s nomination. The agreement that was finally signed into law directs the federal health agency to drop the grade requirement for any critical access hospital that has had this designation since Jan. 1, 2024, and we received a notice of noncompliance before Jan. 1. 2026.
“The return of [critical access] the designation is a good step, but it doesn’t solve the problem,” said Matthew Beehler, a spokesman for American Advanced Management, the company that owns and operates Glenn Medical Center.
“We are trying to face the truth about how much it will take to reopen because it will require great efforts to hire,” he said.
Distressed hospital loans 2.0
In Sacramento, a federal bill may now pave the way for the financial aid sought by Glenn Medical.
Assemblywoman Esmeralda Soria (D-Fresno) on Thursday introduced a 2023 sequel to legislation that created the state’s Distressed Hospital Loan Program. That fund ran out of money after allocating about $300 million to hospitals. Soria’s new proposal, Assembly Bill 1923, calls for a new round of $300 million for struggling hospitals. If the bill leaves the Legislature and gets the support of Gov. Gavin Newsom, hospitals may apply for loans.
That previous loan program provided the then-shuttered Madera Community Hospital with $57 million, allowing it to reopen by March 2025. It is the only hospital in Madera County.
American Advanced Management took over and reopened the Madera Community; also owns Glenn Medical.
“In reality we will have to get funding from the government like Madera did,” said Beehler of American Advanced Management. “As we saw in Madera…we have to pay the costs for about a year before you get a refund.”
The ongoing challenges of rural hospitals
Glenn Medical’s management challenges are unique, stemming from the reinterpretation of long-standing federal law. But like many rural and community hospitals, it has been working hard for years. That fragile financial situation makes these hospitals very vulnerable to any change.
“Here’s the thing, most of these rural hospitals are doing well,” Melnick said. And especially private hospitals, those that are not part of a larger health system, are “living year to year right now.”
The first round of bailouts for distressed hospitals went ahead in 2023 as many hospitals warned they were on the brink – which they said was a result of high staffing costs and low reimbursement rates. In announcing the bill, Soria said he is trying it in part because of the federal budget bill President Trump signed last year that made major cuts and changes to national security programs.
That law, experts say, will starve hospitals in rural and underserved areas of tens of billions of dollars over the next decade. “Many hospitals are facing a financial crisis right now, because of the largest health care cuts in history that came with this new federal administration in 2025,” Soria said.
In an effort to reduce this scourge, Congress created the $50 billion Rural Health Transformation Project. California will receive $233 million from that fund this year, with more expected over the next five years. But experts have noted that this federal project accounts for only about a third of the expected losses in rural areas. It is unclear whether Glenn Medical will be able to get a piece of the money.
Ana B. Ibarra writes for CalMatters.
